Always avoid the 3Ps of business taboos, Chula marketing guru warns
A professor from Chulalongkorn University’s Faculty of Commerce and Accountancy is warning entrepreneurs of the “3Ps” they should avoid and to hang on to hope that this fourth wave of Covid-19 will soon pass.
Thailand has been hit by four waves of the outbreak, and the business community has reacted to each differently.
Many businesspeople saw the first wave as a “challenge” and saw new opportunities or creative channels. However, when the second wave hit, many went into “panic” initially but marched on after accepting the situation.
However, when they began to break into a “cold sweat” when the third wave arrived. Money began running out and they did not know what to do next. Before they could find a solution, the fourth wave hit heavily and swiftly, with several entrepreneurs feeling too “exhausted” to continue and many “raising the white flag” and closing their businesses permanently.
“We’ve surfed four waves and must not run out of energy. Let’s keep going. Hold on a little longer, and look at the countries where the pandemic has begun to subside and you’ll see a light at the end of the tunnel,” said Asst Prof Dr Ake Pattaratanakun, vice president of Corporate Communications, Brand Management and Alumni Relations at Chulalongkorn University. He was speaking at the “Biz Genius” radio show broadcast on 101.5FM recently on the subject “What businesses should not do during the fourth wave of Covid-19”.
In a sluggish economy, businesses usually need to invest more and devise different competitive strategies that often turn out to be a trap, leading their business into an abyss. Ake, therefore, pointed out the “3Ps” that entrepreneurs should avoid if they want to sail through the fourth wave of the Covid-19 crisis.
The 3Ps are:
• Price: Don’t compete only on price-cutting if you don’t want to go down quickly.
When a business appears to have reached a dead-end, a popular solution that many businesses opt for is a price war, which is the most intense marketing weapon, but during a crisis, businesses should not just focus on price.
“No matter how fiercely competitors cut prices, we should not engage in the price war, because we can be hurt. Don’t get trapped because the price is not all of the marketing mixes,” he said.
Ake explained that there were other marketing mixes businesses can consider during this crisis, such as the 7Ps, namely products and services (Product), price (Price), distribution channels (Place), marketing promotions (Promotion), customer service personnel (People), process (Process) and physical elements that promote experience among target groups (Physical evidence).
“We can use other marketing mixes, like giving free stuff, improving the process or the physical appearance like photo spots that are appealing to customers, etc. Suppose we open a botox injection clinic, instead of competing by price undercutting, we can do a promotion for brides, by keeping the same price, but giving additional value to the product with a clear target group,” Ake said.
• Postponement: Don’t take the money first and provide service later, because then you can risk losing customers.
Many businesses have started using a method called Postponement, such as offering learning courses, beauty courses or vouchers for services at an appealing price to lure customers to pay upfront and use the service later.
“When we need cash flow, we use this method to bring in customers’ money first. But when the situation gets better, or as time passes, when customers come to use the service, many entrepreneurs do not feel like serving, because these customers have bought courses at a cheap price. We want to get more customers who pay regular prices. When we do not feel like giving full service, customers are dissatisfied, feel cheated, and may even write bad reviews on social media and ruin everything,” Ake said citing examples of many businesses.
“This method should be used with caution. If possible, it is better to avoid using this strategy because, in the end, entrepreneurs often can’t cope when customers come to redeem cheap packages when the business is open as usual,” he warned.
• Pseudo: Don’t break the law
Many businesses are affected by government measures to contain the outbreak, such as the closure of properties, limiting the number of customers, etc. The longer the pandemic and the lockdown last, the more people start feeling helpless and choose to break the law. For example, spas secretly open the back door to customers, liquor stores sell alcohol in opaque bottles, or restaurants open secretly.
“Don’t do this,” the professor said. “Apart from severe penalties for violating the law, businesses risk losing their reputation and social responsibility. Most business operators that violate the law will be arrested, and suffer a bad reputation. It is not worth it. Don’t think that it’s a secret between us and the customers, and it will be fine. Most of the people who report to the police are not customers but their own competitors. This is what happens all the time.”
No matter how hard it is to do business during Covid-19, businesses should not fall into the “3Ps trap”. If an entrepreneur has already gone down that path, then get out of there as quickly as possible, Ake advised.
“These are challenging times. Let us think of other strategies to attract consumers to be used with the 7P marketing mix to help us consider all aspects of doing the business. I believe that there will be light at the end of the tunnel soon,” Ake concluded.
Asst Prof Dr Ake Pattaratanakun can be watched speaking on the subject of “What Businesses Shouldn’t Do During the Fourth Wave of Covid-19” in “Biz Genius” show at https://youtu.be/Z0SFjx5wpG0.
You can pick up good business tips from marketing gurus regularly on the Biz Genius programme broadcast every Monday from 4.30pm to 5pm on the YouTube CU Radio channel.
Call Thanita Wangvanichapan at (02) 218 3280 or email [email protected] for more information.