Practical reasons why the advertising of Fast Moving Consumer Goods (FMCG) should continue even in a recession

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CURRENT ECONOMIC REALITY

Nigeria has plunged into her second consecutive quarter of negative economic index which has left individual, private and government outfits feeling and living the harsh realities. The country is experiencing job losses, drop in costumer consumption habits due to dwindling disposable income.

As it has been a norm in recent times, clients tend to cut their spend, due to uncertainties of the fiscal and monetary policies of the government. However, from a strategic business standpoint, there are a set of companies that should continue to invest behind their. These are companies that manufacture fast moving consumer goods (FMCG), and for the following reasons:

NEED TO STAY IN TOUCH WITH CONSUMERS

As incomes dwindle, consumers begin to prioritize purchases and often opt for the most important lower-priced commodities (the trade down effect) entities when decision time is near. Basic needs become priority, consumption pattern of the consumer changes though the need remains constant, which makes it pertinent for FMCG brands to constantly be in the face and minds of consumers to stimulate and make their brands the brand of choice at the point of making their decisions.

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For example, in 2009 during the global recession, Milo and Bournvita, from the stables of Nestle and Cadbury respectively, invested heavily behind their brands to stay relevant in the minds of their consumers across major cities in Nigeria. Coca-Cola also confirmed to invest in outdoor advertising within 2009 despite the state of the economy.

FOR HIGH RISK THRESHOLD INVESTORS

Investors are always on the lookout for resilient, focused and goal driven businesses to put their money in. A business that dominates advertising space during a recession is seen and believed to be resilient and optimistic about its business outlook.

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INCREASED MEDIA VALUE

Although the cost of media may not necessarily drop during a recession, however, because clients tend to really cut down on advertising spends, this creates a vacuum and array of excellent opportunities to secure well discounted top-rated media space or time, as they will be available due to drop in general media spends.

INCREASED MEDIA VALUE

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Although the cost of media may not necessarily drop during a recession, however, because clients tend to really cut down on advertising spends, this creates a vacuum and array of excellent opportunities to secure well discounted top-rated media space or time, as they will be available due to drop in general media spends.

MARKET SHARE AND LEADERSHIP

Continuous advertising of FMCG brands during a recession creates an opportunity to gain market share and market leadership, and attack timid rivals. This increases investor and consumer confidence in the brand. can also improve the stock market valuation of the company.

STRENGTHENED BRAND POST-RECESSION

Continued brand promotion during an economic downturn, will result in equity building, strengthening of the brand and making businesses more profitable at the end of the recession period.

For instance, Maltina and Gulder invested in their own reality TV shows, MALTINA DANCE HALL and GULDER ULTIMATE SEARCH respectively, all to create leverage and stronger equity for the brands, and this continued strongly even through the recession and now.

 

(Joshua.Igbasan – Brandeyemedia Nigeria)

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