recession marketing a book

8/14/2019 Recession Marketing a Book

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INTRODUCTION

A recession is a general slowdown in economic activity over a sustained period of time, or a

business cycle contraction. During recessions, many macroeconomic indicators vary in a

similar way. Production as measured by Gross Domestic Product (GDP), employment,

investment spending, capacity utilization, household incomes and business profits all fall

during recessions.

What causes it?

An economy which grows over a period of time tends to slow down the growth as a part of

the normal economic cycle. An economy typically expands for 6-10 years and tends to go

into a recession for about six months to 2 years. A recession normally takes place when

consumers lose confidence in the growth of the economy and spend less. This leads to a

decreased demand for goods and services, which in turn leads to a decrease in production,

lay-offs and a sharp rise in unemployment. Investors spend less as they fear stocks values

will fall and thus stock markets fall on negative sentiment.

Stock markets & recession

The economy and the stock market are closely related. The stock markets reflect the

buoyancy of the economy. In the US, a recession is yet to be declared by the Bureau of

Economic Analysis, but investors are a worried lot. The Indian stock markets also crashed

due to a slowdown in the US economy. The Sensex crashed by nearly 13 per cent in just twotrading sessions in January. The markets bounced back after the US Fed cut interest rates.

However, stock prices are now at a low ebb in India with little cheer coming to investors.

Effects of recessions

Bankruptcies

Credit crunches

Deflation (or disinflation)

Foreclosures

Unemployment

People have hypothesized that its easier to start companies during downturns, because

labor, rent, and other resources are cheaper (in economic jargon, the opportunity costs are

lower). And there have been plenty of news articles talking about out-of-work professionals

going into business for themselves. But heres a slightly different questionis it easier to

start a successful company during a downturn? Not so obvious, is it? It might be easier to

start a company, but harder to start a successful one if the economy is weak. The following

table, based on the Fortune 500, shows what percentages of top companies wereincorporated during a recession.


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But as we move up to the most successful companiesthe ones at the top of the listthe

situation changes. Among the top 10 companies, a full 70% were started during recession

years. Lets look more closely at these top 10. This table includes the name of the company;

the date that they were incorporated into business (when two companies merged), whether

that was a recession year according to the Wikipedia listing; and then whether it was a

recession year, according to NBER dates, which are similar but not identical to the Wikipedia

listing.

The above data shows that for companies to be successful in the long term they have to

adjust to such periods of slowdown and come out to turn them in to an advantage rather

than treating them as just a challenge for survival. All the companies mentioned above

undertook strategies to counter the recession by expanding operations and introducing

newer brands in the market.


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The greatest slowdown to have hit the world since the great depression, the current

recession has led to rising unemployment and extreme drop in sales. As a result, businesses

typically cut costs, reduce prices and postpone new investments. The first area to bear the

brunt of cost-cutting in any organization is the marketing and advertising department.

Marketing expenditures in areas from communications to research are often slashed acrossthe board but such an indiscriminate cost cutting is a mistake. Although it is wise to

contain costs, overall long term performance can be jeopardized if the company fails to

support brands or examine core customers changing needs. Hence it is necessary to put

customers under the microscope and nimbly adjust strategies, tactics and product offerings

in response to shifting demands. In times of successful sales and rapid growth, marketers

forget that rising sales arent caused only by clever advertising and appealing products.

Consumers factors such as disposable income, feeling confident about their future, trusts in

businesses and economy and lifestyles that encourage consumption are the most

important factors that affect purchases.


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UNDERSTANDING CONSUMERS RECESSION PSYCHOLOGY

The wave of economic news is eroding confidence and buying power, driving consumers to

adjust their behaviour in fundamental and perhaps permanent ways. Spending in much of

the developed part of the world was based on a quicksand of debt and dwindling savings.

Marketers also abetted consumers in defining the good life in material terms, and urging

them to live beyond their means. As a result what consumers are now facing in the current

scenario are piles of bills, stagnant or falling incomes and shrinking value for their money.

Other factors such as failures in the financial, housing and insurance sectors; and taxpayer

bailouts of mismanaged businesses have also fuelled more distrust and scepticism to

marketers messages. These combined effects have created a profound challenge for

marketers, not only to survive during recession but rise and sustain considerable recovery

after the worst is over.

The first step in responding must be to understand the new customer segments that emerge

in a recession. Typically marketers segment according to demographics (over 40, or new

parent or middle income) or lifestyle (traditionalist or going green). However, in a

recession such segmentation may be less relevant. Marketers need to undergo a strong

exercise and segment their markets based on a psychological segmentation that takes into

account consumers emotional reactions to the economic environment. Marketers should

think of their consumers as falling into four groups:

1. Slam-on-the-brakes Segment: This segment feels the most vulnerable and thehardest hit financially. Although lower-income consumers typically fall into this

segment, anxious higher-income consumers can as well, particularly if health or

income circumstances change for the worse. They react to the market changes by

reducing all types of spending and by eliminating, postponing, decreasing or

substituting purchases

2. Pained-but-patient Segment: Pained-but-patientconsumers tend to be resilient andoptimistic about the long term but less confident about the prospects for recovery in

the near term or their ability to maintain their standard of living. Like slam-on-the-

brakes consumers, they economize in all areas, though less aggressively. Theyconstitute the largest segment and include the great majority of households

unscathed by unemployment, representing a wide range of income levels. As news

gets worse, pained-but-patient consumers increasingly migrate into the slam-on-the-

brakes segment.

3. Comfortably well-of segment: Consumers feel secure about their ability to ride outcurrent and future bumps in the economy. They consume at near-prerecession

levels, though now they tend to be a little more selective (and less conspicuous)

about their purchases. The segment consists primarily of people in the top 5%income bracket. It also includes those who are less wealthy but feel confident about


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the stability of their finances the comfortably retired, for example, or investors

who got out of the market early or had their money in low-risk investments such as

CDs.

4. Live-for-today segment: Carries on as usual and for the most part remainsunconcerned about savings. The consumers in this group respond to the recession

mainly by extending their timetables for making major purchases. Typically urban

and younger, they are more likely to rent than to own, and they spend on

experiences rather than stuff (with the exception of consumer electronics). Theyre

unlikely to change their consumption behavior unless they become unemployed.

Regardless of which group consumers belong to, they prioritize consumption by sorting

products and services into four categories:

Essentials are necessary for survival or perceived as central to well-being.

Treats are indulgences whose immediate purchase is considered justifiable.

Postponables are needed or desired items whose purchase can be reasonably put off

Expendables are perceived as unnecessary or unjustifiable.

Throughout a downturn all consumers, except those in the live-for-today typically re-

evaluate their consumption priorities. As priorities change, consumers may altogether

eliminate purchases in certain categories, such as household services (cleaning, lawn care,

snow removal), moving them from essentials to expendables. Or they may substitute

purchases in one category for purchases in another, e.g. Swapping dining out (a treat) for

cooking at home (an essential). Most consumers become more price-sensitive and less

brand loyal during recession, they can be expected to seek out favourite products and

brands at reduced prices or settle for less-preferred alternatives; e.g. choosing cheaper

private labels or switch from organic to non-organic foods.


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MANAGING MARKETING INVESTMENTS

During recessions its more important than ever to remember that loyal customers are the

primary, enduring source of cash flow and organic growth. Marketing isnt optional its a

good cost, essential to bringing in revenues from these key customers and others. Still,

company budget cuts often affect marketing disproportionately. Marketing communication

costs can be trimmed more quickly than production costs and without letting people go. In

managing their marketing expenses, however, businesses must take care to distinguish

between the necessary and the wasteful. Building and maintaining strong brands ones

that customers recognize and trust remains one of the best ways to reduce business risk.

The stock prices of companies with strong brands, such as Colgate-Palmolive and Johnson &

Johnson, have held up better in recessions than those of large consumer product companies

with less well-known brands. Surgically trimming the budget is easier to do during a

downturn than in prosperous times. Tough times provide an imperative to cut loose poor

performers and eliminate low-yield tactics. When survival is at stake, it is easier to get

companywide buy-in for revising marketing strategies and reallocating investments.

