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The raw materials cost increases. Shortages and the high cost of raw materials produce an

economic and moral pressure to avoid wastes.

Advertising and marketing men can expect rapid changes in a variety of markets and
industries. In energy, there will be a decrease in competitive advertising between the various types.

We will probably see a switch to more educational advertising for coal, gas and electricity.
Advertising campaigns will be directed towards eliminating waste rather than increasing

consumption. In consumer durables there will be a move away from planned obsolescence. Cars,

for example, will be replaced every five to ten years rather then every three. Total consumer
expenditure will fall and price will become an even more important factor. In manufacturing,

smaller companies will be squeezed out of existing markets.
In packaging, many products, like personal deodorants with their excessive use of raw

materials, will change or disappear as paper and aluminum shortages push up the cost of packaging.
As advertising budgets are cut, advertising agencies themselves will be involved even more

into marketing and management consultancy. And in marketing, manufacturers will demand

quicker returns on less capital investment. Innovations will be marketed much faster (and copied
much faster by competitors). Brand life cycles will be much shorter. Agencies will have to be much

faster in their response to marketing problems and work longer hours for less money.

WHEN A FIRM IS IN TROUBLE

Sometimes firms are in trouble. It is necessary to pay attention to the following symptoms in

order to save a firm:
1. There is no real plan for the future. The company is merely reacting to events as

they occur. For example, the company depends entirely on one supplier for an
important component and has not found an alternative supplier in case the first

one is closed by a strike or goes bankrupt.

2. There is a chronic shortage of working capital. Payments to suppliers and even
payrolls are delayed.

3. Employee’s morale is low, with frequent absenteeism, and high turnover in the

work force.
4. Profits are low or non-existent because sales are weak or costs are higher than

expected.