Question

Which of the following strategies is not the right marketing strategy for crisis periods such as the Covid-19 outbreak?

A. To make vertical collaborations.

B- Entering new markets.

C- To make horizontal collaborations.
D. Making high-budget advertising campaigns

E. Developing new product

Answer 1

Strategies including vertical and horizontal collaboration, and coopetition have been proved to be useful during times of crisis. Pharmaceutical organizations around the world are working together for developing the vaccine and drugs for fighting the pandemic, retailers are sharing their information readily regarding the stock levels, and even the technology companies are joining hands for good of the mankind. Reducing the advertising budgets will further reduce the visibility of the products and aggravate the problem of low sales. Hence advertising budgets should be maintained or increased during times of crisis. If the offerings of the firm (including the services or products) can be modified for a new customer segment, the company can enter into a new market and make the business more resilient to the adverse impacts of recession and crisis.

However, developing a new product may not be the right marketing strategy for crisis periods such as the COVID-19 outbreak. This is so because finances may not be enough during the crisis that also results in financial crunches for customers and businesses alike. Developing a new product can be a highly risky proposition and marketing strategy during these hard times. During these uncertain times, businesses should try to maintain their business activities and customer bases. The response will be quite low when a new product is tested in the market during crisis times. There may also be certain shortages and deficits associated with the delivery options, retail channels, and procurement of supplies and raw materials also, which may exacerbate the costs or delay the operations. All of these scenarios and the effects of a crisis like the COVID pandemic will result in even greater operational costs and expenditures that will be associated with the new product development and launch. Even after all this, there is no certainty that the product will be successful. Only a few products might be successful during times of crisis, including a product that may solve the crisis itself. In present times, it can be a COVID-19 vaccine. A few other products like a drug that can cure cancer or AIDS may also be successful. However, the majority of businesses do not engage in the production of such critical products and services.

Customers will not like to take risks that may be associated with the new product or service especially in the times of crisis, as they are not in a position to do so. In the uncertain times, they would like to stay with products that they have faith in, and which have been tried and tested for their performance/utility/features. However, customers will be more forthcoming when the crisis is resolved and will be ready to try all varieties of new products.