In Portugal, we have treated what is actually a permanent structural shift in state and household financing models as a temporary crisis. Consequently, rather than overcoming our financial hurdles, we have been met with deflation and its perplexing side effects. The banking sector is forced to dismantle its historical business model; despite nearly all operators attempting to push credit, negative interest rates will never be enough to spark consumption.
This current reality is tied directly to a deficit of trust in the future and pervasive uncertainty regarding stable incomes, breeding a deep aversion to debt and credit—akin to an alcoholic suddenly turning into a militant teetotaler. Something profound has fundamentally altered how people relate to their purchases, establishing a rigorous new culture of evaluating the value for money behind every transaction.
Marketing that continues to view financial distress as a passing nuisance—a mere flea bite to be scratched away—is doomed to failure. The same fate awaits decorative marketing that relies on disproportionate power over consumers. Even in quasi-public services or near-monopoly regimes, customer tolerance for inflated prices and fees is razor-thin, easily triggering customer churn and an immediate collapse in revenues.
Within this economic landscape, the role of marketing within companies naturally shifts, moving closer to production and distribution operations while shedding its infatuation with superficial communication. Yet, this instinctive retreat toward a stripped-down marketing model focused solely on price-cutting harbors its own trap. When consumers have less money and significantly higher standards, winning them over with purely functional arguments becomes exceptionally difficult.
Because consumption is inextricably linked to modern living, demand acts as the engine driving the economic carousel—generating employment, distributing income, and maintaining the satisfaction required for social peace. Therefore, reducing marketing to a relentless cycle of price and volume promotions, dragging it out of the boardroom and back onto the factory floor, ultimately exhausts itself. While cheap gimmicks may capture short-term volume, they destroy margins and erode long-term business sustainability.
The central challenge remains: how to expand the overall pie. Regardless of philosophical, ecological, or moral debates, the sustainability of our current economic system depends on marketing’s ability to invent compelling reasons to buy—reasons that go far beyond simply spending less or hoarding more. Commercial marketing possesses an irreplaceable dimension of ideology and market creation; markets do not grow without organized ideas clearly explained to citizen-consumers.
Despite the financial stress of economic headwinds, marketing must retain its capacity to propagate hope and offer belief. While protecting short-term cash flows is critical, brands must continually animate consumers to secure the lifetime value of enduring, long-term relationships.
Paulo Fidalgo
CEO of Marketividade
