Impact of Covid-19 Pandemic On International Marketing

The COVID-19 pandemic has significantly impacted international marketing in several key ways: 1) International travel restrictions and border closures have disrupted supply chains and global trade. Exports and foreign direct investment declined substantially. 2) Consumer behavior and spending patterns changed worldwide as people focused more on essential goods and shifted spending online. 3) Digital technologies like videoconferencing and e-commerce saw rapid growth, while in-home entertainment and education increased in importance. 4) Globalization's future prospects are uncertain, but international cooperation on issues like vaccine development, supply chain policies, and technological advancement could help mitigate the pandemic's economic effects and support a healthier debate around globalization going forward.

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Impact of Covid-19 Pandemic On International Marketing

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ramya penmatsa

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Impact of covid-19 PANDEMIC on internationAL marketing

IMPACT OF COVID-19
PANDEMIC ON
INTERNATIONAL MARKETING

Ramya PENMATSA
IESEG IMBA - 2020/21 [email protected]

0 pg.
1.Changes in international marketing practices due to current pandemic:

The threat of flu and pandemic outbreaks has a long history. The arrival of pandemics is
recurring for every 10-50-year intervals and could not realistically be prevented. Right now,
there is an effort to learn from the consequences of the outbreaks for the future. In the middle
of the pandemic times, its complex to estimate the long-term economic, behavioral or societal
consequences. The world is completely unprepared for such pandemic. On a business level,
pandemic has forced many markets to shut down, leading to complete disruption of economical
& financial parts of the industry. Let’s do further analysis on pandemic effects and
consequences on international marketing.

Pandemic effects on international Marketing:

The impact of pandemic is felt differently across the countries. There is a significant change
in consumer interest and behaviors around the world. The businesses like tourism and
hospitality had huge impact, due to restrictions on national and international travel, as part of
preventive measures. Organizations all over the world, had to take rigorous steps including,
reduction of budget, cost cutting, prioritize tasks and employee furlough or layoffs. As the
world is unprepared, from the market point of view, leaders are struggling to decide from where
to sell to how to mange supply chain with the vision of globalization. The globalization and
anti-globalization have triggered a huge pressure in businesses, leaders are advised to plan and
shape for future sustainability [1].

Covid-19 has damaged companies go-to-market-strategies, especially in emerging markets.

Sales of goods in emerging countries (Africa, Asia, Latin America) are hard even in normal
times, the social distancing and restrictions has brought complications to the market [3].
Economy has crashed due to disruption in international trade. Covid-19 has hastened a
fracturing of global economy along regional lines like China, United States and Europe. Most
of the international activities are shifted to regional, although it’s not so developed as long
distant trade. According to Current forecasts, there is nearly 13- 30% decline in merchandise
trade, 30-40% decline in foreign direct investments, 44-80% drop in airline passengers in 2020.
This declining percentages in several industries has resulted in global market loss. The below
graph explains this fall down of trade, FDI and Travel [2].
The magnitude of global exports in 2020 has fall down similar to late 2000s, according to
WTO forecast. The impact of downfall in FDI is not much of shock, as business activity of
multinational organizations does not closely track FDI trends. In contrast, the collapse of
international travel is against the growth and indisputable. The contribution of tourism is more
than business travels, automotive manufacturing on international trade and investment. The
restrictions imposed on international travel in April 2020, nearly 45% of countries had partially
or completely closed their borders. However, the fall in passenger numbers is still more than
passengers flying abroad in 2003.

The consumers in emerging market like China, India and Indonesia has high optimism than the
rest of the world. The figure below explains
Most of the countries, consumers intend to shift their spending to essentials and basic needs.
However, in countries like India, spending is bouncing back beyond essentials, due to
upcoming festival and wedding seasons (for example: Diwali). Consumers are at different
stages of returning to normal activities. Below figure, it shows current the stage of activities of
different countries.

Going digital is the current trend, consumers started purchasing online in most parts of the
world. Food and household products have seen an average growth of over 30% in online sales
across countries. Compared to last year, the vacation spending is reduced, even in the countries
that exhibits signs of recovery. Figure shows, the list of countries and their percentage of
holiday planning in comparison with last year.
Need to recognize the Home as a hub for marketing

During the pandemic, consumer spending for in-home services like Entertainment and
education has accelerated. Marketers need to find a two-way communication mix with their
customers glued to phones, smart speakers like Home, Alexa, etc. It’s crucial to find a middle-
ground without being intrusive in the increasingly complicated digital world [4].

