By Sneha Ullal
(With inputs from Saloni Dutta, Shobana Nair and Simran Sabherwal)
The festive season has just arrived. But with obstacles like the economic slowdown and RBI’s recent ban on zero percent interest schemes, will consumer brands be successful with their aggressive campaigns this year? Here’s an overview of what one can expect from the usual suspects across categories, in the next three to four months
For brands in India, there isn’t a more exciting time than now. Festive season sales are a huge deal — the fullon aggressive marketing and ad campaigns first target Onam in Kerala, then Ganesh Chaturthi in Mumbai, then Durga Puja in the East, Dussehra in most parts of the country; Diwali (where everyone goes all out) and the celebrations round off with Christmas and New Year.
This year though, the excitement might be toned down a notch. Despite the aggressive campaigning, there’s been a dip in sales and footfalls, largely due to the ongoing economic crisis, that hasn’t really shown signs of improving anytime soon. That said, some brands are positive — especially the ones that really make their presence felt during this time like consumer durables and chocolate brands — about this will change and are all set to attack consumers with the best offers and shiniest, new products. All that’s left to ask is, will this season end with a bang or go kaput?
CONSUMER ELECTRONICS
With sales contributing to close to 30 to 35% of their revenues, clearly this season means a big deal for consumer electronic brands. However, with RBI’s recent announcement on the ban on 0% interest schemes offered by banks, will the festive sales on smartphones and big-screen TVs – two of the season’s most popular consumer purchases – suffer a setback? That remains to be seen, and these consumer durable brands might just have to rethink their marketing and sales strategies. For now, here’s what some of them are planning to do this year.
TVs: Big on region-specific offers, combo deals
Thanks to the economic slowdown, most consumer durable brands have hiked their prices in the last few months. Industry records show that prices of refrigerators and washing machines rose to 6 to 7 % in the first quarter of 2012-2013; however, prices of LED, LCD TVs have fallen.
AOC TV, which manufactures and retails a range of LED and LCD TVs, plans to offers special gifts, along with competitive prices, this festive season. “Consumers are postponing their plans to purchase LED/LCD TVs,” reveals Saurabh Grover, Director, AOC India. “To keep their interest alive, we had to pool in more monies in giving special benefits and attractive prizes. So we’ll slash our budgets a little for OOH, Radio, Print, TV and the same budget will be utilized in offers and gifts like gym bags, tablets and DVD players for consumers.”The brand doubled its marketing spends this year, concentrating mostly on Print and regional level TVC ads, along with promotions on OOH, Digital and Radio, since their offers are tailored for each region.
Samsung too played the ‘assured gifts card’ well this Onam, with a gift promised with every purchase of their flat panel TVs and are also looking to launch new TVs ahead of Durga Puja and Diwali, along with refrigerators and ACs.
Home appliances: Doubled marketing spends; hopeful with new launches
Whirlpool doesn’t seem to be fazed by the new RBI norm or the slowdown. In fact, last week, it launched a new range of refrigerators, washing machines, air conditioners and microwave ovens.“We are aiming for a growth of 15% and sales turnover of Rs 850 cr during this period, and are confident of getting there,” said Shantanu Das Gupta, Vice President – Corporate Affairs & Strategy, Whirlpool India, in a press statement.It’s also opting for the freebie route this season.
The ‘Whirlpool Makes You Look Good’ Diwali offer promises a free gift from Revlon and scratchcards to win products from Arrow and Philips, with every purchase of any Whirlpool appliance. They’ve also almost doubled their marketing spends this year to Rs 20 cr from last year’s Rs 10 to 12 cr. The brand also plans to launch a multi-media campaign for this Diwali promotion, going all out with both ATL and BTL activations.
Godrej Appliances, which spends 30 to 40% of its annual marketing spends only for festive launches and campaigns, is also planning a slew of new launches, which started during Onam, and will continue onto Navratri and Diwali. The brand, which hopes to change the wary mindset of its consumers with “strong, tactical, offer-led communication”, will roll out an extensive Digital campaign, with SEM, social media, ORM and digital ads. “This channel gives us a huge opportunity to engage with our consumers in real time,” says Kamal Nandi, Executive Vice-President, Marketing & Sales, Godrej Appliances. “However, we continue to invest in the traditional media like TV and Print, which we use for mass communication during product launches or scheme announcements. We are also active in on-street and shop level activation and engagement programmes which are an essential part of brand-building strategy.”
LG, which is expecting 20% growth in sales this festive season, also hopes to launch new products in its home entertainment and appliance categories. It’s planning 360-degree campaigns across different media, including Print, Digital, TV, in-shop promotions and BTL activations, with special emphasis on innovative digital campaigns. Other big brands like Panasonic and Samsung are also optimistic of a positive festive season with each expecting sales growth of 35 to 40%.
