At HUNET's 'Foresight Korea 2025' forum, discussions centered on corporate future strategies and innovation approaches. Among the notable presentations, the lecture on "Marketing Strategies in Times of Economic Downturn" by Ki-seok Seo, CMO of Life4Cuts, garnered significant attention from business leaders.
Ki-seok Seo brings extensive marketing expertise from his roles as IKEA Korea's CMO, GM's Head of Strategic Planning, and Kakao Mobility's Brand Director. Currently serving as CMO at Life4Cuts, a global self-photo studio brand with over 700 locations worldwide, he focuses on promoting K-photo culture globally.
Brand Essence: Beyond Logos and Images
The lecture began with insights into the fundamental value of brands. Seo defined brands not merely as logos or images but as promises to customers and valuable assets. "During economic downturns, what ultimately endures is the brand," he emphasized, noting that price competitiveness alone cannot sustain growth. In today's intensifying global competition, brand strength has become crucial for corporate survival and growth.
Capturing Customer Mindshare, Preference, and Purchase Points
Successful brand building requires three critical elements: Mental Availability, Desirability, and Physical Availability.
First, Mental Availability refers to how easily a brand comes to mind for consumers. For instance, when thinking of cola, if a particular brand immediately comes to mind, that brand has achieved high mental availability. The significance of this element is underscored by the fact that "in any category, consumers typically recall no more than five brands naturally."
Second, Desirability encompasses brand preference and desire. It includes how much consumers love, trust, and perceive the brand as trendy. This goes beyond mere awareness to create emotional connections.
Third, Physical Availability refers to actual purchase accessibility. Nike's case illustrates the importance of this element well. Their excessive focus on D2C (Direct to Consumer) strategy led to reduced product availability in retail stores, which hindered brand growth.
These three elements are closely interconnected, requiring balanced development. When evaluating brand performance, three key questions emerge: "Does our brand naturally come to mind in its category?", "Do consumers genuinely prefer our brand?", and "Can customers easily access our products when they want to purchase?"
Beyond Short-term Sales: Sustainable Brand Growth
Marketing serves two main purposes: 'sales' for short-term revenue growth and 'brand growth' for long-term value creation.
Sales-focused marketing concentrates on immediate revenue generation. While this contributes to immediate corporate performance, it's insufficient for sustainable growth. The true value of marketing lies in long-term brand development.
Brand growth marketing focuses on increasing mental availability and desirability in customers' minds. "To remain memorable to consumers, continuous engagement is necessary, and to earn genuine love, excellent content and products must be consistently delivered."
The concept of 'Incremental Customer' is particularly noteworthy. This involves attracting new customers who previously didn't consider our brand. Effective marketing discovers potential customer segments and converts them into actual customers.
Furthermore, it presents the innovative perspective that "marketing is the customer." This means marketing isn't just a corporate department but an integrated activity encompassing all customer touchpoints. Marketing's ultimate goal is to ensure brands remain beloved and chosen, requiring a customer-centric, integrated approach.
Five Marketing Strategies to Navigate Economic Downturns
1. Sustained Strategic Marketing Investment:
During downturns, marketing budgets are often the first to be cut. "When revenue drops, companies typically cut marketing budgets first, increase sales pressure, and finally reduce benefits." However, this can be a fatal mistake.
Research supports this view. Companies that increased marketing investment by 48% during downturns doubled their market share, with 60% achieving 10-17% additional revenue growth compared to competitors. Reducing marketing investment leads to a decline in 'Share of Voice,' weakening long-term corporate influence and revenue.
2. Differentiated Brand Positioning:
'Liquid Death' has emerged as a new powerhouse in the U.S. water market. Within three years of its 2019 founding, it achieved a $700 million valuation, with 2022 revenue tripling to $130 million. This success demonstrates the effectiveness of differentiation through punk and heavy metal imagery.
Running shoe brand 'On' has maintained an 85% average annual growth rate since 2010, reaching $1.2 billion in revenue in 2022. Their 2023 campaign featuring Zendaya as brand ambassador led to a 32% increase in brand preference among Gen Z consumers. When product differentiation is challenging, marketing and communication can create 'Perceived Distinctiveness.'
3. Strategic Pricing Policy:
84% of discount campaigns actually result in reduced profitability. IKEA's "Our Lowest Price" strategy succeeded because it aligned with the brand philosophy of "providing good products to more customers at reasonable prices" rather than simple price reduction. Pricing policies should reflect brand values and philosophy.
4. Customer Loyalty Strategy Development
Community building should extend beyond simple CRM or membership programs. IKEA 'Family' and Adidas and Nike's 'Members Week' provide unique brand experiences beyond mere benefits. McKinsey research shows that providing differentiated value to loyal customers is more effective than simple price discounts.
5. Brand Experience Innovation
Chipotle and Taco Bell's successful brand recoveries began with returning to fundamentals. Marshall's case demonstrates the value of maintaining core brand values while expanding into new categories. Continuous innovation in delivering brand uniqueness to customers is essential.
These strategies focus on building long-term brand value rather than short-term performance. An integrated approach is essential for surviving downturns and emerging as a stronger company.
Conclusion: Customer-Centric Marketing Mindset
A "Market-oriented Mindset" isn't just a slogan but essential for corporate survival. Marketing extends beyond flashy advertising or promotions, beginning with understanding customers and thinking from their perspective.
"The moment you enter the company, you're no longer a customer."
This provocative statement accurately points out a common trap for corporate insiders. Even experienced executives can become trapped in an insider's perspective, missing genuine customer voices.
Walmart's legendary founder Sam Walton stated, "There is only one boss. The customer." Customers aren't mere consumers but true corporate decision-makers. They have the power to 'fire' companies by taking their wallets elsewhere.
The importance of customer-centric thinking becomes more prominent during downturns. According to a 2023 Harvard Business Review study, companies that strengthened customer-centric strategies during the 2008 financial crisis outperformed the S&P 500 index by an average of 25% over the following three years. McKinsey's recent analysis shows that companies in the top 25% for customer satisfaction achieved three times higher Total Shareholder Return (TSR) than lower-ranked companies, even during downturns.
Notably, Forrester Research found that companies ranking high in the Customer Experience Index (CX Index) showed five times faster revenue recovery than lower-ranked companies during the 2020 COVID-19 pandemic. This proves that a customer-centric strategy isn't just an ideal but a core driver of corporate survival and growth during crises.
Ultimately, the key to overcoming economic downturns lies not in short-term cost reduction but in continuously strengthening brand value. This isn't merely a marketing tactical issue but connects directly to fundamental business philosophy. Only companies that recognize customers as true bosses and create value from their perspective can achieve stronger growth beyond economic downturns.
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