Gauging Recession's Upside Is Tricky Territory

Companies Face Tough Decisions When Tasked With Marketing During a Recovery

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Trying to figure out when a recession is ending and a recovery is beginning is easier in hindsight than when it's actually happening.


REAL GDP GROWTH: Since 1971, the U.S. economy has experienced seven recessions.
Just as recessions aren't officially declared until after two quarters of economic declines have been recorded, the lag time between anecdotal signs of recovery and the statistics to back it up can create a no-man's land. During that time, a marketer can be forced to choose between protecting the bottom line and propelling sales growth.

"The Upside: Marketing for a Recovery" looks at the 12 months following the start of seven past economic rebounds. Click here to purchase the white paper.
But marketers wondering the best course of action for this recovery might study some of the products that succeeded as past recoveries were getting off the ground. A look through the Advertising Age archives of the past 80 years finds numerous cases of products and services that grew in terms of sales and share thanks to companies that mounted ambitious marketing campaigns while others were paralyzed by fiscal jitters.

The historical research is detailed in the Ad Age Insights white paper entitled "The Upside: Marketing for a Recovery." The paper looks at the 12 months following the start of seven past economic rebounds.

Among the products that took off during the earliest parts of past recoveries were L'eggs panty hose, Chrysler's K-Cars, IBM's personal computer and Microsoft's Xbox.

Why were these products successful? In some cases the product combined the allure of introducing something new with a value proposition. In other cases, a new technology captivated consumers and couldn't be restrained.

An uptick in marketing activity can buttress the recovery and prevent growth from flagging. With the government invested in the Detroit automakers, is it your patriotic duty to buy a domestic vehicle as it seemed back when Lee Iacocca was selling Chryslers?

Marketers also have to be sensitive as consumer sentiment begins to shift. When some begin to see better times ahead, it may not be sales of luxury items that surge. Value remains important, which mean offering guarantees and extended warranties might be more effective than vague quality appeals.

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