When the economy slows down it is prudent to analyze and reduce overhead and unnecessary expenditures. Many large companies layoff workers, cut capital projects, reduce research, development and many other endeavors to conserve cash. It is also tempting for businesses to cut their marketing budget almost entirely.  While it is an immediate cost savings, in the long run it may actually hurt one’s business.
 
To determine where to reduce marketing budget dollars and how to maximize remaining budgets, evaluate the following resources:
 
·     Customer Data
Companies who possess consumer databases and have access to analytics (including shopping habits, website traffic and referral sources) can continue to be very successful with marketing efforts. Leveraging this data can help a company target specific niches and price products appropriately including the creation of demographic-specific promotions.
 
Amazon is a perfect example of a company poised for success.  With terabytes of data on customer buying habits at its disposal and the ability to change prices and specials instantaneously, Amazon is poised to weather the storm.
 
·     Aggressive, Value Based Marketing
As consumers are watching their own dollars, there is tremendous opportunity for value-based marketing campaigns.  More people are clipping coupons, opting for 2-for-1 specials, rebates and more.  
 
Wal-Mart is famous for extending generous deal to get customers in the front door. During the technology slowdown from 2000-2001, Wal-Mart devastated a number of competitors with their “Every Day Low Prices” campaign.  In 2008, Wal-Mart is set to do the same thing for a Christmas season by dropping many popular toys to unheard of prices challenging other retailers such as Target, Toys R Us and even Amazon to compete.
 
·     Access to Capital
As the global credit crunch continues, the companies with access to capital will continue to be able to fund marketing initiatives.  Large companies with available capital will be able to ramp up marketing campaigns to overshadow competition.   Firms with smaller budgets may not be able to compete but it doesn’t mean there isn’t opportunity.   Depending on resources, smaller businesses should dedicate remaining marketing capital to continuing the “conversation” with loyal consumers in addition to exploring opportunities to cross-sell their other products.
 
The downward economy is causing many to streamline but there is still a need and an opportunity to engage consumers. Now more than ever, consumers are looking for value and a brand that empathizes with their need for additional cost-savings.  Evaluation the above areas is a good place to determine the most effective way to continue reaching out to consumers even in a leaner economy.