Uncertainties during the lockdown
We are going through strange and unpredictable times, and businesses are grappling with the unknown factors every new day. But to get things going through any tough situations, brand owners across industry must sit with teams and plan ahead. Now is the good time to reflect and act.
Some facts –
As per FICCI, the economy grew at a six-year low rate of 4.7% in the third quarter of the current fiscal. The corona crisis will further aggravate the situation and revival will be a longterm process.
As per JLL report, ~ 30 per cent of hotel and hospitality industry revenue could be impacted if the situation doesn’t improve by the end of June 2020.
As per Retailers Associations of India (RAI), India has over 15 lakh modern retail stores that generate Rs 4.74 lakh crore worth business – is under the direct impact of the pandemic. Though government authorities is doing its best to allow essential to transact during this period, the demand side looks discouraging for most of the other category of retail brands.
The immediate reaction to the above facts is panic and could get decision makers into Denial zone (Kubler Ross Grief Cycle), and it may take long to come out of this loop due to sudden disruption in supply. However, we have a point of view towards mindful marketing that brands could deliver during this pandemic. We understand and aware of the fact that around 70 percent of the small enterprise are not touching marketing due to revenue impacts. The bright side is (as per Hammerkopf Consumer Survey) that there is an 87 percent increase in social media usage amid lockdown, and 75 per cent people were spending more time on Facebook, Twitter and WhatsApp compared to time before pandemic started. This gives a hope that there is an opportunity during this lockdown, where brands could leverage the time in minimal marketing effort. For the same we have devised the COVID-19 Marketing Matrix to encourage optimized marketing spend during this time.
Before we continue with the Marketing Matrix, we also gathered from primary interviews that brands are likely to pivot into new market with additional or new feature or services using same resources or adding new resources. While few brands will market same product / services into new market with slight changes or customization as per customer requirements.
Brands are constantly watching the customer movements and demands as per change in requirements due to sudden pandemic. From customer prospective the wallet is getting small in each passing day.
For the benefit of better understanding, we have created a framework called Lockdown Framework. The Lockdown Matrix is the function of Market and Resources. It goes like this:
- Most of companies will continue in the existing market with same product and services. They are Opex heavy and not in the hurry to change during this Lockdown
- While few companies are contemplating taking low risk of entering in new market by targeting new customers with same product/ services. As per the consumer demand, company are likely to offering using same resources (tech, employee, IPR, etc.)
- We are not likely to see radical innovation or change during this lockdown where companies will start producing new product or services to enter new market. Perhaps post lockdown they might re-think their strategies and enter new market with new service/ products.
- This is the favorite box, which describe disruption during lockdown. Companies would try using new resource and process to offer better product in same market. Again this is a sweet spot for many brand to win this lockdown period by offering existing customers by being innovative.
For each of the approach in the lockdown framework, brands should have the Business continuity plan. Each plan is considered based on different scenarios as different companies will have different internal and external factors affecting them in the lockdown period.
Shown below is the COVID-19 Marketing Matrix that presents the various possible decisions that could be planned during slowdowns. We wanted to share it with the hope that it can help decision makers to fight the slowdown from the business war rooms.
Quick remarks on the Matrix picture below:
- Business leaders must take series of actions to reduce the business and employment risk. A well thought out business continuity plan covering pandemic outbreaks or lockdowns will help in minimal disruption to your services. Apart from several set of protocols which include fewer face-to-face meetings, working remotely, split teams and locations, we have identified Marketing is key. Marketing in such lull period is key to real success when the markets are back to normal. Marketing will ensure the brand identity alive especially when you are part of crowded space. However constant hammering of brand identity into the minds of consumer needs constant cash flow into the marketing budget, and during slowdowns that itself is a major challenge. Taking into account this Matrix would serve as a starting point at the planning stage.
- Three scenarios are considered here for different period of lockdowns
- Three different set of Plans A, B and C to accommodate the revival plans (each plans is different for different budget , burn rate, operating expense /opex, etc)
- COVID-19 Marketing Matrix highlights the possible decisions which will affect the marketing spend in the unpredictable situation at different stage/ scenarios
Acknowledging the fact that every company’s situation is different – this matrix is a suggestive representation for taking a strategic marketing decision