Managers can defy old mind-sets and creatively search for superior solutions to customer

needs instead of relying on the next line extension. The challenge is to make well-defended,

case-by-case recommendations about where to cut spending, where to hold it steady, and

even where to increase it.

Assess opportunities. Begin by performing triage on your brands and products or services.Determine which have poor survival prospects, which may suffer declining sales but can be

stabilized, and which are likely to flourish during the recession and afterward. Your strategic

opportunities during the downturn will strongly depend on which of the four segments your

core customers belong to and how they categorize your products or services. For example,

prospects are reasonably good for value-brand essentials sold to slam-on-the-brakes

consumers, who will forgo premium brands in favor of lower prices. Value brands can also

effectively reach out to pained-but-patient consumers who previously bought higher-end

brands, a strategy Wal-Mart aggressively used with its everyday low prices policy in the

2001 recession. Value brands have opportunities with postponable products, as well. Repairservices can market to the pained-but-patient group, who will try to prolong the life of a

refrigerator rather than buy a new one. Where the business opportunities are uncertain or

declining, it may be time to part with brands or products that were ailing prior to the

recession and are on life support now. For those that remain, companies should concentrate

their marketing resources on maintaining relevance to core customers in order to sustain

brands through the recession and into the recovery.

Allocate for the long term. When sales start to decline, companies shouldnt panic and alter

a brands fundamental proposition or positioning. For instance, marketers catering tomiddle- or upper-income consumers in the pained-but-patient segment may be tempted to


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move down- market. This could confuse and alienate loyal customers; it could also provoke

stiff resistance from competitors whose operations are geared to a low-cost strategy and

who have intimate knowledge of cost-conscious customers. Marketers that drift away from

their established base may attract some new customers in the near term but find

themselves in a weaker position when the recession ends. Their best course is to stabilizethe brand. Even cash-poor firms would be wise to commit a substantial portion of their

marketing resources to reinforcing the core brand proposition. Reminding consumers of

how the brand matters can add to the cushion provided by previous investments in building

the brand and customer satisfaction. De Beers came to this realization aft er it reduced its

U.S. marketing budget early in 2008 in response to the grim economic outlook. When

research revealed that diamonds represent enduring value to a majority of consumers, the

company doubled its Christmas advertising spending over the previous years. Brand-

awareness ads in several media proclaimed, Heres to less, and enjoined us to buy fewer,

better things because a diamond is forever. Although Christmas sales in the United Statessoftened compared with the previous years, prices were stable and trends in consumers

desire to buy diamonds remained healthy.

When opportunities are stable or uncertain (but leaning toward stable), firms should push

their advantage. In past downturns, consumer goods companies that were able to increase

share of voice by maintaining or increasing their advertising spending captured market

share from weaker rivals. Whats more, they did it at lower cost than when times were

good. On average, increases in marketing spending during a recession have boosted

financial performance throughout the year following the recession. (Of course, not all

increases have raised performance. Therefore, especially in the current, deep recession,

resources should be judiciously targeted to viable business opportunities.) Firms with deep

pockets can make cost effective acquisitions that strengthen their brand portfolio or

customer base. In the 2001 downturn, Smuckers acquired the Jif and Crisco brands from

Procter & Gamble. These brands were too small for P&G and not in any of its core

categories, but they proved to be a good strategic fit for Smuckers. In the current recession,

Smuckers is acquiring another such brand from P&G Folgers. Though it does not meet

P&Gs margin targets, with renewed marketing attention it has the potential to be an

important source of future sales for Smuckers. In deciding which marketing tactics to

employ, its critical to track how customers are reassessing priorities, reallocating budgets,

switching among brands and product categories, and redefining value. Its therefore

essential to continue investing in market research. As the recession winds down, consumers

will regain buying capacity but possibly will not return to their old purchasing patterns.

Market research should explore whether consumers will go back to familiar brands and

products, stay with substitute products, or welcome innovations.

In recessions, marketers have to stay flexible, adjusting their strategies and tactics on the

assumption of a long, difficult slump and yet be able to respond quickly to the upturn when


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it comes. This means, for example, having a pipeline of innovations ready to roll out on short

notice. Most consumers will be ready to try a variety of new products once the economy

improves. Companies that wait until the economy is in full recovery to ramp up will be at

the mercy of better-prepared competitors. Even during a recession, new products have an

important place. Live-for-today customers, with their undiminished appetite for goods andexperiences, oft en appreciate novelty. And the other segments will embrace new products

that offer clear value compared with alternatives. Because new-product activity slows in

recessions overall, launches can economically gain visibility. In 2001, for example, Procter &

Gambles successful introduction of the Swiffer WetJet established a new product category

that eased the chore of mopping floors and weaned consumers away from cheaper

alternatives.

Balance the communications budget. During recessions cash-strapped marketing

departments are under pressure to do more with less and demonstrate high returns oninvestment. Typically, the share of the advertising budget devoted to broadcast media

shrinks, whereas the share that goes toward efforts with more-measurable results, such as

direct marketing campaigns and online ads, grows. Point-of-purchase marketingpromoting

price cuts or generating in-store excitementalso tends to pick up during recessions.

Internet advertising in particular is targeted and relatively cheap, and its performance is

easily measured. Despite a deepening recession, marketers spent 14% more on online ads

over the first three quarters of 2008 than they did over the same time frame in the previous

year. Another factor driving this growth in digital-ad spending is consumers migration to

online social media such as MySpace, Facebook, and LinkedIn, which help people intensify

networking efforts amid layoffs and a tough job market. The new-member sign-up rate at

LinkedIn, a site that focuses on professional networking, has doubled in the past year. That

said, broadcast media still remain important for building mass-market consumer brands.

Although strong brands can be carried for a period on the momentum of previous brand-

building investments, no brand can afford to coast solely on earlier efforts. Brands that are

out of sight on the television screen will sooner or later be out of mind for a large

percentage of consumers. Indeed, while advertising in newspapers and magazines and on

radio and local television all declined in 2008, advertising on the four national broadcast

television networks in the United States remained steady.


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ADVERTISING: AN ANTI-RECESSION TOOL

When the American arm of Hyundai, a South Korean carmaker, said that it was worried

about the economy and may cancel its plans to advertise in the Super Bowl, American

football's grand finale, on February 3rd last year, the advertising and media industries

shuddered. Marketing spending is one of the first things companies decide to cut when

faced with slowing sales. Suddenly a recession in ad-spending seemed imminent.

This data makes the company believe that ad spend does not give enough returns for the

amount spent on it, so the first thing in a slowdown is to cut the advertising budget. But in

this data the long term impact of advertising is not quantified.

The explanation is generally based on share of voice. In a recession, some brands reduce ad

spend, which can allow those brands which dont cut to steal market share from those

which do. There are probably more subjective elements too: in a recession, advertised

brands may appear to consumers as safer, more aspirational choices. But ultimately the

main factor seems to be whether or not a brand is being advertised more than its

competitors. Of course this suggests success is not just about being brave and maintainingbudgets in a recession. It also requires that at least some competitors arent so bold and are


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cutting back. There are additional factors at work in a recession. For a start, advertising

(especially TV) becomes cheaper due to reduced demand. So the same money buys more

media. Consumers reining in their spending also tend to stay at home more so the TV

audiences available to advertisers can go up. These trends allow brave advertisers to get

better value for their media ad spends. The long term effect of advertising (which oftencomprises up to 80 per cent of the total effect of ad spend) and its duration can be a

significant determinant of sales not only during the recession but for some time afterwards.

To demonstrate this, Figure shows the sales generated by advertising under three different

scenarios:

1. Maintaining ad budgets.2. Cutting budgets by 50 per cent for one year.3. Axing budgets by 100 per cent for one year.

In the latter two, scenarios we assume the brand in question returns to spending a normalbudget in the year after the cut. The result on sales directly attributable to the companys

decision to stop advertising altogether for one year and then returning to normal weights

after this, it takes three-four years to get back to the sales level where the brand would

have been had its ad budgets been maintained.

