Markets and shopping malls across the country are radiant and sparkling this time of the year. Buzzing with numerous exciting activities, they seem to be successfully inviting everyone to come and check out the latest products on offer. The festive season is finally here.
But along with the festoons and the special offers, there?s something else also. Earlier, the festive season, starting in the middle of September (coinciding with Ganesh Chaturthi) and continuing up to December, was supposed to be the most critical and auspicious season for growth in sales, especially in the consumer durables, auto, home appliances and FMCG (fast moving consumer goods) sectors. There is still some amount of frenzy amongst marketers during this season to offer discounts and freebies and consumers continue to throng the shops. However, since the last few years, this buoyancy, both amongst the marketers and consumers, seems to be fading. Now, with marketers offering discounts and freebies all year round, and consumers shopping as and when they need, the festive season seems to have become just a tradition which marketers are adhering to. At the same time, there are still a sizeable number of marketers who still try to leverage the festive season to the hilt as they believe in the potential of the season to boost sales. Moreover, due to the economic slowdown the buoyancy in the market was a little tempered during the festive season in the last two years. This year, marketers seem to be trying to make up for the lost opportunities.
Most consumer durables and FMCG companies have already announced their festive offers for this year and have earmarked a chunk of their annual budgets for a marketing blitzkrieg during this season. Consumer electronics maker Sony India has allocated Rs 45 crore for the marketing and communication activities during this festive season with prime focus on the launch of 3D products in the Indian market. The home-grown brand, Mirc Electronics (Onida), spends about 35-40% of its entire marketing budget during the festive period. For Chinese white goods maker Haier Appliances India, 15-20% of the overall marketing budget is devoted to festival marketing for ATL (above-the-line) and BTL (below-the-line) activities combined. Again, Whirlpool India has announced a budget of Rs 20 crore and LG India would be spending about Rs 65 crore on festival marketing promotions.
BrandWagon spoke to marketers and analysts to understand if festival marketing is still as relevant as it used to be. Says Masaru Tamagawa, managing director, Sony India, ?Consumer sentiments are buoyant during the festive season and they tend to splurge more on household products including consumer electronics. The festive season is very important to us as it contributes significantly towards our revenues. At Sony, we plan to utilize this opportunity with our attractive consumer promotion offers.?
Anand Ramadurai, general manager, Mirc Electronics, feels that the importance of marketing during this time cannot be igno-red. ?The consumer sentiment is usually more upbeat during festive periods. Also, there is a general feeling among consumers that the best deals and offers are available during the festive period only. This is even if there are offers all year round,? he says.
Anand Singh, director, marketing (colas), Coca-Cola India, also feels that the festive season continues to be relevant in the marketing calendar as consumers still like to buy during the festive season to celebrate the occasion. ?The festive season is an occasion to celebrate and revel in prosperity.? Coca Cola has launched a specific campaign to celebrate the spirit of Diwali. Singh says, ?Brand Coca-Cola stands for optimism and as a brand we believe that people are happier when together. It is this spirit, which also resonates very well with festivals that our campaign leverages.?
Some marketers believe that even though there are discounts and freebies all year round, special offers in the festival season are a long-established practice that can?t be done away with. Salil Kapoor, chief operating officer of direct-to-home (DTH) operator DishTV says, ?Whether it?s Christmas in the West or Diwali in India, the market size always expands during this period. Over the years, we expected festival sales growth to come down but it hasn?t. I feel it is a joint effort by customers, retailers and companies which keeps sales growing.?
Pradeep Saxena, senior vice-president (auto) of global market research firm TNS, says that year-round freebies and discounts are more on FMCG products than on consumer durables. ?The dis-counts on consumer durables happen during low seasons such as monsoon and shradh ( a period when people in certain parts of the country refrain from making big purchases). The purpose of these discounts is to `maintain? the sale and not allow it to fall,? he says.
?In contrast, the objective of festival marketing is to do disproportionately high business during a few weeks. At the festival time buying sentiment among consumers is at a high. A promotion at that time works like a catalyst and brings in even the fence-sitters.?
Some marketers admit that they do see a slight change in the pattern over the years as purchases are more need based now. Shanta Roy Sanjeev, head-marketing, Haier Appliances India, agrees that the trend is changing. She says, ?Earlier, people used to wait for exciting offers during the festive season but now they don’t. They buy things as and when needed as purchases have become need based now. They may postpone a part of their purchase but what is needed is bought then and there. But we are continuing the tradition of offering discounts and special offers during the festive season.? She says Haier’s sales do increase marginally during the festive season. ?Thirty per cent of the sales happen during the festive season. But this year, the market hasn’t really picked up. We hope to see the real madness in the last seven days.?
Singh of Coca Cola also agrees that Indian consumer has evolved and likes to buy throughout the year.
Saxena of TNS feels that one category where the trend has definitely changed during the festive season is automobiles. ?One dip that I have clearly observed is the lack of promotions by the two-wheeler industry. It is probably due to continuing high sales. In the case of cars, there is already a waiting period for many models, hence, understandably no major promotions are there,? he says.
W hile remaining upbeat about the festive season, marketers reflect on how consumer response has changed over the years. While some believe that it is still as buoyant as it was, some say that it has indeed changed. Says Sony’s Tamagawa, ?Over the last few years, we have noted that there has been a significant increase of consumer interest in our promotional offers during festive season. Not surprisingly then, we have also witnessed a steady growth in sales. Looking forward, we expect the trend to continue and support our sales in festive season.?
Agrees Saxena, ?We have not witnessed much change in the consumer response. If anything, it is better because the consumer expects promotions to happen during festivals. Even with the changing times, various festival days such as Dhanteras and Diwali witness the highest sales of the year particularly in the case of automobiles.?
Mirc’s Ramadurai, however, feels that the period of ?festive buying? has come down from 4-6 weeks earlier to just 2-3 weeks now. ?With more disposable income, and increasing mobility, everyone does not wait for that one period during the year in which to make purchases.? ?The trend is shifting. While everyone loves to get something additional it’s happening all year round now. Consumers will wait for festive season only if something big comes up,? says Sanjeev of Haier.
What is clear is that marketers continue to try and make most of the festive season across the country. But is there a method in the madness? We asked the marketers if the festive promotions and offers are actually a result of any market research that they undertake. Says Singh of Coca Cola, ?We regularly conduct multi-dimensional research across the year and these insights, layered with our understanding of festivals, helped us conceptualize the campaign. Says Sanjeev of Haier India, ?We conduct consumer research after the festival season is over to gauge consumers’ response and to understand what products were bought, what is the profile of the consumers who bought these products. This provides a kind of roadmap to the plans for the next festive season.?
Kapoor of Dish TV says that while they do not do any specific market research for marketing during the festive season, they decide the various offers and freebies to be offered during this period based on what the competition is doing and on the overall dynamism of the DTH industry.