Brands bullish this festive season; ad spends up 15-20%
Market sentiment is expected to be buoyant during the festive season this year following a good monsoon. Post demonetisation and GST rollout, which had a major impact on businesses and marketers, things have started to settle down and the industry is expecting good results this festive season. According to industry sources, the 2017 festive season is expected to register an increase of about 15-20 per cent in ad spends as compared to 2016.
Panasonic India has bundled its festive offers under the ‘India Ka Tyohaar. Panasonic Ka Uphaar’ initiative. Valid from September 1 to October 22, 2017, the company is making available easy finance offers with only Rs 99 down payment on selected products, along with assured gifts, extended warranties and discounts.
In the paints category, Berger Paints would be prominently present on all advertising platforms, including the traditional and non-traditional mediums, during the festive season, which encompasses TV, Print, Radio, OOH and digital.
While Orient Electric has started a new campaign for its LED products for this festive season, the brand will also have a focused campaign for its fans and other products. Biscuits and confectionary brand, Parle Products, is also bullish on this festive season. With the launch of new gift packs, the brand is hoping to build CDMs and equity among consumers as well as gain maximum visibility in modern trade outlets and other outlets spread across the nation.
Spends allocated for festive season
The introduction of GST has had some impact on primary sales in the month of June as channel partners were reluctant to stock material for most brands. However, the transition to the GST regime has been fairly smooth and hence, is not expected to play spoilsport for secondary sales this season. The market is bouncing back now, with brands geared up for the festive seasons with aggressive advertising, marketing and promotion. As far as the consumer durables industry is concerned, the full input tax credit under GST will help brands to advertise more, and marketers are expecting a healthy increase in ad spends for the festive season.
Parle Products, which had consciously laid on festive ad spends in 2016, expects to see a 40 per cent increase in ad spends this year, with a significant presence in media.
E-commerce companies, which were among the biggest advertisers two years ago, have rationalised their spends, barring a few larger players. Amazon wants to trigger the consumers in Tier 2 and 3 cities and below geographies of the market through heavy advertising this festive season.
While Berger Paints expects the ad spends to remain promotional as last year, Orient Electric is spending heavily on marketing this year on ATL and BTL as compared to their last year’s spends. Jewellery brand Tanishq, which recently brought on board Madison as their media buying agency, is also expecting spends and revenues from the festive season to go up.
Krishnarao Buddha, Category Head, Parle Products, expects a 20-25 per cent increment for Parle’s traditional sale between August and October. Anshuman Chakravarthy, Head Brand & Corporate Communications at Orient Electric, is hopeful of doing good numbers in the next 3-4 months during the festive season sales.
Factors giving a boost to consumer spending this festive season
Krishnarao Buddha is of the opinion that offers like sales, buy one get one free and other discount coupons are lucrative enough to increase footfalls at stores and boost consumer spending, as this is the time when consumers don’t mind spending extra bucks as the intent is usually not for self consumption, but for gifting purpose.
Sudhir Nair, General Manager Marketing, Berger Paints, believes that rural demand would be bullish because of good rainfall this monsoon in most parts of the country, which in turn should drive up farm incomes and thus, would drive the demand for paint products in the economy category. “The consumer price index (CPI) is well under control and with RBI cutting rates interest rates, the consumer spends are expected to go up in discretionary segments,” he added.
While pointing out that consumer demand has been picking up of late following the initial impact of GST and wearing off of the demonetisation effects, Orient Electric’s Anshuman Chakravarthy noted that market sentiments look positive now with inflation under control, a symbolic lowering of interest rates and a fairly good monsoon.
With a seller base that has grown to over 2 lakh at a growth of 160 per cent YOY, Amazon’s sale events offer big savings on big brands and Ravi Arun Desai, Director, Mass and Brand Marketing, Amazon India, expects this season to be as brilliant as their previous sale events in terms of traffic, new customers and gross sales.