Even cutting budgets by 50 per cent for a year takes two years to recover fully (as shown by

the middle line in Figure). This is one explanation why those brands not cutting budgets

during a recession seem to benefit for two to three years after the recession is over: rival

brands that did reduce spends will take time to get back to their pre-recession levels.

Looking at this another way, if ad spend is cut during a recession; it has to be increased

during recovery to get back to pre-recession sales levels quickly.

The crunch is that for the example in Figure the increased spend required during the

recovery just to get back to pre-recession sales levels within a year will have to be around 60

per cent higher than the amount saved by cutting the ad budget in the first place. And this,

of course, assumes that the lost consumers can be won back easily. From a financial point of

view it would seem the only justification for cutting advertising spends in a recession would

be if a company needed the cash flow earmarked for advertising. Otherwise, the figures

simply do not justify the cut in the ad spend.

Value, value, value

Ultimately, there may be no choice for a company, and marketing budgets may have to be

cut for a business to survive on reduced revenues. It may be decided that profits have to be

shored up during the recession by reducing expenditure, even in the knowledge that future

profits will be hit during the recovery if the brand has to spend more to claw back lost

ground. Before swinging the knife, marketing teams should investigate whether they can

make current budgets work harder in a way which would allow them to reduce outlays

without experiencing a drop in sales. For advertising there are many alternatives to

investigate: from quality viewing (buying media time within more relevant programmes) to


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more efficient budget allocation and improvement of advertising creative. Some of these

could more than compensate for fairly sizeable budget cuts. However, if cuts have to be

made, the question then becomes which expenditure adds the least value? This is possibly

what drives companies to reduce their advertising expenditure - simply because they do not

understand its full value and especially as it is usually the single biggest investment on thebalance sheet. The temptation to switch to greater use of promotions, which could generate

a visible short term increase in sales, may be too strong. But there is evidence that even

promotions rarely achieve a positive ROI (for the manufacturer) so understanding the brand

and how effective its different marketing spends are is crucial for responding quickly when

the recession bites. Then the expenditure stream that adds the least value can be reduced

first. For most brands, however, that would not be advertising.

Facts which substantiate the importance of advertising in recession:

1970 recession year American Business Press (ABP) and Meldrum & Fewsmith

study showed that sales and profits can be maintained and increased in recession

years and [in the years] immediately following by those who are willing to maintain

an aggressive marketing posture, while others adopt the philosophy of cutting back

on promotional efforts when sales appear to be harder to get.

1974-1975 recession years ABP/Meldurm & Fewsmith 1979 study covering

1974/1975 and its post-recession years found that Companies which did not cut

marketing expenditures experienced higher sales and net income during those two

years and the two years following than those companies which cut in either or both

recession years.

1981-1982 recession years -- McGraw-Hill Researchs Laboratory of Advertising

Performance studied recessions in the United States. Following the 1981-1982

recessions, it analyzed the performance of some 600 industrial companies during

that economic downturn. It found that business-to-business firms that maintained

or increased their marketing expenditures during the 1981-1982 recession averaged

significantly higher sales growth both during the recession and for the followingthree years than those which eliminated or decreased marketing.


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Cahners and Strategic Planning Institute (SPI) produced their report, Media

Advertising when your market is in a Recession. It disclosed, During a recessionary

period, average businesses do experience a slightly lower rate of return relative to

normal times. However, expansion times do not generate a higher level of profits

than normal periods as might be expected. This phenomenon was explained by ananalysis of changes in market share. During recessionary periods, said the

Cahners/SPI report, these businesses tended to gain a greater share of market. The

underlying reason is that competitors, especially smaller marginal ones, are less

willing or able to defend against the aggressive firms. The study then pointed out

that businesses that increased media advertising expenditures during the

recessionary period gained an average of 1.5 points of market share.

Media Ad Expenditure Impact on Market Share

Average Point Change

1990-1991 recession years Management Reviewasked AMA member firms about

spending during the 1990-1991 recession. Fortune follows the brave, it

announced, noting that the data showed that most firms that raised their marketing

budgets enjoyed gains in market share. Among the magazines sample, 15 percent

reported greatly decreased ad budgets. Advertising was somewhat cut by 29

percent. The keys to gaining market share in a recession, concluded ManagementReview seem to be spending money and adding to staff. Firms that increased their

budgets and took on new people were twice as likely to pick up market share.

Profit Impact of Marketing Strategy (PIMS) Study

In 1999, PIMS conducted a study of 183 UK-based companies that compared advertising

spend during recessions to share and profit gains during recovery those that spent in

recession did better afterward than those that did not.


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Beyond the statistics, why it may be more important than ever to market despite

economic downturn: Strong consideration should be given to the idea that marketing plays

a more critical role now than it did during previous recessions. While marketings role was

once more informational than brand identity building, and considering that never more than

today has the clutter factor been so great, relationships between customers and brands are

critical.

Evolving role of marketing over the period:

Relationship marketing has surged to the top of effective marketing campaigns as a

means to keep an appropriate level of share of mind for purchase loyalty. Marketingserves to foster and maintain consumer-brand relationships.

The effect on profits - From the Harvard Business Review, Advertising as an

antirecession tool, come the effects of cutting advertising on the bottom line. The

rationale that a company can afford a cutback in advertising because everybody else

is cutting back [is fallacious]. Rather than wait for business to return to normal, top

executives should cash in on the opportunity that the rival companies are creating

for them. The company courageous enough to stay in the fight when everyone else is

playing safe can bring about a dramatic change in market position. In addition, the

article points out Advertising should be regarded not as a drain on profits but as a

INFORMATIONALBRAND AND

RELATIONSHIPBUILDING


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contributor to profits, not as an unavoidable expense but as a means of achieving

objectives. Ad budgets should be related to the companys goals instead of to last

years sales or to next years promises.

OPPORTUNITY MATRIX

By combining two dimensions of brand equity at the onset of the recession and

brand investments in the recession, we get four scenarios.

1. Brand Equity (High), Reduction in brand investments: High Loss Potential

2. Brand Equity (High), No reduction/increase in brand investments: Recession is

opportunity

3. Brand Equity (Low), Reduction in brand investments: Survival game

4. Brand Equity (Low), No reduction/increase in brand investments: Double or

nothing

Brands in cell (1) run the distinct danger that their equity will be significantly eroded

in the current recession. They start from a favorable position, but their behavior will

lead to a significant weakening of their position by the competition from private

labels and the brands in cell (2). Managerial decision-making for these brands is

overly cautious and focused on the short-term. These brands should emphasize

activities that keep their customers satisfied (and, hence, retain them), rather than

focus on cost-saving activities. Indeed, customers lost during the recession may

never come back, even when the economys outlook improves again.

BRAND

EQUITY

HIGH

LOW

HIGHLOW

SURVIVAL

GAME

RECESSION

Opportunity

DOUBLE OR

NOTHING

HIGH LOSS

POTENTIAL

BRAND

INVESTMENENTS


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For brands in cell (2), the recession is an opportunity to pull ahead of their short-

sighted competitors in cell (1). Their proactive behavior will strengthen their

(relative) position, not only in the recession period, but also in subsequent years.

Brands in cell (3) are in the worst possible situation: they start weak, and their

management makes the wrong decisions. They are prime candidates to be de-listedby retailers who are pushing their private labels in recessions and many of them

will. Their brand equity will decline, and many will not even survive the recession

The brands in cell (4) have the opportunity of a lifetime to fight back. They start in an

unfavorable position their equity is low and, in normal times, it would take

tremendous marketing investments to break through the competitive clutter.

However, given that most brands cut back in recessions and, hence, belong to cells

(1) and (3), brands in cell (4) are able to increase their share of total market

communication in the category dramatically by maintaining or even better

increasing their marketing investments. But it is a risky strategy if it is poorly

executed, the anticipated increase in sales and profits will not materialize and the

brand may be discontinued.

