by Ben Tang

Created on: February 18, 2009   Last Updated: March 04, 2009

Tough times are definitely here but it will gradually disappear. After all, it has been proven that recession is cyclical. The answer to keeping afloat in this environment is being persistent with strategies. Grandiose expenditure and opulence is a thing of the past. The following are 5 tips to marketing your small business during recession.

1) Understand Consumer Behaviour

Understand your customer needs. When times are bad, conspicuous spending by consumer happens. Consumers are more willing to postpone purchases, make a trade down, buying less and resist purchases that are not critical. Explore means to make your product economical by cutting off frills. Extravagance will only make a product seemed more unaffordable and discourage interest.

2)Maintain Advertisement Spending

Studies have proven that an increase in advertising during recession especially when competitors are cutting back, can improve market share by having a higher share of voice. Advertisement should be targeted via cheaper media outreach compared to expensive event sponsorship. For example, consumers are more likely to spend time at home to avoid expenditure than go to a cinema. Therefore, this is the best time to advertise on television. To fit the budget, a shorter airtime is recommended over the cutting of frequency. Substituting radio for television advertising, can also help reduce the advertising cost.

3)Advertising Family Values

Place emphasis on family values. In tough economical times, people tend to stay at home and look for comfort from home and family support. Replace images of coolness, individualism and extravagance with cozy family oriented images. Humor will appeal more than instilling fear in advertisement. An advertisement should also stress on better value and not corporate image or superiority in ownership.

4)Consider Direct Marketing

Networking is a great way to reach out quickly and efficiently because everyone will be keen to earn a little extra income. Recruit customers to become your agent or distributor can help your business cut down operational cost. Introductory fees or other incentives can be given to lure customers to work for you. After all, a friend recommendation is usually better preferred than a stand alone advertisement.

5)Pricing tactics

Bundling scheme may no longer work due to consumers not wanting to stock up excesses. This is a common behavior in a market that is in deflation. Since customers will be shopping around for the best deals, you do not necessarily have to reduce price permanently, but you can offer short term promotions. The thresholds for quantity discounts can be reduced. Loyalty scheme can be given to i.e. a repeat purchase can be given discounts, incentives or even longer credit term. In tough times, price cuts attract more consumer support than promotions such as sweepstakes. Vouchers or introductory coupons can be given as a tool to attract customers

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