Marketing budgets suffered during downturn – survey
According to a marketing survey conducted by Team Namibia in March, 54.5% of respondents said that their annual revenue had dropped, whereas 31.82% said that their annual revenue remained the same, while only 10% said that their revenue had increased.
The survey found that while sales are going down, cost-cutting measures were introduced. About 60% of businesses have reduced their current marketing budgets, and for about 30% of businesses, the marketing budgets had remained the same while 30% have increased their marketing budgets.
Bärbel Kirchner, account director of Team Namibia explained that 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,” Kirchner said.
She added that 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,” Kirchner stressed.
Meanwhile, the survey endorsed the view that 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, for example; through advertising in the print media, on radio or on television.
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).