Conclusion: Just as slumps in the stock market offer great opportunities for courageous

investors, slumps in the real economy offer great opportunities to courageous managers. All

evidence indicates that a proactive strategy is associated with increased brand success and

shareholder value. If you wait till the good times come back, you ignore the advice given by

the legendary ice hockey player Wayne Gretzky: I skate to where the puck is going to be,

not to where it has been. Recessions are not for the faint -hearted but who said that fair

weather makes great managers?


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DIGITAL AND INTERNET MARKETING

Some traditional media only make sense if you have sufficient funds to run the media

enough times to reach a certain threshold level. It requires enough funds so the

production-to-media expenditure ratio stays sufficiently low. However, some digital options

such as search marketing can be used at virtually any scale and budget; effectiveness is

not dependent upon threshold levels. Search terms, which generate leads to your site, can

be bought as single words or thousands of words. They can be bought for a day, a week, a

month or whatever intervals you choose. They can be bought immediately around key

events or special promotions. Even small businesses can buy search terms. And the key is

that you only pay for results (when someone clicks on to your site). So there is a direct

correlation of spend and return, with no production costs involved.

Creative pre-testing: More companies are realizing that they can use the instant feedback of

the Web-to-Test ideas including for non-digital material. Web-based testing can be overt,

in the form of asking for consumer feedback or it can be covert, by simply looking at the

data related to consumer usage patterns to determine which material performs best.

Competitive monitoring: The last point is a reminder that even during the tough times, your

competitors arent sleeping. In fact, they like you are probably considering new and

better options. During tough times, its important to monitor their activities. Where theyare, outdo them. Where they arent, fill the void (if its cost-effective and makes sense for

WEB Based testing

COVERT

Techniques

OVERT

Techniques

Feedback by looking at thedata related to consumer usage

patterns to determine which

material performs best

Feedback by asking theconsumers


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you). When they stumble, pounce on the opportunity with better offers, better information

and better options punishing them by swaying consumers away from them. Doing some

simple online monitoring will help you know what they are doing and what consumers are

currently saying about your competition.

The next digital difference to note is the benefit of digital channels relative to data and

interactivity. Data is both the fuel and the byproduct of digital marketing. It is the fuel

because you generally need some data (email or website addresses, opt-in permission, etc.)

to enable your digital marketing efforts, such as sending out emails. Most companies these

days already have some of that data. At the same time, every interaction with consumers

generates data; it is the natural byproduct of digital marketing. As noted in the previous

point, a lot of this data (on site traffic, etc.) can be used for measuring and improving your

digital marketing. Digital marketing can also generate a great deal of personal user data that

has value. In fact, this is data that often costs money when it comes from third-partysources. So smart activities can yield real benefits. Beyond user data, you can also gather

user opinions, views and insights.

Nowadays, brands are looking for more innovative ways to attract customers whether be

it increasing brand awareness, acquiring users, promoting new products or simply tapping

into a new segment. India being the biggest untapped and fastest growing online market in

the world - brands are more than happy to explore this space and use their money

intelligently. Brands do not seem to be reducing their advertising investment; instead they

are investing money in the right media vehicles. They are weighing all the options and

maximizing returns. With the Indian Web space packaging a mix of both online and offline

advertising solutions, brands want every pennys worth at this tim e of recession. The Indian

online space is booming with new and innovative websites/portals. Economic woes are not

expected to spell disaster for the Internet advertising industry due to a few key factors that

will create spending buoyancy.

Measurability with better

understanding of the audience

More effective ad placements

Better targeting

Wooing audiences through

video advertising and reaching

that vital audience following

eyeballs.


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According to a recent poll by marketing consultancy firm R3 of at least 50 marketers who

manage around 100 of Asias top 500 brands, 25% are planning on reducing theirexpenditures.R3 however also says that at least 40% of Indian marketers said they were

going to spend more than originally planned on digital media, direct media and promotions.

Digital marketing is beginning to pay off for automakers since it allows them access to urban

well to do families and a recent article in Economic Times points out the payoffs from

internet marketing for cars

Maruti claims over a lakh cars it sold last year originated from digital marketing

initiativesTata Motors saw 4,000 customers booking its low-cost car Nano over the internet.

Around 17-18 % of Maruti's sales now are estimated to originate from digital

marketing from mere 2-3 % in 2005

Internet is responsible for 5% of Hondas total sales in India.

Tata Motors dedicated website on Nano got a little over 30-million hits from the

date of launch of the car to the closure of the booking.

Digital channels can indeed drive sales. One mobile phone handset company in Asia saw

50% of sales coming directly from digital, while only 21% of their marketing money for thephone model actually went to digital channels. Mobile based marketing is a part of digital

marketing which has come up as an innovative way to market in recession as every penny

spend is very important. HSBC conducted a mobile-based promotion with High Networth

Individuals (HNIs) at international airports departure lounges, offering them applications

that would be useful in the country they were travelling tosuch as tips on communicating

better in the new language or locating a bank branch. According to Vinod Thadani, regional

head, mobile, Group M, South Asia, which conducted the campaign for HSBC, a valid

database of 14,000 was generated of which almost 30% was converted.


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Affiliate marketing is another technique to consider when you want fast, efficient activity. In

affiliate marketing, another advertiser posts your material on their (existing) website. When

people click onto your site from theirs, you pay them an agreed amount per lead, just as you

do with search terms. Software can manage this transaction, so this relationship or

multiple relationships can be managed efficiently. Simple, existing material can be used inaffiliate marketing.

Leveraging social networking sites

Social networks, such as Facebook, and a variety of other language equivalents, are now

also aggregating large audiences. These sites present the potential for brands to cost-

effectively reach very large audiences, often with little/ no costs associated. In marketing

through social networks, you can possibly re-purpose or produce very low-cost

communications material. As with video distribution, penetrating social networks requires aclear strategy.

SPRITEs latest campaign launched online before hitting TV

Coca Cola India is launching its latest campaign for Sprite, the second-largest selling

carbonated drink in India, on the Internet. This is the first time the cola major is breaking a

campaign for one of its brands online, giving TV a miss. This campaign is being done at

Network18's In.com site. Breaking this campaign online before hitting TV is a major

achievement and highlights why TV18 group seems most likely to emerge as India's best

organized online entity. The new campaign will see Sprite building on its Seedhi baat no

bakwaas proposition, with communication around Fridge Mein Jayega Bade Kaam Ayega for

the 1.25-litre fridge pack. For instance, the online contest will bring in interactivity as

internet users view eight seconds of the Sprite commercial and will have to complete the

rest. The first six participants who guess the ending would win Nokia multimedia phones.

The interesting point is that for the two days that the campaign is being aired online, Coca

Cola expects close to 4 million page views. This type of activity results in effective

advertising to millions of people and spend on it is very less as compared to other traditional

forms of advertising.

Trends in print advertising

This is an economic downturn and there is a sharp drop in marketing and advertising

budgets of various companies but this slowdown has caused some people to innovate and

adopt new strategies and approaches to traditional print advertising.

1. While there may not be a substantial drop in ad rates, media houses are throwing infreebies and value-adds for consumers without changing the rack rate (officially

quoted maximum rates), resulting in an effective drop in ad rates which results in anoverall discount up to 10-20% through various routes.


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2. Big Bang Approach: There is a rise in new trendthat of going for big bang ads running full-page

ads, front-page flaps and cover jackets in

newspapers and magazines. In a twist of

selective scheduling, some advertisers are

looking at cutting down on frequency and

duration of the ad campaigns and instead

running a few big ads during select periods.

3. Another interesting trend is in categories suchas consumer products that are choosing to

advertise in bursts at the beginning and end of the month, which may coincide withconsumer buying patterns, as opposed to running the campaign throughout the

month.

4. Another trend is the equality in ad rates for national clients and retail (local) clients,traditionally retail rates are 40-50% lower than regular rates as they are applicable to

local businesses which may want their ads to appear only in a local edition. National

brands these days are, however, striking rates closer to retail rates for national

release.

