Indian marketing industry prepares to fight its way out of an ever deepening crisis

04 Sep,2013

By Amit Bapna & Ravi Balakrishnan

 

One of the ubiquitous scenes in the Bollywood films of yore was a doctor stepping out of an operation theatre and with a voice heavy with emotion, telling the hero’s concerned family and friends “Dawa ke saath dua ki bhi zaroorat hai.” (You are going to need prayers as well as medicines).

 

A similar fatalism appears to have large parts of India’s marketing and marketing communications business in its grasp. Almost everyone we’ve spoken to on this story believe, yes, things have never been this bad. Yes, they are hoping and praying for a good festive season, encouraged by a strong monsoon and an increase in rural demand. And beyond that, who knows?

 

Traditional wisdom demands that brands spend their way through a recession in order to gain disproportionately once it’s over and done with. But how does that apply to a slowdown that has dug its heels in? How long can one spend through a situation that none of the industry pundits dares put an end date to? It’s hitting some categories a lot harder than the others.

 

Auto brand sales have been heading southward nine months in a row registering a decline of 7.4% in July. Some companies have moved to a 4-5 day week manufacturing schedule to optimise efficiencies. TV campaigns in the category are being replaced with discounts and dealer incentives.

 

Marketing budgets, among the first victims of a slowdown in many cases, are getting recalibrated. The beer brand Fosters which was scheduled to announce its new positioning — a shift away from the previous ‘Art of Chilling’ — has slashed its TV allocations from Rs 6 crores to Rs 4 crores.

 

Piyush Mathur, president – India, of research firm Nielsen, adds wryly “Every company is going to be looking closely at the return on every dollar — or should I say Rs 67 — of expense.” While a spending freeze is a tempting option, it’s also likely to be disastrous, particularly for a crisis with an unpredictable end.

According to Arvind Sharma, chairman and CEO – India subcontinent, Leo Burnett, “Unless you have a 60% share of the market, there are opportunities for growth if you plan right.” Short term or sales oriented work may meet quarterly results but it merely postpones the problem. “When the whole market is aligned to poor quarters ahead the approach becomes more strategic,” says Mr Sharma.

Adds Rohit Ohri, CEO, Dentsu India, “The big challenge is being able to navigate the flux and to not wait till things improve. There need to be innovations in terms of product and bringing in new markets and consumers.”

Which explains why, in spite of a slowdown, Godrej has no intention of changing its new product launch schedule. Many companies are instead relooking every aspect of marketing to find a workable solution. In the case of Godrej, it’s a mix of a multimedia approach and a deeper focus on consumer insights.

Sunil Kataria, COO – sales, marketing and SAARC, Godrej Consumer Products believes, “No single medium works well in such conditions. We have to use touchpoints at a time the consumer is most receptive.” He cites the example of Godrej Hair Expert Hair Care that landed new consumers based on the insight that people colour their hair ahead of social occasions. And so Father’s Day was tapped for a campaign that played out across TV, radio, activation and print, in which children encouraged their parents to use hair colour.

With a relatively small marketing budget, Citibank deploys a precision marketing strategy, which it believes, helps garner disproportionate brand preference in relation to its physical footprint. Shares Sanjeev Kapur, chief marketing officer, Citi India, “We deliver targeted communication across specific locations regularly frequented by our customers. These include specific malls, restaurants and cinemas. The messages are delivered either through conventional displays such as billboards, point of sales materials or through technology driven locationbased marketing.”

Says Sandeep Singh, deputy managing director and chief operating officer, marketing and commercial, Toyota Kirloskar Motor, “We have shifted our attention from above the line to below the line activities and have enhanced our focus to non-metro areas. This has been done due to the increase in our dealer network and better monsoons which impacts non metro markets.”

Nielsen’s clients which include some of the country’s biggest marketers are cutting back on testing of ad concepts or packaging. They are instead trying to focus on more functional research — for instance, a study of retail outlets across 29 cities to determine which shops work best for their portfolio of products.

Expensive television and print campaigns are being put under a sharp scanner. Says CVL Srinivas, chief executive officer (South Asia) GroupM, “Clients will definitely stay away from media where there is rate inflation. They do not have the appetite to pay a premium in the current scenario.”

Says Shankar Nath, head — marketing & direct, ICICI Lombard General Insurance, “We have a strange situation where TV and print media would feel the need to increase rates — owing to the 10+2 ruling and the increased newsprint prices respectively — whereas marketers, given the macro situation, are expecting (almost demanding) a rate reduction.”

In such a scenario, marketers will have to harness the reach of new vehicles such as social media, mobile, activation and trade marketing. ICICI Lombard has launched their latest campaign on road safety on the digital platform.

While initially mass media was being considered, the current mix is concentrating on the digital space with on-ground activation support. L’Oreal India is apparently earmarking a large chunk of its budgets for digital beginning 2014. Explains Vivek Bhargava, CEO, iProspect-Communicate2,

“Digital is about maximising efficiency and it can help create a brand with a niche target audience that has the maximum propensity to buy your product.” Travel company Kuoni ran with an activation led promotion — Winter Holiday Bazaar a one-day road show offering the best deals to travel enthusiasts across various cities, shares Rajeev Wagle, managing director, Kuoni India.

Amidst all this brouhaha about slashing budgets and reallocation, Rahul Saigal, president, Geometry Global, a WPP-owned activation agency strikes a cautionary note, “A shift must be dictated by a fundamental strategic decision to achieve something different for the brand. Such a decision cannot and must not be taken on the basis of budget availability, alone.” The role played by advertising is very different from that played by other marketing services. Activation cannot achieve what advertising can and vice-versa.

In a recent interview, KV Kamath, chairman of ICICI Bank said, “Textbooks were written when you did not have to deal on a realtime basis with several markets. So it is time to push them to the back of the table.” It’s an apt summation of the current state of affairs and an acknowledgment that there are quite literally no textbook solutions. When the crisis is over, what marketers did to survive through it will probably be the stuff of textbooks in the making.

 

 

Source:The Economic Times

Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

Licensed to republish

 

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