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Now is Not the Time to Slash Your Marketing Budget

During the pandemic, many firms have slashed their marketing budgets. However, history shows that companies that bounced back the best from past recessions didn’t actually cut their marketing budgets, and in some cases they even increased their spending. So reports the Harvard Business Review

dollar 3706548 640 smallHowever, they did shift where they were spending their marketing dollars.

Many firms may be quick to slash R&D, but axing new product launches during recessions may be the wrong move. Research shows that products launched during a recession are more likely to survive long-term and produce higher revenues. That’s due, in part, to slimmer competition during recessions. The best time within that recession to launch a product is right after the mid-point, although that can be difficult to pinpoint.

Pricing is another area that can get firms into trouble. Firms sometimes increase their prices during recessions, only to have to reduce prices to appeal to price-sensitive consumers. And, this behavior causes firms to lose market share.

Lastly, firms that maintain or increase their advertising budgets during recessions can increase their share of voice.

Read the full article from the Harvard Business Review.

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