Why marketing budget slash may not save brands at trying economic times —expert

Marketing communications expert and  Group Chief Executive Officer of Prima Garnet, Mr. Lolu Akinwunmi has cautioned against  hasty and indiscriminate slash of marketing  budgets, as a cost- saving measure, during recession,  arguing such action might not necessarily enhance the fortunes of the brand it is meant to protect.

Akinwunmi made this observation  while delivering a lecture, tagged ‘Maintaining Market Leadership In A Turbulent Environment’, at the fellowship award of the National Institute of Marketing of Nigeria (NIMN), held virtually, recently.

The former Chairman,  Advertising Practitioners Council of Nigeria (APCON), argued that  since the nation’s economy is  passing through turbulent times,  maintaining leadership at such period  for brands and marketing professionals, therefore,  requires an adjustment of strategies, tactics and products offerings so as to meet shifting demands.

“As sales start to drop, businesses typically cut costs, reduce prices, and postpone new investments. Marketing expenditures from communication to research are often slashed across the board. We all know that in many instances, such cost -cutting decisions are indiscriminate, and can even be a mistake,” Akinwunmi stated.

The former APCON chairman believes that while it may be wise to contain costs, failing to support brands or examine core customers’ changing needs can jeopardize performance over the long term, adding that companies that put customer needs into consideration, enhance their fortunes better than those that embark on indiscriminate ad spend review.

According to him, the COVID-19 global pandemic has induced changes in marketing communication, promotional and media spends, forcing businesses and brands to re-evaluate their thinking about current and future marketing campaigns.

He argues that while brands try to reposition themselves, in the highly uncertain economic terrains, the likelihood of market alteration, increased competition and  demand for creative and aggressive marketing practices, is becoming increasingly obvious.

Akinwunmi, also a fellow of the marketing institute,  stated  further that though the telecoms industry seems to be the only active sector for now, the ‘honeymoon’ may soon be over if the economic situation fails to improve, and  individuals’ earning powers are affected.

“So in essence, we are looking at a tougher time the rest of 2020 and the first two quarters of 2021, during which we cannot meet our projected growth forecast and will now be lucky if the economy grows by 1%,” he stated.

The Prima Garnet’s boss believes the impact on the nation’s marketing industry is grave, since it is likely to  suffer serious reverses associated with the general business environment.

“We may witness fewer investments in the industry at large because of low ROI. We may also experience disruptions in operations, like salary cuts and adjustments, as income drastically reduces and we may even see many companies having no choices than to retrench,” he stated.

Akinwunmi however  believes that embracing  changes in marketing and marketing communications ecosystem,  coming to  terms with the chaos and getting ready to re-build, have become imperative for marketing practitioners.

The former APCON boss  argues further that  managing new imperatives for growth, should also be of utmost concern for marketing practitioners, desirous of maintaining a leadership position with their brands  ‘in the midst of this uncommon level of uncertainty’.

Congratulating the new fellows, the institute’s president, Mr. Tony Agenmonmen,  described the conferment of a total of 48 individuals with the Fellowship of the institute, as an indication of the institute’s rising profile,  as it continues to attract quality practitioners into its  fold.

He therefore urged the new fellows  to project the image of the institute, positively; since  many will look up to them for leadership, counsel, and directions with regards to activities concerning the Institute.

 

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