Investing for the recovery

“The winners in downturns are the companies that find ways to innovate in spite of everything.” This quote comes from Brian Walker, CEO of Herman Miller. Many companies believe this is true because they consider R&D an investment. Unfortunately, since Marketing is considered an expense in most companies, these same companies often cut their Marketing spend in a downturn. However, if you consider that Marketing is MUCH more than just the promotional/advertising function, and you believe that “new products are [y]our lifeblood” as Mr. Walker does, than perhaps you need to consider another piece of sage advice from Philip Kotler:

“…most of the impact of marketing is felt before the product is produced, not after.”

Studies by the PDMA and others have found, consistently, that appropriate Marketing input into new product development has more leverage to success than additional investment in R&D. So, if you believe that innovation in terms of new product/services is key to your success coming out of this downturn, and you want to optimize your opportunity for success, we recommend you re-look at your Marketing investment to make sure it is focused where you need it to be.

Mitch

Advertisements
This entry was posted in Down economy, Innovation, Marketing and tagged , , , . Bookmark the permalink.

2 Responses to Investing for the recovery

  1. Pingback: Sales People Want New Products to Sell and Other Myths « Value Acceleration

  2. Linda Keith says:

    Good points, Mitch. An interesting twist comes into play when the business requests a loan as the recovery kicks in.

    Businesses who have made good strategic decisions to continue their marketing spend, or even accelerate it, in the recession may have chosen to live with reduced profits or owner compensation to do so.

    Good strategic decision but the recent historical numbers may look to weak to their banker. The business lenders absolutely have to show projected, recurring cashflow to repay loans.

    Businesses need to be ready with their ‘story’ when they approach their banker. What is their marketing strategy? What will be the pay-off? Has there already been a pay-off in early 2010?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s