Impact Of Recession On Firms’ Marketing Activities

Research question

Recession is thought provoking and multidimensional fact that has actually been a matter of discussion lately. This fact also has been premeditated earlier and results of this have been a point of interest for business and academicians as well. Chief objective of the study here will be to explore the impact of recession upon the marketing activities undertaken by different firms. This study will later answer the question that, will the firms alter or adjust their marketing activities because of recession to survive in the market?

Academicians have earlier studied recession widely, but just few studies have actually emphasized majorly on marketing mix factors and marketing actions at the time of recession. Yet, few studies have provided clear proof that firms, which enhance their marketing activities at the time of recession, would face the enhancement in their market share as well as sales (Apaydin, 2011).

What is the effect of recession on firm’s and their marketing activities and strategies? Do the firm’s needed to change their marketing strategies to survive recession? Is recession actually an ill for the firms?

Research question

Main aim of the research undertaken is to analyse and study the affects of recession on firms and particularly upon their marketing actions and undertakings. Objective is to study few firms and know if the firm’s change their marketing actions at the time of recession what effect will it have on their profit. The research questions answered here will be:

1. Does recession affect firms?
2. Does recession has an impact o firm’s marketing activities
3. Do firm’s need to alter their marketing actions at the time of recession
4. Does recession enforces firm’s to change their marketing activities

Research objective

Major purpose of this study is to analyze the affects of recession on firms and their marketing activities. The study will evaluate recession’s affect upon firms and especially on the strategies and tactics followed by the firm’s to undertake their marketing actions. Aim of the study is to go through several different firms, read about their actions of marketing, analyze recession’s affect on their actions and thereby recommend changes that can help the firms overcome recession and its bad affects.

Surviving recession and fighting the ills in this case means that firms do not suffer majorly from reduced sales or declined share of market. Sustaining in this time of recession refers to the fact that naturally the firms have enhanced their share in the market and sales at the time of recession (Dugal and Morbey, 1995).

If answers can be found to such questions that how firms adjust or need to alter their strategies of marketing because of recession it can partially also confirm that studies undertaken earlier and their results were actually valid or not. Outcomes of few studies undertaken earlier argue the fact that enhanced marketing activities can actually improve firm’s performance at the time of recession. They say that firms need to change their actions while marketing their good and services when they know that market is facing a situation of recession. They have felt recession not as a sin and have proved that firm’s can really get a boom at these times if the work efficiently and with little care and changes in their actions (Farquhar, 2012).

Research objective

Purposes would probably direct the way of this study, as research needs to be undertaken with an aim to attain the objectives. To be capable of fulfilling the major aim of this study, the study needs to underlie the aims and objectives. Aims and purposes of this research have been divided in two parts empirical and theoretical objectives.

Theoretical objectives of the firm are:

1. To study and analyze and their compare relevant and similar works involving marketing activities at the time of recession.
2. To create from preceding studies as well as from all the literature available on marketing the theoretical model of probable changes in activities of marketing during the time of recession
3. To build from earlier studies a proper theoretical model of conceivable adjustments within activities of marketing at recession phase

Empirical objectives of the study:

• Interviewing the decision makers of the firms considered in the study and ask them about effects that recession has on firm’s marketing activities ?
• To study and analyze the outcomes of the undertaken empirical study and then compare the results to the available theoretical models ?

Conceptual framework

Definitions- As per Bernard Ryan in 1991 National Bureau of economic research explains recession as a phase of minimum 6 successive months when the Gross national products i.e. GNP moves down. He adds to this fact another definition of the term saying that 3 constant months when there is a decline in compound index (Goddard and Melville, 2011). During such phase unemployment boosts up and consumer confidence goes down. Recession is a phenomenon that raises queries and interests. As per to Ryan in the year 1991 the concept of managing a study that mixes marketing and recession goes back to 1920’s. Once again such phenomenon has actually been up-to-date while global economy turned in to downturn in end of 2008 (Goodell and Martin, 1992).

Independent variables

Independent variable refers to a variable , which is manipulated to establish the value of dependent variables. Dependent variable refers to something that is measured in terms of an experiment or is evaluated in a numerical equation as well as they are inputs to those measurements. Here in this study recession is an independent variable affecting the dependent variable, which is marketing strategies of the firms.

