Marketing Strategies for Tough Times

Advertising Is An Investment

Quite often, nutraceutical industry companies not only look at advertising as an expense, but as something that is carried out for the sole purpose of immediate sales.

Advertising should be viewed as an investment rather than an expense. It is an investment not only for short-term sales gains, but also for achieving long-range goals and developing brand equity. Strong and consistent advertising reinforces favorable attitudes toward your company and its products, not only among customers but also among stakeholders and the other audiences you must influence.

In today’s supplement industry marketplace, advertising is often used to assist in reducing the overall cost of doing business. For example, the average cost of the business-to-business sales call has doubled since the start of this decade and, on average, each sale may require a minimum of five sales calls. If advertising can substitute for one or more of the personal sales calls, the effect can be accomplished for pennies on the dollar.

One would like to think the nutraceutical industry has a growing understanding and use of marketing concepts, and advertising is viewed as an integral part of the marketing mix rather than as an expense. If so, it is in the company’s best interest to develop and maintain an aggressive advertising policy, assuming it can expect a favorable result on sales and income.

Data shows there is a direct cause and effect of increasing or decreasing advertising during recessionary periods. The three basic premises are:

• Advertising creates power. Companies that invest more in advertising over a period of years experience faster growth than those that spend less.
• Advertising serves to revitalize. Companies that have increased their advertising during a recession have recovered more rapidly than their counterparts that have maintained or reduced advertising.
• Advertising increases the bottom line. Organizations that have continuously increased their advertising investment have enjoyed similar increases in sales.

In the 1979 book How Advertising in Recession Periods Affects Sales, the American Business Press stated that the findings of six recession studies presented formidable evidence that cutting advertising budgets in times of economic downturns can result in both immediate and long-term negative effects on sales and profit levels.

Coopers & Lybrand and Business Science International in a joint 1993 report concluded that companies that maintain aggressive marketing programs during a recession outperform businesses that rely more on cost-cutting measures. The report went on to say that a strong marketing program enables a firm to solidify its customer base, take business away from less aggressive competitors and position itself for future growth during the recovery.