Weekend Argus (Saturday Edition)
Cutting marketing spend an error
IT IS just a few days since Minister of Finance Pravin Gordhan delivered his annual Budget speech and while the South African economy is experiencing challenges, there is some good news. The anticipated increase in VAT did not materialise, there was tax relief for some and government grants were increased.
The biggest mistake most companies make is to reduce investment in marketing and communications in tough times.
The truth is that consumers have not stopped spending, they are merely looking for more bang for their buck. Given the tax relief and that VAT was not increased, for example, consumers may well have more disposable income now.
History has proved that those brands that are consistently advertised during tough times enjoy greater consumer loyalty.
It would, therefore, serve marketers well to invest more in advertising and communications to maintain brand loyalty during the economic recession.
Odette van der Haar, chief executive of the Association for Communication and Advertising, says: “South Africa has seen a prolonged period of challenges, from power issues, to political issues, to exchange rate fluctuations that keep even the most adept economists guessing.
“However, our tenacity as a nation in general, and as marketers in particular, has continually found ways of mitigating these challenges.”
From the beginning of next month, the government will be imposing a “sugar tax” on sugar-sweetened bever- ages, and this will affect most beverages on supermarket shelves. Products such as carbonated soft drinks, fruit juices, sports drinks, energy drinks, vitamin waters, sweetened iced tea, cordials and squashes, to name but a few, will be affected.
This is an opportunity for responsible marketing and communications, as well as creativity, in driving home the important message of a healthy lifestyle. There is a need for greater collaboration between marketers and their agency partners on this issue.
Again, marketing budgets should not be reduced.
“It may seem counterintuitive to increase spend during difficult trading conditions, but smart companies should use this opportunity to shift their thinking, be bold, remain visible and identify needs that their consumers may have,” Van der Haar says
“It also reinforces the need for agencies to develop strategies and implement effective communications campaigns that deliver a defined and measured return on investment for their clients, thereby ensuring that our sector remains a critical, strategic partner to the broader business world.”