Bajaj Auto, one of India's Top Ten advertisers, is in the process of consolidating the strategic media planning for all its brands with MindShare (the WPP company that combines the billings of HTA, O&M, Contract, Rediffusion, Equus and Speer). Till date, Bajaj had three creative agencies and two media agencies. Among its creative agencies, Leo Burnett used to handle motorcycles, Lowe Lintas scooters and scooterettes and Quadrant handled Bajaj three-wheelers. Among the company's media agencies were Initiative Media (Lintas' media-buying arm) for buying print space and Mediavision (the media-buying division of HTA, now part of MindShare) for buying television time. The new arrangement for media will be effective from April 2001. For creative, Bajaj will continue with its earlier arrangement.
All communication to this effect, which gathered momentum about a week back, has been conveyed rather covertly. It is noteworthy that no pitches were called for. Senior officials at the agencies and at Bajaj's Pune headquarters are either tight-lipped about the move or claim ignorance. In fact, a Bajaj senior executive, when questioned, was eager to know if "someone in HTA has gone on record" with the claim. For MindShare, it is a valuable gain after bagging Levers' business almost two months back.
A source in one of the top media-buying agencies says that a concerned agency (handling the creative) has received a letter from Bajaj stating that "MindShare will handle some additional function" for the brands. "But what that will be and how it will effect existing agencies has not been made clear," he explained. This story has been put together by confirming the news with reliable, senior insiders. A high-level source in the know confided, on condition of strict anonymity, that communication has been sent to the three agencies (Lintas, Leo Burnett, Quadrant) and that "they will now only be involved in the creative process".
He reasons that the idea behind Bajaj's latest initiative is to "streamline operations and get a tight control over planning and implementation". "We had to coordinate between five agencies for media planning (Initiative and Mediavision have been involved in implementation planning, as opposed to strategic planning). At so many times, a single-point view is very necessary for the corporate as a whole. That is what we are trying to do," he explains. He believes that this should result in some cost efficiencies. "But this streamlining will most reflect in the additional visibility that Bajaj gets or is perceived to get," he adds.
Bajaj's latest move is not new for observers who cite cases of Levers and P&G where creative, media planning and media buying have been, at times, handled by three different outfits. It is noteworthy that strategic planning happens to be "hugely prestigious" for any agency, says a senior media executive. But since Bajaj did not invite any pitches, it is imperative to ask how a decision was taken to go ahead with MindShare. "Mediavision has already done lot of media-buying for us," replies the source. "Since TV is the most fluid of media today and Mediavision is doing a fairly good job, we felt that we should go with them."
According to last published reports, Bajaj Auto spent about Rs 90 crore in advertising in 1999-2000, making it one of India's Top Ten advertisers. Considering the unfriendly market that Bajaj faces today, advertising is bound to become one of Bajaj's most critical tools. Last December, Bajaj got the first serious jolt when Hero Honda threatened its leadership position. Between April and November 2000, Hero Honda sold 6.69 lakh motorcycles compared with Bajaj's combined sales of 2.46 lakh scooters and 3.73 lakh motorcycles. Mopeds were the only saving grace (50,000 units), but a meagre consolation.
"That has led to huge angst within the company," reasons an agency executive. It could be one of the reasons for Bajaj seeking tighter controls over advertising. This year (till February 2001), sales of Bajaj scooters, scooterettes and step-throughs have all decreased over the previous year. Motorcycles are the new growth engine, having seen a 70 per cent jump over a low base. But considering Hero Honda's pace, Bajaj needs real-impact advertising more than ever before.
© 2001 agencyfaqs!