CIM on Surviving Consumer Downturns

The Chartered Institute of Marketing in the UK is challenging the traditional strategy of reducing costs, especially marketing spend, and cutting investment to ride the storm of a downturn in consumer spending.

'Companies should avoid the knee-jerk reaction of cutting costs and look instead to maximise their marketing budgets. At times of economic uncertainty marketers need to develop long term marketing plans for organisational success, ensuring marketing goals are clearly defined and effective marketing evaluation and control is in place,' says Mike Detsiny, Director of Marketing and Training for The Chartered Institute of Marketing, 'It is a time to focus on creating new added value and refocusing investment on effective differentiation through research and development and new product development'.

Instead of slashing spending, marketers who responded to the Summer Marketing Trends Survey have indicated their marketing spend has actually edged up slightly from 2.2% to 2.7%. The survey results show that companies have established a benchmark for spending which they hope is affordable even in an uncertain economic climate. This is reinforced by the CIM Sales Plan Confidence Indicator of 91.7, which is a substantial improvement on the confidence level recorded by the Spring MTS of 84.9. The confidence indicator is the second highest level recorded since summer 1999 when it stood at 93.5.

A majority of firms, 65%, expect to achieve or over-achieve their sales plans for the current year. This compares with 37% of respondents in the Spring 2002 MTS. There has been a fall in the number of firms describing their sales plan as 'very challenging', the figure now stands at 35% against the 63% recorded in the last survey.

'The next few months are likely to be uncomfortable for business with liquidity drying up and government spending the most buoyant sector of demand,' predicts Douglas McWilliams, economic adviser to The Chartered Institute of Marketing. 'Hopefully, the indications from this survey are a signal that the economy will weather the storm with only a limited amount of damage.'

For marketers seeking winning strategies despite a downturn in consumer spending, the CIM is offering a one-day workshop, The Survival Kit for Marketers, running on 6 September in Edinburgh.

For further information visit www.cim.co.uk

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.