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Aaf Pres For Karsten

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Karsten Walker

The document discusses strategies that marketers can employ during an economic downturn or recession. It suggests focusing on the three M's: money, medium, and message. For money, it recommends being more efficient with advertising budgets by targeting specific regions, negotiating last-minute ad placements, or focusing on proven vehicles. For medium, it says to concentrate spending on formats with strong ROI. For message, it advises crafting messages that address consumer concerns like value and confidence. Examples include Hyundai's buyer assurance program and GameStop's targeting of gamers and gift-givers. The overall conclusion is that downturns need not mean cutting marketing if the three M's are optimized strategically.

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Aaf Pres For Karsten
THE PANIC OF 1907 Run on banks NYSE fell almost 50% Led to Federal Reserve System
THE PANIC OF 1907 Wrigley¡¯s
THE GREAT DEPRESSION Began with stock market crash of 1929; lasted through World War II Stock prices fell 90% Real disposable income fell 28% Unemployment spiked at 25% 9,000 banks failed
THE GREAT DEPRESSION Kellogg¡¯s
THE GREAT DEPRESSION Kellogg¡¯s Chevrolet
THE GREAT DEPRESSION Kellogg¡¯s Chevrolet Procter & Gamble
1970S RECESSION Began November 1973 and ran through March 1975 High inflation made worse by war and oil crisis Unemployment reached 9% Inflation rose to 11% Stock market crashed almost 50%
1970S RECESSION Toyota Procter & Gamble FedEx People magazine Costco Microsoft
1980S RECESSION Started in July 1981 and ended November 1982 Increased interest rates Slowed the rate of growth of money supply Unemployment rate peaked at 10.8% Inflation hit 13.5%
1980S RECESSION Walmart Hershey¡¯s CNN MTV The Home Depot
2000S RECESSION Began with collapse of dot-com bubble in 2001 Post-September 11 economy, Y2K, and accounting scandals Unemployment reached 6% Dow Jones worst one-week point loss in history
2000S RECESSION Apple iPod Crest Whitestrips Swiffer WetJet Axe body spray
EMPIRICAL EVIDENCE Stopped advertising Loss in top-of-mind awareness Loss in awareness Negative attitude shift Lowest increase in sales two years after recession Increased advertising Market share increased 1.5% Nearly 5% increase in profits 275% increase in sales two years after recession Sources: Millward Brown, AAAA, and McGraw-Hill
CURRENT ECONOMIC SITUATION Recession began December 2007 Credit crunch, bankruptcy, bailouts, and housing crisis Unemployment rate 7.6% Drastic shift in consumer behavior since early 2008 ¡°The worst financial crisis since the Great Depression¡±
CMO SURVEY U.S. senior marketing executives who believe that during an economic downturn, the marketing budget is the first thing to get cut 21% Disagree 79% Strongly/somewhat agree Source: Epsilon, ¡°Epsilon CMO Survey,¡± September 8, 2008
FRANK BLAKE, CEO, THE HOME DEPOT ¡°There¡¯s absolutely a benefit in making changes during a downturn. As one of our vendors said: ¡°A downturn is a terrible thing to waste.¡± Source: The Wall Street Journal, June 5, 2008
BENEFITS Brand-building is long-term Tough times are inevitable ¡°We never change the long-term strategy because of short-term problems¡±¨CLouis Vuitton CEO Yves Carcelle Positive effects of advertising are seen well past the short term Cost to maintain advertising is less than cost to begin again
MOST IMPORTANT ASSET
MOST IMPORTANT ASSET Customers
SUPERBOWL XLIII
SUPERBOWL XLIII Hyundai 5 commercials 2009 North American Car of the Year Introduced Genesis Coupe Over 450 million impressions
SUPERBOWL XLIII Joel Ewanick George Wallace Vice President of Marketing Vice President of Comedy Hyundai Humor Division
SUPERBOWL XLIII
SUPERBOWL XLIII
THE OSCARS
THREE YEARS FROM NOW?
SALES RESULTS January 2009 General Motors -49% Ford -39% Chrysler -54% Toyota -32% Nissan -30% Volkswagen -16% Mitsubishi -34% Hyundai +14%
TO CUT OR NOT TO CUT?
WHAT YOU CAN¡¯T CONTROL
WHAT YOU CAN¡¯T CONTROL
WHAT CAN YOU CONTROL? The Three M¡¯s: Money Medium Message
MONEY How do you get more bang with less buck?
MONEY
MONEY Advance Auto Parts Budget decreased Dumped sports sponsorships and national cable TV Increased network radio Only paid for 77% of U.S. 23% saved has been reinvested in more radio ¡°Regionalized¡± a network radio buy
MONEY
MONEY Grocery Outlet Never advertised before recession Negotiate last-minute avails Buy unsold/cancelled inventory Weekly flexibility Cover 90% of stores
MONEY
MONEY Hyundai Dealers (Eastern Region) V oted to increase ad budget Afforded more media weight Sales outpace the rest of the country January national sales +14% January Eastern Region +20%
MEDIUM Focus on vehicles with proven ROI Narrow target to best prospects and hit them hard
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM Chick-fil-A No change to strategy and spending Heavy users of outdoor Maintain a ¡°wish list¡± General Motors canceled Snatched up prime locations
MESSAGE Construct your message for the times Consumers don¡¯t disappear¨Cthey change their behavior Value-conscious consumer mind-set and behavior shift since early 2008 ¡°Staycations¡± and ¡°cocooning¡± 60% of Americans budgeting more this year than last
MESSAGE
MESSAGE Hyundai Identified the real issue¨Cconsumer confidence Hyundai buyer assurance program Protection in case of ¡°involuntary loss of income¡± Addressed fear
MESSAGE
MESSAGE GameStop Two targets: gamers and gifters (moms, grandmas, aunts, etc.) Gamers: make sure you get the games you want Gifters: 2,500 games under $20
MESSAGE Results Holiday sales up 22% from last year Best Buy game sales down 12% from last year
CONCLUSION
Aaf Pres For Karsten

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Aaf Pres For Karsten