DOWNTIME OPPORTUNITY Showcasing and Media Advancement in Times of Subsidence Bucharest, 15 th of December 2008

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DOWNTIME OPPORTUNITY Marketing and Media Innovation in Times of Recession Bucharest, 15 th of December 2008. At the point when TIMES ARE GOOD, YOU SHOULD ADVERTISE… WHEN TIMES ARE BAD, YOU MUST ADVERTISE! . 4.3. 1.7. 0.6. - 0.8. 0.9. 0.6. Source: AMB, 2001. Source: PIMS database, 1999.

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DOWNTIME OPPORTUNITY Marketing and Media Innovation in Times of Recession Bucharest, 15 th of December 2008

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WHEN TIMES ARE GOOD, YOU SHOULD ADVERTISE… WHEN TIMES ARE BAD, YOU MUST ADVERTISE! 4.3 1.7 0.6 - 0.8 0.9 0.6 Source: AMB, 2001 Source: PIMS database, 1999 Businesses which had expanded their showcasing offer were, by and large, not essentially less gainful amid retreat (10% - 9% - 8%) Market share and benefits of those organizations that kept up or expanded market spend amid and after subsidence, exceeded the ones that cut back Maintaining 'share of brain' costs considerably less than reconstructing it later on Economic downturns compensate the forceful promoters and punish the shy ones

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High Star "development" Question stamp Product-showcase development Cash dairy animals "upkeep" or "gather" Dog "reap" or "strip" Low High Competitive position AND FOR THOSE ADVERTISERS THAT WANT TO OPTIMIZE THEIR A&P BUDGETS: ZERO BASED BUDGETING Source: BCG THE TRADITIONAL MARKETING BUDGETING PROCESS IS INCREMENTAL AND LACKS STRATEGIC PRIORITIES: It gives just restricted thought to the huge contrasts in A&P power and affectability among market fragments and nations It neglects to perceive the central decisions to be made among development, support, and collect procedures for every brand, section and nation Market share and the effect of A&P ventures on benefits are not measured, and, thus, share targets are not connected to A&P spending plans

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ZERO BASED BUDGETING CAN FREE-UP MORE THAN 20% OF YOUR A&P BUDGETS! F One FMCG's conveyance of A&P interests in brands as a rate of turnover 5 High 1 3 25 22 Illustration 17 Market development 2 4 6 22 19 17 Low Source: BCG investigation Strong Weak Contested Competitive position MANY COMPANIES DON'T OPTIMIZE THEIR PORTFOLIOS Investments in brands with a frail market position (boxes 1 and 2) are generally little and underneath the base venture level: little effect Investments in brands with a very aggressive and developing business sector (box 3) are likewise restricted: unexploited potential Investments in brands with a low-development yet profoundly focused market (box 4) are deficient, yet too high for a reap methodology Investments in brands with a main market position (boxes 5 and 6) are far in abundance of the level required for upkeep

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DOW JONES INDUSTRIAL AVERAGE RECESSIONS 7/81-11/82: Part 2 Of consecutive Recessions. Proceeded with tight financial arrangement to battle expansion. Twofold digit loan fees, taking off unemployment. 15,000 Nov. 21, 2008: Bear advertise intraday low of 7,449 11/73-3/75: Oil stun, vitality emergency. Staglation (expansion, monetary stagnation). "Whip expansion Now." The Great Depression, including the disastrous 1929-33 retreat and a profound 1937-38 subsidence The Great Depression, including the destructive 1929-33 retreat and a profound 1937-38 retreat 10,000 5,000 0 1930 1940 2000 1980 1990 1970 1960 1950 Source: Bloomberg WORST OF TIMES… …

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Key details for four mafor subsidence periods Source: AdAge DataCenter examine; IHS Global Insight; Group M; National Bureau of Economic Research

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THE AUTOMOTIVE INDUSTRY The Great Depression (1929-1932) Car deals ran down with 71% somewhere around 1929 and 1932! Advancements: Chevrolet offered its merchants $ 50 for each dangerous exchange they send to the junkyard; recoil the supply of second hand autos GM's Buick started a crusade to advance utilized upscale Buicks; processing plant support of utilized autos keeps up resale costs The Motor and Equipment Association began in 1930 an advertisement battle advancing repair and upkeep; extra income streams through upkeep and parts deals Chrysler presented in 1932 its least expensive auto ever, a $ 495 Plymouth; esteem for cash Other subsidences: Patriotic contributes later downturns; purchase nearby In 1981, GM and Ford began to offer sponsored auto advances to shoppers during an era that loan costs were surging (21%); defreeze credits

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FINANCIAL SERVICES The Great Depression (1929-1932) The Dow Jones Industrial Index dropped 89% between September 1929 and July 1932 More than 7600 banks fizzled in the US somewhere around 1930 and 1933 Innovations: The Federal Home Loan Bank, made in 1932 by Congress to bolster contract loaning, began a promotion battle in 1933 to energize purchaser getting Recession 1973-1975 Innovations: Congress made in 1974 the Individual Retirement Accounts (IRAS), urging specialists to assume more liability for their retirement accounts Discount agents happened, slicing stock-financier commissions (Charles Schwab) The Vanguard Group made the initially ordered common store in 1976 A Chicago grocery store chain spearheaded the idea of utilizing Visas to pay for basic needs in 1974

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CONSUMER PRODUCTS AND RETAILING The Great Depression (1929-1932) Real Consumer Spending fell with 29% somewhere around 1929 and 1933 Innovations: GE begins to offer coolers with a 4-year benefit contract arrangement (1930) General Foods started test showcasing a scope of solidified nourishments in 1930 Sears (retail) broadened in 1931 into accident protection, in 1932 presented what was adequately a platinum card (passbook investment account) Ward (retail) presented in 1934 an administration permitting list clients to shop by telephone Recession 1973-1975 Real Consumer Spending in 1974 fell with 0,8%, the greatest decay since 1946 Innovations: Frederick Smith propelled Federal Express in the midst of soaring fuel costs Bill Gates and Paul Allen began Microsoft in 1975 Miller propelled Miller Lite in 1975, the primary lower calorie brew to pick up acknowledgment among men

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MEDIA The Great Depression (1929-1932) US promotion spending dove 54% somewhere around 1929 and 1933 Innovations: Time Inc. propelled Fortune magazine in 1930 Crain jr. propelled Advertising Age in 1930 Esquire propelled in October 1933 Recession 1973-1975 Real advertisement spending fell 4.4% in 1974 and 4.3% in 1975 Innovations: Time Inc. propelled People magazine in 1974. Individuals is currently the nr. 1 magazine in number of promotion pages and incomes Recession 1980-1982 Real advertisement spend fell 3.7% in 1980 Innovations: Dawn of link: dispatch of CNN (1980), MTV (1981), Disney Channel (1983) Gannett propelled USA Today in 1982, now the biggest every day daily paper in the US

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ADVERTISING AGENCIES The Great Depression (1929-1932) Innovations: McCann and Erickson converged in 1930 Recession 1973-1975 Innovations: Buy low, offer high: Warren Buffet purchased more than 10% in Interpublic Group, furthermore a major stake in Ogilvy&Mather (1974) Recession 1980-1982 Innovations: Gaining scale: Saatchi&Saatchi obtained Compton Communications in 1982 for $ 57 million; Chiat/Day purchased Regis McKenna (Apple) in 1981