Ways To Recession Marketing

WAYS TO RECESSION MARKETING As explained before, the classification of customers and classification of consumers according to priorities by sorting products and services in the section ―Understanding Recession Psychology‖; the ways in which in which marketing could be done in recession is different for different groups of consumers and different for different products and services. This could be well summarized with the following table: -

Some of the ways which companies could follow at the time of recession are: 1. Increase the advertising budget. Increasing spending increases a company‘s share of voice. If your competitors cut back, your message has the chance to grow stronger. 2. Utilize sponsorships. This type of awareness advertising and promotion gives a business valuable exposure to targeted, core audiences. 3. Stay in contact with loyal customers. Keep in touch and let them know what you have to offer. 4. Product introductions. Don‘t hesitate to introduce well-conceived and properly marketed new products when the competition is weak. 5. Sustain awareness. Advertising works cumulatively—remind people frequently about your brand or they‘ll forget you. 6. Don‘t ―cheapen‖ your advertising. Trying to save on creative or production costs can be a kiss of death, and customers will notice. 7.

Enhance product and company publicity. Maintain a media presence with a smart, effective, ongoing public relations program. Strengthening relationships with key media will provide long-term financial benefits.

8. Be more aggressive in marketing your products so that you become the choice for consumers even in the tough times of the consumers. 9. Start sponsoring. This type of awareness advertising gives your business valuable exposure to targeted, core audiences. 10. Maintain continuity to sustain awareness. Advertising works cumulatively so you have to remind people frequently about your brand or they'll forget you. 11. Step up public relations efforts. Be sure to maintain a media presence with smart, effective PR programs. 12. Keep an eye on the competition and don‘t panic. 13. Concentrate on your core brands and products. 14. Don‘t price promote unless you can cut costs or live with lower margins. 15. Don‘t cut on the quality of your products for cost-cutting because this could hamper your brand image and if known by the consumers would result in loss of sales of your product. 16. Focus o perfect segmentation of the market and positioning of the brand. 17. Make your creative work harder.

18. Review on the budget allocation of your product basket. 19. Have a more effective communication with the customers for retaining them. 20. Spend more on media dollars, less on overheads. Need in the recession is to focus on your current results rather going for long-term results. 21. Use digital marketing software tools for finding whether or not the particular advertisement would give the desired results, even before implementation, which in a way helps in reducing cost. Some of the tools to measure results are: Ad Server for Advertisers. Ad Server for Publishers. Web Analytics. e-Mail Marketing. Mobile Analytics. Mobile Ad Server. Web Server Statistics. e-Survey Systems. Feedback Systems.

STRATEGY OF MARUTI-SUZUKI AT THE TIME OF RECESSION Maruti Suzuki is an example of the automobile sector, which lies in the one of the badly hit sectors during the time of recession. This sector goods and services lied under the groups of ―Postponables‖ as explained in the classification of goods. The automobile sector has been divided in four major segments:1. Economy. 2. Mid-range. 3. Premium. 4. Luxury. It caters more to the urban population of India, directly linked to disposable income. In this sector, the critical success factor has changed from price to price-value. Maruti Suzuki is one of India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned – a people‘s car for the middle class India. Until recently, 18.28% owned by the Indian government, and on May 10, 2007, it sold its complete share to Indian financial institutions. The parent company is a globally renowned for its mini and compact cars for three decades, its technical superiority, power and performance into a compact, lightweight engine that is clean and fuel efficient. Maruti has been labeled as an ―employer of choice‖ for automotive engineers and young managers. The company vouches for customer satisfaction.

• SX4 • D'zire MUV

Segment

• Alto • WagonR • Zen • Swift • A-star • Ritz

• Gypsy • Grand Vitara

A3

Segment A2

• Omni • Versa

C

Segment

• M800

A1

Segment

Maruti has segmented its cars in the following segments

It seems, changed gears just in time to survive and thrive despite the slowdown. They revitalized their brand despite and in spite of the slowdown by simply emphasizing its core brand proposition – value for money, fuel efficient cars – and increasing its value!

But managing their brand portfolio well is not Maruti‘s only claim to the marketing fame. Over the last quarter of stagnating sales, the motor company went on an overdrive to enhance its market penetration. For one, instead of restricting its annual dealer level discount scheme till the end of December (as it does every year to clear year-end sales), Maruti 1. Extended the lucrative cash discounts way into February; 2. Next up is their strategic tie-up with Corporation Bank to finance Maruti Suzuki vehicles on an all India basis to enable credit access at a time when banks are antsy about lending too easily; and

3. Finally, proactively embracing the ‗voluntary disclosure of fuel economy‘ to drive home the message to consumers about their leadership in making highly fuel efficient cars. As per Shinzo Nakanishi, MD & CEO, Maruti Suzuki India Limited, the move ―would enable customers to make an informed choice when purchasing a car in the market.‖  So this was the way Maruti-Suzuki tackled recession without showing any kind of negative impacts in the sales of their products.