Review previous articles

From prior researches it could be established that few actions, that firms have actually undertaken in previous recessions have seen actions and alterations in those actions changing the effect of recession within firms. Such activities may have also been iniquitous or veracious what comes to success of the firm at the time of recession and even after that (Helm and Gritsch, 2014). It was previously declared in the limits that this time it is not suitable to research the effects of marketing, as all effects are not yet identifiable. If firms are making few alterations in their tactics or enhance their investments in marketing actions, the outcome of their activities might be seen within few years (Hogg, 2013).

As per Goodell & Martin in the year 1992 the biggest problem in marketing while recession is the way in which marketing actions can help experts and the firm notwithstanding the effects of cycle of business and also comes out with an enhanced position within the completion of the phase of recession (MCNAMARA, 2009).

One instance can be privately owned window maker named, Marvin’s windows, which considered recession as an opportunity. It also computerized its entire lead tracking system as well as considerably raised its budget of advertising at the time of recession of 1981-82. As an outcome sales raised from some $37 million in 1981 to $45million in the year 1982 and later to $68 million in the year 1983 (Ng and Coakes, 2014).

Theoretical objectives of the firm

Major literature regarding marketing comes from Philip Kotler. The author has written several academic books regarding management of marketing and also principles of marketing that are used as basic theories of marketing. This main concept in marketing must never be unrestricted in the time of recession or in the time of downturn when firms tend to have lesser and no additional income (Parent, 2015). There are few instances from several successful marketers who are international firms like Toyota, Procter & Gamble, Sony, Nike, Nokia and Disney. Kotler & Armstrong in 2006 have brought out that such firms have actually been very successful in their activities of marketing, as they have emphasized on consumers and are organized to answer efficiently towards changing requirements of their patrons (Scheers, 2018). At the time of recession firms must also be conscious regarding their clients and must be capable of responding to altering needs by accepting the change in the strategy. In the study undertaken here there would be empirical part in which firm with dissimilar size and needs will be taken into consideration and their changes in marketing actions at time of recession will be analyzed, thereby evaluating the effect of the same (Srinivasan, Rangaswamy and Lilien, 2005).

• Hypothesis

H0: Recession has a bad effect on company’s profit

H1: Recession has a good effect on company’s profit

H0: Recession does not effects firm’s marketing strategies

H2: Recession effects firm’s marketing strategie

Research methodology

Research design- Qualitative approach was selected as it was thought to be very efficiently applicable on this research. It has been argued by Uusitalo in 1991 that the research data and research method are actually subordinates to the entire research problem.  The author also says that research problem as well as research questions generally define the already utilised data and method in order to maintain better consistency and efficacy in the study. In other terms, to be capable of having exact response to entire problem of research of the undertaken study, a qualitative method for analysis will be used in order to be more precise and exact in terms of results. Alasuutari in the year 1995 says that methods of qualitative research disclose greater causes behind the phenomenon that quantitative method actually ignores to do. Such reality even speaks in favor of selecting qualitative process as well as qualitative approach for this research undertaken here (McKinney, 2018).

Population 

The study offers proper base to continue evaluating and studying the alterations in the elements of marketing mix at the time of recession. It will help firms know and understand the changes they nee to make in the marketing strategies when recession occurs, thereby enhancing their future results in profit making. Alterations made within undertaken activities of marketing are actually of great interest to know and study, but to analyze the same and evaluate the actual effects of such alterations, study demands more and more facts. Financial and statistical analysis must be involved for the coming phase and also it can be undertaken as a study, which is quantitative based. While taking great analysis there must be strong limitation in terms of size, industry and for level of internationalization in firms considered in this study. Statistical analysis on basis of clear data will even enhance credibility as well as reliability of research (Panneerselvam, 2014).

• Sampling method and sample size

Empirical objectives of the study

Firms altering marketing strategies during recession will be targeted. Samples will be chosen using stratified random sampling method

Sample size- 50 organizations from entire Kuala lampur region will be selected.

