The signs of an imminent recession are all around us. Spillover from the subprime mortgage crisis is weakening both consumer confidence and the consumer spending – much of it on credit – that has buoyed the US economy. Companies should bear eight factors in mind when making marketing plans for 2008 and 2009.
●Research the customer. Don’t cut the market research budget. You need to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing. Consumers take longer searching for durable goods and negotiate harder at point of sale. They are more willing to postpone purchases, trade down or buy less. Must-have features of yesterday are today’s can-live-withouts. Trusted brands are especially valued and can still launch products successfully, but interest in new brands and categories fades. Conspicuous consumption becomes less prevalent.
●Focus on family values. When economic hard times loom, we tend to retreat to our village. Look for cosy hearth-and-home family scenes in advertising to replace images of extreme sports, adventure and rugged individualism. Zany humour and appeals on the basis of fear are out. Greeting card sales, telephone use and discretionary spending on home furnishings and home entertainment will hold up well, as uncertainty prompts us to stay at home but also stay connected with family and friends.
●Maintain marketing spending. This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain consumers need the reassurance of known brands, and more consumers at home watching television can deliver higher-than-expected audiences at lower cost per thousand impressions.

Brands with deep pockets may be able to negotiate favourable advertising rates and lock them in for several years. If you have to cut marketing spending, try to maintain the frequency of advertisements by shifting from 30 to 15-second advertisements, substituting radio for television advertising, or increasing the use of direct marketing, which gives more immediate sales impact.
●Adjust product portfolios. Marketers must reforecast demand for each item in their product lines as consumers trade down to models that stress good value, such as cars with fewer options. Tough times favour multi-purpose goods over specialised products and weaker items in product lines should be pruned.