Recession as we all call it and have been facing its aftermaths during the past one year started when Lehman Brothers the 158 year old Iconic brand filed for bankruptcy. There was turmoil everywhere. Financial institutions were folding everywhere. The question every business was asking was- Which of them will make it through the year? Retails being no different were busy adjusting their product mixes and marketing approaches to remain profitable.
While these questions still loom on the pages of every newspaper and magazine, marketers and brand managers are racking their brains to come up with strategies that will carry their companies through the turmoil. Even without brilliant answers, it’s pretty certain that many brands and stores will survive this challenging time, just as their predecessors weathered the Great Depression.The depression originated in the United States, triggered by the stock market crash of October 29, 1929,known as Black Tuesday, but quickly spread to almost every country in the world.
Of course, some businesses did fail in that difficult financial climate. But some iconic brands were also created during the same era.Am sure history would repeat itself. There would be brands which would come out as winners during this recession and take a step forward in attaining an iconic image.
Camel Cigarettes – in 1920 Camel was the top selling tobacco product. American Tobacco Company then struck back with the Lucky Strike brand and by 1929 Lucky had overtaken Camel as the number one brand. Two
years later in the heart of the Depression, Chesterfield also overtook Camel. Camel countered with a massive increase in advertising spending and by doing so demonstrated the power of advertising during depressed times. By 1935, it was back on top.
Proctor and Gamble – This is a company which has a philosophy of not reducing advertising budgets during times of recession and they certainly did not make any such reduction during the Depression. P&G has made progress in every one of the major recessions and that is no accident. When their competitors were swinging the budget axe, P&G actually increased their spending. While the Depression caused problems for many, P&G came out of it unscathed. Radio took P&G’s message into more homes than ever. P&G first turned to radio in 1923 advertising Crisco on a New York station. Other products such as Ivory and Lava soap were advertised on ‘product oriented’ shows which were similar to todays infomercials. But in the heart of the depression P&G took a step which changed not only that company but the broadcast medium forever while creating great demand
for its products. The president of P&G at the time was Richard Deupree. In spite of the fact that shareholders were demanding that he cut back on advertising, he knew that people were still buying essential household products. So he created radio programming that did not focus on a product. Because of that, we now have a cultural attribute known as the “soap opera.”
In 1933, P&G went on the air with its first “soap” – “Ma Perkins,” sponsored by Oxydol. P&G was so satisfied with the increase of sales, they went on to introduce “Vic and Sadie” for Crisco, “O,Niells” for Ivory Soap and “Forever Young” for Camay. By the time 1939 rolled around, P&G was sponsoring 21 radio programs and they doubled their radio advertising budget every two years during the Depression. Radio was one of the fastest growth industries of the depression. P&G virtually built daytime radio with its advertising budgets and
programming. Two industries were thriving from the advertising budget of one.
During the 1920s, Fords were outselling Chevrolets by 10 to 1. In spite of the Depression, Chevrolet continued to expand its advertising budget and, by 1931, Chevrolet took the lead in its field. It is believed that Ford’s weaker balance sheet entering the Depression rendered it unable to respond to Chevrolet.
During the same era, Levi Strauss & Co. was falling on hard times. With a customer base composed primarily of manual laborers, Levi’s saw sales of its jeans drop by more than 50 percent during the 1930s as the unemployment rate soared. Times were changing, and that meant Levi’s brand message had to adapt.
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Inspired by the success of this approach, Levi’s decided not to rely solely on its advertising message of durability, similar to that used by many other brands. Instead, it chose to go for a more emotional appeal by emphasizing the western mystique of Levi’s jeans, the cowboy lifestyle popularized by Western films.
By re-examining its core message, Levi’s was able to position its product as a mainstream apparel choice. This allowed the company to broaden its marketing base and move beyond the relatively small group of blue-collar workers it had served up to that point.
But Levi’s didn’t stop there; it implemented a small idea that turned out to be a major marketing coup. In 1936, a red tab imprinted with the Levi’s trademark was added to the back pocket of its jeans, a bold step that effectively placed free advertising on the people walking around wearing them. The garment industry has never been the same since across the world.
Faced with similar economic challenges, many people consider present times a second Depression. But the concepts that succeeded so brilliantly in 1930s America are hardly unusual in the current marketplace. There are millions of broadcast ads and infomercials on TV, radio, and even the Internet. Many, if not most, brands have an outward manifestation of their identity plastered all over the actual product. And credit for consumers? If a store doesn’t accept credit cards these days, it probably won’t stay in business very long.
The goals for marketers in the 1930s were the same as they are today: Make your product stand out, make it desirable, and make sure your company is still around when the sun begins to shine again. As we continue to look for ways through the current financial crisis, it’s time once again to disrupt the status quo and apply fresh thinking to our strategies and tactics, just as marketers did during the Great Depression. Difficult times call for creative methods and visionary leadership. How will you—as retailers, brand managers, and marketers—respond to the challenge?
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