Smartphones: Full speed ahead with new launches
While Nokia hasn’t revealed any concrete plans, it just announced the Lumia 1020 last week; and is poised to launch more. Viral Oza, Director – Marketing, Nokia, India, reveals why the brand will neither be shaken by the slowdown nor the fierce competition: “Over the last three to four years, Nokia has always focused on one thing: relevant innovation. For us, it is not about what the device has, but what you can do with it. The key differentiator is how we focus on our services and experiences. We continue to differentiate and innovate so that we grow faster than the market.”
In terms of the competition, Sony just launched Xperia Z1 (Rs 44,990) with a new promo TVC with Katrina Kaif, while Samsung introduced the new Galaxy Note 3 (Rs 49,900). Blackberry will be announcing their festive offers soon, and it also slashed the prices of some of their models, like the Z10, which now sells for Rs 30,500 from Rs 40,000.
Local brand Intex technologies is also bullish about this season, as they prepare to launch their new TVC for its flagship smartphone Aqua i7, starring Farhan Akhtar. “The TVC will go on-air from October 1, and will also be seen on Digital media over the next two months,” says Keshav Bansal, Director-Marketing (Mobile), Intex Technologies. “We have deployed a campaign in order to achieve the targeted sales and also increased our marketing expenditure by 350% as compared to the last year. We are also doing OOH activities in selected regions and also pursing some branding tie-ups during the festive seasonInspite of the slowdown in the market, we continue to spend considerably on all our marketing activities.”
Cameras: Will hike prices; focus on technology and combo offers
Last year, Canon’s campaigns centred around its compact camera and printer ranges. This year, it plans to focus on its technologies and DSLR-lens combos.“We are also looking at innovative ways of presenting our offers; for instance, with a DSLR we can give another lens and call it a combo deal,” explains Dr Alok Bharadwaj, Executive VP, Canon India. The brand is also looking to reduce its overall marketing and ad budgets to half, owing to the Rupee devalue. “We have cut down 50% of the advertising budgets, although we have maintained the monies for BTL (workshops, etc),” says Bharadwaj, “After reducing our media mix to half the major focus is still TV, because our category is such that the reach is important. Our marketing spends during the festive season months will be about Rs 25 cr.” Olympus plans to focus on launching mid to high-end and mirrorless cameras, having just launched the OM-D E-M1, while Nikon, on the other hand, recently launched two new cameras in the COOLPIX range to kickstart its festive campaign.
AUTOMOBILES AND TWO-WHEELERS
Market conditions have been rough on this sector especially, and car sales haven’t be phenomenal throughout the year. While most brands usually expect a 20% growth this season, most Indian car brands are expecting only between 8 to 10 % growth in sales this year. To add to woes, RBI just announced a hike in repo rate – the short-term lending rate – to 7.5% from 7.25%. Will this dampen the festive mood of car brands?
Cars: Hiked prices; experimenting with Radio and Digital
There’s been a steep rise in prices this year and even the festive season will not be spared. Hyundai, for instance, is planning to increase prices by Rs 4,000 and Rs 10,000 across most of their models, from October 1. That said, they hope to go all out with their ad and marketing campaigns, with their newly launched Grand i10, priced at Rs 4.25 lakh. General Motors India, too, hiked prices of their cars Beat, SAIL and Enjoy by up to Rs 10,000 earlier this month.
Experts believe that media spends have risen to up to 24%, as a tactic to push sales. “Normal festive campaigns usually offer schemes on new models, but while initially brands used to reduce schemes to encourage consumers to buy products, that’s not the case anymore,” recalls Sanjay Gopala krishnan, AVP- Marketing, Fiat Chrysler India. “In fact, automobile brands are generally increasing offers because of low market sentiment.”
Other brands like Maruti Suzuki and FIAT are hoping their new launches will see rise in numbers. While it looks like Maruti will stick to promoting the new Stingray (while there are rumours that a hatchback might also be launched soon), FIAT is currently focusing on promoting the Linea Classic, which will also be central to their new festive campaign. “As a brand, we’ve not been affected by the economy,” says Gopala krishnan. “Overall, in volumes we are growing and as per that we are looking at various festive activities, with Linea Classic at the centre of it all.” FIAT will plan Digital and Radio campaigns, depending on the market requirement.
