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Marketing And Branding Beyond COVID-19: A South East Asian Perspective
Going forward given the dramatic shift in consumer psychology and as the purchasing power of consumer plummets, the very scope of marketing and branding would be essentially limited to providing food for the masses.
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The most recent global narrative is that novel Coronavirus pandemic would inevitably change both economic and social setting to much-hyped about 'New Normal'. As one of the key components of the economy, the market behaviour of both buyers and suppliers is, expectedly, bound to witness a dramatic shift. As a result, one of the key activities in the market economy, marketing and branding of products and services is also certain to undergo a sea change. In the post-COVID-19 setting, traditional exchange processes in the market place would be less relevant calling for new business designs and models that are, functional, viable and sustainable.
The global economic structure and individual economies have no option but to catch up with and settle down for the New Normal, whatever it may constitute. Both structure and dynamics of markets will get an altogether new shape and composition propelled mainly by inequalities in incomes and wealth, aggravated by the pandemic.
While the fundamental principles and practices of marketing, however, may not outlive their utility, marketing and branding domain will definitely assume a new façade more so in the context of the developing economies. The reason being developing economies are fraught with their own structural and institutional challenges such as variability in purchasing power and the fact that the organized market has only a limited share in the trade. Hence, in the new emerging setting, strategies and target audience of both marketing and branding in the developing economies will be different compared to those that we find in the developed economies. More so, when the economies are on the downside of the wheel of the business cycle.
Given the fact that wealth and income disparities divide shall remain glaringly pronounced in developing countries, as Covid-19 exposes the disparity between having and have not in the forefront, time is now ripe to take the marketing and branding approaches out of traditional 'box'. For instance, a meagre 7% of the population in South Asia owns 70% of the wealth which is critical in determining the consumption pattern as against more equal societies. This, in turn, decides the pattern of marketing and branding exercises beyond Covid-19.
Therefore, the new imperative is to look into marketing and branding through a philosophical perspective and humane angle beyond mere profit-making and sales exercises. During and post-pandemic times, marketing revolves generally around three distinct sets of activities. This is truer and more valid for all the developing economies, including Nepal.
First, purely aimed at product promotion and sales, is related to marketing of essentials such as health, hygiene and food products and their business sustenance. Second, especially for economies like Nepal, takes on and assumes a societal marketing perspective. This is related to welfare schemes and all other marketing practices that are essentially non-profit making in nature. They are aimed at and centred on making basic necessities available for the consumers. This would actually comprise the largest segment of supposedly the marketing activities for the business firms. This is exactly where the role of corporate social responsibility (CSR) and corporate philanthropy on the part of large companies matters the most. It is also an ideal opportunity for them to promote the variety of philanthropic edifices like the Foundations specifically started to support charitable and philanthropic activities. Several of these entities were seen engaged in post-Gorkha earthquake rescue, relief and, to some extent, rehabilitation. earthquake times in Nepal. Recently, Bill Gates Foundation of the US has committed $150 million in funding to leverage the resources to ameliorate the adverse impacts of the Covid-19, particularly the poor and the vulnerable. Through these initiatives, businesses can better communicate one powerful message to the masses that they are sensible and sensitive enough to care for common man’s needs and concerns when required. This perhaps is the best branding strategy that pays in the long run.
And the third set is primarily related to the marketing of services. We are all aware this is on the rise given the nature of the GDP composition across all developing economies like Bangladesh, Srilanka, India, and Pakistan. The service sector comprises of anywhere between 51% to 61% range of the economies’ GDP and the same has been increasing over the years. Sectors like education, health, ICT need to formulate innovative strategies for making themselves relevant in the challenging times ahead as the demand of services in these sectors will geometrically surge given the COVID-19-induced 'great lockdown' which drastically has reduced travel and movement of people.
Perils of the Digital Divide
The post-pandemic marketing and branding of both goods and service are largely going to take place on digital platforms, but largely only for the urban population. Hence, the digital divide is going to be one formidable challenge for all marketing, branding and sales exercises since the digital infrastructure is going to hold the primary key. It is worthwhile to compare variation in internet penetration across countries of our region where India- 40.9%, Nepal- 55.6%, Pakistan-32.4%, Srilanka-33.5%, and Bangladesh- 57.2. Thus, leveraging and unleashing the full potential of e-commerce in the South Asian economies like ours is going to make it a game-changing phenomenon. Data suggests that while the online sales were 15% of total retail sales in China and 14 % global average, it stood at meagre 1.6 % in India, 0.7% in Bangladesh and 0.87% in Nepal.