Trends in television advertising

Due to the current slowdown there has been

substantial planning in TV ads to avoid

wastage. As the economic slowdown deepens

advertisers are trying to optimize their ad

spending by moving to targeted channels

known as frequency builders because they

offer advertisers the scope to air their ads at a

much higher frequency to select audiences.Ad rates on general entertainment channels

are around 10 times those on channels

targeted at select audiences. Multiple airing of

an ad on a targeted platform would be much

cheaper than a single airing on an

entertainment channel.

Selective Scheduling

Big bang ads running full page ads,front page flaps and cover jackets

in newspapers and magazines

BIG BANG APPROACH


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WAYS TO RECESSION MARKETING

As explained before, the classification of customers and classification of consumers

according to priorities by sorting products and services in the section Understanding

Recession Psychology; the ways in which in which marketing could be done in recession is

different for different groups of consumers and different for different products and

services. This could be well summarized with the following table: -


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Some of the ways which companies could follow at the time of recession are: -

1. Increase the advertising budget. Increasing spending increases a companys share ofvoice. If your competitors cut back, your message has the chance to grow stronger.

2.

Utilize sponsorships. This type of awareness advertising and promotion gives abusiness valuable exposure to targeted, core audiences.

3. Stay in contact with loyal customers. Keep in touch and let them know what youhave to offer.

4. Product introductions. Dont hesitate to introduce well-conceived and properlymarketed new products when the competition is weak.

5. Sustain awareness. Advertising works cumulativelyremind people frequently aboutyour brand or theyll forget you.

6. Dont cheapen your advertising. Trying to save on creative or production costs canbe a kiss of death, and customers will notice.

7. Enhance product and company publicity. Maintain a media presence with a smart,effective, ongoing public relations program. Strengthening relationships with key

media will provide long-term financial benefits.

8. Be more aggressive in marketing your products so that you become the choice forconsumers even in the tough times of the consumers.

9. Start sponsoring. This type of awareness advertising gives your business valuableexposure to targeted, core audiences.

10.Maintain continuity to sustain awareness. Advertising works cumulatively so youhave to remind people frequently about your brand or they'll forget you.

11.Step up public relations efforts. Be sure to maintain a media presence with smart,effective PR programs.

12.Keep an eye on the competition and dont panic.13.Concentrate on your core brands and products.14.Dont price promote unless you can cut costs or live with lower margins.15.Dont cut on the quality of your products for cost-cutting because this could hamper

your brand image and if known by the consumers would result in loss of sales of your

product.

16.Focus o perfect segmentation of the market and positioning of the brand.17.Make your creative work harder.18.Review on the budget allocation of your product basket.19.Have a more effective communication with the customers for retaining them.20.Spend more on media dollars, less on overheads. Need in the recession is to focus on

your current results rather going for long-term results.

21.Use digital marketing software tools for finding whether or not the particularadvertisement would give the desired results, even before implementation, which in

a way helps in reducing cost. Some of the tools to measure results are: -


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Ad Server for Advertisers.

Ad Server for Publishers.

Web Analytics.

e-Mail Marketing.

Mobile Analytics.

Mobile Ad Server.

Web Server Statistics.

e-Survey Systems.

Feedback Systems.


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MARUTI-SUZUKI: AN AUTOMOTIVE MASTERSTROKE

Maruti Suzuki is an example of the automobile sector, which lies in the one of the

badly hit sectors during the time of recession. This sector goods and services lied

under the groups of Postponables as explained in the classification of goods.

The automobile sector has been divided in four major segments:-

1. Economy.2. Mid-range.3. Premium.4. Luxury.It caters more to the urban population of India, directly linked to disposable income.

In this sector, the critical success factor has changed from price to price-value.

Maruti Suzuki is one of India's leading automobile manufacturers and the market

leader in the car segment, both in terms of volume of vehicles sold and revenue

earneda peoples car for the middle class India.

Until recently, 18.28% owned by the Indian government, and on May 10, 2007, it

sold its complete share to Indian financial institutions.

The parent company is a globally renowned for its mini and compact cars for three

decades, its technical superiority, power and performance into a compact,

lightweight engine that is clean and fuel efficient.

Maruti has been labelled as an employer of choice for automotive engineers and

young managers.

The company vouches for customer satisfaction.


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Sales of MARUTI-SUZUKI after implementation of their marketing strategies during the

times of recession till and in July: -

Analysis of sales data:

Severe impact on A1 segment car (Maruti)as shift of customers to newer brands and

cars which give them similar facilities and

are new in the market at similar prices;

No impact on C and A2 segment cars with

new implementation of strategies and

getting more and more new cars in the

segment for getting customers go for

something new.

Though not completely unaffected by theslowdown (the market leader posted a

decrease in sales for all three months in the last quarter), in January 2009, Maruti

Suzuki bucked the trend and reported a 5.59% increase in domestic sales.

A closer look at their figures reveal that their recent additions to the A3 segment

(Dzire and SX4) is what is making the numbers look so cool. The segment saw a two-

fold growth, selling 6,590 units (even higher than their cash cow Maruti 800) as

against 2,939 units in the same month last year.

High sales seen due to the marketing strategy implemented by the company in the

A3 segment cars.


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SX4 was launched in May 2007 and DZire in March 2008.Both the cars are runaway

success ever since they have been launched in India and they have kept the A3

segment unaffected.

Overall, recession has not adversely impacted the passenger car segment.


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VODAFONE: GO THE ZOO-ZOO WAY

One of the best campaigns seen so far is the Vodafone's ZooZoo campaign. Never in

the history of Indian advertising, had we witnessed a campaign that generated so

much interest and curiosity among all the segments of the society, be it young or

old. So much has been written about ZooZoo in various media.

ZooZoo was created to promote the value added services (VAS) of Vodafone.Vodafone was trying hard to capture the VAS space because it is a potential cash

cow for cellular companies.

Vodafone also wanted to make the most of the IPL Season2. Although IPL is a crowd

puller, it is also a marketer's nightmare because of the clutter. IPL attracts all the

deep pocket advertisers and to standout, one needs to think out of the box.

Thus ZooZoo was born. ZooZoo is a semi alien semi-human character living in an

earth-like place (lot of which is left to the viewer's imagination).These are very

simple beings who are very expressive. They laugh aloud, cry loud and have a child

like simplicity around them. Thus have an emotional and personal attachment with

all the consumers.

The success of ZooZoo is the success of minimalism and simplicity. Although the

production process of ZooZoo ads are not simple, as a consumer I was attracted to

the simplicity of the concept and the execution. ZooZoo also highlights the power of

storytelling. Each ad tells a very simple story. After all brands are made throughstory telling.


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Another factor that aided the success of

ZooZoo is the scale of the campaign. Reports suggest

that there are around 25 different ads of ZooZoo to

be aired during this IPL season. This unprecedented

scale has kept the curiosity high among the viewers. Ithas infact dwarfed all the other advertisers in this

season.

There is lot of risk being taken behind this

campaign. The Vodafone managers who okayed this

campaign may have risked their jobs to bring out such

a massive campaign.

The agency also risked their credibility. One

should appreciate the creative talent of O&M and

Nirvana Films who proved that Indian Advertising has

come of age.

Vodafone has taken ZooZoo beyond advertising.

The fan club in the facebook page of ZooZoo has already touched 316,572 and

counting.

All these has transformed into a great viral movement. There are already a plethora

of mail forwards and blogposts celebrating ZooZoo.


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ZooZoo is a great marketing story. Vodafone has benefitted immensely by this

campaign. It caught the attention and fancy of the consumers, aroused curiosity, told

stories and made people retell the story.

Marketing Guru Seth Godin always emphasized that Brands should be

Remarkable. He defined remarkable as "Worthy of Making a Remark

about "

The ZooZoo is a classic example of being Remarkable.

Sales of VODAFONE after implementation of their marketing strategies during the times of

recession of the month of June 30, 2009: -

Vodafone reported an increase of 23 percent in revenue at constant exchange rates, and 33

percent,taking into account exchange rate fluctuations. The revenues included a 7 percent

benefit of revenue from their stake in Indus Towers.

Data revenues for Vodafone remained flat quarter on quarter, but were up 30 percent year

on year. Strangely enough, messaging (SMS) revenues declined quarter on quarter.

