You’d think that for companies navigating tough economic times, now would be a time to hunker down. Not so fast. In fact, history has proven that those businesses who continue to spend on advertising and remain visible during a down turn, perform better when normalcy returns, short as well as long term.
Here is a story of two companies surviving during The Great Depression. Kellogg dared to introduce Rice Krispies, a cutting-edge cereal whose new technology allowed it to stay afloat in milk and even “Crackle”. Their competitor, Post, chose the more common, conservative approach to managing the time and reeled in advertising and promotion, waiting for the storm to subside. What happened? Kellogg’s profits rose by more than thirty percent. They became an industry leader, a position they held for decades.
While at first glance cutting back may appear the obvious course, downturns have been known to present opportunity. The field is no longer level and takes a dip allowing new products and ideas to stand out. Also, costs are lower, returning more bang for the promotional dollar. Something new and inventive is given the opportunity to rise and shine.
History repeated itself as Kraft introduced Miracle Whip in 1934 to become one of the top selling salad dressings, Texas Instruments brought out its transistor radio in 1954 and we all know what happened when Apple showed us the iPod in 2001. All were introduced during a down economy.
The moral of the story is don’t sit back on your laurels. Continue to work, think imaginatively and stay productive in anticipation of a time when the effort will not only pay off, but will allow you to flourish while the others are busy playing catch-up.
