Marketing During Economic Downturn

Kellogg’s and Post were side-by-side cereal giants at the start of the 20^th century. So, why does Kellogg’s now dominate the market?

It’s a marketing case study that has practically passed into legend. At the start of the Great Depression, Post took the conservative approach. They cut back on marketing spend, pulled back on advertising, and settled in to wait it out until the economy rebounded. For many businesses, this felt like a logical, almost knee-jerk response to a major economic downturn. 

However, Kellogg’s did the opposite. They doubled their ad budget and plunged headlong into radio advertising, promoting their new cereal, Rice Krispies, with a fervor that many companies shied away from at the time. The results were palpable. 

While Post cereals were slowly forgotten by consumers, Kellogg’s remained front of mind as families were looking for ways to shrink their food budgets. As a result, Kellogg’s was the brand customers began to trust. When the economic fog lifted, Kellogg’s cereals were on everyone’s breakfast table. Their profits had risen almost 30%, and Post would never fully recover from such a significant loss of market share. 

What Does This Mean for You? 

Kellogg’s isn’t the only company that gained traction during an economic downturn. Disney and Toll House both launched their brands during the Depression, forging memorable identities that have endured for generations. In 2001, the iPod launched to great success amid a struggling economy. Even more recently, during the downturn of 2010, Amazon made big, innovative strides, launching its Kindle line of products and growing sales by almost 30%. 

What’s more, this isn’t just a B2C phenomenon. In fact, in a study that tracked 600 B2B companies during the 1981-82 recession, McGraw-Hill Research found those who maintained or increased ad spend were more likely to emerge as a stronger, more successful company. These companies averaged higher sales growth than those who decreased their marketing budget, and this growth continued long after the recession was over. Three years later, the sales of the more assertive companies had increased a whopping 256% over those who had cut back on advertising.¹ 

How Can Life Science Organizations Respond? 

You don’t need a major product launch to rise to the top during tough times. As “noise level” drops when your competitors become more cautious and complacent, simply remaining consistent, present, and vocal can yield major dividends. Such consistency will not only keep you front of mind with customers, but it will also project an image of corporate stability that reassures your audience during uncertain times. This increase in share of voice as others fall silent can ultimately equate to an increase in share of market. 

Admittedly, responding in such a way can be challenging for B2B companies, especially those dependent on any touch points subject to market volatility. That said, the same basic principles still apply. The bottom line: Investing in marketing now can seize market share that lasts long after an economic downturn ends. 

Naturally, in the clinical research pipeline from drug discovery to patient applications, it’s critical to stay active for reasons beyond just business. No amount of economic or political disruption pauses global health needs. It is more than a pseudo-inspirational car commercial with upswelling music. It is more than a salesperson speaking in hushed tones to say, “We’re here for you.” It is about real patients that really do need you to be there for them. Continuing to be present, and to strengthen your presence for them, is paramount. 

Proven Strategies for Sustainable Growth 

So, how do you continue to serve global health needs and market your brand while staying cost conscious? It comes down to finding the right balance between cutting costs to survive today while following eight basic principles to grow for tomorrow: 

Not exactly sure where to start? Our worksheet is your guide to cost-effective marketing and the perfect overview of every cost-conscious strategy. 

Reference
¹ Lodish, L., Williams, P., Fader, P., et al. When the Going Gets Tough, the Tough Don’t Skimp on Their Ad Budgets. Knowledge at Wharton Podcast. 16 Nov. 2008.  

About the Author

Lea LaFerla

President, SCORR Marketing

As a seasoned professional with over 25 years of experience in sales and marketing within the medical device, clinical diagnostic, and pharmaceutical industries, Lea successfully manages a portfolio of global health science clients and oversees SCORR’s business development, marketing, client service, communications, and digital departments. By leveraging her expertise and fostering collaborative relationships, she creates marketing initiatives that are not only impactful but also focused on delivering measurable results and demonstrating ROI.

Lea has built a reputation for her ability to navigate complex industry landscapes, adapt to emerging trends, and drive innovation. She remains at the forefront of the rapidly evolving health care and life sciences sectors, constantly seeking new opportunities to enhance SCORR Marketing’s services and deliver exceptional value to clients.

Lea LaFerla

President, SCORR Marketing

As a seasoned professional with over 25 years of experience in sales and marketing within the medical device, clinical diagnostic, and pharmaceutical industries, Lea successfully manages a portfolio of global health science clients and oversees SCORR’s business development, marketing, client service, communications, and digital departments. By leveraging her expertise and fostering collaborative relationships, she creates marketing initiatives that are not only impactful but also focused on delivering measurable results and demonstrating ROI.

Lea has built a reputation for her ability to navigate complex industry landscapes, adapt to emerging trends, and drive innovation. She remains at the forefront of the rapidly evolving health care and life sciences sectors, constantly seeking new opportunities to enhance SCORR Marketing’s services and deliver exceptional value to clients.