Eyeing festivals, consumer durable cos up ad budget by 20%

Written by Yogima Seth | New Delhi, Sep 28 | Updated: Sep 30 2008, 04:26am hrs
With the onset of festival season, especially in the northern part of the country, from next week, consumer durable companies have increased their promotional expenditure by 15-20% this year to woo customers who have been keeping away from purchases till now due to high inflation.

While Godrej Appliances has earmarked Rs 40 crore for its promotional activities this year, LG Electronics have hiked its promotional expenditure by 15-20% and would largely focus on new products.This festive season is expected to see more sales over last year as there had been a postponement of purchase so far due to high inflation and high interest rates. With new products and assured gifts ranging from Rs 1,000-Rs 3,000, the company expects to witness a growth of 17-20%, says Kamal Nandi, vice president, Godrej Appliances.

Nandi added that the company has earmarked 40% of its Rs 100 crore promotional expenditure for the festive season spread between August and December.

For LG Electronics, it is a huge line-up of new products across different categories that will fetch good volumes for the company this time.

Unlike last few years, this time LG has focused on new range of products across categories and this would be supported by new Diwali-based commercial as well as upgradation of our brand stores across the country as a run-up to Diwali and all this at 15-20% more investment vis--vis last year, says V Ramachandran, director (marketing), LG Electronics India.

The company will come up with 10 new models in microwaves, new range of top-loading and front-loading washing machines, slim and ultra-slim televisions, LCDs and home theaters. According to Ramachandran, while there would be an overall jump of 30-35% in sales, LCDs will drive the value growth of consumer electronics. Haier Appliances is also working on festival promotional schemes and is expected to make some announcements early next week. With margins under pressure, Haier is still contemplating the scope of promotional schemes for this festive season and will take a decision shortly, says Pranay Dhabhai, director, Haier Appliances.

Even analysts feel that this Diwali will be better than the whole of this year as there would be disbursement of revised salary during that time.

There would be more money in the hands of consumers around Dusshera and Diwali this year as people will end up getting their revised salary which in turn would lead to an increase in consumerism, says a Mumbai-based analyst.