India’s nascent retail industry is already matching the advertising expenditures of their western counterparts, which are relatively mature and much older. Typically, in the western retail markets, the advertising expenditures are 2-2.5% of the turnover.
In India, retail companies have already crossed this bar with the ratio being around 5%, while a few like the Pantaloons’ Big Bazaar boasting of a 10 to 15 % figure.
With modern retail growing in leaps and bounds, one can clearly see the difference in the marketing techniques especially of multi-brand retailers, operating especially in the large formats such as supermarkets and hypermarkets, from their western counterparts. Most industry experts point out the competitive nature and the attractiveness of the retail industry to it.
?While most of the efforts are to promote the value offered by retailers, there is little or no advertisement that is directed at building the brand. Internationally, where the retail is more organised, the retailers focus upon more brand building campaigns,? said Gurpreet Randhawa, principal consultant with Technopak. Also, in the western markets, he added, the retailers typically spend heavily on ?loyalty programmes?, catalogue printing etc, because these efforts directly build loyalty of customers and ensure repeat business. There is difference even in the retail penetration when one compares the two markets. ?For instance in the US, mammoths like Wal-Mart entered the big four cities including New York only recently, and so most of their campaigns have been mostly localised as they took a long time to cover the entire country. However in India, there is a rush to grab a share of the growing retail pie as soon as possible,? said Samar Shekhawat, vice-president marketing Spencer’s Retail. Retail chains want to become pan-India as fast as possible and the penetration is actually beginning from the big cities and then penetrating to the smaller ones. Industry experts say that in India most retailers resort to tactical advertising campaigns. This is more pronounced here because the retail is more unorganised and the modern retailers have to fight with traditional players to get footfalls. Take the example of Big Bazaar or Spencer’s Hyper, or a local player like REI Agro, all of them are visible in national newspapers, bringing out full-page advertisements.