Two-wheelers: Continue to enjoy steady growth; looking to cash in with new products
This year has seen a steady rise in the two-wheeler segment, with a 7% growth in overall sales (4 % rise in motorbike sales and 21 % in scooters). Cashing in on this steady growth, Hero MotoCorp will launch 15 products starting this month till March 2014, a majority of which will be out during the festive season. While some will be revamped versions of old models, others will have patented innovations, thanks to the company’s recent acquire of 49.2 % stake in American sport motorcycle company Erik Buell Racing. Industry experts believe that the brand promotions for the festive season might just focus on the same. While Suzuki Two-Wheelers doesn’t plan to launch any new products this festive season, Bajaj Auto might raise prices of its motorcycles.
Watches: Increases spends; all set to launch new products and campaigns
The slowdown hasn’t rattled both consumer and luxury watch brands yet. That said, for consumer labels, the festive and wedding seasons are critical; so they plan campaigns that keep the momentum of sales and recall consistent. Fresh from the recent Edge watch campaign, Titan plans to launch a campaign highlighting the holistic brand. Apart from that, the brand will also launch a new Raga campaign, with a TVC starring brand ambassador Katrina Kaif which will be out soon. “This collection has close to 30 variants,” explains Rajan Amba, Global Marketing Head, Titan Industries. “Additionally, we will also roll out close to 100 variants in this month, with strong outdoor and print campaigns, which will continue till the end of the season.” Titan is also looking to invest more in digital media than last year, but other than that TV and outdoor continue to be promising media to showcase their products. In the last two months, the brand spent about 25 to 30% of its annual budget.
Jewellery: Affected by the gold shortage; will still go for TV, print
While the shortage of gold has been a major concern for domestic jewellery businesses, bigger jewellery brands ave felt the pinch too, but are managing to pick up the pace with the start of the festive season.For Dussehra and Diwali, Tanishqwill be launching a range of studded jewellery. “TV and Print have been vital advertising media for Tanishq,” says Deepika S Tewari, General Manager, Marketing-Jewellery Division, Tanishq. “However, the media mix varies from collection to collection.”Next month, the brand will also announce ‘My Expression 2’, the second edition of the social media campaign/contest launched last year, where 12 designs will be incorporated in Mia’s collection. “This year, we have added Mobile to our marketing efforts, to mark the launch of Mia 3.0,” adds Tewari.
Confectionery: Diwali will be as sweet as last year
Last year, ASSOCHAM recorded that demand for chocolates was steadily increasing during festive season with corporates using it as a gift item, and a general preference for that over traditional sweets, due to increased cost and even adulteration. The consumption of chocolates is steadily increasing and its market size is expected to cross Rs 7,500 cr by 2015 from the current Rs 4,500 cr, the survey added. At the helm of this market is Cadbury Celebrations, which has always come up with memorable marketing and ad campaigns during Raksha Bandhan and Diwali. This year, too, shall be no different. “As we get into Diwali, we will look at getting consumers to celebrate the festival’s true spirit,” says Amarpreet Anand, AVP, Chocolate-Gifting & Strategy, Cadbury India. “The true essence of the festival, of spending time together with your loved ones, seems to be lost. Through, Cadbury Celebrations, we will look forward to actually enabling people to come together and spend quality time this Diwali. Our campaigns for Diwali will be amplified on TV, Digital, in-store, Radio and through on-ground activities.”
Colas: Will festive associations help improve numbers?
Even the soda beverages have had a bad year in terms of sales and volumes growth; and are heavily relying on the next couple of months to change the scenario. Thums Up, for instance, has had a strong association with Durga Puja for years.“This year, we are taking this even further with the ‘Amader Pujo’ campaign which is an integrated marketing campaign,” reveals Debabrata Mukherjee, VP – Strategy & Innovations, Coca-Cola India. “We will offer consumers the chance to drop Thums Up crowns, labels, cans in designated boxes as their contribution towards building 25-foot-tall iconic Durga Puja structures. The pre-Pujo period is extremely lively as everyone is outdoors – shopping, planning and gearing up for the festival. This is the best timing to initiate on-ground activations to forge a deeper connect with consumers.”
Apparel: Focused towards improving sales and digital media presence
While sales of the overall retail segment have increased to 10 % this year, clothing and accessories brands hope to benefit greatly this festive season, with a little help and support from the wedding season shoppers. And realizing that most Indian consumers are veering towards online shopping — for the convenience and to get better deals — brands are ensuring that their digital and e-commerce presence is strong. For And Designs, over 55% of the annual budget is dedicated to this festive season. While there has been a strategic shift from traditional media to more hybrid ones, digital media plays a huge role for the brand’s campaign. “New-age media have proven to be more interactive with today’s evolved audiences. With such media, the ROIs are in favour of brands, allowing us to explore longer durations of our campaigns,” says Mukesh Sawlani, MD, AND Designs India Ltd.
Feedback: snehal.ullal@exchange4media.com
