Recession and Building Product Marketing

Building products has always been a highly competitive marketplace, and the current economy is causing many firms to reconsider how they allocate their resources. While cash flow and other short-term considerations may demand most of your attention, it is important to continue planning for long-term growth and profitability.

History suggests that companies that continue active marketing programs during slow economic times are more likely to come out of a recession faster and better positioned than companies that throttle marketing initiatives.

To make this point, I want to share a few of the strategies being used by Chusid Associates’ clients:
  • NEW PRODUCTS AND NEW COMPANIES: Several of our clients are actively developing new products and even launching new businesses right now. One CEO told me. “This is a great time for us to be gearing up. We’re getting great deals on the equipment we need for our new plant.” Another says, “I am blessed to be launching my business at this time. All my competitors are distracted by debt service and downsizing, so I have been able to swoop-in and grab opportunities they are missing.”

  • CAPTURING MARKET SHARE: Even though it has had to lay-off some of its employees, one of our clients is actually increasing investment in marketing communications. The general manager explains, “There is an 18 to 24 month lag from when an architect first calls us and when we actually get to ship an order. If I cut back on advertising now, I will still be paying for that decision in 2010.”

  • BUILDING SMARTER: Many designers and builders are reluctant to use new products. Yet when times are tough, they may be more motivated to consider innovations that offer time or cost savings. This is just the case with our client offering a prefabricated wall system. Their ability to deliver a project faster, slashing construction financing, is opening doors for them.
Granted, not all of our clients have the means to invest in growth right now. For them, the goal is to identify the best strategic options possible with the resources at hand. Even this can be to the benefit of a firm if it enables them to jettison dead weight and focus resources on the products and marketing programs that are most important to your future.