Ford has some problems right now.  The economy has Ford asking tough questions about the future of their organization.  One of their dilemmas is whether or not to suspend new product development projects in order to stockpile cash.  They certainly need the cash, but as Ford’s global product development chief Derrick Kuzak points out in this report from the Detroit News, “Outstanding products are the heart of any turnaround of our business and its future success.”  If Ford stops investing in new product development, what future are they saving by stockpiling cash now?

Not an easy decision.  This is similar to the branding decisions that all businesses face when economic times are tough.  Companies worried about troubled economic times will often decrease spending on advertising.  Short term, they “save” money.  But long term, they risk losing traction in the marketplace.

So, what is the answer? In “How to Market in a Recession” John Quelch of the Harvard Business School weighs in by saying, “This is not the time to cut advertising.”  Brands that increase advertising during recessions improve market share and see a higher return on their advertising dollar.  While actually raising ad budgets may seem impossible for some, Quelch recommends at least maintaining current spending levels.

At Armstrong|Shank, we advise our clients to look at their marketing mix and see how it might be restructured to include more direct marketing tactics.  For example, the Web offers many scalable, measurable tactics that can be tied to performance measures.  Maybe some dollars can be moved over to a targeted pay-per-click campaign or to an online lead generating campaign.

However, you don’t want to totally abandon your brand advertising.  Often branding tactics are the foundation for other direct efforts.  Specifically in the business-to-business sector, branding activities are critical.  Marketer Galen De Young has a nice discussion on this topic in his article “B2B Search Marketing: Branding’s Best Friend” on SearchEngineLand. He notes that, “…in the B2B world, customer acquisition is directly related to branding, a longer-term initiative.”

Economic turmoil can be a scary time for businesses.  It is sometimes tough to see how we might make it through the storm to sunnier days.  While trying to figure that out, it is imperative to think ahead to when things turn around and ask where your organization should be positioned at that time.  Smart marketing decisions now will make all the difference then.

Photo courtesy of Flickr user yourpaldave.