Some executives plan modest spending increases, but most expect the market to remain tough through a good portion of 1992, and they've planned accordingly. Having already cut budgets as much as they dare, given the competition, they'll hold the line this year and wait to see if the early signs of an economic recovery are sustained.
In 1993 look for marketers to place their dollars on the sure bets, targeting their most lucrative markets more specifically. Specialized, a Morgan Hill, Calif.-based bicycle maker that reduced ad spending by about 25% in 1992, will increase its budget this year, though not to 1991 levels, to help promote its product introductions.
Instead of trying to lure new customers, director of marketing Barry Breede said Specialized will focus on avid cyclists. 'We're finding our market has more or less started to define itself. It is people who already have an interest in cycling,' said Breede.
A similar shift is occurring at Bugle Boy, where the focus has been almost exclusively on brand awareness. Advertising manager Susan Scheimann said Bugle Boy plans to target shoppers familiar with its clothes, and a portion of the company's planned spending increase will go to in-store promotions, to try and get loyal customers to buy more. 'We definitely will be aggressively advertising next year,' said Scheimann.
Increased budgets are also planned at Levi Strauss & Co. and Mitsubishi Motors, which will focus on three models - the Eclipse, Diamante and Gallant - with advertising concentrated in the top metro-area markets. Mitsubishi director of advertising Frances Oda said Mitsubishi's spending increase would be 'significant,' with a particular emphasis on the Gallant to 'bring an emphasis back to the core of our product line.' Mitsubishi spent $50 million in the first half of 1992.
At DHL Worldwide Express, Dean Christon, manager of marketing services, said his company may increase its direct mail program, but not with added dollars. 'We're going into the year trying to plan realistically that it will take a while for the economy to grow,' Christon said.
Jim Fisher, vp/marketing for Shakey's, said the restaurant chain plans to help franchise owners, who have taken a beating in the recession, spend more on local promotions such as value menu combinations of pizza with chicken and fries. 'That particular promotion last year helped drive our sales to double-digit growth,' Fisher said.
Cuts are planned at Mazda Motors but only because Mazda increased spending substantially in 1992 to launch five new models, said vp/marketing Jan Thompson. Mazda plans to shift money away from national advertising. 'Our focus will be on dealer ads to make the needle move in major markets,' Thompson said.
Copyright Adweek L.P. (1993)