Final answer:
It is generally false that firms should cut back on marketing during a recession. Continuing marketing efforts can maintain visibility and prepare a firm for post-recession growth, and can even offer opportunities to increase market share while competitors pull back.
Step-by-step explanation:
During a recession, it is commonly thought that firms should slash their marketing efforts to save costs. This, however, is not necessarily advisable. Despite weakened demand, maintaining or even increasing marketing activities can be crucial for a firm's survival and future growth. Retaining visibility in the market ensures that once the recession is over, the firm is well-positioned to capitalize on recovering demand. Moreover, cutting back on marketing can lead to reduced sales, which further exacerbates financial difficulties.
Moreover, periods of recessions also present opportunities. Some competitors may reduce their marketing efforts, leaving a gap that can be exploited. By strategically investing in marketing, firms can potentially increase their market share and emerge from the recession stronger than before. Therefore, it is often false that firms should cut back on marketing during a recession as a universal rule.