We Call it Austerity, They Call it Frugality
More business publications have been weighing in on the theme that Marketing News is devoting a series of articles to, beginning in our Oct. 15th issue, Austerity Marketing.
Business Week’s Oct. 20th cover story is “The New Frugality,” with discussion about consumers returning to the savings ways of previous generations.
Advertising Age, it its Oct. 13 issue, features a story called “Ten things you can learn from ‘70s recession.”
That one has some interesting tips, although I’m not sure this economic downturn will be like the one in the ‘70s since that one had rampant inflation. We’re in a deflationary scenario right now, just look at petroleum prices with other commodities sure to follow them lower.
When people find money they thought they had in safe investments suddenly wiped out as is happening now, they spend less and prices have to fall to entice them to buy again. It will be interesting to see how far they fall before spending picks up.
Business Week economist James Cooper notes the recession we’re in now would need to run through April of next year to equal the two longest in post World War II history, those of 1973-75 and 1981-82. “At this point many forecasters think that’s not out of the question,” he writes.
The impact on marketing continues to be seen across the country. Gap Inc. has said publicly that it won’t buy any more TV advertising this year, looking at other media instead.
PepsiCo is reviewing all aspects of its soft drink brand marketing for such icons as Pepsi and Mountain Dew, planning to spend $1.2 billion in three years on new branding efforts. “It is our belief that especially in this economic downturn we should be investing in the category to get consumers to stay with, and some to return to, the packaged liquid refreshment beverage category and to our brands,” said Pepsi Chairman and CEO Indra Nooyi in a recent analysts’ call.
Which path should your company or organization follow? Keep reading our series, the next article appears in our Nov. 15 issue and looks at B-to-B austerity plans, and feel free to comment here or e-mail me at jfrank@ama.org to discuss or detail your plans.
