Are brands cutting down on spends?

By Neha Kalra , afaqs!, New Delhi | In Marketing | August 21, 2008
With rising inflation, will marketers take a second look at their media plans? afaqs! seeks industry opinion

With the slow down of the Indian economy, the Sensex, commodities, fuel prices - just everything is going paranoid about the situation. afaqs! spoke to brand owners and advertisers on whether they would alter their media plans and expenditure.

Kaushik & #BANNER1 & # Roy
President, brand strategy and marketing, Reliance

Kaushik Roy
No matter how wafer thin the agency and media margins may be, there will be a further demand to cut costs by reducing overheads and profits from the agency fee or media rates. One hears about people in the agency and media business moaning over their increments. The smart advertiser will be the one who will ensure a fee structure that doesn't encourage attrition at the agency level.

On the media front, the obvious effort will be to deliver the same GRP (gross rating point) at a lower cost. Also, the advertiser could expand the list of channels, as audience fragmentation is not linked to economic phenomena. The advertiser will gain by going to smaller channels. Shorter bursts of advertising could increase the impact per campaign period.

Satish Kumar
Managing director, Henkel

Satish Kumar
As somebody said, "In good times, you want to advertise, and in bad times, you have to."

We will continue with our advertising and media activities as planned. Apart from advertising, we have built-in activities that enable consumers to experience our brands to induce trials. As consumers buy our products for their quality and efficacy, we believe we have an opportunity to grow volumes with repeat purchases. In fact, we recently launched new products - Bref Power Cleaner and Pril Degreaser - in the home care category.

We are now using print, radio, satellite TV and Doordarshan, along with on-ground activities, to enhance media reach and increase brand awareness.

We will bring in efficiency from cost optimisation in logistics or supply chain and have no plans to alter our advertising and media expenditure.

Joydeep Roy
Chief development officer and head, marketing, Tata AIG

Joydeep Roy
Research suggests that insurance and investment buying customers buy into the corporate brand first, before buying specific products. Taking this into cognisance, Tata AIG Life has embarked on a long term brand building programme, which is agnostic of the short term slowdown.

However, significant emphasis will be placed on measuring the efficacy and returns on investment in brand marketing and communications. Promotional spends will need to work harder, sweat more.

Innovations and high impact programmes will offset any budgetary realignment. From the inception of the brand building programme, the focus at Tata AIG Life has been to invest 'smarter' and, subsequently, measure impact.

Shantanu Dasgupta
Vice-president, marketing, Whirlpool

Shantanu Dasgupta
While inflationary trends and the resultant price increases do suggest a possible slowdown in the market going forward, it's too early to say what the exact effect will be.

The latter part of the first half did see a slowdown, but how much is attributable to inflation and how much to the delayed and brief summer, which adversely impacted offtake of air conditioners and refrigerators, is difficult to gauge. The second half has key purchase occasions such as Onam (in September) and Diwali. We will know in the next few weeks whether inflation will have a dampening effect on the buoyancy that we are accustomed to seeing in the festival season.

With regard to our advertising and media plans, suffice it to say that we have shortened our planning cycle to tailor our market investments in line with market growth. But it goes without saying that we will be investing during Onam and Diwali and there will be a fair balance between above-the-line and below-the-line investments.