At times of economic recession, customers tend to close their wallets and businesses tend to try to reduce commercial costs, as the effects of commercial are not as immediate, especially considering the cost of creating them.

However, companies should be aware that commercials open customers’ hearts, and eventually their wallets.

During an economic downturn, customers are conflicted as the urge to spend and the urge for restraint clash with each other. In this case, companies should solve such internal struggles by convincing customers that their product is worth spending money on.

We can look at Woongjin Coway, which successfully overcame the 2008 economic recession. Woongjin Coway had difficulty selling its water softeners as they are items that people put off buying in hard times.

However, Woongjin Coway sent a message through their commercial that buying a water softener was an “investment a mother makes for their child.” Thanks to this effort, their water softener saw a 12.1 percent growth that year despite the economic recession.

The goal of a commercial is to raise profits. The reason commercials increase awareness and preference is to convince customers to buy products. Therefore, companies should set up a commercial strategy and overcome their difficulties with commercials that move people.

Commercials introduce products to customers and promote consumption to raise profits. Such marketing functions can be categorized by the customers’ reactions below.

First, commercials should set up awareness about the products. When releasing a new product, marketers focus on commercials to ensure their products and brand are widely known, as customers need to know a product is being sold in order to purchase it.

In the case of products where awareness plays a huge role in consumption, such as ramen or beverages, companies concentrate on commercials whenever a new product is released in order to encourage consumption, especially in times of recession.

Secondly, commercials formulate knowledge about a product, providing information about the product and building knowledge and trust to customers. For instance, companies that sell electronics such as smartphones and tablets show off various features to customers in their commercials in order to give them a reason to buy their new, improved products.

Third, commercials can build up a positive attitude and preference toward a product. Commercials differentiate their products with those of rival companies and try to provide reasons for people to choose their products over others. It is important to have commercials that speak to the heart, as good commercials lead to having a positive image of the product, as with the Woongjin Coway water softener.

Commercials play a role in providing awareness, knowledge and preference of a product, prompting customers to purchase them. Therefore, companies should not overlook their effects or simply cut spending on them just because they cannot see their effects in the short term.

Harvard Business School professor John Quelch wrote in his book “Business Solutions for the Global Poor” that businesses should detect customers’ behavioral changes in economic crises and come up with promotional strategies. There is a greater need for an emotionally moving commercial in times of economic difficulty.



By Park Heung-soo, Yonsei University School of Business