The report tries to understand the effects globalisation and the economic downturn have on this organisation.
The theories and practices related to marketing during an economic downturn are delved into while trying to examine how the organisation responds and deals with the challenges this situation poses. An organisation has to resort to several drastic and innovative measures to survive, maintain and thrive during a period of economic slump. The report examines the strategies adopted by Nokia to sustain during this time. The theories related to globalisation have also been studied with particular reference to Nokia and the process by which and the extent to which the company has undergone internationalisation and the global marketing strategies adopted by the company.
The issues of globalisation and economic slump inter-react in different ways and the consequences are varied for different industries and different organisations. While the combined impact of globalisation and the economic downturn is extremely adverse for many organisations in several sectors, it has been possible for some organisations in some sectors to take advantage of globalisation to sail through the storms of recession. The report looks into how Nokia has tried to utilise the advantages of one for withstanding the impact of the other.
"When the economy heads south, marketing lands on the chopping block" ("Marketing during a downturn," 2008, p.4). During a financial crunch, it is the marketing budget that gets cut first. At the time of presentation of the report, 60% of the large companies were expecting to cut down, if not already done so, their marketing expenditure. The contingent strategy adopted here is shifting from traditional marketing to online marketing whereby the companies are spending more on direct marketing while spending less on branding. Moreover, several marketing professionals feel that it is needless to spend separately on branding and direct marketing, as these goals can be achieved together.
Larger companies, which provide larger budgets for marketing, also make the larger cuts during an economic downturn. Smaller companies, which do not have a considerable budget for marketing, obviously do not and cannot resort to any significant degree of cuts in their marketing budgets ("Marketing during a downturn," 2008, p.5). On the other hand, when the buying patterns are not affected much, the marketing budgets may not be slashed. However, in such cases, keeping direct expenditure on the media the same, the budget on marketing overheads that do not directly translate into revenue may be slashed. Companies going through a stage of growth may not cut down on marketing as acquiring their share of the market is crucial for them at this stage. Besides, there are also marketing professionals who opine that it is damaging for companies to cut back during difficult times, as marketing can help companies gain a larger voice and make themselves heard better in the marketplace during difficult times when their competitors are cutting back ("Marketing during a downturn," 2008, p.8). At a time, when the consumers are not willing to spend money on anything that is not an absolute necessity, it would be beneficial to stress on the value of the product and the cost savings associated with buying it.
Giving products at lower prices, giving longer free trial periods, giving money back guarantees and such other risk-free