Disruptive Marketing in a Disruptive Environment

The last few years have been transformational. Between the pandemic and cold wars across the world, nothing is what it used to be. The implications of global events have impacted us in many ways. External disruptors play a key role in how we live our lives. From the availability of goods to rising prices, consumers have been forced to quickly adapt to changing times. This article talks about certain global events that have had major implications on us and why marketing is relevant to helping businesses function in these times.

India has been facing a major container shortage issue recently. We are a country that relies heavily on export and due to a lack of containers, companies have not been able to sell their produce as easily as they could before. This has put a major dent in the balance sheet of most companies that rely on export. The semiconductor shortage has been another major issue. China happens to be the world’s largest producer of semiconductor chips and with their deteriorating international ties, countries have been forced to rely on other countries. Companies like Samsung are an alternative to Chinese semiconductor producers but they are already producing at full capacity. Semiconductors go into many electronics and this has forced companies to increase the prices of their products as a result of this. Border troubles between India and China have not helped in any way. India and China are heavily involved in trade, India happens to be one of the biggest players in the pharmaceutical industry but they rely heavily on China for their APIs(Active Pharma Ingredients). This has also caused a steep rise in their pricing. All these issues are connected to one common issue, companies are paying more to produce their products. Very simple factors like an increase in petrol price can lead to taxi services like Uber and Ola hiking their rates, rise in gas prices has forced restaurants to adapt and increase their prices to remain profitable. The cost of goods sold, which is the direct cost of producing goods that are sold by a company has gone up by close to 20% for FMCG companies.

What do companies do to remain profitable? Where do they turn to try and make up for the rising costs of raw materials? The answer is simple, they hike up their prices and turn to us, the consumers for answers. The question is, will consumers continue to buy products that they have historically purchased at a certain price and have now been jacked up? The answer lies in how companies communicate with their customers and convince them of their value proposition despite the increase in prices.

Marketers play a key role in communicating this value to customers. The focus is usually on helping them understand what they stand to benefit from availing their services which are done in multiple ways. A common approach that companies take is when they slash costs on services and another add ons to convince customers to continue using their products. You must have seen specific products that offer free delivery, especially on E-Commerce clothing and food services. These immediately trigger an impulse in you to purchase from their brand (of course we marketers knew you would).

A strategy that is followed in the B2B industry is when companies focus only on offering services for the essentials and nullify the” add on benefits effect” offered by their competitors which often convinces customers. An example of this is airlines that only allow you to carry a small amount of baggage as opposed to the bigger airlines. Often you do not need the full X amount of baggage you are allowed to carry and budget airlines take advantage of this. Apple is also known to offer only a small amount of internal storage in their MacBooks, making them slightly more affordable. The focus here is on value delivery and only giving customers what they want. The examples we’ve quoted are consumer goods based for ease of understanding but are more prevalent in the B2B sector as companies are more cognizant of what they buy when compared to the average consumer.

Another common strategy adopted by companies is to solve multiple issues with the same product. They try to offer what multiple products currently offer to the consumer through one product, albeit at a higher price. In truth, both parties are saving money in this situation, and convincing a consumer depends on two factors: building the right product and convincing the customer that it is indeed what they need. Reliance Jio is an example we can refer to here. What started off as a telecommunications company has now ventured into TVs, high-speed internet solutions, enterprise solutions and is expected to be your one-stop solution for home internet and network connectivity in the future.

Subscription-based businesses are also on the rise. Commonly seen in industries like food services, fitness, domestic services, etc, these businesses mitigate high customer acquisition costs by promoting repeat business. The cost of acquiring a customer is much higher than that of keeping one and this is exactly what service companies do.

Just solving an issue doesn’t do the trick today as if things are not exactly what they used to be, a consumer needs to be educated on what your brand is offering. Marketers think of customers as a blank slate and consider the responsibility of educating them, their primary role in organizations. An example of this is the EV revolution that is currently gaining momentum in India. Rising petrol price and awareness of the harmful effects of fuel is swiftly pushing customers towards electric vehicles. The issue customers face here is the cost they incur each time they have to charge their vehicles. While it is true that combustion vehicles do cost less, EVs are much easier to maintain after the first year when the cost of charging their vehicles is offset by the lesser maintenance costs they incur. It is up to a marketer to explain to customers how the extra money they pay upfront is actually money in the pocket in the future and of course, the premium they pay is the price it takes to be a responsible citizen, that’s always a good feeling, isn’t it?

Disruptive marketing is on the rise, marketers are finding creative ways to sell their products. Falling back is a big risk as you can become obsolete in no time. Creativity and technology go hand in hand and marketers are in that sweet spot where they need to help customers understand what their money is buying them. We leave you with an outrageous marketing tactic Nissan adopted back in 2013 where they sold their newly launched Nissan Versa Note on Amazon and delivered them in their trademark Amazon packaging box. The first 100 customers received $1000 gift cards from Amazon. While the sale didn’t happen through Amazon as they were redirected to a local Nissan Dealership, the idea was to let customers know that this is how easy it is to buy a Nissan Versa Note today. Ingenious, isn’t it?

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Author: Harish R
Editorial and Digital Marketing Team, NjM
Class of 2023, NMIMS Mumbai

Creatives: Priyanka Mohan
Creatives Web & Promotions Team, NjM
Class of 2023, NMIMS Mumbai