Discussion on the Marketing Impacts of the Global Recession Essay

Discussion on the Marketing Impacts of the Global Recession - Essay Example The Global Recession By the end of 2007, what started as an apparently isolated turbulence in the sub-prime segment of the US housing market turned into a full-blown recession by the end of 2007 (Verick & Islam, 2010). The US housing sector, as stated by Verick and Islam (2010), was unaware of the true extent of the complexities and liabilities which, in turn, caused liquidity to dry up, bringing down the global financial system. The economic drawback was spread rapidly and simultaneously through the global financial system to all corners of the world (Jannson, Hilmersson, & Sandberg, 2010). The result is the global economic recession that peaked in 2008. There had been massive lay-offs, unemployment, unpaid mortgages, bigger debts, enormous financial problems and fraud, financial deregulation of credit, automotive sales loss and manufacturing decline. Marketing Impacts of the Global Recession Up to now, recession is still evident in the global scenario. The increasing globalization of economic activity – the interconnectedness of economic activity across national frontiers calls companies and countries to adapt to the negative effects of the recession (Kitching, Blackburn, Smallbone, & Dixon, 2009). Kotler and Keller in 2009 stated that speed of global business is accelerating diversity but that has slowed down, yet, as they say, its business is as usual. The companies must change their marketing strategies and management capabilities to keep up in the market, at the same time giving customer satisfaction. Several methods and strategies were devised or emerged as the reaction of the global market to the recession. According to Kitching et al. (2009), recessions are regarded as periods of â€Å"creative destruction†, during which some businesses and industries decline while new ideas, technologies, products and industries emerge and become the driving forces of subsequent economic activity and growth. Business strategy and performance vary with ow ner perceptions, resources, and opportunities available of the threats faced (Kitching et al., 2009). According to Orr (2010), findings suggest that two principal factors are dominant in determining international strategy during times of financial crisis – home country market conditions, and the level of domestic industry protection introduced by the foreign country government in response to the economic downturn. Other factors including the variability in relative exchange rates also influenced international strategy during financial crises. Marketing Impacts in Certain Countries of the Global Recession Several developed countries had certain impacts in both marketing and management aspects due to the recession. These countries mentioned in the discussion include Japan, the United States, European Union in general, Australia, Singapore and China. In Japan, Toyota Motor Corporation's profitability was badly affected by the recession, resulting in a fall from record profits to record losses (Greimel, 2009 as cited by Orr, 2010). In response, Toyota is planning to limit expenditure and return to its original focus on quality. In reaction to global currency fluctuations, the lower value of currencies in countries such as the US, and