Opinion: The turbulent times that make modern marketing a mandatory feature in business arsenals
The author explains how it's time for businesses to come up with better, more sensible methods to connect with customers in light of the incoming income constraint
Sep 19, 2022 10:04:00 AM | Article | Moneka Khurana Share -
In the turbulent times that businesses have had to face lately, old marketing tools have slowly made way for new ones. Like businesses, marketing is also an ever-evolving arena. Global events like the pandemic and wars have changed customer priorities, resulting in various marketing hits and misses. It's time for businesses to come up with better, more sensible methods to connect with customers in light of the incoming income constraint. When these actions are taken together, a company is closer to finding efficient contemporary marketing solutions.
How inflation is dictating marketing
Consumer confidence has been at a low again because of something that goes beyond Covid-19 or the Russia-Ukraine war, among other global crises - inflation. Kantar has conducted a global study on consumer concerns and inflation tops the list in this report. We all saw the intense job losses that the industry witnessed during the pandemic. While the situation is improving, the pace has been slow. On the other hand, inflation has hit the most essential commodities, primarily food. There has been a resurgence of people going out on holidays and eating out, but the lower, middle, and upper middle class is bothered with running a house, which is becoming tougher with every passing day. Transport and education costs have gone up. People are cutting down on any non-discretionary items, even in FMCG expenditure. For businesses, it means lower revenue volumes, which directly effects marketing budgets. So how do we resolve the situation? The answer is innovation. To reach people, the only way ahead is cost-effective marketing which employs unique tools to leverage consumer sentiments.
Then again, we see inflation taking a bite on the common man’s budget and consumption expenditure falling off negatively in many industries, while some premium categories continue to boom. This is a dichotomous behaviour, giving rise to the latest trend ‘BANI’, which is brittle, anxious, nonlinear and incomprehensible.
Understanding the shift in priorities and encouraging value-based marketing
The best instance of how inflation is affecting industries is e-commerce. The sector that saw a boom in the pandemic era has not looked back since. The industry marketed itself brilliantly as an easy, one-stop solution to all consumer needs with a central message: convenience. However, if we look at online e-com trends now, companies like Flipkart is seeing a downward trend in the number of searches, be it on mobile handsets, durables, or other categories like TVs, washing machines, or laptops. This is clearly an indicator of consumer priorities at this time. Surprisingly, site visits haven't changed much, so there isn't a gargantuan shift. Customers are typing in searches, but the end funnel conversion has seen a slight dip. Discretionary categories are trending downward. So, it is important to know which product works at what time, and what audience to target for which. Bulk marketing, even when it is online, will not help in returns. Advertising also needs to be tailored now, with each customer being able to look at exactly what they need.
So, there is pressure, it will be interesting to see how the value of marketing changes, expediting new strategies. Value-based marketing is going to become important as marketers continue to get tested and challenged.
The long-term plan
In the long run, it's impossible to only play low funnel because that makes brands completely lose their differentiation. Consumers are increasingly looking for value and uniqueness. In the online world, loyalty has really gone down because it just takes a click of a button to replace your business. The online world is a lot more brutal in respect to seeing brands being able to leverage their loyalty.
If you're building brands that outlive you, they have to be built in the real world, as much as online. You do need to look at the kind of trust that you can evoke when you build a brand. For that, you do need to know some basics and evolve.
I think a reason why insurgent brands were able to take on incumbents is they found niches that they put on and drove them hard. The balance is currently a lot more tilted towards conversions because every penny is being counted. It’s about squeezing the most out of marketing investments and strategies. Doing so will significantly help businesses emerge stronger from the turbulent inflation waves.
(Excerpts from the article have been taken from the MMA India Q3 Board meeting. The author is country head and board member, MMA India.)