Robin Hogarth, a prominent writer, and psychologist, once stated that there are two kinds of world. One ‘kind’ world where everyone has an open mind and tries to help each other out. Here rules are clearly defined and clearly understood by the masses. However, there is a second try of the ‘wicked’ world where people are unwilling to help others. Here rules are ambiguous and vague, which can easily be manipulated.
Marketers, unfortunately, operate in this ‘wicked‘ world, and with digitalization and globalization, it has become even riskier in the last few decades. But since the pandemic, marketers have a new problem at hand in the form of ‘inflation,’ which has the potential to cause mass destruction. In most parts of the world, Inflation has reached double-digit, which is unlike anything people born during the 90s have ever seen.
The challenge now is to cope with the price hikes and still maintain profitability by ensuring that a high volume of products is sold. But it is easier said than done, as most customers are left with so little money to spend, and with such fierce competition, many companies are bound to find themselves in murky water.
For brands to survive this hyperinflation, they must go back to the basics. They must follow core marketing principles to ensure they are relevant in the market. You can learn more about business principles from this document.
What can businesses do to protect themself from Inflation?
The golden rule for any business is to keep the cost down and expand in different markets. But despite the best efforts, the cost of raw materials and labor is on the rise, and brands are finding it difficult to withstand the impact of Inflation. Here are 3 strategies that businesses can implement to protect them from Inflation.
Save your cash: With Inflation, you will need more money to do the same thing you did before, so there is a chance of cash shortage for the business. Therefore, it is vitally important to cut off all your unnecessary expenses, reduce your bad debt, and aggressively protect money in the business.
Be flexible: During uncertain times, it is essential to be flexible in your business approach. If the price of a particular raw material is extremely high, try innovating and introducing a new product. Difficult times require innovation which will never be possible if you are too rigid in your business approach. Flexibility may also go beyond products and into employer management, like allowing members to work from home and other benefits that do not involve sending cash.
Leverage technology: Amid all the Crysis, one thing that does work in your favor is the new technology and constant innovation in the tech space. Leveraging technology can eliminate some of your fixed expenses and reduce overhead costs.
Most entrepreneurs have not seen such Inflation during their lifetime, and it has taken a toll on most businesses. But hyperinflation is nothing new, and during the early 70s, the world faced similar turmoil. Constant innovation will remain the key, and flexible businesses that can leverage technology will prevail.