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KBB Review Title

Talk is cheap...
10 November 2008

It's impossible to ignore the challenging state of the market at the moment and manufacturers and retailers alike have been working hard to push through this instability as the financial bubble continues to burst. 

However, this is not a wholly negative outlook for our sector. During recessionary periods people are less likely to move house but they will still be investing in home improvements and DIY - either in preparation to sell when the time is right or to invest in their future.

The nature of their spend may change (e.g. full scale refurbishment delayed in favour of clever makeovers) but nonetheless there is life in the market yet. We already know that the kitchen and bathroom are the rooms where consumers typically spend the most money. This can range from simply changing brassware to creating a statement vanity area, introducing a stunning shower area or even renewing the whole suite.

As tempting as it may be to cut back on marketing activity in these tough times, it can open up a lot of opportunity.

Research from the Institute of Practitioners in Advertising (IPA) shows that reducing marketing spend in a downturn will help to defend profits in the short term but ultimately the brand will emerge weaker and much less profitable. 

Without continuing to promote the brand, increasing market share after a decline is difficult and companies which invest to maintain their 'Share of Voice' (SOV) will see an improvement in profitability that outweighs the short-term reduction. There is also competitive advantage in the fact that if other companies are cutting budgets, your longer term benefit of maintaining SOV will be even greater. 

Brands exist as a relationship with consumers and figures from market research experts Millward Brown show that 67% of sales are as a result of a strong relationship and that 60% of brands that cut back on advertising spend decline in profits as their relationships suffer. There is also evidence, particularly in hard times, that consumers find solace and comfort in brands with which they identify. Good brands have true personality and if they offer reliability that makes them even stronger in tough times.

Consumers today are bombarded with marketing messages about products to expand their choice - but brands exist to simplify choice. Communication is a major contributor to sustaining a brand relationship and although a review of marketing activity and investment levels is necessary when times are tough it's not wise to take a short term approach and cut back entirely.

With this evidence in front of us it's important that the kitchen, bedroom and bathroom industry maintains, and maybe even grows, its voice within the whole market. We can continue to invest in the elements of marketing which focus on the small things that make a difference. Small things do not have to necessarily jeopardise short term profits.

Continue dialogue and maintain relationships with customers - regular communication is the only way to keep a dialogue going and if this is continued through a downturn, a brand can grow. However, longevity of a brand isn't a 'one size fits all' solution. Consumers are heavily targeted with advertising and marketing messages and evidence shows that people respond better to information that is personalised and relevant. For example, if records are kept on bathroom products bought by a customer a mailer can be sent three or four years later with a shot of the bathroom they bought and a suggestion of a new bathroom design.

Gather data on opinion - customers are the most powerful brand ambassadors and their views can help form the way we target them as well as creating word of mouth on brands - and this is a powerful PR tool. By determining what customers need it paves the way for targeted promotions or offers and can even help with sourcing new products or suppliers.

Read magazines/newspapers - consumer and sector magazines can give creative ideas and inspiration on marketing which can be applied to your own business.

Think local, not global - know your own market and focus on the right people - researching where customers come from can be enlightening and instigating a postcard system in store which asks customers to state how far they have travelled to a showroom will give an idea of geographic reach. Once this data is collected it allows the creation of 'customer hot spots' and an understanding of where they are, where they come from. From this comes effective localised marketing through a variety of channels including press, radio, door drops and direct mail.

Remember that less is more - there are cost effective ways for a business to make its mark. Inviting a handful of customers to attend a focus session with refreshments provides a valuable opportunity to hear customers' views.

Don't underestimate the power of free opinion either - listening in to a group of strangers on public transport or in cafes can provide valuable insight into how people think. Another cost effective way is to run surveys and polls with customers and these can be done free through websites such as surveymonkey.com.

Make phone calls - rather than investing money in advertising think about other cheaper ways to get your message out there - have a few ideas on news angles and call local media to discuss them and possibly get coverage out of it all for the price of a phonecall and some careful thought.

Challenging times focus the mind on cost saving methods in a way that a buoyant economy can't. With many elements of a downturn out of our reach, what we can be sure to do is be proactive with our marketing; get out there and get the business - and fight for the industry's voice in all of the noise that is currently dominating the market.

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