What Will Happen To Marketing In The Time Of Economic Crisis?

That question must be in the minds of a number of marketing professionals these days. What do we do with marketing now in times of economic crisis? Given the economic conditions brought about by the US recession, it's imperative we ask:

1. Do we shut down marketing?
   
2. Do we slowdown on marketing?

The answer to #1 is of course NO. Do not stop marketing. Research shows that retention is strengthened in consumers particularly when marketing is done during economic lows. Why is that? Because your company emanates an image of strength and tenacity during a time when everybody else seems weak and vulnerable.

I'm inclined to respond "no" to the 2nd question too, but of course there will have to be a consideration as to the company's budget and goals. I am not averse to cost cutting when it is done prudently. However, marketing is a very complicated thing - because you spend money to make money. You spend a dollar to get a hundred or maybe even more.

Although cutting marketing cost may end up having to be an option when the bottom line becomes thin, it is nevertheless not a wise move specially if your marketing campaigns are timely and targeted. Because even if the economy is down, your market may still be nudged into the right direction. Even if you decide to lower the marketing budget, always bear in mind the opportunity cost of returns that may not be gained.

One thing about marketing is that, if people are really not interested (or if your marketing campaign does not echo the right message) they will not respond to your advertising.

Bear in mind that marketing is an activity of resonance. Prospects will respond to your message if your marketing campaign is successful - meaningful and well-targeted. Regardless of the signs of the times, people will still spend for essential commodities like food and clothing. Although they might tighten their belts in terms of non-basic expenditure such as vacations, hobbies and maybe extra services that they can still live without at the moment, they might still part with their money if they perceive the value to be much higher than the actual money they shell out.

So capitalize on your products value, if consumers see the value and/ or quality of your product then for sure your marketing will be well worth the allocated budget.

Predictions on How the Philippine Economy will Suffer along with the rest of the World

It's a good thing the Philippines wasn't so advanced in the first place in terms of investment because if we had been, then the Philippines would also be in a pretty bad shape now.

The only reason the Philippine economy is still afloat is because the Philippines was too poor to invest its finances in the riskier financial institutions. Unfortunately the smarter more advanced economies thought that taking smaller more secure investments and reinvesting them into riskier investments made them a lot more money. Unfortunately, that didn't work out the way they planned it.

The Philippines will feel the ripple effect of the US economic slowdown. The impact will be felt first of course in the stock market as well as direct exposure. The latter is minimal while the stock market will hurt PSE among other things. And then in terms of incoming investments. The export industry will suffer - particularly those that service the US and Europe. Yes Europe is also in trouble as a result of the sub prime catastrophe. Iceland has already declared bankruptcy and I'm pretty sure that country was much better off than the Philippines. Both the US and the UK have put in place bailouts as sponsored by their governments. Let's hope they make it through this as well. Because we are all interconnected financially, the Philippines owing money to other countries, make it susceptible to these changes although not on our shores.

Nevertheless the living conditions won't be as bad as it has always been - prices will continue to be high, gasoline prices have at least has gone down because there is less demand for oil now as a result. Business that are dependent on tourism and incoming remuneration from abroad will be hit specifically.

If OFWs abroad will have a difficult time, the Philippine economy will be hit pretty bad although I doubt the the extent to which overseas Filipino income will be threatened any worse than an American or European.

The newspapers these days are just peppered with images of the stock market and how it has just crashed amidst the US economic trouble. The bail-out will take a few months or even years to take effect - as the primary issues now are that people are no longer comfortable with spending money, banks are no longer free to give as much credit as they used to. There is a lack of predictability as to what might happen to the stock market, everything being red now.

Some people are buying stocks while their dirt cheap while most are just unloading what seems like lost causes.

The world will be a lot wiser after this economic slum... if it will survive it

Will The US Bail-out Work?

I have been too busy at work to notice recent international news - particularly about the US economy, given that I've just moved to a new office and am still trying to learn the ropes of the business so to speak. I thought that now that I no longer work for a foreign company, I could get away with not knowing what was going on there.

But the Lehman Brothers bit me in the a*s. A global perspective was required in order to complete a Board of Directors' presentation. I went along with it because it was the right thing to do. Of course there will be local and global impact to what will happen to the US economy.

So now I'm forced to pay attention. Here's what happened for the hapless such as myself.

The subprime crisis already began years ago. The US decided to buy bad assets from developing nations and provide a lending service to not exactly "credit worthy" applicants. This was not a suicidal effort, but in fact at that time a seemingly brilliant initiative.

The idea was even if these financial institutions lent money to people who can only repay a small portion up front; considering that the working conditions will improve in the next 3 years and their assets will appreciate, these firms "ballooned" the repayment over a delayed period (about 3 years or so). That way the lenders will pay a little up front but then have enough money later on to pay for an increase repayment after several years. I bet at the time it seemed like a win-win situation.

This was of course until mid-2007 when the interest rates on housing started to rise and investors were getting shaky. As a result people were forced to sell their investments, impacting the stock market and further damaging the financial institutions that lent money because people were now unable to pay them back when their repayment figures were significantly higher.

