Krish Velkar
Guest Article

Why it might be foolish for some to stop marketing during COVID-19

Are these times truly unprecedented in the sense that have we learnt nothing from past recessions? Also, aren’t difficult times like these said to be an acid test to bonds, or friendships?

Like every COVID article, or advert, even I thought I’ll start with the line, “These unprecedented times have impacted humanity drastically, and have been a major reason for the stagnation of our growth”.

(1) But are these times truly unprecedented in the sense that have we learnt nothing from past recessions? Mark Twain helps me answer this with his famous quote, “History never repeats itself, but it rhymes”.

(2) Also, aren’t difficult times like these said to be an acid test to bonds, or friendships? Actually, Maya Angelou says it better, “People will forget what you did, or said, but never forget how you made them feel”.

Is there truly nothing a brand can do now to make its customers feel better? Could it be seen as a lifetime opportunity for your brand to make a long-lasting impression on the customer?

Well, first and foremost, let’s address the big elephant in the room: 'Cost'. Currently, the most predictable and hard to resist decision for companies is to cut their marketing budget.

Hence, in this article, I attempt to answer the above questions that will help a marketer make a case with his/her internal team to show why it is important not to cut marketing budget during COVID-19.

(1) So, what have we learnt from past recessions?

Many who refrained from cutting costs during recessions in the past have benefited from it. Figure(1)

Data from past recessions Figure(1) (Adgate, 2019)
Data from past recessions Figure(1) (Adgate, 2019)

So, what does this mean?

The professor Mark Ritson and Peter Field rightly say that if you maintain, or increase, your advertising spend whilst competitors reduce theirs, you will get a positive ESOV (excess share of voice) which will, in turn, cause your market share to grow in the long-term. Thus, showcasing the importance of brand visibility right now.

Who is advertising during COVID-19, and has understood this phenomenon?

A few of them in the transport industry - Lexus UK, Toyota UK and Air France UK - have increased online ad spend by nearly 257 per cent, 156 per cent and 327 per cent, respectively (Hillier and Gilliland, 2020). Video game brands have also increased their ad spend by nearly double (WARC, 2020).

In the FMCG sector P&G (Vizard and Fleming, 2020) and Amul have nearly doubled their marketing expenditure. The benefits of not cutting down, or increasing it, are normally reaped in the-long term. However, Amul has seen a 50 per cent jump in sales during the lockdown (WARC, 2020).

Let's assume this data has helped your team at least consider a certain budget. We also need to be aware that this opportunity to increase market share may not arise for all brands, as for some, there is genuinely not much they can do, unless they pull a rabbit out of a cap. Mark Ritson categorises three types of companies (Figure 2):

The impact of COVID-19 for each industry (Figure 2)
The impact of COVID-19 for each industry (Figure 2)

The ones in the freeze category may want to cut costs to make sure they do not shut down.

For the rest, there is a lot that you can do, but the key is to innovate and think unconventionally. However, the irony here is that when I say 'think unconventionally', I really mean going back to thinking about the conventional Kotler’s 4 Ps. Reason being, today marketing is misconstrued for only the 'Promotion' P, while the others are given less importance (to).

(1) What follows is a list of examples of what brands have done to innovate within the 4 Ps.

This aim's to showcase what a can brand do for customers in order to make them feel better and cater to their needs now.

1) Price

This is an interesting P, as the first thing that comes to mind here is discounts and free services. However, there are a few other ways you can reframe the price of your product without reducing it.

(i) Insurance

During the 2008 recession, Hyundai USA realised that people had money to spend on cars, but were uncertain of their jobs being lost in the future, which is why they did not want to spend their money on cars. Keeping this insight in mind, Hyundai launched an insurance campaign, which said, “Right now, buy any new Hyundai, and in the next year, you lose your income, we’ll let you return it”, and sales increased drastically.

Yes, your leading question is how many cars were returned? Answer: 5!

(ii) Servitisation

Servitisation refers to the act of selling tangible products as services.

Currently, people are weary of large upfront costs on products. You could look to reframe your product into a service and charge them accordingly.

Example: Xerox launched its pay per use service, where it did not sell its printers, but sold a service and charged them based on each print. This way consumers had the convenience of not bearing a high upfront cost, but also, had a printer when they needed it.

Here, the focus is not on reducing your price, but reframing it in a way that makes it look more affordable. Also, keep in mind that heavy discounts can increase revenue, but not profits.

2) Product

Here, this would be largely dependent on your manufacturing plant.

· In the furniture industry, Godrej Interio is in the process of making work from home accessories, as offices are moving home. Nilkamal has also innovated with quarantine beds, virus guard partition and hand-wash stations.

· The restaurant industry has deconstructed its products and provided DIY meals kits at home. Also, (there are) dinner glass pods to ensure the safety of consumers.

· Airbnb and several gyms have launched 'online experiences', where you can enjoy a number of activities from home.

· Food delivery aggregators like Swiggy also provide the option of allowing the consumer to buy groceries.

Mr. Chow’s a premium Chinese takeaway that provides a contactless delivery option.

· Vogue, a clothing brand, is making fashionable masks.

· Barcadi Limited and LVMH (the parent company of Dior and Givenchy) have started making hand sanitisers.

The question you need to ask is that with the given resources you have, what can you manufacture, which could be seen as a necessity to consumers currently?

3) Place

In terms of place partnerships, your own e-commerce platform could be key, and the below suggestions can really apply to almost every brand.

· Retail brands and food: E-commerce, availability on all aggregator platforms and WhatsApp business for a personal touch.

· A grocery, or retail store, can look to gamify the online shopping (web/virtual reality) experience by letting a consumer virtually experience the store.

· Product directly available on Facebook, or Instagram, business in order to shorten the conversion funnel.

Behavioural science shows us that people are extremely lazy. Thus, the more easily available your product is to the consumer, the more likely will you sell. Focus on making it extremely easy for the consumer to buy your product.

4) Promotion

I won’t go too deep here, as I'm sure you all have seen enough brands communicating how they are giving importance to hygiene and understand the vitality of brand salience, which is of paramount importance.

Using augmented reality (AR) to promote products.

Promoting high involvement products (spectacles, watches and furniture) online can be challenging, as we feel the need to physically experience it. AR can be a great way to bridge this gap.

Desperate times call for desperate measures. Well, I was apprehensive when I realised that I had to buy spectacles online. Using the AR tool by Lenskart really helped me understand how I would look in them. After this experience, I will not hesitate to buy spectacles online.

AR, which was earlier coined as gimmicky, can really be leveraged well in such scenarios to provide the customer a near life-like experience. Ikea and several watch brands, too, have leveraged on this.

The point I'm trying to make is to not shut down marketing operations completely, and look to adapt to the current scenario where you can. I sincerely hope this article has made you reconsider your marketing spend, or sparked off at least one idea for your brand.

(The author is a planner at Ogilvy.)