Beating the recession blues: Exploring the link between family ownership, strategic marketing behavior and firm performance during recessions

Business cycle research in marketing: a review and research agenda

“…Kashmiri & Mahajan (2014) Advertising; Innovations During recessions, non-family firms tend to decrease advertising intensities and rates of new product introduction, while family firms are likely to maintain advertising and new product introduction. Family firms outperform non-family firms during recessions.…”

“…Advertising Studies on the extent of advertising spending over the BC cycle have repeatedly shown that a majority of firms cuts back significantly on advertising in a contraction, while advertising spending rebounds in the subsequent expansion period (Deleersnyder et al, 2009;Kashmiri and Mahajan 2014;Lamey et al 2012;Özturan et al, 2014). Deleersnyder et al (2009), for example, document pro-cyclical advertising adjustments across 37 countries worldwide in four traditional media (TV, radio, newspapers, and magazines).…”

“…Despite the dominant practice of cutting back on advertising, research has repeatedly shown that maintained, or even increased, advertising spending during economic contractions often results in long-term managerial and social benefits, which can be in the form of better firm performance (Deleersnyder et al 2009;Özturan et al 2014;Kashmiri and Mahajan, 2014), lower long-term private-label growth (Deleersnyder et al 2009;Lamey et al 2012), and higher long-term growth of the advertising industry itself (Deleersnyder et al 2009). …”

“…Innovations Research in both economics and marketing shows that innovation development and new-product launches exhibit pro-cyclical adjustment patterns, i.e., they move in the same direction as the general economy (see, e.g., Devinney 1990;Axarloglou 2003;Barlevy 2007;Lamey et al 2012;Kashmiri and Mahajan 2014). According to Lamey et al (2012), BC fluctuations in this instrument get amplified, both for major and more incremental innovations.…”

“…The arguments for the more severe reductions in spending on innovations and R&D are similar to those for reduced advertising, and relate to difficult spending justification, its common treatment as a suspendable cost, and a reduction in the number of competing innovations. In this context, Kashmiri and Mahajan (2014) show that the reduction in the rate of new-product introductions is less dramatic in familyowned firms, given the longer investment horizon of family executives. Both Lamey et al (2012) and Kashmiri and Mahajan (2014) show that if managers maintain or increase new product introductions in a recession, they will achieve higher growth and better (long-term) performance than when they systematically cut such activities, albeit temporarily, in response to adverse economic shocks.…”