Posts Tagged studies
Cutting Marketing Could Prove Costly
Posted by Gallant in Business Tips on April 10, 2009
Household and personal-care companies that cut spending on marketing in a recession could suffer immediate and long-term business losses, according to a new study. Analysis by a University of North Carolina professor shows home and beauty companies that reduced marketing in previous economic slowdowns lost share to private labels and failed to regain it.
The results of the study are especially timely, as a significant number of these companies slashed marketing at the end of last year. Using data provided by TNS Media Intelligence, which tracks advertising media, multiple researchers have found household and personal-care companies lowered marketing spending by 14% on average in the fourth quarter of 2008. For the year in total, the companies reduced marketing by 8.8%, ahead of the 5% cut by advertisers across all industries.
According to data from Goldman Sachs, a handful of personal-care companies did choose to increase marketing spending late in 2008, contrary to trends. For example, Procter & Gamble Co. devoted more money to advertise its laundry detergent brands, hoping to at least maintain sales and protect against gains from rivals. Further data provided by Information Resources Inc., a marketing services firm, showed foreign-based multinational companies tended to outspend U.S. companies in the home and beauty industry. L’Oréal, for instance, boosted its fourth quarter advertising spending and could stand to benefit in expanded market share.
Conversely, according to the UNC study, about half the share lost to private labels in past recessions has never been recovered by household and personal-care companies. However, research shows leading premium brands that maintain advertising budgets in a recession do not lose business to smaller non-premium labels.
Psychologists Link Entrepreneurs to Juvenile Delinquents
Posted by Gallant in Business Tips on March 25, 2009
Psychologists link entrepreneurial spirit with that of juvenile delinquents.
Stubborn, delusionally optimistic, creative, fearless. These characteristics are typically associated with entrepreneurs. But psychologists and businesspeople frequently add one more word to this list: ignorant.
“Entrepreneurs tend to have a singular weakness that allows them to do things without checking their conscience,” says Abraham Zaleznik, a psychology professor at Harvard Business School, in a CNN news article. “Juvenile delinquents act and then try to sort things out afterward. I think entrepreneurs have this tendency.”
With a recession eliminating 2.6 million jobs last year, many people are being pushed into entrepreneurship without a complete understanding of what it entails.
“You need to be in denial about the huge challenges you face,” Guy Kawasaki, a former Apple executive says in the article.
Despite hardships, recessions can be launching points for innovative at-home start-ups. In fact some of the best new businesses originate during economic downturns because the market is so selective that new products must truly be great to survive. In other words, there’s not a lot of money to go around.
Many successful entrepreneurs are tuned into consumer needs, says psychologist Lynn Friedman. Many come from nurturing families and value the idea of trying new things. Entrepreneurs “live in the world of action, and they often need help with slowing down and thinking several steps ahead,” she says.