• Data collection method- Data would mainly words within this study and findings will disclose the meaning of such data and their interpretation. Empirical data within the study would be gathered from both secondary as well as primary sources. Primary data carries unstructured as well as semi-structured interviews from selected firms. The interrogated persons will be the CEO’s, managers of marketing and several other determining level staffs who are actually dealing with firm’s activities of marketing. The views and opinions of experts will add variation of all responses. Responses of the undertaken firms can even be compared to responses of the experts and this would add reliability to the undertaken interviews. The aim of these interviews cannot be attained, as of major problems to reach the correct persons as well as turning away of the interviews from previously dealt interviews (Welman, Kruger and Mitchell, 2005).
• Questionnaire design

The questionnaire will include both open as well as closed ended questions.

Data analysis method

With an aim to answer the questions of research, the gathered data requires to be methodically analyzed. The study here will use content analysis as the method for textual enquiry and analysis. As per Silverman in the year 2006 content analysis is extensively acknowledged method for text analysis. In this method the academic investigator creates a proper set of groups and later counts the number of examples that lie into every single category.

In this research which means appropriate lettering as well as reading of the interviews. Secondary data requires to be analyzed appropriately to be capable of finding most relevant data and information regarding the interviews. After analyzing both types of data i.e. secondary as well as primary, there would be flawless view regarding the outcomes and responses for major problem of research.

In this thesis the exterior validity will actually be measured though comparing them to several other researches considering the same topic. Valuation of internal validity will be done on basis of theories and terms relating to the same. Internal validity would enhance since the used theories and terms are actually well known and have been previously used in several studies. The research here will not aim towards generalizations; rather outcomes of the study could be compared with the outcomes of studies undertaken earlier (Danieli and Woodhams, 2005).

Validity and reliability

Reliability refers to repeatability of research study concisely described. As per Silverman in 2006 reliability means the level of consistency till which occurrences are allocated to similar group by diverse observers. The author also says that standards of reliability could be content in the non-quantitative tasks through making entire research procedure transparent via recitation strategy of the research and describing methods of data analysis in an adequate manner. Paying proper attention to the theoretical transparency that interpretation occurs and depicts the way in which this creates precise interpretations could also please it.

When a research is reliable, almost similar outcomes could be attained if similar phenomenon and situations that were studied by utilizing similar type of research. Challenges towards reliability in this study enhance the reality that there are not several exactly similar types of studies undertaken in Finland. Nature of the recession even enhances the challenges of reliability, as there is exactly no sole formula available to predict the next recession or amplitude of the research. Till date, almost each and every recession phase has actually been different from each other and the effect of recessions has diverse forms, which refers to the fact that similar outcomes are nearly impossible to attain in coming time of recession. Such challenges are answered by transparency within the whole study. This study is partially based upon prior studies regarding recession that enhances the reliability. Reliability of the research also enhances, as the firm were considered when every single one represented dissimilar sector. The study also has added reliability through interviews of experts in marketing that has actually brought several aspects on the outcomes of the interviews (Carmines and Zeller, 2008).

Conceptual framework

Ethical issues

Ethics is not related to description of a particular set of rules and policies, instead it relates to process of providing a framework for analysing and evaluating problems and determining proper course of action for the same. There are many frameworks for ethical research conducted in developing nations. These frameworks emphasize on collaborative partnership as well as sharing responsibilities with researchers, community and policy- makers. The framework must be on basis of the notation set forth in the declaration of the frameworks (Panneerselvam, 2014).

The undertaken study will consider few basic ethical rules. They will be:

1. Keeping in mind the social value through specifying beneficiaries of this research
2. Making sure that the research is scientifically valid and will help firms in future.
3. The population undertaken must be in a way that each sample gets equal chance to occur.
4. Valuation of ratio of risk–benefit by equating the risks of project with potential benefits (Chandra and Sharma, 2013)

How did finding arrive- recession actually is a multidimensional phenomenon which researchers have never found perfect description for that, yet it has just enhanced the interest towards phenomenon from academics and business life’s behalf.

It is very clear that firms would be actually interested in the reality whether there exists any way through which they can attain profit from recession. Thus there exists no requirement to argue the reason for need of this research.  The chosen topic thereby is most relevant to be studied (Czinkota and Ronkainen, 2005).

