BrainTrust Editorial

According to a study by Penn State’s Smeal College of Business, strong companies increase their marketing spending and achieve superior business performance.

The 2005 study shows that, for strong companies, a downturn in an economy is actually a competitive advantage.

“Athletes often choose times of stress to mount attacks — strong runners and bicycle racers may increase their pace on hills,” say study authors Gary Lilien and Arvind Rangaswamy.

The authors surveyed more than 150 marketing executives about their experience in the last recession.

However, while strong companies benefit, weaker companies don’t do as well when they try to increase their marketing, the authors warned.

What differentiates the two? “Pre-established strategic emphasis on marketing, an entrepreneurial culture, and a sufficient reserve of under-utilized workers, cash, and spare production capacity,” the authors wrote.