However, much like Bharti Airtel and Idea Cellular, Vodafone India reported a decline in

ARPU, impacted by the mobile termination rate cut.


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In terms of Minutes of Use, Vodafone clocked 10% higher minutes of use, at 71,775 million

minutes, up from 65,276 million minutes used in Q4-09.

Of its Total Customer Base, 93.2 percent was Pre-paid. The companys average customer

base grew by 56 percent year on year, on launching in seven new circles.

Net additions for the company declined quarter on quarter - Vodafone India added 7.68

million subscribers in the quarter, as opposed to 7.83 million subscribers added in the

previous quarter.

Much like other operators, Vodafone India has suggested that usage per customer declined

on account of multiple SIM usage, which is being attributed to the free minutes and free

SIM cards being given by operators, particularly in new circles.


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The above picture clearly depicts how the ZooZoo advertisements have helped in increasing

the customer base for Vodafone in the last quarter with a sharp increase of 3.8%, from

17.5% to 21.7%.

Vodafone reports churn on an annualized basis, and the company saw a pre-paid churn of

26.3 percent churn for the last four quarters, with a Pre-paid churn of 26.4 percent, and a

post-paid churn of 25.3 percent.


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HORLICKS STRATEGY DURING RECESSION:

Horlicks has a significant presence in over fifteen countries. Today Horlicks is the best

known brand in the health foods category in India. The brand enjoys the trust of generations

of Indian mothers and this relationship has been nurtured by the brand by fortifying the

product from time to time. Today, Junior Horlicks contributes 11% to Horlicks total sales

turnover and has been one of the fastest growing product extensions to the Horlicks brand.

But it isnt just product development that Horlicks has concentrated upon. It has also

created new attractive packaging options including jars, refill packs and sachets. Horlicks

was the first brand in India to introduce a refill pack option and also the first to shrink-wrap

bottles. In a way, theres a Horlicks pack for every occasion and mood.

Indian health drinks market is still in its infancy due to the lack of awareness among the

population. In value terms, the health food drink market is around Rs 1, 400 crore and in

volume terms around 65,000 tonnes per annum. Glaxo Smithkline (GSK) with four brands -

Horlicks, Boost, Viva and Maltova - is the leader in Indian health drink market. Complan,

Glucon D from Heinz India and Cadbury Indias Bournvita are also popular among the Indian

health drink brands.

Examination time (January-March) every year is a great time for health drink powders like

Horlicks and Boost, Glaxo Smithklines (GSK) flagship health drink powders for kids. It is

GSKs peak sales period, following which demand slumps by about 10-12%, thanks to a near-

halt in hot drinks by consumers in the ensuing summer months. And so begin the good

times for kids and bad times for brands like Horlicks. In the last summer however marketers

at GSK decided to challenge these bad times head on. They launched a cold-consumption

campaign for Horlicks first by teaming up with the launch of the successful movie Ice Age 2

in India and then by roping in the Taare Zameen Par child star Darsheel Safary and adding

summer variants to their portfolio. The chilled drink positioning for Horlicks not just

translated into red-hot national sales for Horlicks during the summer; but also gave the

brand a chance to keep its visibility high throughout the year.


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SOCIAL MEDIA MARKETING:

Social media is an umbrella term that defines the

various activities that integrate technology, social

interaction, and the construction of words and

pictures. Marketing has been inside-out (one way)

approach to broadcast the product message to

the consumer with & expect the user to listen,

consider purchase of the product. Social Media

Marketing is use of media that is capable of two

way communication, engage consumer in a

dialogue, hear their review comments, spread your

product message among their network along with

increase in product sales, you would also getfeedback from consumers.


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TRADITIONAL MEDIA:

Television, Radio, Print are the traditional media, currently used for marketing the products

or services, characteristically it adopts the law of few (scarce resource) that leads the

products to fight for limited media available to broadcast their message, pricing. Demand to

Price elasticity is driven by the quality of the program on the media. So many brands have

fewer channels to advertise in a particular slot of time.

SOCIAL MEDIA:


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Internet & Mobile Phones are the two main constituents of Social Media and it differs in

availability of scale, does not have the problem of few, less elastic demand curve compared

to traditional media. Specific and narrow target user social media channel can be found or

created to market the product, a new channel creation has lower entry barrier. Here fewer

brands have a lot of channels of advertising so they can reach a wider audience in effectivead spending.

There are many ways to brand development. One such way is brand extension wherein a

company extends its brand to various categories. One such brand in league of brand

development is what is done by Horlicks. Horlicks was introduced in market as a health

drink. It then extended into biscuit category. Now it has extended to another class of

products namely functional foods category with its new Horlicks Nutri-Bar in the time of

economic slowdown. This energy bar is positioned as a ready-made healthy solution to

hunger.

Challenges: Marketers should not get infected by Competition Myopia, wherein the

marketers view the competitors too narrowly. In this case, Horlicks Nutri-Bar may see itself

as the pioneer in cereal bars category, but they are not the only one in ready-to-eat hunger

satisfying food class. In this context or category, they have a major competitor, namely Mars

Snickers, which has a positioning similar to Horlicks Nutri-Bar, though it comes in

confectionery category. Horlicks Nutri-Bar is a recently launched product, while Snickers is

an established player. Horlicks has to identify its competitors, and strategize accordingly to

highlight its POD (Point Of Difference) and gain SCA (Sustainable Competitive Advantage).

The rural market is growing at a fast rate and GSK has taken it as a strategy to expand its

distribution in the rural area to expand in sales and fight the recession and increase its

sales. In an aggressive Go to Market approach, it created a second layer of distributors in

the smaller towns to supplement the existing chain of around 500 big distributors. The

current market reach of GSK Consumer Healthcare is about 25 percent and the goal is to

reach 40 percent.


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The Internet is a good way to connect with kids. So, there are tips posted on examinations

on the website Exams ka bhoot bhagao (Drive the exam demon away). Besides, the

company has also reached out to children with Wizkids, a contact programme that provides

a platform for schoolchildren across 25 cities to showcase their talent.

Positioning:In the minds of the consumer it is communicated as a Value-for-Money product

while its competitors like Complan are perceived to be more expensive. So compared to its

competitors it is the best money proposition and the consumer gets value for the money

spent. Parents even in a slowdown are not ready to compromise on the nutrition of their

children. They are willing to spend more for their children. This allowed the company in

succeeding to even increase its price by about 5 percent.

TargetforHorlicks Nutri-Bar: Young working adult as the growth market.

To conclude GSK Consumer Healthcare for its product Horlicks has done good innovativemarketing so as to maximize the return on the money spent during the economic downturn.


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JET AIRWAYS SOARING HIGH

Introduction:-

Famed investor Warren Buffett once joked that a generation of Wall Street investors wouldhave been served well if someone had shot down the Wright brothers as they attempted

their historic flight. Indeed, its been a tough decade for the airline industry and their

investors. The same can be extended to the Indian Aviation industry which has seen a

double digit growth in the recent decade but has also borne the brunt of recession. Soaring

fuel costs, aging fleets, dwindling number of passengers are the every day challenges that a

manager in an airline industry has to deal with. The recent recession wave that took the

world by storm has even added to the woes of the aviation industry.

"We are bleeding. Everybody is bleeding. Giving a helping hand to the airline industry is doneall over the world,", Naresh Goyal of Jet Airways said while asking the government for a

rationalization of taxes.

Lets have a look at the comparison of Indian aviation industry:-

Disadvantage India:-

ATF price in India 60-70% higher

Sales tax in India averaing at 26-30%

Airport charges, landing and parking fees high


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As a result of the cumulative effect of all the above mentioned effects the airlines in India

have a huge amount of operating cost which adds to the woes of the airlines industry in

India. Adding to this is the current economic slowdown that has hit the world. The airline

industry is in tatters worldwide as the recession has squeezed purses, forcing people to look

for cheaper modes of transport. This has not only stung the high cost, luxury airlines but thelow cost, no-frills one also.

