Consumers will be starting to make discretionary choices, which means that what is not essential will move out
While the Indian economy may break out of contraction in the current quarter, the social and cultural norms are also permuting to the new ways of the world. This has led to most forecasters revising their growth projection for the current financial year.
From nearly 120 million lives being impacted to 30 million job losses, all sectors and the people associated with them have been marred by the ramifications of the coronavirus. It is believed that the pandemic will have a far-reaching impact on India, as the country has not faced a recession of this proportion in the last 30 years. “India is a bit out of depth when it comes to being resilient in a recession in an economy like this,” comments Mohit Anand, Managing Director, India & South Asia, Kellogg.
Anand explains that an unusual situation such as this takes a different dimension for a marketer when it comes to delving into consumer behaviour and needs. “Consumers will be starting to make discretionary choices, which means that what is not essential will move out. Hence, brands will fight to place themselves in the consideration set,” he explains.
Sharing some quick tips for marketers to capitalise on, and win during such atypical times, Anand advises, “The first principle of winning in a recession is to be offensive on demand. This means brands should not cut back on the future. Instead, they should take a hard look on what is required and use that dial up the offer.”
Innovation, brand and peoples’ capabilities are key areas where companies are beginning to invest because these factors matter the most during a recession. Achieving the very elusive balance of being offensive on demand and defensive on cost is what people need to wrap their minds around to survive.
Owing to the pandemic’s reverberations, it is witnessed that consumers are changing their frame of reference and new behaviors and demands are being spotted. Anand says, “The change in reference is not due to pricing. It is due to the value, which is a function of the consumer benefit, divided by consumer cost. We are seeing a counter-intuitive consumer reaction. Products that offer a huge number of consumer benefits, both physically and functionally, even at higher costs, will have a better value than those which have a lower cost.”
He elaborates on how digital was always going to be a game-changer and how Covid has accelerated the pace of this change. “E-commerce has done really well because the behaviour of consumers has changed. Additionally, the engagement of the consumer has also changed because people have shifted to digital consumption. Efficiency is an added factor that has accelerated the pace of change.”
“To win in this recession, we need to invest in capabilities. For example, the skills to run an e-commerce business today are completely different from what we thought six months back. We need the right talent set and the right people with future-fit skills,” remarks Anand.
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