What to Do in a Crisis in Business?

How do people act when the economy is shrinking? What should businesses do when the economy is shrinking? Because we have been through things before, we can learn from them.

One of the most important macro factors in the country is the mood of the people who buy things. People are less optimistic during this time, and every family acts more carefully. He spends less on some things and doesn't pay for others at all.

When people choose to spend less and pay less for most of their purchases, they create a new balance. Demand goes down and shifts to cheaper goods, which is called "down trade."

People who used to buy more expensive brands look at their budgets and switch to cheaper names. All brands lose some customers during this time, but they also gain new customers who aren't familiar with them before.

Periods of economic contraction happen when people usually buy fewer things, but demand for some goods goes up. People tend to spend less during these times, but they also choose certain goods as treats and eat more of them.

For instance, the contraction has a bigger effect on the car industry, while the demand for products that make home entertainment more fun grows.

That's because people who cut back on almost all of their spending make up for it somewhere else. There are "reward products and brands" for every contraction time.

1. When people spend money when the economy is bad, it makes them feel bad. On the contrary, spending their money on useful things alleviates customers' feelings of guilt.

Because of this, it is more important than ever for brands and stores to give customers "good reasons" to buy during times when the economy is bad.

1. When people are in a pessimistic mood, their need to join grows. During these times, the value of family and friendship grows. It's becoming less important to be "I" and more important to be "we" built on solidarity and sharing.

When the economy is bad, managers decide to cut costs, and marketing costs are the first thing they cut. Firms that don't do this, on the other hand, are the ones that grow the fastest after the contraction time.

It is important to look at all costs, including advertising costs, and find ways to save money on all of them, but it is a terrible idea to cut everything.

This is because advertising is not just a "must-have" for brands, it is a "must-have" for marketing. Also, when there is less advertising from other brands, the voice of the advertising brand is heard more clearly.

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