So the complex web of financial transactions occur until here we are in a state where "everyone owes everyone." Companies like Bearns Stearns, Meryll Lynch & Lehman Brothers who capitalize on these investments felt the blunt first.

And so Bearns Stearns and to be rescued by the US government while Lehman Brothers ended up filing for bankruptcy last Sept-15. Right now the US government needs to implement their $700 billion bailout plan (if that's what it's going to be or something better up their sleeves really quick) or it will hurt not only for America but for the rest of the world as well as the domino effect will just spread throughout the world.

Now to answer the question: Will the US bailout work? According to Forbes it's too big to fail as it brings together Republicans & Democrats to the table as Congress tries to digest Bush's initiative. They say it's no good but there's not better choice right now. It is a rather dire situation - do or die.

If the rescue plan fails, the economy fails. The rest of the world can only watch and wait.

Delta Air Lines Will Take The Wifi Route To Beat Competition

The airline industry is quite robust and very competitive. Everyone competes to be the best airline around. They offer sodas and snacks as well as in-seat entertainment systems that aims to make the passenger experience a lot better than the other airline.

Delta Air lines has taken this competitiveness to a whole new level by making their airplanes virtual wireless internet (WiFi) hotspots. Delta is the first large U.S. airline to commit its main fleet of jets to a technology that lets passengers surf the Net while flying. The service will be available for a $9.95 flat fee on flights of three hours or less, and $12.95 on longer flights.

Beating out JetBlue that offers a limited online solution composed only of e-mail, messaging and shopping on Amazon.com.

Now why did Delta choose this service as compared to other unique service points? Here are a few reasons

• It's cheap. Delta though would term that cost-effective instead. They don't have to shell out a dime for additional manpower in the airplanes and or additional infrastructure. All they had to do was partner up with a service provider - in this case it was Row 44
• Quick and easy to deploy. Again because of the minimal need for additional manpower and infrastructure to support such an additional service in the part of Delta, it is indeed the wise choice. It's not only cheap but easy to set up.
• Does not require a lot of maintenance. Since the service provider handles the efficiency part of the bargain, all Delta really has to do is sit back and watch the money roll in

Like any option for an additional service, the above criteria should be checked. It is imperative that if the company decides to provide an additional service, it should be well worth the effort. Meaning it is appealing to the customer and it is cost effective as well as easy to deploy.

Particularly as prices of consumer products and services continue to rise, it is very important that companies let people see the value of each and every purchase. This goes the same for commercial flights.

This will ensure a win-win situation.

Mirror Mirror on the wall, who's the biggest ad spender of them all?

The biggest ad spender for Q1 of 2008 goes to the Healthcare sector and with good reason! As the world gets more polluted, more and more people are putting a premium to health and insurance with Nielsen Global Consumer Concerns report, May 2008 noting health as the global consumer's biggest concern. This makes a lot of sense. There are so many kinds of diseases going around, people are so busy now making sure they're insured for their family or that they stay healthy enough to go on working.

Basically the growth in advertising spend per sector looks like this

• Healthcare - 10%
  
• FCMG or Fast moving consumer goods - 6.7%
  
• Clothing and accessories - 5.5%

With regards to advertising medium, television has seen much growth too in the last quarter, followed by radio and newspaper

Will Starbucks Say Goodbye Soon?

Starbucks has been going on a downward spiral with an initial job cut and then a lawsuit over "free" wifi. Starbucks is finally closing the doors of 600 outlets! That's a lot I tell you. That's approximately 10% of their total store chain since they have 6,800 US stores. And 600 stores have the equivalent of 12,000 employees losing their jobs. That's really sad.

So what happened you ask? Let's take our answer from Boston.com's Alex Beam - he has laid down in the best and simplest possible terms the answer

What went wrong at Starbucks? To invoke the venerable business cliche, they didn't stick to their knitting. Their core business was overcharging consumers for coffee, and a very lucrative business it was. Then they started selling dreamy CDs, and the company even helped produce a movie, "Akilah and the Bee," that bombed at the box office. Schultz bought a basketball team and started hanging out with Mick Jagger and Paul McCartney, the usual recipe for business disaster.

Google Getting Sued Again! This Time By Viacom Bec Of Piracy Issues On Youtube

There have been just articles upon articles on privacy issues for online use. And I agree that is imperative that people be able to retain online privacy at some point. Companies like Google though make a living out of collecting personal information from users. This allows them to profile clients, enhance advertising and improve the user experience online.

But in cases like this when Viacom sues them, that information also becomes a threat. After illegally posted clips of "The Colbert Report' was posted on Youtube, Viacom cried foul and demanded to know who was doing this.

This then started the avalanche of online piracy and online privacy nightmares for everyone concerned. The judge just ruled that Google would have to turn over user information for Youtube, and although I don't think it's really a big deal as long as they find the culprit and put the case to rest just so we can all go on with our lives, it's still sensitive that this amount of powerful data can fall indeed be transferred and can indeed fall into the wrong hands.

At this point though, Google and Viacom have come out publicly to say that they will do everything they can to retain people's anonymity. Yeah right!