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Firms shouldn’t cut marketing spend

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Enterprise

Firms shouldn’t cut marketing spend

Experts advise cutting marketing expenditure
Experts advise cutting marketing expenditure only as a last resort to save business from imminent fall and only for definite period. FILE PHOTO NMG 

In the last six years Kibe has been struggling to keep his business running. Debts have been increasing and sales erratic.

During good times Kibe used to have several employees who would move across the country marketing. He also used to participate in local and international trade fairs and occasionally did various promotions. But now with the low sales and high cost, he cannot afford such indulgencies.

Well, we do not know exactly what happened to Kibe’s business and made sales to gradually decline until he found himself debt-trapped and in need to take quick action to save his once thriving business.

However, most probably when things started getting tough, instead of finding a solution through more marketing that would lead to more sales and product development to meet customer needs, he went the debt way to bridge the gap.

It is an open secret that most business problems have their roots in marketing. Yet, when things are tough the first culprit of cost cutting or negligence is marketing.

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Marketing, in this sense, should be viewed broadly as an activity that starts long before a product is developed, produced and sold and continues throughout. Marketing is not merely trying to push customers to buy what you have. It includes finding what customers need and providing it.

Marketing must continue with sales and promotion of a product to check and react to new market developments, changes or customer lifestyle, preferences and activities of competitors that could hurt.

Marketing is often neglected because, in most cases, it does not yield instant returns. Developing the product or positioning yourself in the market is a long-term investment, and it is difficult to show real time returns on expenditure. There is always a waiting time before results are visible and thus the erroneous impression that a marketing need is not an emergency or a pressing need any time; yet it is, always.

Experts advise cutting marketing expenditure only as a last resort to save business from imminent fall and only for definite period. Treat it like a painkiller or a first aid; not as a treatment.

There are several other better ways to cutting cost. They include increasing efficiency by training your entire staff and yourself; eliminating or reducing activities that does not yield fruits; moving your business to less costly area; outsourcing non-core services and improving your customer service to retain them among others.

There is sufficient evidence to prove that cutting marketing spend in even in the worst economic times is suicidal. Only a fool can doubt it.

Economists actually advise that the worst economic times is the best time for businesses to market and reinvent themselves. This is because as already mentioned, marketing is not merely pushing what you have but finding out what need customers have and proving solutions.

Even in the worst-case scenario in terms of returns on marketing spend, the sales made are statistically likely to outweigh any savings you may have made by cutting cost.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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