Jet Airways strategy:-

Jet Airways, has been a stalwart in adopting new marketing strategy to attract new

customers, to maintain visibility. Jet Airways has always been a forerunner in the Indian

aviation industry in adopting unique ways of marketing which has in part helped the

company attain and retain number uno position in the sector. To combat the economic

slowdown Jet Airways has adopted a new Digital Marketing Strategy known as Affiliate

Marketing Strategy. Jet airways is a pioneer in this regard. Though Affiliate Marketing is a

tried and tested technique in US and European countries, Jet Airways has pioneered this

technique in India, atleast in the aviation sector.

Understanding Affiliate marketing:-

Affiliate Marketing is an Internet-based marketing practice in which a business rewards one

or more affiliates for each visitor or customer brought about by the affiliate's marketing

efforts. It is an application ofcrowd-sourcing.

The Affiliate Marketing industry has four core players at its heart: the Merchant, theNetwork, the Publisher and the Consumer. The market has grown sufficiently in complexity

to warrant a secondary tier of players, including Affiliate Management Agencies, Super-

Affiliates and Specialized Third Parties vendors.

Affiliate marketing overlaps with other Internet marketing methods to some degree,

because affiliates often use regular advertising methods. Those methods include

organic search engine optimization, paid search engine marketing, e-mail marketing, and in

some sense display advertising. On the other hand, affiliates sometimes use less orthodox

techniques, such as publishing reviews of products or services offered by a partner

Merchants favor affiliate marketing because in most cases it uses a "pay for performance"

model, meaning that the merchant does not incur a marketing expense unless results are

accrued (excluding any initial setup cost). Some businesses owe much of their success to this

marketing technique, a notable example being Amazon.com. Unlike display advertising,

however, affiliate marketing is not easily scalable.

Affiliate websites are often categorized by merchants (i.e., advertisers) and affiliate

networks. There are currently no industry-wide accepted standards for the categorization.

The following types of websites are generic, yet are commonly understood and used by

affiliate marketers.
http://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Affiliate_(commerce)http://en.wikipedia.org/wiki/Crowdsourcinghttp://en.wikipedia.org/wiki/Vendor_(supply_chain)http://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Search_engine_optimizationhttp://en.wikipedia.org/wiki/Search_engine_marketinghttp://en.wikipedia.org/wiki/E-mail_marketinghttp://en.wikipedia.org/wiki/Display_advertisinghttp://en.wikipedia.org/wiki/Display_advertisinghttp://en.wikipedia.org/wiki/Scalabilityhttp://en.wikipedia.org/wiki/Scalabilityhttp://en.wikipedia.org/wiki/Display_advertisinghttp://en.wikipedia.org/wiki/Display_advertisinghttp://en.wikipedia.org/wiki/E-mail_marketinghttp://en.wikipedia.org/wiki/Search_engine_marketinghttp://en.wikipedia.org/wiki/Search_engine_optimizationhttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Vendor_(supply_chain)http://en.wikipedia.org/wiki/Crowdsourcinghttp://en.wikipedia.org/wiki/Affiliate_(commerce)http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Internet


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Search affiliates that utilize pay per click search engines to promote the advertisers'offers (i.e., search arbitrage)

Comparison shopping websites and directories Loyalty websites, typically characterized by providing a reward system for purchases via

points back, cash back CRM sites that offer charitable donations Coupon and rebate websites that focus on sales promotions Content and niche market websites, including product review sites Personal websites (This type of website was the reason for the birth of affiliate

marketing; however, such websites are almost reduced to complete irrelevance

compared to the other types of affiliate websites.)

Weblogs and website syndication feeds

E-mail list affiliates (i.e., owners of large opt-in -mail lists that typically employ e-maildrip marketing) and newsletter list affiliates, which are typically more content-heavy

Registration path or co-registration affiliates who include offers from other merchantsduring the registration process on their own website

Shopping directories that list merchants by categories without providing coupons, pricecomparisons, or other features based on information that changes frequently, thus

requiring continual updates

Cost per action networks (i.e., top-tier affiliates) that expose offers from the advertiserwith which they are affiliated to their own network of affiliates

Websites using adbars (e.g. Adsense) to display context-sensitive, highly-relevant ads forproducts on the site
http://en.wikipedia.org/wiki/Pay_per_clickhttp://en.wikipedia.org/wiki/Arbitragehttp://en.wikipedia.org/wiki/Price_comparison_servicehttp://en.wikipedia.org/wiki/Loyaltyhttp://en.wikipedia.org/wiki/Cash_backhttp://en.wikipedia.org/wiki/Cause_Related_Marketinghttp://en.wikipedia.org/wiki/Couponhttp://en.wikipedia.org/wiki/Rebatehttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Niche_markethttp://en.wikipedia.org/wiki/Bloghttp://en.wikipedia.org/wiki/RSShttp://en.wikipedia.org/wiki/E-mail_marketinghttp://en.wikipedia.org/wiki/E-mail_drip_marketinghttp://en.wikipedia.org/wiki/E-mail_drip_marketinghttp://en.wikipedia.org/wiki/Newsletterhttp://en.wikipedia.org/wiki/Shopping_directoryhttp://en.wikipedia.org/wiki/Price_comparisonhttp://en.wikipedia.org/wiki/Price_comparisonhttp://en.wikipedia.org/wiki/Adsensehttp://en.wikipedia.org/wiki/Adsensehttp://en.wikipedia.org/wiki/Price_comparisonhttp://en.wikipedia.org/wiki/Price_comparisonhttp://en.wikipedia.org/wiki/Price_comparisonhttp://en.wikipedia.org/wiki/Shopping_directoryhttp://en.wikipedia.org/wiki/Newsletterhttp://en.wikipedia.org/wiki/E-mail_drip_marketinghttp://en.wikipedia.org/wiki/E-mail_drip_marketinghttp://en.wikipedia.org/wiki/E-mail_marketinghttp://en.wikipedia.org/wiki/RSShttp://en.wikipedia.org/wiki/Bloghttp://en.wikipedia.org/wiki/Niche_markethttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Rebatehttp://en.wikipedia.org/wiki/Couponhttp://en.wikipedia.org/wiki/Cause_Related_Marketinghttp://en.wikipedia.org/wiki/Cash_backhttp://en.wikipedia.org/wiki/Loyaltyhttp://en.wikipedia.org/wiki/Price_comparison_servicehttp://en.wikipedia.org/wiki/Arbitragehttp://en.wikipedia.org/wiki/Pay_per_click


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Jet Airways and Affiliate Marketing:-

Features of Jet Airways Affiliate Program:-

Commision

CPS:- Rs.12,500

Recurringpermanent

CustomerDemographics

Gender:-men,women.

TargetCountries:-All,

especially India,Australia, Newzealand,Malaysia.

Keyword policy

Restrictedkeyword access.

PromotionMethods

Organic SearchEngineoptimization.

PPC Search

Engine.Contexual

Advertising

Blogging/Forumpostings.

Own/PublisherWebsite.

MarketingResources

Banner

Text Links


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Why Affiliate Marketing by Jet Airways:-

As mentioned above, the company, due to the economic recession was facing dwindling

profit margins and reduced occupancy. But at the same time, the airline was aware of the

fact that, the brand of Jet Airways need to be in people`s mind. If they cut down on their

marketing, any competitor who aggressively markets in this economic slowdown will get a

large share of people`s mind. So major reason for Jet adopting affiliate marketing was that

this strategy gives the company a large economical Virtual Field Force, so as to say. The

marketing strategy gives the airline many other advantages like:-

1. Increased cost effectiveness:- Due to the Activity based pricing, the affiliate canrealize his commission of Rs. 12,500 only when a sale is materialized through the

affiliate site. This drastically cuts down the marketing cost of the company as

spending on inefficient traditional marketing ways are reduced.

2. Greater visibility:- Today many potential customers look at the internet as anultimate source for all their problems. So by adopting this strategy, the company is

increasing their visibility in the digital world, akin to hoardings in the real world. This

increased visibility results in instant recall by the customer, especially in untraded

waters of Australia, New Zealand, and Malaysia.

