Making Lemonade in the Current Economy

As the old saying goes ... "When life hands you lemons, make lemonade."

A recession provides you, as a business owner, an opportunity to look at your company and truly evaluate what you have. Especially now when sales are decreasing, it is the time to look at your marketing plan and see if it is current.

Fear is not an option. Studies at Penn State and the University of Texas have shown companies that maintain their marketing budgets tend to increase market share and experience growth at the end of the recession. Consumers want reassurance in difficult times and the perception your company is doing well creates that consumer assurance and increases your market share.

So, how do you create or refine your marketing plan? The plan should follow some basic rules. Be SMART:

• Strategy
  
• Maintain marketing spending
  
• Allocate the budget
  
• Research the consumer
  
• Target the consumer

Have a strategic plan to acquire new customers, to entice existing customers to spend more and persuade more customers to shop more frequently. To accomplish these goals you must first have a product or service the public or a segment of the public needs or wants. Second, make sure your pricing strategy matches the targets audience's mind set by testing new discounts, having sales and promoting the events to your audience. Pricing is a touchy issue but a company can offer many incentives for a consumer to come in and buy.

Maintain marketing spending is the second strategy. Now is not the time to reduce marketing spending. Let your competitors do that. Let them be forgotten. During the Great Depression Proctor and Gamble promoted Ivory Soap, beating out the competition. At the end of the Depression, Ivory Soap was still on the shelves while much of the competition was gone.

Third, allocate the budget. Do not put all your apples in one form of the marketing budget. All of your hard-earned money should not be spent on advertising or sales. Use a mix to reach the target consumer and create a way to track the marketing to see which part of the mix gives more bang for the buck.

Next is researching the consumer. This is the biggest problem for most small businesses-they do not know their customers. Research on the Web to discover the characteristics of your typical customer and to answer some of the basic questions. Do they come from a specific region? Is the market growing, stable or trendy? What is the size of the market in revenue and customers? What do customers expect from your product or service? How much are they willing to pay? What is your advantage over the competition?

Targeting the consumer is critical when money is tight. After doing the research and determining the type of consumer who will purchase your product or service, how do you communicate your message? Find out what consumers read, where they live and where they shop. What radio, TV and Web sites do they visit? Only spend your marketing dollars where it will have the greatest effect. Again be sure to target the consumer, who fits your profile. Reaching others will be a wasted effort.

Companies that survived the Great Depression are those that knew the consumer, believed in their product and charged ahead. Attitude is everything. Fear is not an option. There are many sources to help you. Please contact your local University of Missouri Extension county office, the nearest Missouri Small Business and Technology Development Center, SCORE, or your local college or library for assistance.

- Charles Holland, business specialist, Monroe County SBTDC 8/17/09