An Historical Look at Marketing Through Recessions from 1973 to Present. Presented to the Indianapolis Chapter of the American Marketing Association June 9, 2009.

1. Marketing Through a Recession Survival Tips From a Grizzled Veteran www.larsonassoc.com American Marketing Association June 9, 2009

2. “ In an ideal world, every company would enter a recession led by a team of grizzled veterans who could draw on their experiences of past downturns to guide it through the current one. Many companies don’t have grizzled veterans and even for those that do, it can be difficult to rise above the crisis to ponder the lessons of history. Yet in a recession, developing accurate strategic plans is usually a high-stakes effort.” Source: McKinsey & Company; Mapping Decline and Recovery Across Sectors, Winter, 2009

8. “ We are living in the worst economic conditions since the Great Depression.” This is fiction.

9. Economic Indicators Data as of June 9, 2009

10. Dow Jones Industrial Average - 1987

11. A Closer Look at DJIA 1987 Black Monday / Black Swan Event

12. Sure, economic conditions are tough today, but two-thirds of the US population have lived through tougher times, and we came out alright on the other end. The biggest difference between the current recessions and prior ones is that cable TV and Internet news coverage now encourages spreading of fear farther, faster than ever before.

13. “ We have nothing to fear but fear itself.” Franklin Delano Roosevelt – March 4, 1933 This is fact.

15. “ Consumers today, because of lack of confidence in the economic future, are spending less and saving more of their income. Well-planned promotion can increase sales by helping to overcome this propensity to save.” “ When consumers are reluctant to spend any money, they are unwilling to settle for products that do not precisely meet their need specifications. A firm must be more careful both in measuring the needs of the market and in designing products to serve these needs”. “ What is the role of marketing in a recession?” Journal of Marketing , April, 1975

17. GM Survey of Prospective Car Buyers “ If a company can ascertain concretely and in detail just what its buyers would like to have, if it can build its products in conformity with those desires and design its sales and advertising messages so that they will answer the questions that are uppermost in the minds of the motorist, obviously there will be continued improvement in the merchandising processes and a broadening of the service rendered.”

19. “ General Motors got into trouble when they thought they were in the business of making money, instead of the business of making cars.”

24. Basic Business Truth In a declining market, a company must increase its share-of-market just to maintain the status quo.

28. “ Challenge No. 1 for marketers, both in their own minds and dealing with their senior management, is to get over this culture of fear we’ve all been dealing with.” Source: Get your head in the game. Marketing News 02.28.09 AMA

33. Marketing Must Be Accountable for Increasing Revenue Profitably

36. Marketing P & L Statement Sales (Gross Revenues) (minus) Cost of Goods Sold (Direct labor, purchases, commissions) = Gross Margins (minus) Marketing Variable Expenses (e.g. Adv., promo.) = Marketing Contribution AKA Marketing Margin (minus) Fixed Costs & Overhead (G&A Expenses, Rent, Insurance) = Net Income Before Interest & Taxes

37. One Way to Measure ROI Marketing ROI = Marketing Contribution Marketing Variable Expenses Marketing Management (a pub of the AMA) has many excellent articles on Marketing ROI. AMA has also published a book Marketing ROI by James D. Lenskold © 2003

38. What Is Marketing?

39. What Is Marketing? Advertising Promotion Public Relations Events Web Site Click Through Rates Graphic Design Gross Rating Points Social Media

40. What Is Marketing? “ Marketing is a business discipline for obtaining and maintaining profitable customers”. Charlie Larson

41. Profitable Customers! Source: Prophet’s 2005 State of Marketing Survey CEO’s CMO’s

43. Marketing Is Behavioral Science

46. Who Needs A Strategy?

48. Building the Business & Putting Out Fires You are here X

49. Building the Business & Putting Out Fires You are here X You want to be: Here ? Here ? Here ?

50. Available Tactics Twitter Facebook Web 2.0 E-Mail Blasts Direct Mail Print Media Broadcast Media Consumer Generated Content Public Relations Events

51. Thinking Tactically You are here X You want to be here X Tactic Tactic Tactic Tactic Tactic

52. Thinking Strategically You are here X You want to be here X Road Map Strategy Tactic Tactic Tactic

53. Stimulus Experience Consider (options) Search (information) Choose (options) Buy Identify the customer behavior that needs to be modified at each stage of the Buying Process and the most appropriate contact programs to accomplish this. The Buying Process

54. Universal Marketing Planning Objectives Past Business Results Competitive Analysis Positioning Branding Tactics Strategy Road Map

56. “ Too many people concentrate on doing things right than on doing the right things.” Peter Drucker

61. Boston Consulting Group Portfolio High Brand Share Low Brand Share High Industry Growth Low Industry Growth Cash Cows (Milk Profits) Dead Dogs (Bury Business) Rising Stars (Invest Time & Money) Problem Children (Invest Time) Source: Boston Consulting Group

63. Strategy Example High Market Share Low Market Share High Market Growth Low Market Growth Attract entirely new customers. Attract customers from competitors. Have current customers buy more from you. Exit the business, invest in CD’s.

64. Brand Strategy Format Target Audience Description: Insights that describe the motivations that bring someone into your market in the first place: Examples: Coffee drinkers concerned about caffeine intake. Blue collar workers who travel the Midwest. New mothers concerned about what to feed their baby.

65. Brand Strategy Format Target Audience Description Current Thoughts & Behavior

66. Brand Strategy Format Target Audience Description Current Thoughts & Behavior Desired Thoughts & Behavior

67. The Brand Strategy Audience Description As a real person. Their needs and motives as they enter the market for your brand of service or product. Desired Thoughts and Behavior. What’s in It for Me? Why Should I Believe You? Brand Personality . Current Thoughts and Behavior.

70. Branding To Make Your Company More Valuable

71. What Is A Brand? “ A brand is an economic relationship between a buyer and seller based on a consistent experience with the product or service which meets or exceeds the buyer expectations. “ This relationship can be functional, emotional or both. “ The relationship is strengthened or weakened by every contact between the brand and the customer.” Charlie Larson

72. What Is A Brand? “ A brand is an intangible asset defined by the expectations people have about an entity. These expectations are developed over time by what the entity communicates and – more importantly – by what it does.” Eric Hutchinson – The Brand Consultancy

73. What Is A Brand? “ Your brand is the relationship between you and your target audiences that secures future earnings by securing preference and loyalty. A brand is the fusion of the emotional with the functional components of a product or service… Strong brands address an idea beyond the attributes and functional benefits.” Nick Russel - Interbrand

74. Experience = Relationship Expectations Common Brand Elements If the Experience is equal to, or greater than Expectations, you have a positive relationship. If the Experience is less than Expectations, you have a negative relationship.

75. Financial Reasons for Strong Brands A strong brand = A strong relationship with customers = Strong positive cash flow into the future.

76. Financial Brand Valuation

77. Internal Branding

78. “ Marketing is too important to leave to the marketing department. “ Everyone in the organization has to make decisions based on the impact on the customer.” David Packard – Co-Founder – Hewlett-Packard

85. “ Why have marketing? To make money.” © 1999

87. “ You are trying to move product and / or service. Period.” © 2003