In the last six years Kibe has been struggling to keep his business running. Debts have been increasing and sales erratic.
During good times Kibe used to have several employees who would move across the country marketing. He also used to participate in local and international trade fairs and occasionally did various promotions. But now with the low sales and high cost, he cannot afford such indulgencies.
Well, we do not know exactly what happened to Kibe’s business and made sales to gradually decline until he found himself debt-trapped and in need to take quick action to save his once thriving business.
However, most probably when things started getting tough, instead of finding a solution through more marketing that would lead to more sales and product development to meet customer needs, he went the debt way to bridge the gap.
It is an open secret that most business problems have their roots in marketing. Yet, when things are tough the first culprit of cost cutting or negligence is marketing.
Marketing, in this sense, should be viewed broadly as an activity that starts long before a product is developed, produced and sold and continues throughout. Marketing is not merely trying to push customers to buy what you have. It includes finding what customers need and providing it.
Marketing must continue with sales and promotion of a product to check and react to new market developments, changes or customer lifestyle, preferences and activities of competitors that could hurt.
Marketing is often neglected because, in most cases, it does not yield instant returns. Developing the product or positioning yourself in the market is a long-term investment, and it is difficult to show real time returns on expenditure. There is always a waiting time before results are visible and thus the erroneous impression that a marketing need is not an emergency or a pressing need any time; yet it is, always.
Experts advise cutting marketing expenditure only as a last resort to save business from imminent fall and only for definite period. Treat it like a painkiller or a first aid; not as a treatment.
There are several other better ways to cutting cost. They include increasing efficiency by training your entire staff and yourself; eliminating or reducing activities that does not yield fruits; moving your business to less costly area; outsourcing non-core services and improving your customer service to retain them among others.
There is sufficient evidence to prove that cutting marketing spend in even in the worst economic times is suicidal. Only a fool can doubt it.
Economists actually advise that the worst economic times is the best time for businesses to market and reinvent themselves. This is because as already mentioned, marketing is not merely pushing what you have but finding out what need customers have and proving solutions.
Even in the worst-case scenario in terms of returns on marketing spend, the sales made are statistically likely to outweigh any savings you may have made by cutting cost.