One of the news on my social media feed this morning stated that the average taxi income has dropped to Rs. 1000 from an average of Rs. 4000 to Rs. 5000 per day. This forced me to recall my conversation with Marketers from different sectors like FMCG, food & beverage, cosmetics, and automobiles that the average sales revenue has dropped by 80% since the pandemic.
My observation on consumer/customer behavior during this COVID-19 situation is even more interesting. If you scrutinize your conversation with family, friends, or peers, the average household income has dropped drastically by around 20% to 40%. Hence, the spending has proportionately decreased too.
The situation right now is that there is an 80% cut in the income of consumers/customers. Therefore, they are only buying essential goods and have slashed other non-essentials from their shopping list or consumption habits. Hence, businesses are losing 80% from their regular sales revenue.
Now, why do Brands need a relevant Marketing strategy in Covid-19 context?
Earlier, we used to term specific products as price-sensitive products. Sales of these products are largely affected by their price. Vegetables or meat products are some of the common examples. Today, the market has changed. In my opinion, all products, be it a regular commodity or high-end brands, fall under the price-sensitive category.
In Marketing Strategy, we consider three elements: Need, Wants and Demand. As the economic crisis lingers, the latter two elements, Wants, and Demand seems to be crumbling.
For example, coffee maybe my Need but an espresso is my Want, and an espresso at the high-end coffee shop is definitely a Demand.
Hence, I advise brands to take a deep dive into their current pricing strategy with their conceptual Target Group at the focal point. Reworking on pricing strategy doesn’t necessarily mean decreasing the price. Think about bundling, packaging, and cross-promotion strategies to help the brand garner more sales. Apart from increasing sales revenue, it will also ensure a chain effect of purchase and repurchase which will boost the engagement between your brand and your consumers.
In a world without a pandemic and an economic downfall, we would have considered the 4 Ps of Marketing: Product, Price, Placement, and Promotion equally. This cannot work in the situation that we are in today. Worldwide marketing researches with top CEO’s (reference to one of the International Webinar) have already claimed that the effect of the ongoing pandemic on market behavior will be directly felt for 2-3 years. In my analysis, PRICING STRATEGY should be a brand’s focal point of the overall marketing strategy today. It could be the most effective way for brands to stay relevant in the changing economic world of 2020 and beyond.
Founder & CEO , M.A.D Consultant Pvt. Ltd
The author is a professional Brand Consultant who wants to extract the brand from his experiential knowledge