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Reframing Recession: A Reset for New Zealand's Economy

June 27, 2023
Dean

Recession? Scratch that, it's a reset.

Early last month, we were joined by Cameron Bagrie, former chief economist for ANZ bank, for an insightful discussion about the future trajectory of New Zealand's economy.

One of the central themes of the discussion was a redefinition of the economic landscape. Cameron framed the past five years as a period of 'business as abnormal.' He suggested that the impending economic downturn is not so much a decline, but rather a reset to normal.

Cameron predicted a more challenging economic environment over the next three years. However, this adversity may be an opportunity for exceptional business operators to distinguish themselves from the mediocre. As he put it, "It’s going to put the fun back into running a business.”

The time has come, Cameron emphasised, for long-term investments and a strategic focus on capturing market share.

Following Cameron's presentation, Ron Montgomery, business development manager here at The Mark, shared industry knowledge on how to think about marketing in a recession.

In a normal marketing environment it can be expensive to increase market share, you’re trying to lure customers away while your competitor is also speaking with them, then a recession comes along and the first thing on the chopping block can be marketing. This presents a perfect opportunity to grow - when your competitor is cutting back.

Ron discussed Share of Voice. This represents your marketing spend as a percentage of the total in your field. For example, if you spend $100,000 out of a total $1,000,000 spent in your industry, you have a 10% Share of Voice. Significantly, this percentage often predicts your future market share - if your Share of Voice increases or decreases, your market share tends to follow suit.

Our tips for navigating the recession:
1) Recognise changes in your target market's priorities and ensure your messaging and tone reflect these shifts.
2) Conduct an audit of your marketing spend, aiming to refine and reallocate it to more cost-effective and high-impact strategies.
3) Make investments in long-term assets, like a distinctive brand and high-impression marketing tactics such as signage, to support both short-term and long-term goals.

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