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      Marketing and advertising in prism of Business Cycle

      The most recent economic roller coaster and its impact on medium and small businesses are not quite obvious however; sporadic and panic driven actions by small business owners are starting to show an impact. The most obvious decisions to cut advertising and marketing budget to meet year end profits is the most flowed decisions that can be observed.

      As a general rule it is vital to recall some of the most fundamental rules of business. Advertising and marketing are the corner stones of any solid business that plans to maintain and expand its market shares. Cost cutting and or fat trimming in order to achieve short term budget requirements in exchange for long term loss of market shares is by far one of the most devastating decisions that can be made.

      It is not to say that budget adjustments in marketing and advertising section may not be done, rather than achieving a balance that assures long term business market shares and survival. It is our opinion that specially in economic down turn in general markets, it is vital not only to maintain advertising and marketing budgets, but if possible at all an increase in those spending should be undertaken.

      The same, however, does not apply to economic down turn in specific markets and industries. If particular downward trends in specific industry is noticed, overall reductions and budget adjustments is vital and will ensure proper financial liquidity and cash flow that may assist in long term survival.

      None of the above strategies would generally apply to publicly traded companies or very large organizations. Those points are rather generalist theories based on most common business and economic environment for small and medium size business. But again, even very large organizations have similar concerns that need long term as well as short term strategies.

      To reiterate the above strategies, it is important to remember that the mere budget increase or maintenance of advertising and marketing funds does not assure any level of success. Any consideration to spend marketing and advertising funds should be subject to detailed scrutiny for efficiency, effectiveness and return on investment.

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