The season of big bang consumer promotions is about to dawn in all earnest and manufacturers are betting on aggressive promotions, advertising and marketing spends and a jump in consumer spends, to turn things around. But smart marketers are realising the futility of wasting marketing funds on me-too promotional activities.
“Marketers are looking at ways to create differentiation (in their festive promotions) apart from simply outshouting their competition,” says Srikant Sastri, MD of Solutions Integrated, a marketing services company.
Except for a minor uptrend in home appliances sales, volumes of colour televisions are yet to pick up. Consumer durable sales traditionally record a big jump during Dussera and Diwali in the western and eastern markets and during Onam in the southern markets.
Sources indicate that semi-urban and rural markets are expected to show better volume growth. The drop in durable sales is also attributed to the fact that the festivals have fallen during month-end, as salaries and bonuses have not yet been disbursed. Sources indicate that with bonuses expected in Kerala this month-end, growth is expected to pick up.
Many marketers, this year, will stay clear of vanilla promotions and contest manias. “We will keep our two important launches during the season. It is an auspicious time for buying and gifting and we want to give the consumer better value through a breakthrough product,” says Motorola marketing head Lloyd Mathias.
Not to say that Motorola will not indulge in any promotions, but that it will be primarily directed towards the new launches, not a secular offer across its product line.
Consistent discounts and incentives offered by durable manufacturers in the last few months are affecting their profitability and margins. Says Girish Rao, VP, marketing LG, ”We are betting big on the coming festive seasons. Already Kerala is likely to witness a 30% growth across categories.”
Recently durable majors in Maharashtra, Gujarat and Punjab hiked prices by 5.5%, in a bid to protect margins and bottomlines. “In the mass market, rates are already as competitive as possible and prices are not likely to fall further.
Durable majors are hoping that the various promotions and schemes will increase consumer spends in tier I and tier II markets,” said an official of a consumer durable company.
The market for both CTVs and refrigerators are shifting to the semi-urban and rural areas, as the penetration in the urban areas for these products are quite high. Hoping to cash in on the coming festive seasons, durable majors are planning to enhance the production capacities and advertising budget, sources said.
“Consumers don't choose a brand because of a gift, rather, after buying the product they ask for gift, and it has to be given,” says Mirc Electronics marketing head Vivek Sharma.
With Rs 2,000 crore of television advertisings riding this festive season, marketers are looking at getting the bang from their ad buck. In fact, new launch-based promotions look like the promotional trend around Diwali-Onam this year.
“The gifting ritual around festival time is taking on new hues. Earlier, gifting was emotional - hence sweets & dry fruits. Now it's turning into an opportunity to make a statement about the giver,” says Titan Industries' business head, Ajoy Chawla.