Here is an interesting observation: I emailed several folks who posted stories about, or relating to, Kellogg’s huge success following their continued marketing during the Great Depression – to find MORE stories about other successful companies who did the same. Guess what? NONE of them had any further examples! So being the search king that I am, I hit Google and dug deep to find several other great examples for you!
Today I post up the following for your review:
For many companies recessions are a time when short-term considerations trump long-term potential. This is not irrational thinking. It’s true that the uncertainty of recessions creates an opportunity for serious profits, and the historical record is full of companies that made successful gambles in hard times: Kraft introduced Miracle Whip in 1933 and saw it become America’s best-selling dressing in six months; Texas Instruments brought out the transistor radio in the 1954 recession; Apple launched the iPod in 2001.
Then again, the record is also full of forgotten companies that gambled and failed. The academics Peter Dickson and Joseph Giglierano have argued that companies have to worry about two kinds of failure: “sinking the boat” (wrecking the company by making a bad bet) or “missing the boat” (letting a great opportunity pass). Today, most companies are far more worried about sinking the boat than about missing it. That is why the opportunity to do what Kellogg, and Chrysler and Kraft and TI and Apple did exists. That is also why it’s so nerve-racking to try it.
Both anecdotal and empirical evidence support the case that advertising was the main factor in the growth or downfall of companies during those years. To put it bluntly, the companies which demonstrated the most growth and which rang up the most sales were those which advertised heavily. The Great Depression offers classic examples of the power of brand advertising even during times of economic crisis.
Proctor and Gamble – This is a company with 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.
Chevrolet – 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, the “Chevy 6” took the lead in its field and remained there for the next five years.
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.
Let’s return to Proctor and Gamble for a while. 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. Therefore, 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.” Are shareholders always right? NO– or they would be executives instead!
So once again, those companies which took advantage of the Depression and came through in good form were those who kept their name in front of the public in spite of a lack of purchasing power.
Which type of company will YOU be? It is a decision you need to make sooner rather than later, and stick to it, and see it through.
Today’s new frontier is video on the web: websites, YouTube, online video and the like. Call me and I can help you take advantage of the power of VIDEO now, while YOUR competitors are cutting, slashing and pulling back.
Uncertainty? Who cares?!