With the current state of the economy, many companies are bracing for the worst and are adjusting their expenditures accordingly. Typically, the first casualty is the marketing budget. While common sense is what CEOs and CMOs cite as their reasoning for a reduction in advertising and marketing (less share of wallet available from consumers), prevailing research supports just the opposite. In fact, studies show that a recession is the ideal time to increase marketing budgets and augment market share and sales versus competitors.
A McGraw Hill/American Business Press research study of business practices during the 1981-82 recession reveals that companies that maintained or increased their marketing and advertising spend during the recession experienced an average of 256% higher sales than their competitors who reduced their marketing over the same period. What is really telling about this research is that the sales figures quoted stayed constant for three years after the recession had ended.
A similar study conducted over same period by research firm Meldrum & Fewsmith concludes that aggressive advertising did not only grow revenues; it even increased profits.
In 2001, a study comparing marketing practices during the 2001 recession determines that aggressive recession advertisers increased market share 2 ½ times the average compared to all businesses in the post-recession.
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