Competing in a recession is like running a marathon. A smart frontrunner will seize the lead and work to increase it while others are flagging. If the other runners allow the gap to widen, it will be really tough for them to regain the lost ground when the pace picks up again. Speaking recently at the business roundtable for sustainable development in Lagos, Professor Enase Okonedo, dean of the Lagos Business School, explained that businesses must operate in a sustainable manner and engage their internal and external customers to ensure they understand their needs at all times, irrespective of the state of the general economy.
Bayo Ayeku (FCIS) president and chairman of Governing Council Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) at a media parley in Lagos recently said businesses must have a long term view of their operations in this period of the Covid-19 pandemic. He suggested that corporate governance principles which are transparency, fairness, responsibility and accountability can be used to reset businesses following the disruption occasioned by Covid-19.
For instance, many parties have faltered in their contractual agreements following the lockdown to slow the spread of the pandemic. Ayeku therefore said this is not time to for any party to raise the issue of technicality “but to find solutions because Covid-19 will end and we should not destroy the relationships. Parties should manage the relationship by coming to the table using the key of transparency and other principles of corporate governance.”
Let me expatiate further
The relationship between share of market and share of voice
Smart thinking brand managers that would like to be in the game for the long haul would find innovative way to keep talking and sharing relevant information useful to the brand users. The connection between share of market (SOM) and share of voice (SOV) has been proven. The higher your share of voice compared to your actual market share, the more likely your brand is to grow its market share in the subsequent year. So, if you increase your marketing investment at a time when competitors are reducing theirs, you should substantially increase the saliency of your brand.
This could help you establish an advantage that could be maintained for many years. According to the president, ICSAN, cost of business would go down in some areas while it would go up in others. Brand managers must therefore find a nice balance to ensure they remain in business and out run the hurricane.
The relationship between brand size and profit margins in a post-recession era
Because they benefit from scale, big brands enjoy an advantage over smaller ones in terms of attracting repeat purchase and recouping their marketing investments. Therefore, a brand that increases share during a recession stands to benefit from this multiplier once the economy rebounds. What is what considering is that if as a brand you shy away from investing and repositioning for the future when that future eventually arrives you would be in the past in the future.
Reduced “noise” during recession provides opportunities
A new product launch may actually have greater impact during a recession than at other times, for several reasons. A product that is unique or demonstrably better than others should be able to command a higher price, even among price conscious shoppers during a recession or sluggish economy. Competitors who are running scared may be late in countering a new product with their “me-too” offerings. And, because media costs are likely to be lower, advertisers should get more buzz for the naira spent.
These savings may be compounded by the relative ease of cutting through in a less cluttered atmosphere. A good example to illustrate this is a current campaign by The Entrepreneur focused radio station Jordan FM 105.5 FM which is currently offering varied discounts (up 30% ) to potential advertisers to lure them home to do more business with the station in the face of dwindling or dragging business. Advertising rates would go up when the economy gain momentum in the near future. So reduced noise during economic recession provides opportunity Do you know how to take advantage?
But in spite of all the evidence suggesting that economic recessions are a good time to market more aggressively, management teams need to judge each case on its individual merits. The best strategy for your brand — whether it is offense or defense — will depend on a number of things: the nature of your category, your category’s size, the inclinations of your customers, your brand’s strength relative to others, and, most important, the actions and reactions you expect from your competitors.
Speaking recently at the African Brand Congress in Lagos, Ugo Geri-Robert, executive director Kantar Nigeria, said as company budgets continue to be put under pressure, cost effective marketing solutions and best practice across board would allow marketers to get more from their corporate budgets, allowing them to continue to engage with consumers, to help ensure their companies and brands survive and outlive the recession and the pandemic.
Feel to share your perspective on this very interesting debate with me via any of the following channels. email@example.com/ + 234 802 311 7969 / + 234 809 023 5545 @michaelumogun.
Michael Umogun is the deputy registrar, Institute of Chartered Secretaries and Administrators of Nigeria.