2. Globalization’s Post-Coronavirus prospects

Current forecasts call for international businesses to start growing again, as the pandemic is
under control in few countries. However, 2020 will be a declining and uncertain point for many
globalization metrics. The patterns sound different from the past, new strategies have to be
implemented in this process, although it’s difficult to have a definite solution for all the rising
issues. Leaders in the organizations have found five key drivers of globalization approach:

2.1 Global growth patterns

Internal flows tend to fluctuate with macroeconomic cycles. In favorable economic
conditions, they grow faster than GDP, whereas in bad times they shrink faster, as people at
borders hide out behind borders. Rapid growth can be achieved once the pandemic is
completely under control. Globalization is a powerful contributor to the growth and health
around the world. According to analysis, few connected countries are less infected and less
vulnerable to the disease outbreaks, due to their strong health care systems. This means
international business leaders can go beyond regulating the pandemic trends and help in
balancing the negative to positive by contributing to growth, health and international
cooperation. Firms across industries are in the action of manufacturing vaccine and needed
medicine supplies. Large multinational organizations can contribute to soften the pandemic’s
economic effect, for example, Unilever’s can pay their suppliers faster and extending support
to contractors, customers and employees.
2.2 Supply chain policies
The shift in supply chain approaches have the potential to rearrange trade and FDI flows.
Companies are in a dilemma to continue with domestic trade as matter of political pressure and
risks incurred or companies and countries look for international diversification given the safety.
However, economically its proven that globalization plays prominent role in uplifting the
growth and economy of countries.

2.3 Technological shifts

The technological shifts such as videoconferencing and e-commerce have seen a skyrocketing
growth due to Covid-19. These pandemic shifts can strengthen globalization unless they are
curbed by protectionist policies. Cross-border e-commerce increases export opportunities for
small and medium scale companies. Forced remote work could also spur more services and
techniques offshore. Increase in 3D-printing leads to more trade in comparison with past years.
Leaders should try to bring technology and globalization together in their structured approach
and strategy which could benefit their organizations, suppliers, consumers and overall
economy.

2.4 Public Opinion

The people opinion about globalization could be negative due to Covid-19, trim down the
strong support for immigration and trade reported in recent polling. The restrictions on
international travel because of wide spread of infectious diseases could result in trade
protectionism. The statements of politicians on anti-globalization and anti-capitalist’s
movements further complicates for organizations to debate about globalization. However,
governments and corporate leaders could focus on facts like providing basic needs and real
economic contributions to support a healthier globalization debate.

2.5 Marketing at a hyperlocal level

The lockdowns across the world have made local businesses more important than ever. There’s
an increasing sensitization among consumers to support local communities and businesses.
Marketers need to recognize how this trend impacts their products and services and devise a
strategy to reach customers at a hyperlocal level. Increased personalization using analytics like
ethnographic data, trigger-based messaging, and agile test and learn approaches are the way
forward.

Conclusion
Covid-19 has affected the world on several levels, but for globalization it’s not a severe bend
down. International activities have resumed in few countries, with careful research on drivers
that lead to globalization can help firms to restructure their go-to-market strategies, even profit
from globalization’s turbulence. Marketers have the tools and data to understand the marketing
trends. Now, is the time for them to show their value by driving towards the best of the world’s
capabilities to end the pandemic and boost the recovery.

References

1. HBR-Steven Altman, May 2020 https://hbr.org/2020/05/will-covid-19-have-a-lasting-

impact-on-globalization
2. Tamara charm-September 2020 https://www.mckinsey.com/business-
functions/marketing-and-sales/our-insights/a-global-view-of-how-consumer-
behavior-is-changing-amid-covid-19
3. Abheek Singhi, Namit Puri, and Amit Mittal-May 2020
https://www.bcg.com/publications/2020/reimagining-go-to-market-strategies-after-
covid-19-pandemic
4. Arun Arora and team, July 2020 https://www.mckinsey.com/business-
functions/marketing-and-sales/our-insights/reimagining-marketing-in-the-next-normal