Page 341 - Marketing Management

318 PART 4 BUILDING STRONG BRANDS

Paper Towels Paper Towels Homemakers originally used cotton and linen dishcloths and
towels in their kitchens.Then a paper company looking for new markets developed paper tow-
els, crystallizing a latent market that other manufacturers entered.The number of brands grew
and created market fragmentation. Industry overcapacity led manufacturers to search for new
features. One manufacturer, hearing consumers complain that paper towels were not ab-
sorbent, introduced “absorbent” towels and increased its market share. Competitors produced their own
versions of absorbent paper towels, and the market fragmented again. One manufacturer introduced a
“superstrength” towel that was soon copied. Another introduced a “lint-free” towel, subsequently copied.
The latest innovation is wipes containing a cleaning agent (like Clorox Disinfecting Wipes) that are often
surface-specific (for wood, metal, stone).Thus, driven by innovation and competition, paper towels evolved
from a single product to one with various absorbencies, strengths, and applications.

Marketing in an Economic

Downturn

Given economic cycles, there will always be tough times, such as 2008–2010 in many parts of the
world. Despite reduced funding for marketing programs and intense pressure to justify them as
cost effective, some marketers survived—or even thrived—in the recession. Here are five guidelines
to improve the odds for success during an economic downturn.

Explore the Upside of Increasing Investment
Sainsbury’s no-nonsense value ap- Does it pay to invest during a recession? Although the severity of the recent downturn took firms
peal was just the right message to into uncharted territory, 40 years of evidence suggests those willing to invest during a recession
send to UK customers in the midst have, on average, improved their fortunes when compared with those that cut back. 69
of a recession. The amount of investment isn’t all that matters. Firms that
received the most benefit from increasing marketing investments
during a recession were often those best able to exploit a market-
place advantage such as an appealing new product, a weakened
rival, or development of a neglected target market. With such
strong evidence, marketers should consider the potential upside
and positive payback of an increased investment that seizes market
opportunities. Here are two companies that made such a decision.
• General Mills increased marketing expenditures for the 2009
fiscal year by 16 percent, increased revenues by 8 percent to
$14.7 billion, and increased its operating profit by 4 percent. As
CEO Ken Powell explained, “In an environment where you
have consumers going to the grocery store more often and
thinking more about meals at home, we think that is a great
environment for brand building, to remind consumers about
our products.” 70
• UK supermarket giant Sainsbury launched an advertising and
in-store point-of-sale campaign called “Feed Your Family for a
Fiver” that played off its corporate slogan,“Try Something New
Today,” to encourage shoppers to try new recipes that would
feed families for only £5.

Get Closer to Customers

In tough times, consumers may change what they want and can afford,
where and how they shop, even what they want to see and hear from a
firm. A downturn is an opportunity for marketers to learn even more
about what consumers are thinking, feeling, and doing, especially the
loyal customer base that yields so much of a brand’s profitability. 71