The Hindu Business Line : Durables majors stick to ad budgets despite slowdown

New Delhi, Dec. 9 Despite being faced with sluggishness in post-Diwali sales, durables majors are not curtailing their advertisement and marketing spend for the year ahead. They say the durables business is a marketing heavy segment which needs to keep boosting consumer confidence to stoke demand.

“There is no cut in our advertisement budgets. Samsung plays a lot on innovation and this has to be supported with intense advertisement and marketing campaigns. We have earmarked about 20 per cent more this year over last year for advertising and marketing activities,” said Mr Ravinder Zutshi, Deputy Managing Director, Samsung India. Godrej and Boyce, LG and Sony will also stick to their advertisement and marketing budgets, say the companies.

“We increase our marketing budget every year by about 12-15 per cent. This year too, it is going to be no different. We are cautious but certainly not pessimistic. Early summers will be good indicator on the market conditions,” said Mr Kamal Nandi, Vice-President, Sales and Marketing, Godrej and Boyce Appliances. Last year, Godrej had earmarked Rs 110 crore towards brand promotions.

But Mr Francis Xavier, Managing Director, Francis Kanoi Marketing Planning Services, holds a different view. “Ad spends will be somewhat subdued for the coming year. It is believed that 2009 will be a rough year for the manufacturing sector as a whole. Companies despite their claims will adopt a wait and watch policy. In reality, the budgets will take a nosedive but in planning it will be more,” said Mr Xavier.

Consumer Electronic and Appliances Manufacturers Association Secretary-General, Mr Suresh Khanna, said, “There is a tightening of belts across the industry after the slow-down post-Diwali. However, when the market is growing, it is unlikely there will be a drastic cut in ad and marketing budgets.”

Industry watchers say that the trick is to offer consumers value propositions with a lure of high-end technology during recessionary times rather than totally doing away with brand promotion budgets. “As a part of the communication and marketing strategy for Sony India, we had budgeted Rs 200 crore for the entire year’s promotion. We have used TV commercials, advertisements in print and online media, radio as well as initiating activities in malls and airports,” said Mr Cyril Mani, Head, Marketing Communications, Sony India.

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