The looming crisis in Russia will cause many marketers to reevaluate budgets, strategies, and relationships. Though there may be many challenges ahead for companies as they face the prospect of slower growth and pressure on margins, there is a silver lining in that black cloud. During the last financial crisis in Russia a decade ago, some companies took advantage of falling media costs and slow-to-react competition to capture market share and set the stage for strong future earnings. There are several opportunities for marketing during a recession. Here is the first.
OPPORTUNITY NO. 1: CUSTOMERS GENERALLY REEVALUATE THEIR BRAND LOYALTIES DURING A RECESSION. It is no longer business as usual. Many people will be looking for greater value as their buying power weakens. A recession breaks down barriers that make consumers otherwise resistant to new brand messages. This creates an opportunity for brands that have otherwise been unable to capture significant market share in a crowded category or one dominated by a larger competitor.
If you are the number 2, 3 or 4 brand in your category AND you have a good story to tell, this could be your best opportunity in years to deliver your story and receive a positive reception. Reacting to the last financial crisis, MTS continued advertising, while its competitor Bee-Line retreated. As a result, MTS substantially grew its subscriber base and overtook Bee-Line to become the number one Russian mobile service provider. And MTS still retains the top spot today, despite Bee-Line’s ubiquitous advertising campaign.