Don’t Waste a Good Crisis

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News & Events Archive
Nov 14, 2008

Don’t Waste a Good Crisis
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Every day we open the papers or turn on the television and read about another company filing for bankruptcy or laying off hundreds of employees.  The stock market is on a roller coaster ride, and credit is scarce.  We won’t even mention real estate.  So what is a company to do?  Retail sales are slowing down, and people may not need services at the moment.  Do you need to cut costs and where?  According to Dr.  David Urban, Chair of VCU’s Marketing Department your business must stay innovative in these challenging times.  Cutting employees may not be the answer.  “Now is not the time to stop training employees,” says Urban.  “You can’t stop investing in equipment and plant improvements.  You need to keep advertising.  Maybe public relations would be a better place to put your money.  Get involved with a cause.”

     Many companies have thrived during tough economic times and some notable products were created during a hard market including Crest White Strips, the IPOD, Axe Body Spray, and the IBM PC.  Urban says, “According to a major consulting group study of over 400 companies, 48% of the companies that cut expenses across the board during the 2001 recession lost ground whereas 52% of the companies that increased gross margins had improved by an average of 20% near the end of the recession.”  

     Dr.  Urban encourages companies to consider a marketing audit.  “A comprehensive, systematic, independent, and periodic examination of a company’s marketing environment, objectives, strategies, and activities to identify problems and opportunities and recommend improvements.”  He also suggests that companies need to make some tactical plans including cutting the right costs and getting to the root cause of unnecessary expenditures.  Dr.  Urban indicated that companies should consider promoting consumer benefits as opposed to product features and is a firm believer that discounting can be addictive.

     Dr.  Urban made his comments at the November Innsbrook Executives’ Breakfast Club meeting on the 12th of November which was sponsored by Sam’s Club.

Stacey Abbott and Jeff Ripley of Sam’s Club were the sponsor members for the November Breakfast Club meeting.