Will this festive season be a turning point for marketers still battling to recover from the aftermath of the economic downturn that began last year? Large-scale promotional efforts by companies to woo consumers, extensive spends over marketing and advertising, ambitious sales targets for the next three months and initial sales trends suggest that it very well may.
Consumer products companies across the board have lined up various innovative offers this festive season in the hope that consumers, enthused by the sight of sprouting green shoots all around, will come out and spend this year. Confectionary maker Cadbury India, for instance, has raised its sales bar by 10% this year over last year. While refusing to share absolute numbers, Sanjay Purohit, executive director, marketing, Cadbury India, says: ?I don?t see why we can?t achieve it given the overall mood that prevails in the economy as well as amongst people.?
The company has launched various initiatives, such as unique gift packs ranging from Rs 75 to Rs 600, to boost sales. These initiatives are backed with an extensive multi-media marketing campaign to promote its chocolates this festive season.
Top consumer durable companies such as LG, Samsung, Godrej Appliances and Whirlpool also expect to rake in 30-40% more from festive sales this year as compared to last year. For instance, Samsung, Godrej and Whirlpool have sales targets of Rs 1,700 crore, Rs 600 crore and Rs 550-600 crore, respectively, accounting for a third of their annual sales.
?The mood has been upbeat for the last few months,? points Kamal Nandi, vice-president, sales and marketing, Godrej Appliances. ?Sales during Onam in August were very encouraging. Growth was as high as 56% for us.? Shantanu Dasgupta, vice-president, corporate affairs and strategy, Whirlpool India, echoes the sentiment: ?The last few months have been good. Consumers are back.? To woo consumers, Godrej Appliances has launched an offer called ?Aladdin Make a Wish? where with the purchase of any appliance, consumers get assured gifts worth Rs 800 to Rs 4,290 plus an opportunity to act in a movie produced by Eros International.
Whirlpool, on the other hand, has ?Sabka Jashn, Sabki Jeet?, while Samsung is giving gifts totaling Rs 25 crore on a range of products such as LED and LCD TVs, DVD players, refrigerators, washing machines etc. ?The promotion also includes an exchange offer on our slim-fit television sets, savings on combo purchases etc,? says Ravinder Zutshi, deputy managing director, Samsung India.
All these companies are aggressively advertising their offers across media platforms to catch consumer attention. ?Ad spends this year are higher by almost 15-20% over last year,? says Whirlpool?s Dasgupta without specifying the exact amount. Nandi of Godrej, in contrast, gives precise details concerning his company?s ad spends. ?Our total (advertising) spends for the year are Rs 85 crore. Of this, the festive season alone will account for about 40%, which is around Rs 34 crore.?
Festive marketing is not an unusual concept. Marketers across the board launch lucrative offers and back them with heavy spends on promotions and advertising in a bid to catch consumers? fancy. The economic downturn last year saw companies suspend the festivities because of their financial constraints and low consumer sentiment that followed the decline in investments, increase in inflation and interest rates, and salary cuts and job losses for many.
This year companies are not worried about drawing a blank at the sales counter. Not at a time when employers are restoring pay cuts, announcing partial increments and even bonuses in some cases. Pay hikes for government employees is another factor that has given hope to marketers that consumers can do with some discretionary spending this year as opposed to last year.
This confidence is pushing retailers, real estate developers, automobile majors, gems and jewellery makers to pursue the route of discounts and offers quite aggressively this year. Hyundai, for instance, is giving bundled offers on various models excluding the i20 this festive. Tata Motors had a ?Nine Days Nine Cars? offer going between September19-29, which allowed buyers of any Tata car in this period to get a 70% refund on the invoice price of the vehicle (30% was tax deducted at source), provided they participated in an online contest. Tanishq, in contrast, has a ?Queen of Diamonds? contest, where the retailer is giving prizes worth Rs 4 crore this season.
All of this aimed at wooing consumers to its outlets ?We hope to see a value growth of 30% this festive on the back of higher gold prices,? says Sandeep Kulhalli, vice-president, retail and marketing, Tanishq. ?Volume growth will be low, but value growth should be high,? he points.
Even department stores such as Shopper?s Stop have been quick to gauge the mood this festive. ?Durga Pooja is a big peak for us,? says Vinay Bhatia, vice-president, marketing and loyalty, Shopper?s Stop Ltd. ?We had a special Pujor Bazaar to woo consumers in the east of India,? he says. ?Elsewhere, customers who make purchases worth Rs 6,000 and above as well as Rs 50,000 and above at our home furnishings and decor store HomeStop and at the home section of Shopper?s Stop are getting assured gifts. There is also a limited edition of a special ethnic-wear collection this festive plus members of our loyalty programme First Citizen are getting assured gifts for collective purchases of Rs 30,000 and Rs 1 lakh respectively between October and December this year,? he adds.
Ajit Joshi, managing director and chief executive officer, Infiniti Retail, which promotes the Croma chain of electronic stores, said footfalls during the three long weekends stretching from September 19 -21, September 26-28 and October 2-4 were more than impressive. What drew consumers to Chroma were freebies and zero finance schemes being offered on a range of products. ?Pick-up of larger appliances is more at this time of the year. It helps when you have offers going with these products. Sales get a boost,? says Joshi.
If early indications are anything to go by, the mood among consumers is likely to continue being upbeat in the coming months even as the economy regains its momentum of growth. ?Consumers are back in full swing. Onam and Durga Pooja were good for us. We saw growth of over 20% in sales. The momentum in my view should be on right through the festive period,? sums up Kishore Biyani, chief executive officer, Future Group.