In 2017, a World Bank team interviewed private sector actors and other key stakeholders in India, Nepal, and Sri Lanka. Based on this and the survey cited earlier, the team found that key constraints to cross-border e-commerce included inadequate logistics and connectivity, payments restrictions, and digital regulations. As per the same survey, small and medium enterprises reported that removing regulatory and logistical challenges to e-commerce would increase their exports, employment, and productivity by as much as 20–30 per cent. A survey was conducted in the year 2018 covering more than 2, 200 internet-enabled firms from Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka to understand the broad trends in and constraints on e-commerce. It becomes a structural challenge whenever e-retailers are not enthusiastic about and are averse to accepting national payments through cards due to lower commission payable to banks. For Bangladesh, the slow pace of liberalization and age-old banking practices are the main hurdle. However, countries like Pakistan and Bangladesh have serious issues with net connectivity and IT. For the majority of these developing countries, government regulations for digital transactions appear to be a major concern. In these countries, the Internet is only consumed but did not get reduced to ‘commoditization’ Added to that, countries like Nepal have some structural challenges such as capital control to curb capital flight that restricts the growth of digital businesses. In such a scenario, moving to digital means becomes herculean unless the much required structural challenges are addressed and resolved.
It is only hoped that the plethora of opportunities that get unlocked by COVID would provide a shot in the arm for making digital access a reality. Also, the opportunities for growing cross-border online trade in the region are equally significant. It may also be noted that e-trade is already happening informally across the land borders that are in high demand could easily be catered to online by South Asian firms. It is a blessing in disguise as 28 per cent of the region’s population is younger than 15 years old. As such, millions of young people of the present generation are becoming more and more tech-savvy and they very soon would become the consumers, entrepreneurs, and technicians of tomorrow. However, at present in these economies, the Internet is being used purely for consumption and not for interaction or engagement with consumers. Despite the fact that e-commerce platforms do exist, limited infrastructure and difficulties encountered in making payments made it cumbersome in availing these services fully.
On the positive side, to cite an example, after the arrival of the pandemic, the Government itself has swung into action to announce and commence an official and government-sponsored platform for delivery of goods in Nepal. In case of India, the government has been able to trace infected cases by launching Aarogya Setu app However, portal’s efficacy and its continued relevance can be judged only when the citizens welcome and accept it for the sheer ease and convenience while using it as consumers. Gaining hassle-free access and convenience from one’s comfort zone while using the platform alone can make such platforms acceptable by the public at large in the long-run.
However, in parallel, some new trends in supply, delivery and marketing as well as in demand and consumption have consolidated if not emerged completely as new. One good thing, The Covid-19 certainly intensified adoption of digital platforms in every possible aspect of transactions from placing demands, delivery of goods and services and clearing payments. One clear indication of this is the rise in number and volume of transactions across all e-commerce platforms during the last month. In Nepal itself, total internet consumption has gone up by 50%. Despite all these, the real issue is the productive use of connectivity across all these South Asian economies.
Therefore, for the producers and sellers too, the one way to stay afloat in this changing market dynamics is to fully understand the digitally-driven consumer behaviour and adapt to state-of-the-art leveraging technology to remain afloat in challenging times for the urban high-end customer market.
Since every walk of economic as well as social life has been so severely impacted globally by this unexpected catastrophe, it would be unthinkable to imagine that marketing domain in general and branding would remain unscathed. COVID though a health pandemic has severe economic implications resulting in recession. The dynamics of demand is poised to alter at least in the short run. The job losses would force the majority of consumers to practice self-imposed austerity. Producers may need to re-customize their products to survive. As an obvious and major psychological toll of the pandemic of this scale and scope, the consumers would more than ever before are likely to remain risk-averse.
To conclude, going forward given the dramatic shift in consumer psychology and as the purchasing power of consumer plummets, the very scope of marketing and branding would be essentially limited to providing food for the masses. The next theme for marketing and branding processes should not be the brand "HUNGER" that cannibalizes the consumers. Marketers need to conceptualize, define, develop, and deliver brands that masses can afford, buy, and get value from in terms of utility, satisfaction, and welfare. That would ideally be the harbinger and precursor for new normal that one witness in the post-COVID scenario.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.