Canon India spends 70 per cent of marketing budget on BTL

By Chhavi Tyagi , afaqs!, New Delhi | In Advertising | June 30, 2009
The company increased the BTL share in its marketing budget by 20 per cent to provide product experience to its prospective consumers

Photography workshops, activities in retail touch points, consumer engagement activation, exclusive lounges, experience corners in retail shops - these are some of the initiatives that photographic and digital imaging company Canon India has taken in the last few years to engage more and more consumers with its products.

The company boasts of a 50:50 share of ATL (above the line or mainstream media) and BTL (below-the-line) in its annual marketing budget of Rs 80 crore (in 2008).

However, the current year saw the company's marketing spend coming down by Rs 20 crore, leaving it with Rs 60 crore to spend in the economic downturn, with consumers increasingly deferring their buying decisions. The management then decided to increase the BTL spend by 20 per cent to provide consumers with hands on product experience.

Canon India's BTL share now stands at 70 per cent. Alok Bharadwaj, senior vice-president, Canon India, tells afaqs! that coupled with the economic slowdown and the need to reach consumers where they were, the company thought it more important to take its monies through the BTL route.

In a product category where the technology obsolescence rate and brand loyalty is high and the consumer depends more on peer discussions and hands-on experience, Canon India decided to create higher consumer engagement through not just putting the product in the hands of the consumers but also sharing with them the technical knowledge on how to use the product better.

Bharadwaj explains, "There has been realignment in the current year's dynamics, with people deferring their product upgrade decisions and first time buyers getting more value-conscious. Dealers are also bearing the brunt of it with a substantial drop in customers coming to their shops. All these factors made it vital for us to convert visitors to the retail shops into our customers and also to increase the footfalls at these retailers."

He adds that there is a strong need to provide the five 'E's - Experience, Education, Engagement, Excitement and Enjoyment - to its customers. "What happens on ground is far more important than what is shown on television," adds Bharadwaj.

The company came out with a BTL strategy that involved all aspects of its marketing chain - consumers, traders and its own sales promoters.

For consumers, Canon launched several new BTL initiatives to tap into existing consumers who were considering second buys, as well as first time buyers, while also increasing the intensity of its existing consumer engagement programmes.

The company is conducting regular workshops for consumers as well as with celebrity photographer Atul Kasbekar. It is also going to schools and has created an online community through which it invites members to participate in contests.

For first time buyers, Canon has expanded its presence in smaller towns by rolling out its experience corners and exclusive lounges in 19 other cities (from just six metros earlier). Also, while its BTL activities were limited to showrooms and retail point activities earlier, it now executes consumer engagement programmes in malls and residential areas.

For traders, the company launched a dealer involvement programme where the company took the spouses of dealers who achieved sales targets on a cruise to Singapore and other places.

While conducting an audit on dealers, Canon realised that out of the total dealers present in the market, only 55 per cent were storing Canon's products, while 44 per cent did not even keep the product. Realising this, the company is now on a fast drive to get as many dealers in its network as possible.

As for investing in its sales promoters, the company not only increased the numbers but also worked on their capability building by providing them training on how to deal with the consumers, thus converting a mere visitor into a customer or a prospective customer.

"No shop owner actually puts expensive cameras in the hands of consumers for fear of harming the equipment. This makes us lose on the touch and feel pull of the product. Additionally, these shop owners also do not have a satisfactory knowledge of the products, which actually puts off many consumers who want detailed information. All these factors made us realise that we need our own promoters who will stand in our experience corners inside these retail shops and provide all that was missing," says Bharadwaj.

Canon also increased its visibility through signage and shop banners and expanded its distribution channels by contacting more retailers and asking them to store Canon products.

However, it's not just camera products for Canon - an equal spend is being made on other products such as printers, projectors and scanners. Through initiatives such as Aamchi Mumbai, Hamari Dilli and Namma Chennai, Canon tried to boost its CSP (consumer system products) division. Bharadwaj shares some figures, saying, "From a small share of 8 per cent in 2007, we went to a 14 per cent (in 2008) and a 30 per cent increase in the current year."

Some of the other programmes waiting in the wings are photo expeditions to Ladakh for its members, an underwater photography tour and many more workshops and dealer engagement plans.

The company is working hard on minimising the cost of BTL initiatives by increasing the efficiency of these programmes, while working on a simple mantra - every quarter, the cost (compared to the previous quarter) should keep coming down. So either, says Bharadwaj, these initiatives will keep getting the same number of people at a diminishing cost or more people at the same cost.

However, since economic slowdown played an important part in the company's decision to hike the BTL share and now, with the economy giving indications of getting back to its feet, Canon plans to go back to its original distribution of the budget between ATL and BTL (50:50) next year. However, Bharadwaj says that the overall spend will also be hiked to make sure that the initiatives undertaken run smoothly.

© 2009 afaqs!