Marketing in the Great Recession: an executive guide

Abstract

PurposeThe world economy is likely to worsen because of the consumer's fears created by a cascade of financial and business catastrophes. To adapt their marketing approach, executives need guidance on how to respond to the sea change in the attitudes of individual customers during this current Great Recession. this paper aims to investigate this issue.Design/methodology/approachGiven that experts believe that we have entered a period of austerity marketing, which is defined as marketing to consumers who do not want to spend, the paper shows how companies can reconcile consumers' fear, their aspirations for comfort, and their new reluctance to flaunt extravagance. His research indicates that marketers will have to include reassurance as part of their appeal.FindingsSome businesses think that the fail‐safe approach is to emphasize great value, but this will require them to understand their evolving customers' value system better than ever in order to sell to them successfully; in particular their need for self‐respect, status and self‐fulfillment.Research limitations/implicationsThe author, a professor of marketing at Waseda University in Tokyo has also been a senior marketing executive for major global businesses. Much of his research is based on first‐hand observation.Practical implicationsIn the consumer markets of the USA, Japan and Europe, one new marketing approach that addresses consumers' higher needs is that of indulgent parsimony, or frugal indulgence. The theory is that recession‐shocked consumers are shopping for less costly goods and services but nonetheless want their purchases to provide comfort and relief from stress.Originality/valueFor the next few years, marketers should encourage guilt‐free (and altruistic) gratification by customers. A potentially successful marketing approach could articulate this customer mindset: “I'm worth it … because I've examined all the alternatives and this one gives me the best value for something I really do need”. Indulgent parsimony – offering reassurance, value and self‐esteem at bargain – may prove most effective.