The Hindu Business Line : Win, win, all the way!

Freebies, price offs and expensive bumper prizes — this festive season looks promising for customers of the consumer durables segment, and manufacturers are vying for their share of the pie.

Buy a colour television and get a small refrigerator, free. Or just go in for a new washing machine and stand a chance to win an all-expenses paid trip to Australia. Freebies, price offs and a chance to win bumper prizes, it's that time of the year again.

The festive season, which apart from ushering in the celebrations, bombards the consumer with a multitude of promotions and discount schemes, tempting him to loosen his purse strings just a wee bit more.

The season sees consumer product makers go all out to grab their share of the pie. Of all the products that flood the festive season, consumer durables/electronics are the ones that see a major spurt in sales during this crucial period between October and November.

In fact, according to estimates, the last three months of the year contribute to roughly 35-40 per cent of annual sales for consumer durables/electronics firms, depending on a company's individual product portfolio.

"Regular household durable items such as refrigerators, washing machines, music systems, etc., where the purchase can be deferred to an auspicious occasion, are hot favourites among consumers during the festive season. While big-ticket items such as automobiles and small-value items such as mobile phones are more need-based purchases rather than occasion oriented," says Gautam Nath, Director, Corporate Services of leading research firm NFO MBL India.

And as far as sales for durables companies are concerned, this season is expected to be much better than the last one. Points out an official from the Consumer Electronics and Television Manufacturers Association (CETMA), "Unlike last year, we are expecting a higher growth from the semi-urban and rural areas. Because of good monsoons, this year, the rural consumer is more willing to spend money."

Little wonder then that consumer durable majors such as LG Electronics, Samsung, Whirlpool, Godrej and Electrolux, have set aggressive growth targets for themselves, ranging between 22-55 per cent, this festive season. They have also chalked out aggressive advertising and promotional strategies for the period.

According to industry estimates, the consumer durables and electronics firms, alone, would be spending about Rs 400 crore this festive season, on advertising and promotions.

Korean major, LG Electronics, for instance, has set a mega budget of Rs 62 crore for the period, which includes spends on the print and electronic media, below-the-line activities and gifts. The company is banking heavily on the festive season to contribute to a substantial percentage of its growth.

"We expect to do business worth Rs 1,000 crore, and sell about 10 lakh units during the festive season, as approximately 25 per cent of the sales comes from this period," says Anil Arora, Head, Marketing, LG Electronics. Out of the total budget, the spend on media promotion is Rs 25 crore, while the expense on gifts is Rs 37 crore.

LG is rolling out two promotional campaigns during the period — Patakha Ghumao Inam Pao and LG Healthy Home Jackpot — which would not only give the consumer assured gifts but also a shot at the 80 jackpot prizes, which include a basket of all LG products.

Samsung India, too, is eyeing a substantial increase in sales during this period, and has launched a Rub ka Kamaal promotion in which it is giving away gifts worth Rs 15 crore as prizes. "By launching the promotion as well as new models of colour televisions, microwave ovens and our `Made in India' refrigerator series prior to Diwali, we expect to maximise our sales during the festival period," says R. Zutshi, Director, Samsung India.

Like LG, Samsung India is sparing no effort in advertising to support its promotions, and has earmarked a whopping Rs 10 crore for print and television advertising. "Given the general economic upturn and the good monsoons we have had this year, we are expecting to notch up sales of Rs 550 crore during the promotion period," says Zutshi.

Whirlpool, which has seen good results from its Onam promotion in Kerala called Aishvarya Deepam, is also coming out with a promotion called Aapka Magic Chalega for the October-November festive season, during which it will be giving away prizes worth over Rs 18 crore. The company's focus would be particularly high on the washing machines segment. "The last three months are expected to generate a growth of 22 per cent for the company. We are targeting to sell close to 4.5 lakh units of appliances during the festive season alone," says Benoy Roychowdhury, Vice-President, Sales, Whirlpool India.

Though price-offs and freebies do seem to be the most popular promotions during the festive season, the once-highly popular exchange schemes are still holding their own.

According to industry estimates, exchange offers still account for a substantial chunk of the replacement market for colour televisions, and contribute to replacements for categories such as refrigerators.

"Exchange schemes are very important to target the replacement buyers in the market, they account for 25 per cent of the total purchases. It has also played an important role in the growth of the frost-free segment, combined with reducing prices of the product. Exchange schemes are very effective in tapping the replacement buyers in the market," says Soumitra Ghatak, Executive Vice-President, Marketing Sales and Services, Godrej Appliances.

"But, such schemes are popular only in the cities where the penetration levels of products such as CTVs is high, and not in the rural areas," adds a CETMA official.

However, since almost all the consumer durables firms are going out of their way with aggressive advertising, the uphill task for a company would be to make its brand stand out among the clutter of promotions.

"One cannot help but emphasise the need to stand out in the clutter during the festive season. It is a time when many categories are very active, and almost everyone has an offer during this period. It is therefore imperative to have an offer, which is relevant to the consumer, and to communicate the same in a manner that will strike an instant chord with the consumer," says Godrej's Ghatak.

Eventually, only the numbers will reveal whether the high-pitched strategies do rake in the moolah for corporates this season.

Pictures by K. K. Mustafah and G.R.N. Somashekar

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