Marketing campaigns rarely happen in silos – Ajayi
By Ibidunni Banjoko
John Ajayi, Publisher of MARKETING EDGE, Nigeria’s foremost brand-centric and advertising magazine, has stated that marketing campaigns rarely happen in silos. According to him, they are often affected by external economic factors such as consumer confidence and unemployment rates.
Mr. Ajayi made this assertion at the Commerce and Industry Correspondents Association of Nigeria (CICAN) Annual Workshop/Awards and Recognition, which took place at Sheraton Hotel, Lagos.
He advised that when developing a marketing strategy, businesses need to factor in the economy of their target market to ensure they prepare for economic uncertainties.
While commenting on the economic factors affecting marketing, he said: “Demand and supply shape the market. some of the biggest economic factors that affect marketing are demand and supply. Often, the goal of a marketing campaign is to drive up demand. When demand is high, the price of a product can also be high, increasing profitability for a business. When demand is low, the price lowers too. When there is a limited supply of materials, either due to manufacturing or environmental issues, the demand increases due to non-availability”.
“Consider the latest technology gadgets that are usually released in limited quantities. The demand is high due to comprehensive marketing campaigns that make it known that only a limited quantity of the products will be available at the launch. This marketing strategy can also be applied to small businesses. When releasing a new product or service, consider marketing it as “limited availability” to drive up demand and price”.
“However, marketers need to be sensitive when promoting products that are deemed necessary, like food, during a shortage. It can be seen as unethical for a production company to market limited supplies of a certain fruit while raising prices to astronomical levels, for example.”
He continued: “Consumer confidence affects purchasing patterns because consumers are more likely to make purchases when they are confident in the economy and their financial situation. In addition to a logical factor, consumer confidence has an emotional component that is beneficial to marketers. When consumer confidence is high; marketing campaigns can focus on the internal elements that affect purchasing decisions by including messaging that uses highly emotional language”.
“Businesses benefit as a result of customers who have more spending power during periods of high consumer confidence. In order to survive a low-consumer-confidence period, businesses need to develop marketing strategies to engage consumers who do not feel they have money to spend on unnecessary products and services. Careful product positioning and messaging is critical during this time to convince consumers they can spend their money on these products.”
One of the factors for revving up consumer confidence to drive demand according to him is employment and wages. “Employment rates affect how businesses market their products and services. When the majority of consumers are making stable income, and continue to expect that stable income, they are more likely to demand more with their purchasing power. This enables businesses, especially those that sell luxury products, to succeed in selling their goods.”
“The amount of wages that consumers make relates to how much they can spend. When wages are rising to meet the increase in expenses, consumers have more discretionary income. However, if wages don’t rise accordingly, or if they fall unexpectedly, businesses that market high-end products like jewelry or luxury vehicles may struggle to convince consumers to buy. When employment and wages are low, businesses may need to create lower price-point products to entice customers.”
He concluded by saying that economic recession affects everyone from large corporations to small businesses to individual consumers. “Marketing during a recession is challenging as businesses generally have a smaller budget and fewer resources. Plus, consumer confidence is low and people generally don’t want to purchase anything they deem unnecessary. Therefore, it’s critical to position products and services as integral to a consumer’s lifestyle, showing them how their lives will truly benefit from that purchase.”
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