Two sectors that have been sent reeling in the wake of the current recession are financial services and automobiles. Not only is profitability an issue, but the brand images of companies in these industries have taken a hit. The damage to the financial services sector is evident as some firms in the industry are seen as contributors to the mess. Automobile manufacturers, especially the U.S. brands, have suffered as consumers have pulled back on spending. Even when people want to buy, they often have challenges securing credit to make a car purchase. The result is that GM and Chrysler are on the brink of death.
The dire circumstances faced by companies in these industries beg the question: Should we be advertising? If yes, what should we say? Many GM dealers are calling for the company to do something… anything, in terms of trying to stimulate sales with ads. It is a fine line to walk as the “good old days” of ad spending are over, but at the same time consumers need some assurance that auto makers are strong and stable. The argument GM and its dealers make is people are hesitant to buy cars from a company they are unsure will be in business two years from now.
Communication from auto brands to the market is needed. The “buy now” messages that historically have dominated this industry must be balanced with reinforcing quality and trust perceptions. Of course, customer-friendly pricing and incentives would not hurt, either. Consumer confidence is shaky; marketers in all industries cannot pretend otherwise. Addressing it head-on through advertising is the right thing to do to restore confidence.
Link: TV Week – “Advertising Can Boost Consumer Confidence, Study Reports”
