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Why You Should Keep Spending On Marketing During Covid-19 Crisis

By Monday 20 April 2020May 3rd, 2020No Comments

Wine Intelligence CEO Lulie Halstead reflects on five key focus areas for wine marketers during and after Covid-19, based on the evidence presented in a range of marketing theory and practice studies.

1. Continue marketing spend
As companies cut marketing spend, each dollar that is spent becomes more effective as it delivers a proportionally higher share of voice (SOV) among a total reduced spend across a category. This results in this spend being more ‘effective’ than ever with studies showing that “all things being equal, a brand whose share of voice is greater than its share of market (SOM) is more likely to gain market share” (Clarke 2009) so increasing SOV leads to higher market share in the longer term, holding true also during times of recession.

2. Focus on core brands
During times of stress, upheaval and economic crisis, consumers tend to revert to what’s familiar as it makes us feel ‘safer’. This is particularly true when shopping trips are more challenging and there is a need to switch to new purchase channels (e.g. online). Analysis of brand purchase during previous recessions has shown that ‘high market share brands’ tend to win at these times. It’s time to park more niche brand development that might distract and focus on what we know works well.

3. Think about agile innovation and NPD that focuses on relevant benefits
There is also opportunity for selected new product development (NPD) and innovation. NPD that focuses on helping consumers through these times and solves direct problems can be effective, such as convenient and economical larger packaging formats and online engagement activities. Collaboration with competitors, in an environment where competition legislation is being adjusted, can provide also open new opportunity.

4. Avoid promotional discounts
There will be lots of channel pricing discrepancies and short-term promotions, but fixing brands at lower price points will keep them there, causing long-term viability issues. While these will be difficult time for many, consumers will continue to rely on treats, ‘min rewards’ and everyday luxuries in a time of recession, and wine will remain both a treat and a reward, whether priced at $5 or $50.

5. Think local
In times of stress, our tendency as humans is to revert our focus to our local (and national) communities and this is even more true now in an era of lockdown and restrictions of movement. ‘Local’ consumers have the ability to buy direct more easily, visit more frequently as movement restriction are lifted and feel engagement to support brands that are ‘closer to home’.

Photo: Cellar Door Fest (Simon Casson).

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