“…If spending on marketing is considered more effective than luxury offices or financial investments, should businesses cut back? The problem has become clear. The rest is the analysis and evaluation of the effectiveness of each budget item…”. What should the investment strategy and marketing budget be like during an economic recession? is a topic that has occupied the most space in Marketing discussions on forums and seminars recently. Vietnam Economic Time reporters interviewed the chairman of Masso Group about the perspective on Marketing during a recession. The website editorial board would like to introduce to readers a few main ideas as follows:
How do you evaluate the importance of marketing for business development? Do you know how businesses invest in marketing, sir?
This is such a big question and to be able to answer all the importance of marketing for businesses, it is impossible to summarize it in the framework of an article. Here I only present the most core idea through which businesses can feel the role of marketing. What is the difference between businesses and other organizations (public administration, charity, non-governmental, unions, etc.)? The answer lies in customers. A company without customers cannot be called a business! In other words, the mission of a business is to create and maintain customers and marketing is this job. Marketing's leading role in a business comes from the function of capturing customer needs, both actual and potential needs, thereby orienting all departments of the business to produce/provide products and services that satisfy those needs in a way that brings profit to the company. Thus, the responsibility for marketing is not only the marketing department but also the entire enterprise, in which the marketing department performs specialized functions. Understanding this, perhaps enterprises no longer have to worry about the role of marketing in the enterprise. However, in reality, consulting many Vietnamese enterprises, I see that the correct and sufficient awareness of marketing is still very limited, and this happens even in leading Vietnamese enterprises! Investment in the marketing field in companies is often understood as the budget for advertising, promotion... and not comprehensive in the true meaning of marketing as mentioned above.
In the current economic situation, businesses are very careful in all their spending. And many businesses think that marketing is unnecessary at this time and cut all marketing costs. In your opinion, is that thinking completely correct? And is cutting marketing costs for businesses to survive a wise strategy to fight the crisis, sir? Why is that?
This is a question that I have received quite a lot recently, reflecting the concerns of businesses at present. Cutting costs during the current economic crisis is necessary and most businesses in the world are doing it, but the question is which ones should be cut? The answer is "ineffective or vague expenses", so why cut the marketing budget if the business is confident that the expense is effective, helping the company complete the target? If spending on marketing is considered more effective than on luxury offices or financial investments, should the business cut it? So the problem has become clear. The rest is the analysis and evaluation of each business to the effectiveness of each of its budgets. One of the reasons why most businesses often think of cutting their marketing budget in the short term is because (i) marketing budget is synonymous with advertising budget (ii) it is not/difficult to measure the effectiveness of marketing, and therefore often automatically classify the marketing budget as a "luxury" expense, meaning it will be implemented when the budget is abundant and will be cut when times are tough!
In your opinion, what marketing strategies should businesses have during this economic recession?
The general mentality of companies is to be defensive in order to reduce risks, however, through contact, I know that many businesses are still bold in setting high targets and not cutting marketing budgets. The reason is that they still see opportunities and are confident in their growth strategy despite the economic downturn. Therefore, what is the marketing strategy in the context of economic recession is a question without a common answer, but depends on each business, industry, short-term/long-term strategy... there is only one common point that can be shared: the effectiveness of spending and investment is extremely important in the context of recession, and this also applies to marketing.
(Excerpt from an interview with Vietnam Economic Time by Mr. Nguyen Trung Thang, Chairman of Masso Group)
