Recently I was reading an article by John Quelch who is a Lincoln Filene Professor at Harvard Business School about the steps small businesses can take to weather this recession.

 

He suggests the following 8 steps - guess what?! Market research makes the TOP of the list.

 

   1. Research the consumer:

   2. Focus on family values

   3. Maintain marketing spending.

   4. Adjust product portfolios.

   5. Support distributors.

   6. Adjust pricing tactics.

   7. Stress market share.

   8. Emphasize core values.

 

(1) Quelch explains that instead of cutting the market research budget, businesses need to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing. Consumers take more time searching for durable goods and negotiate harder at the point of sale. They are more willing to postpone purchases, trade down, or buy less. Must-have features of yesterday are today's can-live-withouts. Trusted brands are especially valued and they can still launch new products successfully, but interest in new brands and new categories fades. Conspicuous consumption becomes less prevalent.

 

(3) Quelch affirms that this is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain consumers need the reassurance of known brands, and more consumers at home watching television can deliver higher than expected audiences at lower cost-per-thousand impressions. Brands with deep pockets may be able to negotiate favorable advertising rates and lock them in for several years. If you have to cut marketing spending, try to maintain the frequency of advertisements by shifting from 30-second to 15-second advertisements, substituting radio for television advertising, or increasing the use of direct marketing, which gives more immediate sales impact.