As consumers across the country get into the festive mood this season, brands are readily making some sassy moves to induce the customer to open her wallet. Yes, in a recent report the Associated Chambers of Commerce and Industry of India (Assocham) did declare that this festive season the advertisement budgets of corporate India would be curtailed by almost 50%. Reason? Severe slowdown and spiraling inflation. And yet, most of the brand marketers argue that while cost-cutting is up on their plates, their ad spends for this season which spans from October to December will continue to be more or less equal to that of the festival season last year.
?We have not tightened our budgets for Diwali at all. This is the best period for any marketer to get the best return on investment (ROI) on that spend. You cannot get this any other time. If you do not put your best foot forward now, then you are getting into a very defensive zone. You still have another 3-4 months to control your costs,? says Rajan Amba, global marketing head at Titan Industries. ?While media costs are only going up, its the bigger companies that will do well at this time. This is because we have the clout to negotiate better as long as the advertiser continues to show that it will spend money if it gets good rates.? he adds.
?Interestingly, one will find that business is better at the higher price points. It’s the low price points which have been sluggish,? says a top marketing consultant on conditions of anonymity. And therefore, it’s the premium products that are receiving a better marketing push in this sluggish festive market. Take Tanishq for instance. The jewellery brand from Titan Industries is offering customers a free gold pendant on purchase of select diamond jewelery of R8000 and up to 20% off on making charges on select 22-karat gold jewellery. Another example: To celebrate the second anniversary of hatchback Honda Brio in the Indian market, Honda has introduced an ‘exclusive’ edition of the Brio which will have an ?Exclusive? emblem to highlight the new festive edition.
PepsiCo, meanwhile, has launched a festival promotional campaign called, ?60 Crore Tak Ka Recharge’. As per the campaign, consumers buying any one multi-serve pack of PepsiCo’s beverages such as Pepsi, 7UP, Mirinda Orange, Mountain Dew or Slice will get a chance to redeem free talk-time worth R20 with every bottle. Industry watchers say that PepsiCo’s total marketing budget for the year exceeds R250 crore (excluding that for the Indian Premier League). Of this, the company is spending an approximate 25% during the festive season.
While the promotional ad budgets may remain similar in value when compared to the last, marketing campaigns this year are more focused (to avoid wastage) and different in experience now. The mix has become more diverse with public relations and direct communication being included while Facebook and Twitter are becoming an inseparable part of every media plan.
Sanjeev Gupta, managing director of Global Advertisers, says that brands have started to recognise the potential of outdoor advertising in reaching out to their customers. They have hiked their festival outdoor budget by 15-20% in comparison to that of 2012.
Big industry categories such as automobile, jewellery, apparels, media and entertainment channels, airlines, public sector units, banking and financial institutions are aggressively advertising on large size display formats including hoardings, bus media, transit medium and street furniture. According to industry estimates, the auto sector has increased its festival spend from around R15 crore in 2012 to R18 crore in 2013. For the broadcast industry, it has increased from R25 crore (2012) to R28 crore while for the banking and financial sector, the number has moved up from R18 crore to R22 crore.
For many Indians, the festival season is when they make most of their purchases. Therefore, quite a few brands are preparing hard to tap these buyers mainly through a rigorous three-step process ? preparation for product launches, preparation for consumer gifts and preparation for varied type of schemes with the brands’ respective trade partners.
Says Kamal Nandi, executive vice president, sales and marketing, Godrej Appliances, ?The festive season accounts for a significant amount of business in the durables and appliance industry. We are targeting a growth of 20% and a sales turnover of R700 crore this Diwali season.? While Godrej Appliances claims that its overall ad spend this year are comparable with that of last year, estimated to be around R130 crore, the focus will now be more towards direct marketing, road shows, exhibitions and on-ground activations. Meanwhile, the spends on print have come down.
Digital marketing is also taking center stage for many brands this season not just because it is affordable and measurable but a lot of net searching happens before any product buying takes place these days, say marketers. Interestingly, a recent IAMAI-KPMG report states that the Indian online shopping industry is growing at the rate of 59% year-on-year. Says Alok Agarwal, director marketing, eBay India, ?There are no times as tough economic times in the e-commerce space. The fundamentals of e-commerce is variety coupled with great pricing. In the times where money and fuel are becoming dearer, consumers are increasingly realising the benefits of shopping online.? This festive season eBay is hosting the ?eBay Happy Go Crazy Diwali Sale? which offers consumers deals across popular categories.
Interestingly, one can get an indication on whether brands are readily spending on marketing this Diwali from the newspapers. One of the recent weekend editions of The Times Of India had as many as 84 pages in total, up from the normal 36-40 page count ? to accommodate the Diwali ads. R S Suriyanarayanan, associate vice president, Initiative, a media buying agency, says, ?Currently, while one may not get the feel of festives from television channels, it does not mean that brands are not spending. Channels are going through an inventory crunch because of the 10+2 ad cap and not because advertisers do not want to spend. Brands know that they cannot remain absent from the market right now and are looking out for all available media to reach out to their consumers.?