Question

Q1. Using brand development and management strategies as well as communications and PR, create a brief marketing contingency plan for a business whose sales are being drastically negatively affected by the current COVID-19 pandemic. What opportunities and threats (profit/not-for-profit activities) do you foresee? What are the direct/in-direct effects on their bottom line/brand image/public perception? Apply what you’ve learned.

Answer 1

Ans- MARKETING CONTINGENCY PLAN of a restaurant

I foresee the following Opportunities and Threat

Owner of a south Mumbai-based quick service restaurant that is registered on largest and most valuable online food ordering and delivery platform, got a call from the platform’s representative. The food tech platform had recently ventured into grocery delivery and the call was to find out if Shah knew any grocer who would be willing to sell grocery through it. which was doing brisk business till a few months ago, had seen its daily orders drop 80 per cent due to the lockdown.

DIVERSIFICATION into ESSENTIALS

Sensing an opportunity, restaurant offered to double up as a grocer, as he had the space to stock and sell, manpower and other wherewithal. There has been no looking back since then. Starting with three products, it has expanded to more than 100 products in the past one week and it now sells everything — from grocery and vegetables to cheese and butter. In a short span, the restaurant has become the top seller in value and volume terms on platform.

MOTIVATION for the team

Though the margins are thin and leaves him with only 2 per cent after paying off 8 per cent as commission to the food tech platform, it’s an additional revenue stream and has boosted the morale of the staff amid a lull phase of the main business.

INSPIRATION for the Industry

Encouraged by the response, food delivery platform is reaching out to other restaurant partners and gauging their interest in doubling up as grocers.

The key to a solid contingency plan is communication.

Moving to a virtual event, research virtual event delivery options. For some events, such as roadshows (with proper safety measures like usage of masks, gloves, social distancing,etc.), a webinar delivery platform may suffice. Develop ad creative and email messages now to be ready to announce the cancellation or postponement and be prepared to quickly swap these messages into campaigns when and if necessary. Clearly communicate home working policy to workers. Communications, including internal and external communication of safety measures and response plans with employees, customers, suppliers, lenders, regulators/government bodies and other key stakeholders in the business.

1. Check, monitor and comply with WHO guidelines and the requirements and guidance issued by government bodies and local authorities in connection with the health and safety of employees, including the Centers for Disease Control and Prevention in the United States (CDC).
2. Check, monitor and comply with notification obligations required by government bodies (including local entities) and make all appropriate containment, isolation or quarantine arrangements.
3. Review and be aware of the obligations and rights of the company under employment agreements and collective bargaining agreements, and under employment legislation, including applicable privacy rights and obligations.
4. Introduce new policies to prevent the spread of COVID-19 (and consider updating works council and collective bargaining agreements where appropriate) and communicate clearly with employees:
   a) Provide employees with the necessary equipment and technology to work remotely where appropriate (e.g., laptops).
   b) Instruct (to the extent permissible under applicable laws in your country) and/or ask employees to take their work equipment and technology home at the end of every working day.
   c) Consider introducing temporary flexible working policies.
   d) Consider having fever thermometers on hand for voluntary self-checks of employees or to offer/conduct health and fever checks for employees, to the extent permitted by applicable law.
   e) Consider instructing (to the extent permissible under applicable laws in your country) and/or asking employees to stay at home and not to come to the office/ workplace even if they show only mild cold symptoms.
   f) Consider whether employees should be instructed (to the extent permissible under applicable laws in your country) and/or allow employees to stay at home and not to come to the office/ workplace if family or household members have been diagnosed with COVID-19 or are otherwise in self-isolation.
   g) Limit or prohibit business travel, particularly to high-risk areas, and discourage face-to-face meetings. Instead, introduce ‘virtual’ meeting solutions such as videoconferences. Consider self-quarantine measures for employees returning from non-business travel.
   h) Require employees to notify the company of possible exposure to COVID-19 (including following travel to high-risk areas), subject to privacy laws.
   i) Provide training, equipment and support to prevent the spread of COVID-19.
5. Put in place arrangements to perform business-critical functions, if a material part of staff is absent (e.g., relocation of staff from high-risk areas).
6. Consider back-up arrangements and alternates for key personnel/functions.
7. To the extent available in your country, consider applying for short-time work compensation (e.g., so calledKurzarbeitgeld in Germany) and/or compensation from public authorities in the event of quarantine measures being imposed on employees.
8. Ensure strategies, policies, measures and communications (i) are proportionate to the health and safety objective, (ii) sustainable over time and (iii) comply with anti-discrimination and privacy laws.

III. Regulatory Matters

1. Prepare, coordinate and communicate with relevant authorities at the appropriate time to address (potential) containment, (temporary) shutdown of operations and/or sites, quarantine or changes to the business operations, if any. If need be, inform authorities regarding lead times for reduction of critical operational activities and levels.
2. Put in place arrangements to avoid or mitigate shutdowns, relocate to and/or perform operations or critical functions in low-risk areas, in case a material part of operations is located in (potential) high-risk areas and/or subject to containment restrictions, (temporary) shut-downs or quarantine (e.g., relocation of operations from high-risk areas).
3. Update emergency and business continuity plans to have documentation available when coordinating and discussing containment, shutdown of operations and/or sites and quarantine with relevant authorities.
4. Review whether any containment, (temporary) shutdown or change to the business operations triggers an obligation to notify the regulatory authorities. Identify competent authorities and check back with responsible personnel on your side.
5. Consider delayed responses and approvals from regulatory authorities from staff shortages as a result of remote working, travel restrictions, etc., and implications for pending measures.
6. Regularly check (extended) travel restrictions issued by national or federal authorities.
7. Regularly check extended customs clearance and/or expert control restrictions.
8. Regularly check for industry- and sector-specific developments and regulatory updates—in particular, in the healthcare and life sciences industries.

