IT IS NO LONGER an earth-shuddering recommendation that you shouldn’t cut your marketing budget drastically when difficult economic conditions force you to turn each cent over carefully before you spend it. There’s ample evidence of companies that increased their marketing spend in hard times and then experienced above-average growth when the good times returned.
Professor Frikkie Herbst, marketing expert at the University of Stellenbosch, says he still finds many businesses cut that budget when the economy is struggling. “However, in difficult times marketing must be smarter – definitely not shoved aside,” he says. Herbst says research providing reliable figures on the return from each type of marketing investment is urgently required.
One of the interesting new marketing trends we have reported on widely is word-of-mouth marketing. For example, an MBA student at the Stellenbosch School of Business (USB), Marthinus van Loggerenberg, found in recent research that word of mouth marketing works very well in the case of the black middle class and even the most well-off black women in South Africa. Earlier research by the UCT Unilever Institute of Strategic Marketing found that that target group spends around R120bn (40% in 2008) of the total amount spent annually by women in SA.
Van Loggerenberg says few SA brands are currently marketed creatively enough to unlock that vast potential. “They simply employ conventional marketing to try to reach the huge growing black market. They overlook the importance of word of mouth, which still forms a very important part of black culture.”
The success rate of word of mouth marketing has also been confirmed from other areas: research by Millward Brown found 80% of South Africans will recommend a product to someone else, compared with the world average of 69%. On the other hand, only 14% of people believe strongly in ordinary advertising messages, according to research by the Harvard Business Review.