Economic slowdown may not hit FMCG ad spends during festivals

Industry experts believe companies will spend on advertising to revive consumer sentiments and boost sales

e4m by Dolly Mahayan
Updated: Sep 9, 2019 9:08 AM



The economy is witnessing a slowdown and the affect can be seen in almost all sectors. The slump has also raised questions about the ad spends of the FMCG sector during festivals, a period during which these companies traditionally open up their purse strings.

The good news is that industry experts believe despite the slowdown, FMCG firms have no plans to cut their ad spends for the festive season.

“Companies will spend on advertising to revive consumer sentiments. They will woo customers with new offerings to boost their sales and recover from the poor performances. It is expected that large FMCG firms will spend 5-7 per cent of their marketing budget for the festive season, especially during Diwali, says a media buyer.

Though the brands will use all advertising mediums effectively, there would be a larger push on digital and TV mediums, say experts.

Companies have plans to launch new products, attractive offers and significant promotional activities to lure customers and spur a growth in the demand. And it’s not unusual, given that festive season gives a unique opportunity to connect and celebrate with consumers.

According to Mayank Shah, Sr. Category Head, Parle Products, it has been a difficult time for the entire FMCG category and the sector is pinning hopes on the festive time to see a spike in demand.

“The brand plans to launch new premium products during the festivals. This is the time of the year when there is a good spike in sales. There would be new launches and new offerings for the season. Festive packs become a very important tool during this particular time to boost sales. This is the time to the make most of the opportunity, given that consumer propensity is high for buying during festivals,” he shares.

On being asked about the advertising mediums the company will spend on, Shah replied, “We have a 360-degree advertising plan. For us, 7-8 per cent of the total marketing budget is reserved for the festive season, and this includes all mediums.”

“We advertise in two ways. Television is primarily used to derive sales, and digital is used to build engagement about the new offerings,” he adds.

Anirban Sen, Business Head, Chewing & Confectionery, GPI, says the brand will increase its spend this quarter to celebrate the festive season. There will be an increased spend mainly on digital with few selected interventions on TV, he informs.

 “Pan Vilas Elichi will celebrate with the consumers through various offers and limited edition product launches,” says Anirban.

“The growth is expected to bounce back in the next quarter and the growth expectation continues to be in double digit. At the end, it will be quality products and services that will win,” he adds.

As these industry leaders say, the festival season, which begins with the Ganesh Chaturthi and ends with Christmas, will be a crucial time for brands to revive themselves before the year ends.

“The current slowdown is short term and partially cyclical in nature. The FMCG sector will definitely come back on track in the last quarter of the year, believes Mansoor Ali, Chief Sales & Marketing Officer, Hamdard India.

“We will focus on our flagship products such as RoohAfza and Safi, as well as on our range of OTC and lifestyle products during the festive season. The monsoon has been good which gives the industry a ray of hope to thrive and recover in the upcoming festive season,” says Ali.

According to the revised Pitch Madison Advertising Outlook Report 2019, Q3 will be ‘reasonably strong’ on the back of the festive season.

“It appears that the consumer is looking for reasons to not spend or delay his spending. At a time like this, advertisers should not lose faith in advertising, and use it aggressively but effectively to protect their share,” says Sam Balsara, Chairman of Madison World, in the report.

According to Prasad Shejale, Co-founder & CEO of Logicserve Digital, FMCG has traditionally been a top advertiser on television, followed by radio and print. Now it has increased digital ad spends as well.

“This sector has lately emerged as the largest spender on the digital medium. I don’t think brands will tighten their marketing spends in a significant way this festive season,” feels Shejale.

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