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Top firms defies slowdown, increase spending on promotional activities

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Top firms defies slowdown, increase spending on promotional activities

Among the BSE 30 index companies, Dr Reddy’s Laboratories has posted the highest percentage increase in advertisement during 2000-01.

The general slowdown in the economy has not deterred these select majors in the Fast Moving Consumer Goods (FMCG), pharma and electronics sectors from expanding their reach through promotional activities, says a quick survey conducted by the Federation of Indian Chambers of Commerce and Industry for 2000-01.

The print media has emerged the largest source for promotional activities for corporates followed by outdoor promotional activities and television. As for the product mix, the print media captured 37 per cent of the total spending on promotional activities, out door catering had a 31 per cent share while television had a 24 per cent share. Web-based promotional activities had a minuscule five per cent share.

The survey conducted among the 38 bigger companies (predominantly FMCG firms) says that around 54 per cent of respondents increased their spending on promotional activities and around 27 per cent respondents maintained the spending at previous year’s level. Only 19 per cent of respondents said their total expenditure on promotional activities went down.

According to the survey constraints faced by firms are on the demand side, and companies are investing on promotional activities to ensure greater mobility and better target reach of their brands, in an attempt to capture a larger share of a buyers’ market.

In section II of the study, the Ficci survey has categorised the companies into three categories. Type A companies are those with increased level of investments, Type B companies having the same level of investments and Type C companies showing a decline in investments over the last one year.

Among the Type A companies, 50 per cent of the companies increased their expenditure on promotional activities. What’s important is that among the Type C companies, despite the overall decrease in investments, spending on promotional activities has gone up in 66.66 per cent of the respondents.


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