from crisis to opportunity - Academy of Marketing

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Besides the finding and opening of new markets to compensate the difficult situation of the Spanish market, the analyzed firms have adapted their business models and the products and services portfolio to the new conditions, rethinking its organizational design to be more efficient and prioritizing the short-term vision, providing flexibility and rapid response to changing conditions, keys aspects during periods of uncertainty (Hartman 2009). Marketing is a strategic function that maintains an essential link between the customer and various processes within the firm (Day, 1994). Each case defines marketing as essential in the current strategy of survival and strengthening. The firms achieve consumer confidence keeping the promise of quality, and proximity through an emotional speech. Firms have understood that they have to connect with the client, who is more demanding and selective, and with less income. Leds C4 changed their production orientation toward a customer focus, adding to their standard product lines the Special Projects Division, which develops and manufactures lamps to order. While Energivity Consulting reduced its range of action to minimize travel times, so that they can dedicate more time and attention to each client. Considering the classic marketing mix, all variables have been affected during the crisis. In the current market situation, the customer is more sensitive to price changes. Evento Plus, for example, has chosen to offer package services and optimize costs. Damm, meanwhile, has believed that the key factor is to get a product that stands out for its price-value relation, and to create a special feeling with the customer. Despite the competence reaction to reduce the price, analyzed companies maintained the prices. Advertising and communication have focused on highlighting the brands through more rational and emotional messages. While competitors have cut their advertising activities and budgets, our six cases continued their activities and campaigns, reaching the highest consumer recall, particularly Nutrexpa and Damm in the mass media. The coincidence of the rise of digital social networks with the crisis period has triggered a new way to communicate directly with their clients. Growing social media marketing budgets is being so common, particularly in smaller companies. Nowadays the investment in communication is more selective and constant, always looking for a guaranteed ROI. In this way, advertising during a crisis not only helps to engage customers, also helps to maintain shareholder´s confidence and therefore helps to maintain the value of a firm (O'Malley et al., 2011). Concerning the product variable, in large firm’s cases like Damm, Nutrexpa and Leds C4, there´s evidence of multidisciplinary and multi area work, especially in R&D, in order to develop adapted products with new materials and technologies to offer attractive products. This is consistent with Tubbs (2007), who stated that firms that invest in R&D and product development during recessions find it easier to capture market share and customer loyalty. For the marketing professionals interviewed, innovation is a fundamental firm ability to adapt and compete, because it facilitates to change its products and processes faster than competitors, achieving greater profitability and better options when recovery comes. For The Cosmetic Republic case, innovation is connected and opened, with the aim to identify market needs and desires. Leds C4 used a mix of in-house innovation with open innovation processes with design studios and engineering firms, something very common in the two analyzed food companies, which launches a large number of products every year. A common denominator emerges: companies and their directors are inclined to take businessrelated risks, and promote change as a way to gain a competitive advantage (Srinivasan et al., 2005). While competitors have cut the budget in an indiscriminate way, these organizations have adapted their strategies to the economic context and consumer behavior. The interviewees mentioned the use of completely flexible marketing plans, which vary according the changing environmental conditions in order to exploit all the opportunities it offers.
Keeping marketing budgets, especially in advertising, has been fundamental to maintain leadership in the areas where each company operates. In general, the plans are more realistic, with budgets linked to a clear intention and thinking about the income statement. Marketing literature suggests that firms use their capabilities to transform resources into outputs based on their marketing mix strategies and that such marketing capabilities is linked to their business performance. The marketing resources demonstrated which market-based resources, such as customer-linking capabilities, reputational assets, market innovation capabilities, and human resource assets, affect performance outcomes (Hooley, Gordon, Greenley, Cadogan, & Fahy, 2005). In summary, these analyzed companies have seen the crisis as an opportunity to strengthen their businesses, invest aggressively and overtake their weaker competitors. This proactive stance in hostile environments has resulted in a positive impact on performance (Covin & Slevin, 1989), as evidenced by the sales achieved by each of the companies in the years 2008, 2009 and 2010 (see Table 1). The study results give evidence of the efforts to identify and consolidate a proactive marketing response in crisis periods, enhancing their competitive advantage, the strategic emphasis on marketing, a market orientation, the marketing innovation and an entrepreneurial culture. 5. Conclusions, Limitations and Future Research This exploratory study addresses two questions, why and how Spanish companies develop proactive marketing strategy and get better performance in crisis. Although there is strong theoretical and practical evidence that maintaining or increasing marketing activities during crises provide significant advantages, marketing budgets are often under pressure (O'Malley et al., 2011). Thus, perceiving the recession as an opportunity is not enough to make a firm proactive, the firm must also be able to develop and implement a marketing program to capitalize on the opportunity (Srinivasan et al., 2005). Thus, the analyzed firms demonstrate the strategic role of marketing to provide value to firms and ensure their survival in times of crisis. The cases show that aspects such as innovation, market orientation, the strategic emphasis on marketing and entrepreneurial culture are keys to proactively respond to the crisis and improve performance. All firms included in this study evidence that in crisis times successful firms anticipate changing marketing conditions, respond to customer needs and compete by offering superior value (MSI, 2010). This study suggests several implications: Considering the position of the MSI (2010), educators and business leaders have to recognize, appreciate, and understand the significance of marketing in the dynamic but turbulent global world, and to propose new paradigms for marketing’s prosperity and firm survival. In terms of limitations, it´s important to highlight the sample size, being able to expand it to more firms in other sectors and economic activities. However, the case study methodology does not perceive this as a limitation, but as an opportunity to enrich the knowledge about a topic. Also, this is an exploratory work, so that future research should help to understand better the phenomenon. Among the future lines of research, could be considered: (i) to extend this case study to other contexts, (ii) to conduct a quantitative study to identify whether the companies that manage a proactive marketing in times of crisis get superior results compared to those who cut their marketing budgets and act conservatively, (iii) to conduct a longitudinal study to determine whether the companies that implement a proactive marketing in times of crisis achieve better performance levels in recovery.
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