While the world is still reeling from the wrench COVID-19 threw into the global economy, businesses are left wondering what their next move should be in the midst of continued instability. Unfortunately, some choose to decrease their marketing investments in an effort to conserve funds. But is this the right decision? History argues no. Read below for three major moments from the past that prove just how essential it is to invest in marketing during turbulent times.
Kellogg vs. Post
Rewind to the late 1920s. While the stock market crashed marking the worst economic collapse in history, a battle for dominance was taking place simultaneously. Two companies, Kellogg and Post, were both players in the new packaged cereal industry. Now facing a challenge of a lifetime, the two took very different approaches when it came to their response strategies to the Great Depression. Post took the conservative route, cutting advertising and reigning in expenses to safely wait out the damaged economy. Kellogg, on the other hand, took on the risk of doubling its advertising efforts and heavily marketed its new product, Rice Krispies. (Ever heard of it?) The result? Kellogg surged past Post and its other competitors, boasting profits that increased nearly 30% by 1933.
Honda vs. Toyota
The 1970s brought a shorter, but just as distressing recession to the country from 1973-1975 due to the energy crisis. With fuel efficiency top of mind, the U.S. government issued its first miles-per-gallon report to the American public, putting the Honda Civic on top while the Toyota Corolla took second place. Seeing an opportunity to get ahead, Toyota took advantage of strong sales to stay committed to existing marketing/advertising budgets and plans when the economic downturn hit. Honda chose to ride the coattails of its recent media win and played it safe by pulling ads and saving money. By committing to a long-term vision and strategy, Toyota surpassed Volkswagen as the top imported carmaker in the U.S. by 1976.
Amazon vs. The World
When the 2008 Great Recession tanked the economy, many businesses went down with it. The majority of those that lasted followed the course of history by stifling innovation and reserving cash until the coast was clear. Amazon went a different direction. By building a solid foundation in 2007 with the rollout of the brand-new Kindle e-reader, Amazon didn’t stop when alarms started sounding a year later. By continuing to market its new product and invest in next generation product development, Amazon was able to come out on top on Christmas Day 2009 when its customers bought more e-books than printed books. And we all know what happened since then ….
Time and time again, successful brands and organizations have showcased the power of smart, strategic marketing investments when the going gets tough. And not only have they come out on top … they’ve surged ahead of their competition while forging new paths towards unbelievably prosperous futures. There is no doubt that now is the time to invest in you, your organization, and your marketing. As history has shown us, fortune favors the courageous.