Sales of MARUTI-SUZUKI after implementation of their marketing strategies during the times of recession till and in July: In July

Till July

SEGMENT MODEL A1 M800

2009 2796

2008 4953

2009%change 2010 -43.50% 9915

C

7302

6253

16.80%

A2 A3

Omni, Versa Alto, WagonR, Zen, Swift, A-star, Ritz SX4, D'zire

29535

20082009 21602

April'08%change March'09 -54.10% 49383

27014

9.30%

77948

48115 34795 38.30%

194848 160222 21.60%

511396

9101

29048

75928

6009

51.50%

21949

32.30%

Total Passenger Cars

67314 52010 29.40%

263346 230787 14.10%

714655

MUV

214

1597

7489

Domestic Export Total Sales

901

-76.20%

Gypsy, Grand 67528 52911 27.60% Vitara 10546 5632 87.30% 78074 58543 33.40%

2217

-28.00%

264943 233004 13.70%

722144

39860

70023

181231 19.90%

304803 251127 21.40%

792167

Severe impact on A1 segment car(Maruti) as shift of customers to newer brands and cars which give them similar facilities and are new in the market at similar prices. purchases in the wake of subprime crisis. No impact on C and A2 segment cars with new implementation of strategies and getting more and more new cars in the segment for getting customers go for something new. Though not completely unaffected by the slowdown (the market leader posted a decrease in sales for all three months in the last quarter), in January 2009, Maruti Suzuki bucked the trend and reported a 5.59% increase in domestic sales. A closer look at their figures reveal that their recent additions to the A3 segment (D‘zire and SX4) is what is making the numbers look so cool. The segment saw a two-fold growth, selling 6,590 units (even higher than their cash cow Maruti 800) as against 2,939 units in the same month last year. High sales seen due to the marketing strategy implemented by the company in the A3 segment cars. SX4 was launched in May 2007 and D‘Zire in March 2008.Both the cars are runaway success ever since they have been launched in India and they have kept the A3 segment unaffected. Overall, recession has not adversely impacted the passenger car segment.

STRATEGY OF VODAFONE AT THE TIME OF RECESSION

One of the best campaigns seen so far is the Vodafone's ZooZoo campaign. Never in the history of Indian advertising we witnessed a campaign that generated so much interest and curiosity among all the segments of the society be it young or old. So much has been written about ZooZoo in various media. ZooZoo was created to promote the value added services (VAS) of Vodafone. Vodafone was trying hard to capture the VAS space because it is a potential cash cow for cellular companies. Vodafone also wanted to make the most of the IPL Season2. Although IPL is a crowd puller, it is also a marketer's nightmare because of the clutter. IPL attracts all the deep pocket advertisers and to standout, one needs to think out of the box. Thus ZooZoo was born. ZooZoo is a semi alien semi-human character living in an earthlike place (lot of which is left to the viewer's imagination).These are very simple beings who are very expressive. They laugh aloud, cry loud and have a child like simplicity around them. Thus have an emotional and personal attachment with all the consumers.

The success of ZooZoo is the success of minimalism and simplicity. Although the production process of ZooZoo ads are not simple, as a consumer I was attracted to the simplicity of the concept and the execution. ZooZoo also highlights the power of storytelling. Each ad tells a very simple story. After all brands are made through story telling. Another factor that aided the success of ZooZoo is the scale of the campaign. Reports suggest that there are around 25 different ads of ZooZoo to be aired during this IPL season. This unprecedented scale has kept the curiosity high among the viewers. It has infact dwarfed all the other advertisers in this season. There is lot of risk being taken behind this campaign. The Vodafone managers who okayed this campaign may have risked their jobs to bring out such a massive campaign.

The agency also risked their credibility. One should appreciate the creative talent of O&M and Nirvana Films who proved that Indian Advertising has come of age. Vodafone has taken ZooZoo beyond advertising. The fan club in the facebook page of ZooZoo has already touched 316,572 and counting. All these has transformed into a great viral movement. There are already a plethora of mail forwards and blogposts celebrating ZooZoo.

ZooZoo is a great marketing story. Vodafone has benefitted immensely by this campaign. It caught the attention and fancy of the consumers, aroused curiosity, told stories and made people retell the story.

Marketing Guru Seth Godin always emphasized that Brands should be Remarkable. He defined remarkable as "Worthy of Making a Remark about " The ZooZoo is a classic example of being Remarkable.

Sales of VODAFONE after implementation of their marketing strategies during the times of recession of the month of June 30, 2009: Vodafone reported an increase of 23 percent in revenue at constant exchange rates, and 33 percent, taking into account exchange rate fluctuations. The revenues included a 7 percent benefit of revenue from their stake in Indus Towers.

Data revenues for Vodafone remained flat quarter on quarter, but were up 30 percent year on year. Strangely enough, messaging (SMS) revenues declined quarter on quarter.

However, much like Bharti Airtel and Idea Cellular, Vodafone India reported a decline in ARPU, impacted by the mobile termination rate cut.

In terms of Minutes of Use, Vodafone clocked 10% higher minutes of use, at 71,775 million minutes, up from 65,276 million minutes used in Q4-09.

Of its Total Customer Base, 93.2 percent was Pre-paid. The company‘s average customer base grew by 56 percent year on year, on launching in seven new circles.

Net additions for the company declined quarter on quarter - Vodafone India added 7.68 million subscribers in the quarter, as opposed to 7.83 million subscribers added in the previous quarter. Much like other operators, Vodafone India has suggested that usage per customer declined on account of multiple SIM usage, which is being attributed to the free minutes and free SIM cards being given by operators, particularly in new circles.

The above picture clearly depicts how the ZooZoo advertisements have helped in increasing the customer base for Vodafone in the last quarter with a sharp increase of 3.8%, from 17.5% to 21.7%. Vodafone reports churn on an annualized basis, and the company saw a pre-paid churn of 26.3 percent churn for the last four quarters, with a Pre-paid churn of 26.4 percent, and a post-paid churn of 25.3 percent.