Pitch CMO Summit 2008: Marketing budgets stay put

Pitch CMO Summit 2008: Marketing budgets stay put

Author | Puneet Bedi Bahri | Friday, Nov 14,2008 5:21 AM

Pitch CMO Summit 2008: Marketing budgets stay put

The Indian media and advertising industry has been abuzz with talks of marketers cutting down on ad spends for some time now. The spiralling impact of a step like this on the Indian media fraternity was only imaginable. The Pitch CMO Summit 2008, that was held in Delhi on November 13, saw leading advertisers of the country discuss the slowdown and the challenges that it posed in the marketing of a brand. The top honchos stated that while there were no cuts in ad spends just yet, the effort now was to rigorously look at media vehicles that delivered a bigger bang for the buck.

This Summit was an initiative of Pitch, the marketing magazine from the exchange4media Group. Colors was the main sponsor for the event. The topic of discussion of the panel was ‘Impact of slowdown on Marketing’. While Alchemy’s Rahul Sen was the moderator, the panelists included Ankush Arora, VP - Marketing, Sales & After Sales, General Motors India; Saloni Nangia, VP, Technopak; and Sunil Dutt, Country Head, Samsung Mobile.

Indian marketing industry not in recession yet
Moderator Rahul Sen kicked off the discussion directly with the slowdown and its impact. Ankush Arora clarified at the outset, “We are not in recession yet, nor are we in slowdown. It really depends on how you look at the situation; the typical case of the glass is half full. We have in the past witnessed unimaginable growth levels, and those growth rates are not realistic to match anyway. However, it is not as if we are in the negative now. We have to now see how our business adapts to the present growth rate.”

He further said, “The automotive industry’s growth rate has been unbelievable. The automotive business is cyclical, and the last two months have been tough on the industry. This is primarily due to the problems of credit availability in the market. The next 12 months is challenging for sure, but by 2010, things would be looking better again.”

Sunil Dutt added here, “If you had to see the telecom industry, we are speaking of a base that is at 300 million and growing every month. That is not slowing down. There are specific segments where you don’t see such growth and you see postponing of various decisions, but there are segments that have more than normal growth too. This impact would stay for the next 12 months, following which the boom sentiment would return.”

Saloni Nangia stressed that even for her clients in sectors like retail, the sentiment was still of optimism. She said, “We have not witnessed a slowdown in retail and consumer products yet, but we expect it in the next year. But this is only a slowdown and we should not be getting nervous. It is true that the Indian economy is growing at 6-7 per cent, unlike the expected 9 per cent, but all this growth is coming from India itself, and that is something to cheer about.”

An age of sub-segmenting and creating new opportunities
The panel agreed that in a situation where some aspects of a brand’s business were growing and some were not, the need of the hour was to sub-segment the market further and identify the newer avenues of growth. Arora said, “This is the time to sub-segment as therein lays the opportunity. Even there, it is the mid-segment that is in power. The second point is that when you see that liquidity is important and cash is king, look at your supply chain for efficiencies. It would be better to keep yourself very liquid.”

Dutt added here that for Samsung, being present in rural markets was not a matter of choice but a matter of compulsion, given the kind of audiences emerging there. For him, growth was in maximising opportunities. He said, “The mobile phone industry has been accused of adopting a ‘Swiss knife approach’. The idea is to get that difference in your product, and at the right value, to maximise the rupee that you are spending.”

Nangia observed, “Companies were in any way looking at fine-tuning, and right from the product mix, pricing, the format that they are selling through, and how they communicate with the consumer to manage the sale. Brands have been looking at different markets and rolling out those kinds of plans.”

The panel said that the next year could see the focus on the premium segment of audience and also on the mainstream segments. Arora observed, “Consumer still has cash, especially the mainstream. The ticket size is low and it would be a challenge for brands in some of the categories to be able to straddle both premium and mainstream segments.” Speaking on the need for building brand trust, Dutt added, “Consumer needs a back-up in his psyche when something from the brands go wrong, since these are big brands.”

The panel stated that marketers needed to build brands, and perhaps more so when the general mood was low. In such a scenario, prudence was not in bringing down the marketing budget, but to use it judiciously between various mediums.

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