Ryanair Is Gold Standard Of Recession Marketing Strategy

Last Updated (Wednesday, 31 December 1969 15:59) Written by Sean Ashcroft Monday, 30 November 2009 20:19

MARKETING could not be more mission critical in a recession, so why is it that companies' marketing budget is often the first to be slashed in tough times? In a word, fear.

MARKETING could not be more mission critical in a recession, so why is it that companies' marketing budget is often the first to be slashed in tough times? In a word, fear.

Fear that there's not enough "in the pot" to sustain the current marketing spend.

The fear that there is not enough money to sustain decent marketing spends.

Fear that marketing will make no difference because "customers and clients just don't spend in a recession".

Such fear can be understood, but that does not make it any more logical; all the evidence points to the fact that when a company reduces its marketing outlay in a recession its chances of surviving plummet.

Why? Because many of your competitors will view recession as the perfect opportunity to market aggressively, and so steal market share from rivals who are too lily livered to do the same. Cent for cent and penny for penny, marketing spends in a recession deliver a much higher return on investment.

Take Ryanair. Today the Irish-owned airline is Europe's premier low-cost carrier, but prior to 9/11 this was not the case.

It was only in the months after the New York terrorist attack that Ryanair managed to elevate itself to this position. It did so, because it bucked the prevailing marketing trend across the global airline industry at the time.

As a result, most airlines froze their marketing spends. Ryanair, however, saw that by following this course, it would run the risk of dropping off their customers' radar.

As a result, Ryanair decided to step up its marketing campaigns, taking aggressive action to persuade travellers to return to the skies. Ryanair's impressive growth during the post 9/11 period demonstrates that bold marketing can usher a business through recession or similarly testing times.

There's little doubt that airlines have taken this on board; a study by Airline Business shows that most airlines now believe that marketing budgets should not be cut during testing times.

Just under half said they plan to spend 'around the same', a third declared their marketing budget for 2009 would be 'greater than last year', while a further tenth revealed their marketing budget for 2009 would be 'markedly higher.' Only 15 per cent said they planned to cut their marketing spend. Remaining visible when the economic going gets tough is vitally important. _

'We are planning to spend up to 20 per cent more on marketing this year," says Birkir Holm Gudnason, who is chief executive of Icelandair. Iceland's economy, remember, suffered more than most in the wake of the Credit Crunch.

"We recognize that if we cut our marketing promotions then the volume of bookings will drop. However, if we remain visible to people, then the volume of people flying to Iceland will increase."

As the Chartered Institute of Marketing warns in its white paper on recession marketing, 'Keep calm and carry on Marketing': The bottom line is that if you are not in the game, your competitors certainly will be, giving them an edge you don't want them to have.