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(Note: This is an entry we wrote in 2008, but it's still relevant today.)

Often when communications firms are asked by clients and media, “what should businesses do when the economy takes a bad turn?,” the standard answer is, “don’t cut back your marketing and advertising.” Unfortunately, this answer is not only biased, but may not be good advice at all. A far better reply is “get back to basics.” And nothing is more basic than evaluating those 4 Ps of marketing: Product, Price, Place, Promotion.

Product: Are you providing the right benefit?
Is your product affected positively or negatively when your customers are feeling a financial pinch? If your product is a luxury item, the answer might not be a comfortable one. However, if you have a product that people tend to buy less of during difficult times, you need to look at the product, and more specifically its benefits to your consumer. Consider how you might position your product to make it a more advantageous one during a rough economy: Does it provide more benefits than simply luxury? You may want to adjust your positioning to reflect those benefits that, prior to a negative economy, may have been secondary.

Price: Is it right?
Okay, here comes a tough one. If you are sitting in a warehouse full of products that are no longer moving, you may want to consider adjusting your price, changing the framework of the purchase, or reducing your production costs. This may be a simple proposition – lower the price. Or maybe you can find a way to enable people to purchase your product over time or with additional incentives. Another thought: Is there a way to lower your production costs without compromising quality? Break out your old supply-demand curve and make sure you know where your price needs to be. You may have to narrow your profit/sale in the short term, but keep on top of it and you can weather the storm with a solid price strategy.

Place: Are people finding you in the right spaces?
If you have a traditional product distribution model, now might be the time to change where consumers can access your product. As an example, many businesses continue to rely on pushing their products through traditional placement with retailers, while more and more people go to the Internet to find deals and value in their purchases. If you haven’t fully flushed out this distribution model, now is the time to ramp it up. But whether you’re changing where people find your products/services or getting away from “tradition,” make sure you think about how and when people will be happy to find and purchase your product. Then work to put your product in their way.

Promotion: Which tactics are working hardest?
Finally, we come to the questions we hear most often as an advertising agency. Should ad (promotions) spending be cut? The answer is, “it depends.” When sales are going well, we tend to keep adding to our mix of promotional tactics (direct sales, print, radio, interactive, etc.) without always scrutinizing the value they are providing. There is no better time to review our tactics. The kicker is that it is difficult to measure the value each tactic is providing. Most promotional efforts do not provide specific, measurable returns in the short run, and they all work hand-in-hand together. (The reason ad budgets usually get cut first is that it is difficult to provide crystal-clear ROI, which makes it easy for an accountant to break out the red marker.) We suggest making a list of all your efforts and putting them in the order you feel they are working. You’ll want to consider how the tactics complement each other as well as bang for the buck (cost) in this list. Which tactics could be dropped in order to save short-term expense, without compromising your sales, market share and top-of-mind awareness? If you need to save some expense in order to keep people employed, pay the rent, etc., by all means cut back on the tactics that are at the bottom of your list.

Sometimes a little pressure provides the best reason to make sure your marketing, and your 4 Ps, are lining up with your vision and adding to your overall business. Refining the basics can keep you heading forward in an economy that’s moving backward.

 

One of the most dangerous phrases in marketing is, “people won’t understand.” It is based on the assumption that as mass marketers, we should always speak to the lowest common denominator of intelligence. This way of thinking has three fundamental flaws:

It breaks the “one on one” law. (Okay, it’s not a law, but we live by it at 3.)
The irony of mass communication is that a message can’t feel like it was created for a mass of people. You are speaking, in each and every message you create, to a single person. Even though millions of people may see your message, only one person at a time is interacting with the message. There is no collective watching, only many people having individual experiences. If you lose sight of this, every message you create could become meaningless on a personal level.

When people are engaged, they are damn smart.
You’ve done your homework and know your target. You’ve created a message that not only speaks to your target on an individual level, it will also speak to them based on their knowledge and understanding. This person is going to be engaged because you are solving a problem and/or offering them a benefit that speaks to their current situation. And once you are speaking to someone on their terms, whether they have a doctorate from Harvard or dropped out of eighth grade, you can bet that they are more likely to tune in and be receptive to your message.

Nobody likes being talked down to.
We’ve all seen the surveys that indicate most people believe themselves to be above average intelligence. Only 49% of them are right. If you want to turn someone off in a hurry, speak down to them and pretend you know more. Watch how quickly they dismiss you (and your product).

Respect people in your communications, and they will respect your brand. While it is true that the person you are speaking to is bombarded with advertising and messaging, it is equally true that they will be engaged by intelligent, thoughtful communications.

 

As a whole, marketers love determining how people are different. And ad researchers are often pushing to find how people are different. Some clients want us to tell them how their prospective customers are different. And the media outlets work diligently to explain how their audience is different than all the rest. It’s possible to get lost in finding differences and segmenting people to better communicate with them.

But beware that you don’t complexify yourself into a meaningless campaign.

It happens like this: We have 14 target audiences we need to reach. Men over 35 with a shoe size smaller than 9 tend to like our product because it makes them feel younger, teenagers with more than two siblings purchase our product because it makes them feel older, and millenials taller than 5’ 6” tend to choose us because they like the way it makes them look in the morning, and on and on. So, you put together a great media plan, create semi-custom campaigns for each of your audiences and a year later you sit back and wonder, “How come the men over 35 numbers went down? And teenagers just stopped using our product all together? Well, thankfully, sales held firm for our millenials.”

What went wrong? You have a binder that is 5” thick that proves you did your homework. Unfortunately, what you don’t have is a well-defined brand. (A quick refresher: A brand lives in people’s heads, not in your binder. If it is not well-defined, it simply means there is no common positioning and emotional feeling about you among your audience.) Why? Because you tried to give your brand unique meaning across many diverse people, based on their diversity. What you need to do is give your brand unique meaning across many diverse people, based on their sameness.

People do not make purchase decisions based on their demographics. They make decisions on a much more personal level. So, when you get into your planning, sometimes it helps to cut across your demographic segments and figure out, “how are these people the same?” “What values do they share?”
“Is there a common factor that is driving a decision to be made?”

You might be surprised at how the sameness of your segments may be the key to your campaign’s success.

 

© 2010 3 Advertising LLC, a full-service advertising agency in Albuquerque, New Mexico.