Earlier, Dr Lovelock had outlined the ways in which a service company can strategise to effectively ride the storm of a downturn.
"The classic response is to cut costs and reduce prices. For example, marketing expenses are reduced and long-term advertising is cut," he said.
However, in cutting costs, it was essential to do so without destroying service quality, he told delegates to last week's breakfast presentation: "Poorly thought-out cost cutting reduces the quality of service and thereby customer satisfaction."
Costs that should be cut are those that don't enhance the service value of an organisation, such as persistent overcapacity and bureaucracy.
One of the most effective ways of surviving a downturn or a squeeze on resources was for a company to prioritise its market segments, and recognise the profitability of different segments. If a company has done this, it can build a portfolio of segments that will spread its risk, so that if there is a downturn in one segment, it can turn to another one.
Dr Lovelock also said that the long-term view required continued marketing spend. The qualities to emphasise in a recession are value, trust and reliability, while messages based on fear, weird humour, adventure and experimentation should be avoided.
Responding to a question, Dr Lovelock noted that there were not many new "secrets" in marketing practice. The way companies organise and execute common sense issues in a strategic way makes the difference, he added.
Companies should take time and energy to implement what they know to be good service practice. An important question to ask was how things would be different as a result of what a company is doing for its customers.
