The question now is how to increase sales? In conditions of economic decline? To answer this question, it is necessary to describe the economic decline, as it is usually characterized by general phenomena that affect and are affected by it, including:
Decline in gross national product or GDP at continuous rates.
The emergence of unemployment in society at a rate of more than 10%, for example.
Continuous and tangible drop in prices.
Sometimes the emergence of product surpluses, especially luxury and less necessary goods.
Some cramped institutions are at risk of bankruptcy.
Banks are tightening their lending operations.
How do we increase our sales?
By analyzing the manifestations arising from the decline, it can be said that the policy of the marketing department must be modified and adapted to the new developments, as the consumer has become more careful and selective in disposing of his income. It is no longer spent without hesitation and has a list of priorities more accurate, and accordingly, the administration can adopt the following solutions and policies:
1. Prices and Quality:
There are many alternatives available to the Marketing Department in this field that can be explained as follows: By reviewing the available alternatives, we note that the main factor that plays a role in adopting a certain policy depends on the quality of the consumer and the degree of competition. Fixed. But consumers with low or middle incomes are undoubtedly affected by price fluctuations, and accordingly, a policy of preserving prices and quality or increasing prices with improving quality is recommended in the case of the first group, but in the case of the second group (middle and low income people), it is recommended to reduce prices and Maintaining the quality if possible or reducing prices while reducing the quality to some degree if there is no financial capacity for the institution to maintain this previous level of quality despite the fact that there is a reservation towards adopting the quality reduction, especially in companies producing and marketing famous brands, and this is no doubt. It requires a marketing study that includes an analysis of demand and its flexibility and a study of tastes in light of the emerging changes. It is also recommended to reduce the profit margin of the unit in those circumstances based on the rule of large sales and little profit, which yields significant total profits.
2. Output Distribution:
If the institution deals with the production of certain goods of excellent quality and with a limited class of wealthy customers, then there is no objection to studying the orientation towards low-income consumers and winning them to the ranks of the institution, especially since the possibility of the exit of less powerful competitors remains a possibility in times of decline and depression.
It is also recommended to try to develop and renew the product so that a new benefit is created for it that earns it additional advantages by which it is preferred over other competing products, and examples of this are many in our working life. Likewise, a study should be conducted that shows the optimal mix of production that achieves the largest possible profit In light of the decline, it is possible to cancel or reduce any production of high cost and limited demand if there is no feasibility for its production, marketing, and so on.
It is recommended to reduce production costs with the stability of good quality as possible, it is possible to search for many alternative and cheap sources to buy raw materials, for example, and use negotiation skills, which leads to reducing the cost of the commodity and increasing its competitiveness. It is also possible to reduce the cost of transportation and distribution by establishing storage warehouses. Medium site, from which it is distributed to neighboring areas to gain it and at the required speed. Like retail stores, for example, it is also possible to put pressure on some general and administrative expenses, but there are some types of expenses that should not be reduced, the most important of which are advertising and promotion expenses, especially in newspapers and publications, which it is preferable to increase under conditions of decline usually.
4. Create incentives and promotion to increase sales:
Incentives can be created to encourage the demand for the company’s products by increasing payment facilities or by conducting contests in which the winning consumer receives a specific prize or a travel ticket, for example, or others.
An incentive discount can also be granted. It is also recommended to increase promotion and advertising programs and participate in trade fairs. We would like to emphasize that in times of economic downturn, the same volume of sales cannot be expected with the same effort exerted in times of boom, and it is a serious mistake to expect that, but marketing efforts should increase by 50% sometimes just to maintain the same volume, and without that we do not rule out that Our sales drop 35% or more depending on the severity of that decline.