afaqs!

The Consumer durables-Ad agencies hop of 2003

By , agencyfaqs! | In | January 19, 2004
Almost all major durables brands called for pitches in 2003. While specific business objectives prompted some pitches, with others, it was more a matter of compulsion


It came to our notice while we were putting together the significant account movements of 2003. At first, it struck us as nothing more than an interesting aside. One of those things that you chuckle about, then dismiss with a shake of the head. But the more we thought about it, the more we wondered. Maybe there was a pattern to it, maybe there wasn't. Maybe it was pure coincidence. Maybe, in part, it was a domino effect coming into play…

We are referring to the manner in which the advertising accounts of almost all the major consumer durable brands - with the exception of Philips and Godrej - came up for review in 2003. LG, Samsung, Whirlpool, Videocon, Akai. Not to mention Electrolux, Onida and National, which were forced to call for pitches on account of the results of some of the other pitches.

The need to impart a 'fresh perspective to the brand' was ostensibly the agenda at LG, Samsung, Whirlpool, Videocon and Akai. Which is quite natural, considering the year-end is when fresh business objectives for the coming year are drawn up. And not only is brand communication one of the key drivers of business strategy, it also happens to be one of the most 'visible' elements of that strategy. (Thus, the easiest thing to change when things aren't going particularly well for the company, agencies often carp.)

LG Electronics India Ltd (LGEIL) reshuffled its agency roster and split its Rs 75-crore creative business between McCann-Erickson India and O&M India. Out went Lowe, Rediffusion | DYR and Capital Advertising, the agencies that previously handled the business. LG's reason for realigning the business is an ambitious business target for 2004 - a turnover of Rs 5,500 crore. "Which means we are looking at a growth of Rs 1,000 crore in one year, and in that context, advertising is of critical importance," Anil Arora, head, marketing, LGEIL, had told agencyfaqs! in a recent interview. After 'Digitally yours', concern for the consumer's health, and cricket passion, LG is clearly expecting another giant creative leap in its advertising.

Samsung, which rivals LG in aggressiveness, is setting its sights equally high. It reorganised its advertising business in mid-2003, well before any of its competitors, and segregated the communication strategy for each of its divisions - consumer durables, home appliances and IT products. It then awarded its estimated Rs 25-30 crore home appliance business (which includes refrigerators, washing machines and microwaves) to Grey Worldwide, while the audio and air-conditioners business, and a part of the IT business went to its own subsidiary, Cheil Communications. The agencies that lost out in the bargain were Mudra Communications (which handled Samsung refrigerators) and Triton Communications (which ceded both washing machines and microwaves). For the record, Mudra continues to service Samsung's Rs 25 to 30-crore colour television account.

While LG and Samsung opted for a multi-agency structure for the sake of 'better inputs', Videocon, in comparison, consolidated its Rs 50-crore advertising business with SSC&B. The idea at Videocon was to "give a strategic direction to the marketing plans of Videocon", explains Sunil Tandon, vice-president, marketing and sales, Videocon. SSC&B currently handles the entire Videocon range (which includes televisions, washing machines, refrigerators, air-conditioners and soon-to-be-launched microwaves) which, as company executives reveal, was previously split between Leo Burnett India, Mudra and iB&W.

In a windfall for SSC&B, Akai Consumer Electronics India - the 30:70 JV between Akai Electric Company, Japan, and the Dhoots of the Videocon Group - too assigned its Rs 10-crore creative duties to the agency, following an uncontested pitch. The account moved from iB&W. According to Basant Pande, COO, Akai Consumer Electronics India, the reason for changing agencies was: "In India, Akai is positioned as a value-for-money brand. The task for SSC&B is to build a strong thematic image to justify Akai's international pedigree and highlight the technical superiority of its products."

Another high-profile durables pitch was that of Whirlpool, which invited Ambience-Publicis, Leo Burnett, St Luke's India and incumbent FCB-Ulka to pitch for its Rs 10-crore new business, which included air-conditioners and microwave ovens. Arvind Mediratta, vice-president, marketing, Whirlpool India, had explained that the pitch was called "specifically for our new businesses (microwave ovens, air-conditioners). Strategic planning on the new businesses entailed a re-look at the entire communication package for the businesses, and the pitch was part of that process." Interestingly, of all the durables pitches, Whirlpool was the only one where an incumbent agency retained the account - despite Publicis Worldwide being Whirlpool's globally aligned agency. "FCB-Ulka came up with some extremely good and innovative ideas. Their selection for the new business was purely on the basis of their pitch efforts," explained Mediratta.

LG, Samsung, Whirlpool, Videocon and Akai might have invited presentations for specific business objectives. For Electrolux, Onida and National, it was more a matter of compulsion when LG empanelled O&M and McCann as its club agencies. At the time LG took its decision, O&M was handling the Electrolux account as well as Onida's CTV, DVD and home theatre systems businesses (which have subsequently been 'parked' with Lemon Communications, which is the custodian of Onida's washing machine account). McCann, for its part, was in charge of National Panasonic's audio, colour television, home theatre systems and camcorders businesses, and was also handling Onida's air-conditioners.

Understandably, LG's decision threw Electrolux, Onida and National in a tizzy, prompting hurried calls for pitches. "O&M is now aligned to a competitive account. So we have to take necessary steps," Sanjeev Wadhwa, general manager, marketing, Electrolux Kelvinator had explained. Since then, Electrolux has awarded its Rs 30 to 40-crore advertising account to Mudra Communications, while a decision on Onida and National is still pending. © 2004 agencyfaqs!

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