Every manager in every company throughout the world has a different viewpoint on marketing. However, they tend to fall into two categories, the first believes that marketing is a benefit to their organisation and the second group believes that it is a cost only and is there to make things “look pretty”. Despite numerous historical failings, when times get tough financially it is usually the second group that is heard the loudest. So it is little surprise that as the cost-of-living crisis deepens, the calls to cut marketing increase. What is surprising though is the source of the most outspoken voices, the UK Government. And how are they going to spread the word?… BY MARKETING?!
No Really. In response to the cost of living crisis, the government is set to launch a campaign aimed at getting businesses to divert marketing spending into cutting prices.
The marketing campaign which will begin early this month (July), will seek to “amplify and channel” the efforts of brands looking to curb rising costs, encouraging other companies to follow suit, the BBC reports. It is thought businesses which agree to introduce cost-cutting measures will be able to add the campaign name and logo to their branding. The yet-to-be-announced slogan looks likely to promote a message of helping out in tough times, cutting prices for consumers using money brands “would otherwise use on marketing.”
Kellogg’s vs Post: Cereal Wars
Or how your business can come out of the cost of living crisis on top.
Across businesses, the first 2-3 months of the New Year are consistently difficult periods to attract new customers. Except for a few industries that thrive, it is largely down to the fact that consumers have spent their available disposable income over Christmas and New Year. However, pulling back on your marketing budget is possibly the worst thing a company can do, and why I want to motivate businesses by sharing a story with you.
In the late 1920’s, two companies—Kellogg’s and Post— were the dominant brands in the packaged cereal market. While it was still a relatively new market, ready-to-eat cereal itself had been around for decades, but Americans hadn’t seen it as a feasible alternative to oatmeal or cream of wheat until the Roarin’ 20s. So, when the Great Depression hit in 1929, no one knew what was going to happen to consumer demand, particularly within such a newly established market. Despite the belief of founder C.W. Post that advertising and aggressive marketing were the keys to a successful enterprise, his death prior to the Great Depression meant that Post did the predictable thing: It reined in expenses and cut back on advertising.
On the other end of the scale, their competitor Kelloggs doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies fronted by the now iconic trio of Snap, Crackle, and Pop. This meant that by 1933, even as the economy cratered, Kellogg’s profits had risen by almost 30 percent in four years and it had become what it remains today: The industry’s dominant player.
This is, perhaps, one of the most telling reasons why it is imperative to maintain your branding presence to stay on top of the food chain – literally. Kelloggs during this time bucked the trend where businesses struggled to stay open – let alone had the budget to market their products to people who largely did not have the money to buy them.
And while this is a condensed version of an important lesson taught in marketing classes around the globe, but tells a true tale of why maintaining your brand through various marketing initiatives is imperative, and why pulling back on your budget when times are hard, could actually mean never regaining that presence again, no matter how hard you try.