Turning adversity into advantage: Does proactive marketing during a recession pay off?

Research output: Contribution to journalArticle

105 Citations (Scopus)

Abstract

Recessions can severely affect the performance of firms, and even their very survival. However, all firms are not equally affected by a recession. Some firms view recessions as opportunities to strengthen their businesses, invest aggressively and establish their advantage over their weaker competitors, whereas others cut back, waiting for the recession to pass. Why do some firms view the recession as an opportunity and develop an aggressive marketing response to it? What are the effects of such a marketing response on the performance of the firm? These are the two central questions we address in this paper. We propose a new construct, which we call proactive marketing in a recession, as the firm's interpretation of the recession as an opportunity (opportunity interpretation) and development and execution of a response to capitalize on the perceived opportunity created by the change (offensive response). We develop and test a model of the antecedents and consequences of proactive marketing during a recession. The results of a survey of 154 senior marketing executives show that some firms do indeed adopt proactive marketing during a recession. Both organizational and environmental contexts influence firms' proactive response to a recession. Firms that have a strategic emphasis on marketing, an entrepreneurial culture, and slack resources are proactive in their marketing activities during a recession, while the severity of the recession in the industry negatively affects proactive marketing response. In addition, firms that have a proactive marketing response in a recession achieve superior business performance even during the recession. Our results suggest that not all firms do, or should, respond in a proactive manner during a recession. Those firms with a strategic emphasis on marketing already have programs in place (e.g., well-recognized brands, differentiated products, targeted communications, good support and service, etc.) that enable them to derive benefits from a proactive marketing response during the recession.

Original languageEnglish (US)
Pages (from-to)109-125
Number of pages17
JournalInternational Journal of Research in Marketing
Volume22
Issue number2
DOIs
StatePublished - Jun 1 2005

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Marketing
Recession
Communication
Business performance
Severity
Resources
Competitors
Industry
Marketing activities
Differentiated products

All Science Journal Classification (ASJC) codes

  • Marketing

Cite this

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title = "Turning adversity into advantage: Does proactive marketing during a recession pay off?",
abstract = "Recessions can severely affect the performance of firms, and even their very survival. However, all firms are not equally affected by a recession. Some firms view recessions as opportunities to strengthen their businesses, invest aggressively and establish their advantage over their weaker competitors, whereas others cut back, waiting for the recession to pass. Why do some firms view the recession as an opportunity and develop an aggressive marketing response to it? What are the effects of such a marketing response on the performance of the firm? These are the two central questions we address in this paper. We propose a new construct, which we call proactive marketing in a recession, as the firm's interpretation of the recession as an opportunity (opportunity interpretation) and development and execution of a response to capitalize on the perceived opportunity created by the change (offensive response). We develop and test a model of the antecedents and consequences of proactive marketing during a recession. The results of a survey of 154 senior marketing executives show that some firms do indeed adopt proactive marketing during a recession. Both organizational and environmental contexts influence firms' proactive response to a recession. Firms that have a strategic emphasis on marketing, an entrepreneurial culture, and slack resources are proactive in their marketing activities during a recession, while the severity of the recession in the industry negatively affects proactive marketing response. In addition, firms that have a proactive marketing response in a recession achieve superior business performance even during the recession. Our results suggest that not all firms do, or should, respond in a proactive manner during a recession. Those firms with a strategic emphasis on marketing already have programs in place (e.g., well-recognized brands, differentiated products, targeted communications, good support and service, etc.) that enable them to derive benefits from a proactive marketing response during the recession.",
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Turning adversity into advantage : Does proactive marketing during a recession pay off? / Srinivasan, Raji; Rangaswamy, Arvind; Lilien, Gary L.

In: International Journal of Research in Marketing, Vol. 22, No. 2, 01.06.2005, p. 109-125.

Research output: Contribution to journalArticle

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