Because of Covid-19 pandemic, Companies have to find ways to adapt, they are urged to calibrate and redefine their purposes, products, channels and target customers.
Companies are adapting their goals and launching initiatives designed to contribute to tackling Covid-19. Such activities are referred to as " purpose marketing" or cause-related marketing" and demonstrate corporate social responsibility. There are many calls for purpose marketing to help elderly and vulnerable people in society and to support, encourage those who are in need of emotional support.
Although research shows that announcing cause-related marketing may negatively influence shareholder value, research also show that such activities can result in more positive consumer attitudes and larger purchase intentions. Companies that engage in COVID-19 related activities either have the resources to do this and/or are able to benefit from the shifts in demand occurring during the pandemic. For example, Coca-Cola has donated 120 million dollars to fighting COVID-19 and temporarily halted its commercial activities.
The effect of cause-related marketing is larger when it is done by a familiar brand of a utilitarian product, when a relatively large amount of money is donated and when the cause is less familiar. It is also important that such activities connect with the authenticity of the brands that initiate them. If this is the case, these companies will not only be doing a good deed: these activities will also strengthen the consumers’ brand attachment and word-of-mouth.
Many companies have developed great out-of-the box ideas that redefine their product portfolios.
It is wise to invest in R&D and innovations in times of contraction, not only in terms of products but also new (potentially complementary) services and processes. The receptiveness of consumers to new products/services is greater during periods of contraction than during periods of expansion. In addition, in such times, many R&D departments have the opportunity to work on new products without excessive time constraints and with greater creativity.
During the COVID-19 crisis, marketing is faced with a major challenge: how do we get the products to buyers? Distribution is limited and many retail chains have even been forced to (temporarily) be closed.
Companies with their own online channel are at an advantage compared to stores that only operate offline. Companies that apply a multichannel strategy in which they combine offline and online channels, perform better in terms of share of wallet and in terms of revenues. Such companies reacted better during the pandemic because they were already prepared to offer their products and services online where others were not, and were therefore more responsive to changes in the customer journey.
4. Target customer
Globally, there is a decline in advertising expenditure of about 10%, with television advertising expenditure decreasing by 25%.
Communication is directed less at acquiring new customers; instead, most companies are devoting greater attention to their existing customers. It is suggested to use combinations of classical and social media, given that these two types of media offer opportunities for synergy when they are used in combination. Another option that is quite often used is sending emails.
However, the COVID-19 crisis also offers opportunities for customer acquisition. The increase in the use of the online channel allows companies to collect data about new customers. This data can be used to profile these customers (e.g., to compare them with similar customers based on their buying behaviour), possibly leading to the identification of new target groups. The next step is to target these new customers with suitable or even customized offers.
By: VSHR Digital Media
Source: NCBI, November 2020