Dr Sreelata Jonnalagedda, IIM Bangalore, feels that while brands must take initiatives where possible to stay relevant during the present COVID-19 pandemic, limited and quality marketing communication may be a better approach as opposed to aggressive pushing of messages.
TPCI: At a time when the market is down and restricted to a few essential categories, how do you view the importance of marketing communications by companies to their target audiences? What should be the new communication approach and strategy?
Dr Sreelata Jonnalagedda: If they can manage it, one approach for brands will be to pivot their business considerably. I got an update from Ola that they will deliver Ola Food to our doorsteps. So now I know that they are doing something and they continue to have mind share. The strategy of brands that are pivoting their business models should clearly be about information.
For those who are in essentials, do they need to shout out loud about what they are doing? I would advise caution in communication, because the principles of communication relevant in pre-COVID times may not be relevant now. Sometimes it is better to go in cautious hibernation, see what becomes relevant and communicate in that context. Instead of communication, therefore, the major focus of these brands is just to be available.
TPCI: Given the emphasis on social distancing, what key adaptations do you deem necessary for companies in their supply chain management?
Dr Sreelata Jonnalagedda: The supply side and demand side are currently disrupted. So in between what we need to do, we haven’t even gotten there. Factories are not up and running completely. I think we are still consuming out of inventory mostly. I am expecting this to ease in a couple of weeks. Any place where they are processing the products is people heavy. Wherever a lot of people are working, they are going to have a little bit of an adjustment issue, because of social distancing. I think those entities will have to make big changes. I propose a staggered workforce, which will be divided into 2-3 cohorts and each cohort works in shifts with appropriate protection.
Logistics and delivery are probably a little easier as they are not people heavy. So social distancing can be implemented and the only bottleneck perhaps will be whether they have enough labour. There is no alternative for the employer than to take responsibility and ensure that all the protocols are put in place. Left to the workers, the seriousness may not be there, which can erode the brand trust. The message has to be that “We are responsible”.
TPCI: What major changes do you anticipate in customer behaviour, approach to consumer brands and buying patterns when the lockdown opens? What kind of opportunities does this open up for marketers?
Dr Sreelata Jonnalagedda: It depends on the product category. When it comes to goods under habitual consumption, customers don’t question whether it is COVID, pre-COVID or post-COVID stage. There we may see category-level demand stay stable or actually increase at the household level. Consumption outside the house in segments like tea, coffee, food and travel has reduced. So a lot of this consumption that used to happen on the road is now happening at home.
But since these are habitual patterns, people will be less sticky about brands for products that they are habitually consuming. So less popular brands might gain traction in essentials. The key to exploiting this opportunity is to make sure that they are available when big brands are out of stock.
It is much harder to talk about discretionary categories. I was just reading an article about real estate, which said that the sector may not necessarily face a prolonged downturn. New people may not be looking at buying houses, but if I have already made up my mind, then maybe I am just waiting for the situation to ease and then trying to figure out where I should buy.
I am also assuming that services like restaurants, salons and entertainment will resume, if they are smart enough to find innovative ways of pivoting their business. Keeping availability levels high is important as well as challenging. That is where brands will need to be resourceful. For instance, there may be an increased demand for things like instant mixes, ready to eat packs, etc on the food front. If restaurants can change their models to make it easier for people to consume at home, they may be able to sustain.
TPCI: The role of e-commerce is expected to increase drastically in the coming months, as retail stores and malls become more or less forbidden territory. What should Indian consumer brands do to prepare for this shift?
Dr Sreelata Jonnalagedda: There will be a shift to e-commerce, but the local retailer will not go away. Let us not kid ourselves as a substantial portion of our population has not shifted online. I feel that e-commerce may find it more convenient to supply to the local retailers. E-commerce is short on labour, so they are not able to supply to every household. That is why the demand will be suppressed if you are relying on just e-commerce. On the other hand, when you go to the local retailer, you mostly end up buying. The local economy needs to be up and maybe e-commerce will fill this intermediary gap. Malls and large retailers will be slow. But for categories like apparel and electronics, those who are anyways investing in digital infrastructure – this is the time to catch up.
TPCI: What impact do you expect on allocation of media budgets post-lockdown, especially the role of digital channels? How do you perceive the importance of content marketing in this context?
Dr Sreelata Jonnalagedda: In my opinion, while marketing budgets will generally shrink, the share of digital will increase. A lot of budget needs to be reallocated to ensure that the distribution is right. Content marketing will help promote your brand, but you should be mindful about how much capacity consumers have to actually absorb content. Every conventional channel has gone electronic – news, social life, friends, entertainment, etc. With so much digital overload, people may have very less bandwidth. So the key is that whatever content is being targeted needs to be highly relevant. Even if you go digital, be mindfully digital rather than just pushing your message aggressively. Be measured, focused and quality conscious for optimum results.
Sreelata Jonnalagedda is an Associate Professor in the Marketing department at Indian Institute of Management Bangalore. Dr. Jonnalagedda develops and teaches a course on Pricing Strategy, covering the economics, operational, and tactical aspects of pricing for second-year MBA students. Her areas of research include pricing, channel structures, information diffusion (word-of-mouth), and the application of game theory to marketing problems, her work has been published in leading Management journals. Dr. Jonnalagedda has worked on case studies/consulting engagements on pricing and marketing innovations, including pricing information products such as InMobi, Red Force Labs, and Amable. Dr. Jonnalagedda holds a PhD from The University of Texas, Austin, a Masters in Transportation from the New Jersey Institute of Technology, and Bachelors in Civil Engineering from the Indian Institute of Technology, Madras. Prior to completing her Ph.D., she worked as a consultant with Supply Chain Consultants, Inc (now Arkieva).