3. Tapping the younger generations:- This digital strategy which also encompassescontextual advertising, gives the airline to reach to the younger generations, which

are becoming a high revenue earner for any airline. This strategy gives the airline to

be present where it matters. Because of contextual advertising used by the

traditional publisher and more effectively by the affiliate the airline gets presence on

social networking sites such as MySpace, Facebook.

4. Reporting:- Since the site of the affiliate is connected to the Jet Airways main sitethrough Shoogloo network, the potential customer can easily book tickets from the

site of the affiliate. Also for Jet Airways, it results in increased validity of sales and

better tracking of sales.


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ALASKA AIRLINES

Strategy to overcome recession: Focus on two areas

1. Discounted airfare deals2. Frequent flyer program bonuses.

Go all in with double miles, for all flights, on all routes; in all classes of service make those

double miles qualify for elite status. Times like these call for bold measures

This offer won't overcome the effects of a worldwide economic meltdown exacerbated by a

stage-5 swine flu epidemic. No promotion would, or could. But Alaska's offer will prompt a

few more people to fly, and give those already committed to flying a reason to book on

Alaska rather than on another airline. It will reinforce and reward Alaska's customers'

loyalty. Andperhaps most importantlyit will force other airlines to seriously consider

mounting similar promotions

One thing that would have done differently: Rather than the somewhat timid seven week

promotion period, it has put the bonus on offer for a solid three months or more.

Booking strategy by airline industries to overcome recession

American Launches Elite-Oriented Promotions

With business travel still in the doldrums, American is offering double elite-qualifying miles

and bonuses to maintain the loyalty of its most profitable customers.

Consumers Win With Booking Fee Elimination


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With online travel agencies eliminating booking fees, how do their fares compare to the

airlines' offerings? The results of our comparison tests may surprise you.

New US Airways Offer: Up to 50,000 Bonus Miles

For those whose normal travel and spending patterns put significant bonus miles within

reach, this promotion lives up to its "Grand Slam" moniker.

American Discounts Annual Airport Lounge Memberships

With American's discount on airport lounge memberships, flyers can buy peace and quiet for

less. Infrequent flyers should steer clear

At Your Service: Online Cruise Reservations

As cruise lines expand options for online reservations, cruise travellers can spend less time

queuing up onboard and more time enjoying their vacations.

Starwood Extends Bonus Points Offer Through November

The latest bonus offer for stays at Starwood hotels may push other hotels to extend

bonuses through the fall as well. It's yet another reason to cheer the travel slump on.

Double American Miles, for New Yorkers Only

American's new double-mile promotion applies to all flights, through the end of the year.

But to qualify, travellers must live in the New York area.

US Airways' Mileage Sale Rates a 'Buy'

With US Airways' 100 percent bonus, the economics of buying miles from an airline turn

Combine Cash and Priority Club Points for Hotel Nights

Priority Club Rewards' new Points and Cash feature lets members combine points with cash

for award nights at any of more than 4,200 hotels in the Intercontinental Hotels family.

New Club Med Program Offers Few Rewards

If a trip to Club Med isn't its own reward, the new loyalty program isn't likely to be a

difference-maker. The hurdles are high and rewards only so-so.

Frequent Flyer strategy


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Consumers Win With Booking Fee Elimination

With online travel agencies eliminating booking fees, how do their fares compare to the

airlines' offerings? The results of our comparison tests may surprise you.

Southwest Adds Wyndham Hotels to Its Loyalty Program

While Southwest's program remains somewhat anemic, adding the Wyndham Hotels

network is at least a down payment on a brighter future for Rapid Rewards members.

United's New Credit Cards Offer Unique Benefits

United has three new credit cards that offer extra mileage and extra benefits for frequent

travelers. But are the high annual fees worth the bonuses?

US Airways Discounts Caribbean, Europe Awards

Looking for cheap frequent flyer award tickets to the Caribbean or Europe this fall and

winter? If your miles are in US Airways' Dividend Miles program, you may be in luck

New United Credit Cards Offer Elite Miles for Charges

For some travellers, the $375 annual fee for United's new Mileage Plus credit card may be

more than offset by the card's perks, making it a high-flying bargain.


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MORGAN HOTELS F@#!ING IT OUT

Introduction:-

The hospitality industry is in the business of serving to even the enemies. The biggest enemythat the US hospitality industry facing is the economic slowdown. If the hospitality

industry is a measure of the wealth in peoples pockets then the news is very bad indeed.

The industry is facing one of its worst times in memory as pubs, clubs and restaurants close

at an unprecedented rate. Insolvencies in the sector have risen by 95% in 2 years as people

opt to stay at home and preserve their cash rather than splurging on luxuries like nights out,

meals and other entertainment.

A report by consultancy PricewaterhouseCoopers (PwC) showed that there were

281 business failures in the third quarter of this year, up from 175 last year and well ahead

of the 220 insolvencies reported in the first quarter and the 212 recorded in the second. Itwas almost double the number reported 144 - in the final quarter of 2006.

This data clearly points out to the fact that people have indeed stopped spending money on

these vices and are looking to invest the money rationally.

Certain comments made by the pub owners especially in US, points out to the fact of

branding and brand image during the slow economic conditions.

The majority of pubs suffering distress are wet-led community pubs

losing out to supermarkets. Some have also found the competition fromwell known pub chains has had a detrimental effectas brand and

familiarity become more important to consumers when personal

expenditure is under pressure.- Mr. Stephen Brown, the hospitalityand leisure director of PWC.

Thus we clearly see that the brand image and familiarity in the minds of people become an

important factor during crunch time. This only reinforces the fact that recession is not the

time to cut back on advertising spending but time to spend the marketing budget rationally.

Shown below is a graph depicting HIP index of the US hotel industry. The Hotel Industry

Pulse, or HIP for short, is a hotel industry indicator that was created to fill the void of a real-

time monthly indicator for the hotel industry that captures current conditions. The indicator

provides useful information about the timing and degree of the industrys linking with the

U.S. business cycle for the past 40 years. Simply put, it tracks monthly overall business

conditions in the industry, like an industry GDP, and points in to the changes in direction

from growth to recession or vice versa.


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The composite indicator is made with the following components: revenues from consumers

staying at hotels and motels adjusted for inflation, room occupancy rate and hotel

employment, along with other key economic factors that influence hotel business activity.

We infer from the graph that the HIP has declined to a figure of 83.1 in year 2009, which

shows that the hospitality industry is indeed facing a crunch in the past two years.


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Recession to Recess-is-on campaign:-

To combat this depressing situation in the economy and also to boost up its occupancy rate,

a high end hotel chain in America, named the Morgan Hotels came up with a campaign

titled Fuck the Recession, Attitude is Everything. The campaign was a bold move on the

part of the marketing team at Morgans as it is not easy for a top brand to put its whole

existence at stake by shouting aloud what people say in private.

The campaign was of the same magnitude as the magnitude of the problem at hand. Also it

kept in mind the frustration the people had in mind about all the crisis talk and moulded a

campaign which actually gave vent to peoples anger. The company knew that people were

frustrated with all the crisis talk and wanted to break away from it. So the mentioned tagline

garnered great interest and brought cheers on the peoples face.

This was only the one part of campaign. The other part which said Recession actually toldpeople that the economic slowdown is not the time to complain but a time to play. It

painted in the peoples mind the idea that at Morgans, there is no crisis, that Morgans

presents an alternative reality, where everything looks exactly like in the real world, except

when you see a guy with an eye on his forehead passing by.

We like to offer our customers a different point of view. We like to take a

dare and be provocative. We want to talk to customers in an authentic way,

to look em in the eye and tell them we have a soul as a brand.

Come ride it out with us and youllhave a better time than with anyone

else.

Says Scott Williams, chief marketing officer

At Morgans

Target audience:-

An internal analysis of the Morgan hotel revealed that the biggest revenue generator for the

hotel was the pub and the restaurant business which garnered maximum revenue for the

company. So the Recessison campaign as targeted towards the young affluent crowd of the

American society. When the campaign was initially launched by the company it was

targeted all the average people in the American society. They did this by getting average

people in th

recession marketing a book

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