Cartesian economic meltdown survey

Company Brief

New Delhi, January 20, 2009

In November 2008, Cartesian Consulting conducted an e-survey amongst a select group of middle-senior business professionals across industry segments in the country.

The objective of the survey was to gauge the impact of the economic meltdown on key sectors and evaluate strategic and tactical remedial measures that were being taken to minimise the impact of the same.

The survey had seven questions covering areas such as:

* Current state of the organization

* Impact on business targets

* Confidence levels in the organization

* Key measures being taken

* Strategic end customer focus areas

* Allocation of marketing and communication spends across channels

A total of 146 professionals responded to the survey – almost 68% of them revealing their names/email ids although it was not mandatory.

What the survey brings is a reasonable and practical perspective on the impact of the Economic Meltdown on the Indian business community – by industry segment. It also gives a clear indication of corrective measures that are being taken/ likely to be taken in the near future and how this is similar or differs by industry segment.

The findings of the survey have been compiled by Cartesian into an extensive report that covers the following:

1.Detailed analysis of responses from entire respondent base to each of the 7 questions

2.In-depth analysis for key sectors where number of responses were sufficient to draw conclusions – Banking and Financial Services, Entertainment and Media, FMCG, Retail (Grocery and Other)

3.Summary of Observations for sectors such as automobiles, telecom, healthcare, consumer durables, consultancy and oil/gas/petroleum

4.Cartesian has developed an Index of Impact based on answers to a specified set of questions in the survey. This measures the extent of impact the meltdown has had on the organisation. Industries have then been classified as high, medium and low impact and further profiling has been done on these three categories to identify the other attributes they are likely to exhibit.

The analysis covers % respondents to each option and implications/ conclusions that can therefore be drawn. Intelligent cross-tabulations have also been done to correlate areas such as end customer focus with apportioning of marketing expenditure. An effort has also been made to profile respondents to key questions in terms of the other attributes that they are likely to exhibit – for e.g. organizations with higher focus on end customer retention are likely to cut their mass media spending in favour of greater skew towards direct marketing/online spends.

Key Findings:

*India Inc seems to have taken a cautious and prudent approach to the downturn – but the outlook is not completely negative

*Banking and Financial Services (BFS) and Auto are the two segments demonstrating a significantly more gloomy perspective of the situation

* Overall, ‘business as usual with tighter controls’ – is the norm

* Business targets have remained the same for the large part - for this financial year atleast ; there is mention of downscaling of targets for the next financial year in some cases.

* Confidence in achieving targets exists – but may be tremulous

*The Cartesian Index of Impact classifies industries as High, Medium and Low Impact

-Airlines and auto are the most affected

-Oil/gas, BFS show moderate impact

-Consultancy and insurance show low impact

*Typically the strategy being followed across industries is a rationalisation of marketing and communication budgets and a freeze on hiring

*High Impact industries are however more likely to exhibit lower spending on mass media/BTL activities and freeze on hiring; Higher spends on online and email marketing can be expected

*Low impact industries continue to focus on aggressive customer acquisition and may not rationalise marketing and communication budgets as much

*Customer acquisition continues to be the focus in most cases

*Mass media/ATL spending is on the lower side – while spends on direct marketing, BTL, online/ web remain more or less the same

*There is an overall belief that direct one-to-one communication with the end customer is of prime importance

For further information, please contact:

Cartesian Consulting

Sunanda Chhibbar

E-mail: schhibbar@cartesianconsulting.com

Tel: 022-24960033