IV. Commercial Agreements/Supply Chain Disruptions

1. Identify and mitigate any potential supply chain disruptions caused by containment zones, factory closures, travel restrictions or employee absences due to illness or quarantine.
2. Consider short-term changes to supply chain and logistics models to avoid disruption (e.g., qualify alternative source replacement suppliers or vendors and consider production alternatives).
3. Evaluate and consider impacts on vendors’ ability to deliver and customers’ ability to pay on time.
4. Review contractual arrangements to identify the company’s rights and obligations arising in respect of delays in production or failure to fulfill outstanding orders (e.g., events of default, cross-default, notice and termination requirements, and applicability of force majeure) and any related consequences of a breach, including dispute resolution provisions and potential applicability of the United Nations Convention on Contracts for the International Sale of Goods (CISG).
5. Review adequacy of force majeure terms of material contracts.
6. Introduce alternative communication channels with customers and suppliers in anticipation of and while travel restrictions remain in effect.
7. Consider short-term marketing and sales responses to demand shocks.

VI. Financing

1. Ensure sufficient liquidity is available to weather the storm (and implement proactive cash management measures).
2. Regularly analyze the impact of COVID-19 (in particular, interruption of normal business activities, supply chain disruption, decreased sales, and extended containment and travel restrictions) affecting cash flows and EBITDA (i.e., financial stress testing).
3. Consider updating/adjusting business plans and budgets to address changes in operations and potential defaults resulting from government actions, including containment zones.
4. Review and monitor obligations under existing financing arrangements to:
   a) Comply with ad-hoc obligations to notify the lender(s) about issues that could adversely affect the financial condition and/or operations of your business.
   b) Verify compliance with agreed general undertakings and representation and warranties.
   c) Verify compliance with agreed financial covenants (in particular, on the next testing dates) and assess (if needed) availability of additional funds from shareholders to equity cure potential breaches of financial covenants.
   d) Engage with lenders and other stakeholders to encourage proactive discussions with a view to (temporarily) waive and/or suspend events of default (including cross-defaults) and other applicable restrictive provisions.
5. Check if you are eligible for any subsidies or other financial support from national authorities with regard to financial losses incurred due to COVID-19 (e.g., short- time work compensation allowance schemes).

VII. Restructuring

1. Monitor insolvency filing obligations and fiduciary duties in the zone of insolvency, and avoid liabilities due to an illiquidity or an over-indebtedness. (With respect to over-indebtedness, please note: the over-indebtedness may kick in much earlier than the illiquidity under German insolvency law in case of a negative going concern prognosis for the current and next fiscal year!)
2. Review (potential) restructuring needs and explore measures to cope with these by way of a preventive and/or insolvent restructuring.
3. Review (potential) external financing needs, available financing (re-)sources (e.g., existing lenders, alternative lenders, factoring, sale and lease back) and anticipate their potential requirements (e.g., restructuring opinion for existing lenders).
4. Review intra-group financings and related risks for each group company as managers of cash flow-positive subsidiaries may have to refrain from feeding a cash pool on an unsecured basis.
5. Keep credit insurers informed in order to prevent them from cutting their support and to ensure early awareness of developments at that end.
6. Contact governmental authorities in order to apply for/obtain potential emergency support (i.e., subsidies, short-time allowance) in due course.
7. Prepare for a prolonged period of uncertainty as the risk of global recession heightens.

VIII. Insurance

1. Review insurance policies to assess potential recoveries for any business disruption.
2. Ensure notifications to insurers are made as required under existing policies.
3. Review and clarify needs for additional insurance coverage as the situation develops.

IX. Data Privacy

1. Identify potential data privacy/leakage risks due to loss of business-critical functions.
2. Update technical and organizational measures to ensure that personal data related to notification requirements (especially health data regarding employees or customers) is also covered and protected.
3. Do not collect more data than necessary, even in view of COVID-19. In particular, consider carefully whether you really need to know who exactly in the employee’s household is affected and whether they are ill or just self-isolating.
4. Check/review company policies regarding remote working and other work arrangements. Consider additional training for employees who do not normally work remotely.
5. Evaluate the use, transfer and storage of new data gathered from individuals (e.g., customers, suppliers and employees) in respect of enhanced risks, including diary management/travel plans, emergency contracts and health data.
6. Stress test robustness of IT systems and cybersecurity controls in anticipation of allowing/requiring employees to work from home.
7. Evaluate involvement of data privacy authorities.

Monitor threats and systems on an ongoing basis to improve security and performance.
You can gain valuable insights into your remote working environment through real time monitoring and threat prevention programmes that come as standard with many IT infrastructures and software licences. Use these monitoring systems to remain vigilant against threats and learn more about how to improve remote performance.

Support users in adapting to the new environment.
Its crucial for employers to be on hand to support users and help them adapt to an entirely new working environment. It’s inevitable there will be some connectivity issues, so ensure your IT support team is well staff and equipped to help resolve problems. Encourage remote users to take dedicated breaks as they would in the workplace, helping them adjust to the new work conditions and ultimately be more productive.

If we are able to implement all the above steps then it will have positive impact on the bottom line , revenues, brand image and on the public image of the business as the business is supporting the society by providing the essentials during the crisis.