Limitations

1. It might get difficult to gather empirical data from targeted firms, as times are already tough for the firms.
2. Firms might not will to share their data and information and would like to keep them personal.
3. There are few general issues in the study like, marketing being a vast field and huge area of research there have to be made few limitations regarding which marketing areas are to be included in this study.
4. Marketing mix is considered as base of this research, so theoretic part as well as study is made with an aim to study all probable changes within marketing mix of firms. But, marketing mix is a very wide topic and the literature available is very vast. Selection and analysis of the available literature will be a big task.
5. The study concentrates only on marketing strategies and not on other tactics that firms adopt at time of recession
6. The study will involve only few firms from different sectors
7. Effects of recession tends to vary from one firm to other or one department to other like HR, finance and production, but the study ignores this fact (Czinkota and Ronkainen, 2005).  

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Identify research area
Formulate research question
Decide on research strategy, research design and research methodology
Write research proposal
Literature review
Data collection
Data analysis
Write first draft
Write second draft
Final report

Recession as a fact actually has many dimensions and lately it has also been a very interesting theme within news as well as media all around the globe. Source for this study arrived from reports of Cilla Bhose in 2009, which discussed the investments in marketing few firms. In the study there also were several views of different managerial level personnel’s belonging to vast agencies of advertising and marketing which brought the result that majority of the targeted firms do not contemplate marketing being the long-run investment and thereby ignore the fact that firms at time of recession can bring better results if able to alter their strategies. The firms to do this needs to be flexible enough and must know the way to adopt changing ecology easily. If firms take marketing and its strategies as a random cots occurring occasionally, they can effortlessly cut down the cost of actions in marketing at the time of economic breakdown, but it is actually not so favorable. Main aim of this research is to analyze if firms are impacted from recession or not and what will happen if firm’s change their marketing decisions because of recession.

References

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Carmines, E. and Zeller, R. (2008). Reliability and validity assessment. Newbury Park, Calif.: Sage Publ.

Chandra, S. and Sharma, M. (2013). Research methodology. Oxford: Alpha Science Internat.

Czinkota, M. and Ronkainen, I. (2005). A forecast of globalization, international business and trade: report from a Delphi study. Journal of World Business, 40(2), pp.111-123.

Danieli, A. and Woodhams, C. (2005). Emancipatory Research Methodology and Disability: A Critique. International Journal of Social Research Methodology, 8(4), pp.281-296.

Dugal, S. and Morbey, G. (1995). Revisiting Corporate R&D Spending During a Recession. Research-Technology Management, 38(4), pp.23-27.

Farquhar, J. (2012). Case study research for business. Los Angeles [Calif.]: SAGE.

Goddard, W. and Melville, S. (2011). Research methodology. Kenwyn, South Africa: Juta & Co.

Goodell, P. and Martin, C. (1992). Marketing Strategies for Recession Survival. Journal of Business & Industrial Marketing, 7(4).

Helm, R. and Gritsch, S. (2014). Examining the influence of uncertainty on marketing mix strategy elements in emerging business to business export-markets. International Business Review, 23(2), pp.418-428.

Hogg, M. (2013). Boomer marketing: Selling to a recession resistant market. Journal of Marketing Management, 29(13-14), pp.1650-1652.

McKinney, W. (2018). Python for data analysis. Sebastopol, California: O’Reilly Media, Inc.

MCNAMARA, D. (2009). Recession Alters Aesthetic Marketing Strategies. Skin & Allergy News, 40(4), p.54.

Ng, W. and Coakes, E. (2014). Business research. London: Kogan Page.

Parent, D. (2015). Performance pay and unemployment during the great recession. Economics Letters, 126, pp.31-34.

Panneerselvam, R. (2014). Research methodology. Delhi: PHI Learning.

Scheers, L. (2018). Strategies of global recession for small business enterprises in emerging markets: Case of South Africa. Journal of Business & Retail Management Research, 12(02).

Srinivasan, R., Rangaswamy, A. and Lilien, G. (2005). Turning adversity into advantage: Does proactive marketing during a recession pay off?. International Journal of Research in Marketing, 22(2), pp.109-125.

Welman, J., Kruger, F. and Mitchell, B. (2005). Research methodology. Cape Town: Oxford University Press.