Marketing lessons from 100 years of economic cycles – recessions, expansions, brands

In the summer of 1971, the Pakistan army decided to launch a major offensive against the Bengali nationalist movement in East Pakistan. An estimated 10 million refugees fled into India and India willy nilly got involved in this war that eventually led to the creation of Bangladesh. Chief of Staff, Eastern Command, JFR Jacob was assigned the task of leading the India offensive. The plan given to the Eastern Command by the chief of army staff targeted the capture of the provinces of Chittagong and Khulna.

Jacob stepped up to present a different plan – capture capital Dhaka as that would ensure capture of the whole of East Pakistan and avoid a protracted war. On December 16, 1971, during a lull in the battle, Jacob flew down to Dhaka and obtained the Pak Army Commander Niazi’s unconditional surrender. India won decisively with only 3,000 soldiers against 26 thousand Pak soldiers at Dhaka and secured the surrender of 90 thousand Pak soldiers.

Fast forward to June 2020, amid the COVID war. The extended lockdown is being lifted but revenues have come to a grinding halt, every corporation is evaluating its priorities and resources are being conserved. Marketing --demand generation, brand building, lead generation-- is taking a back seat. Advertising, the most visible marketing activity, could be reduced or stopped. We are in a recession/major slowdown.

Corporations are asking marketing teams to step forward and share their point of view and plan of action for the journey ahead.

My team and I compiled scientific studies of data from the last 100 years, for 100s of firms across major economies, across recessions and expansions and compiled a whitepaper that will arm marketers to articulate an optimal way forward for their brands, with sound data.

My key takeaways from this exercise…

First, let’s recognise the following MYTHS:

- Total or drastic cuts in advertising will not affect us as overall category demand levels will fall.

- I understand categories like lifestyle, clothing, personal care, gadgets, and F&B are very responsive to advertising – I will not gain even if I resume/increase my ad support.

- At a time when availability is a challenge, mere presence on shop shelves will deliver market share gain.

- Slackening demand will push brand sales and profit down. Hence it’s safer to cut down brand ‘expenses’.

- Conserving resources in 2020 will help invest more in 2021.

Fact is, the next six to 12 months will witness market share changes across most categories. Your actions will dictate whether your brands are on the losing or gaining side of this great flux. Marketing ROI and brand profit will be brand and category specific, so it’s important to test and learn as you move ahead. Conserving resources now will mean three things:

o Opportunity loss – consumer demand cycles are long across many categories

o Open turf will expose you to competitive threat

o Brand metrics will fall once brand investment drops

Key lessons: Sales and market share studies give an unambiguous verdict - that ad support during a recession delivers positive change in sales and market share, both in the short and medium term. Profitability (ROI) studies confirm that ad investments during a recession largely pay back well.

Today, Bangladesh thanks JFR Jacob for his bold plan to capture Dhaka and liberate millions. Two years from now, your business would thank you for taking the right decisions in 2020 – a well thought plan to sustain sales and build market share without compromising profitability.

Read/download Mediant's whitepaper titled 'Marketing lessons from 100 years of economic cycles' below.

(Manas Mishra is co-founder of Mediant, a new age media and communications agency with focus on ROI and transparency.)