Growing Market Share
Recessions Create New Leaders
We’re learning in real-time how to take action amidst uncertain economic forces. Today’s situation is unlike any other we’ve seen.
At the same time, as marketers we can benefit from the perspective of recent (and not-so-recent) recessions to help inform our path forward.
During the subprime mortgage crisis, many brands were forced to make cuts. Those who grew market share following the recession were found to have reduced fixed assets and admin costs while increasing marketing and product development investments. Source: Malik PMS
The dot com bubble had several brands cutting marketing spend. Those making cuts dropped 0.8% in market share while those increasing spend grew 2.0% in share. Source: Malik PMS
Pizza Hut and Taco Bell took advantage of McDonald’s dropping their advertising and promotion budget. While McDonald’s sales dipped by 28%, Pizza Hut increased sales by 61% and Taco Bell sales grew by 40%. Source: Mastering Customer Value Management
Of 600 B2B firms analyzed, those who advertised aggressively grew 275% over those who did not. Source: McGraw-Hill Research
Toyota trailed Honda and Volkswagen. Despite financial pressure from the energy crisis, they resisted cutting ad budgets and adhered to their long-term strategy. By 1976 they surpassed Volkswagen as the top U.S. import car maker. Source: Knoema
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Companies who cut back advertising during these recessions lagged behind competitors who maintained their ad budgets. Source: Buchen Advertising
Companies continuing to advertise during the economic downturn were 20% ahead of where they had been before the recession. Companies that reduced advertising were still in the recession, 7% below their 1920 levels. Source: Harvard Business Review
Post was the cereal king. During the Great Depression, they cut advertising while rival Kellogg’s doubled its spend, investing heavily in radio. Kellogg’s launched Rice Krispies featuring Snap, Crackle and Pop, growing profits by 30% and claiming the category lead — a position it maintained for decades. Source: The New York Times
Look forward by looking back.
In a time when up is down and down is up, take a lesson here and there from brands that have gained where others have receded. The economic impact shares many parallels.
Read the other articles in this series:
1: Quarantined Customers & New Behaviors
2: What now? Postpone, Maintain or Double-Down on Marketing
3: Giving Instead of Giving Up
4: Recessions Create New Leaders5: What to do when ad spend must be cut
6: Pivoting through a Storm
7: Springboarding to the New Normal
8: Coming Back Stronger: A Marketer’s Guide for Recovery
Or skip the articles and get our entire strategy on how to grow market share during economic change. It’s free. It’s not even gated. Just be sure to tell us how you’re putting it to good use.