Earnings are up, so what about spending some on marketing?

Recent news reports have shown that publicly traded companies are garnering very strong, even record earnings during the first part of this year. To be honest this is not coming from natural growth but from massive across the board cost cutting. Once again we are seeing the short sighted formula of cut costs and make the numbers look good for the quarter end. I would recommend that these companies who intend to avoid irrelevance during the next decade do the following two things.

First of all, spend the money on R&D. As we all know the life cycles of products are growing shorter and shorter each and every year. What was very hot two years ago is now ever so passe. I wonder if Fox wishes they had spent more on researching the market around Myspace before plunking down God knows how much money for a product that is being blown out of the water by Facebook.

Secondly, I would recommend spend money on marketing. This is an excellent time to take advantage of your less far sighted competitors and create a revised and/or deeper image in the marketplace. Most organizations virtually shut down operations during times like this. Planning on campaigns is usually suspended and the planning includes just enough effort to keep some sort of plan going but that's it.

Instead, if you want a company that will emerge from this period stronger and more prepared for the rebound which seems coming quicker than expected than start marketing now. Marketing is an investment and you need to be there to take advantage of what will be a rebound in demand. During this recession a great deal of ink has been spilled about comparisons to the Great Depression. What few people remember is that after the Great Depression and WWII came an explosive growth in all types of demand. That is why the Federal Reserve is so concerned about inflation.

By planning marketing programs now and having them enter the minds of your target markets, you will be well positioned to seize the reins of future economic growth. If you decide to wait until the market shows signs of growth, you may be like the person who decides they do not wish to be too soon to the train station. By the time you arrive, the train may have left the station.

Tom Peters once said that a company can not grow by cutting and that is very true. In order to be successful and grow your company, you need not only a successful marketing plan, designed for periods of both growth and decline, you need to be in a position to capitalize quickly and ahead of any changes in the market. Market leaders drive what happens; followers spend all their energy trying to keep up!