Conventional wisdom advises marketing managers to exercise prudence during tough economic times. That is why so many companies freeze or reduce marketing spending during recessions. Some line items fare better than others. For example, it is easier for many managers to justify spending on demand generation than it is to rationalize brand investment. To quote one senior marketing executive, branding is often considered "a rich man's game."
But evidence from previous periods of recession provides us with good reason to challenge conventional wisdom. A 2002 study by McKinsey & Company found that companies willing to invest in branding and advertising activities while their industry peers were cutting spending outperformed industry performance averages when the economy recovered.
For many companies, a down economy is an ideal time to invest in the brand. The question is, where to invest? There is less room for failure in an uncertain economic climate. Spending on the brand may provide an advantage, but only if that spending is well focused.
When budgets are tight, your objective as the brand manager is to pick the brand investments that will deliver tangible business value, preserve the equity in the brand, and mitigate risk. As a cautionary measure, I've listed seven sure-fire ways to fall into the "Tropicana trap" and fail at these objectives.
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