Bulk of local businesses cut marketing budgets amid economic recession – survey
Team Namibia in March conducted an online survey regarding marketing trends during current economic times and according to the feedback, 54.55% of the respondents said that their annual revenue had dropped, whereas 31.82% said that their annual revenue had remained the same.
According to the survey, it appears that 60% of businesses reduced their current marketing budgets, and for about 30% of businesses, the marketing budgets had remained the same, and indeed, according to responses received, 30% have increased their marketing budgets.
Bärbel Kirchner, account director of Team Namibia said, “Cost-cutting measures during an economic recession often include the reduction of marketing budgets to avoid retrenching employees. This approach could be detrimental to business. Literature about marketing activities during an economic downturn or recession generally advocates continued, if not increased, marketing spending as one should not stop communicating with one’s existing, albeit smaller customer base.
“Although this may not be relevant for all businesses and it would also depend on the sector in which the business operates. However, if there is a continued need for the product or service, despite a momentous downward fluctuation in demand, business owners should seriously consider increasing their marketing activities, not only to keep communicating with your customer base and to maintain their market share but also to strongly position themselves and indeed increase their market share, especially if their competitors have gone quiet,” she said.
Engaging the services of a variety of marketing specialists such as marketing research businesses, advertising agencies or online marketing specialists might also become more affordable during tough economic times, as well as the opportunities to get your messages across, e.g. through advertising in the print media, on radio or on television. Respondents to the survey conducted by Team Namibia, endorsed this view.
A total of 72% of the respondents agreed that (20% – agree; 54% – totally agree) that one should continue marketing during an economic downturn, whereas only 11% disagreed (6% – totally disagreed; 5%- disagreed).
In fact, most respondents, a total of 82% of respondents agreed (25%) and totally agreed (57%) that “there a great opportunities to be had when you continue marketing during an economic downturn”.
Meanwhile, according to John Quelch’s (Dean of the University of Miami School of Business Administration and previous Charles Edward Wilson Professor of Business Administration at Harvard Business School) article in “How to Market in a Recession” for Harvard Business Review (2008), it is becomes even more important to know your customers; to maintain marketing spending; and to adjust product offerings in customers’ needs; and indeed to focus on family values.