Info-tech

Marketers split on e-comm ad war

Sangeetha Chengappa  Bangalore | Updated on March 12, 2018 Published on October 06, 2014

Caption/Keywords: ecommerce, trade, e-commerceCredit: sxc.hu

Battle unsustainable in the long term, say marketing experts





The face-off between the country’s e-commerce titans — Flipkart, Amazon and Snapdeal — which began early Monday morning with Flipkart’s ‘The Big Billion Day’ sale, signals the start of a marketing war that is set to intensify in the months to come.

However, brand gurus and marketing consultants say the kind of advertising blitz by Flipkart in the run-up to the sale, which was countered by Snapdeal and Amazon on TV, print, billboards and so on, cannot be sustained in the long run.

No value for money

“The kind of advertising money spent by Flipkart to promote The Big Billion Day sale is not value for money for the company,” says Sridhar Ramanujam, brand guru, author and founder CEO of Brand-comm. “From the marketing perspective, advertising money is spent by companies after clearly determining the sales that it will bring in. In this instance, Flipkart is not making any money given the huge discounts (25-60 per cent) it is offering. By outspending the competition, Flipkart is looking for disproportionate customer mindshare and is out to grab eyeballs with a massive show of one-upmanship. It is not sustainable in the long run.”

Agreeing with Ramanujam, Raghu Viswanath, Managing Director of brand value advisory firm, Vertebrand, says that this kind of advertising spend by Flipkart is all about flexing its muscle power, especially after acquiring Myntra.com and receiving a fresh round of funding recently. “The intense hype created around the sale almost a month in advance is a way of urging new customers who have never transacted online before to log in and avail themselves of great discounts.”

He warned however, that changing the purchase behaviour of customers from offline to online cannot be achieved with a one-day sale as it is a slow process. “It’s a game of aggregation and consolidation that Flipkart is playing to emerge as the last man standing, where companies with deep pockets will survive and buy out or wipe out the others” he said.

‘A good strategy’

Speaking to BusinessLine, Jessie Paul, CEO of Paul Writer Strategic Advisory, a marketing advisory firm, said: “When you blast customers at this level, like Flipkart did, they feel the urge to check out the sale and not feel left out. Even the older generation ends up asking their children, nephews, nieces to buy merchandise at great deals on their behalf.

“Although Flipkart is making losses with every item sold in its one-day sale, it is building up its market share by attracting new customers. Once they gain market share, they will hike prices to make every sale profitable” she said.

Choosing to focus their energies on getting customers to spend on one day by offering fantastic deals and discounts and building up the momentum to that day is a great way to gain customer share of voice, says brand consultant, Harish Bijoor. “Many customers may be disappointed at items getting stocked out in seconds and the site crashing now and then, but that is good for Flipkart because the next time they announce a sale, they will have customers queuing up” he said.

Also read: > When a Flipkart campaign leads to Amazon…

Published on October 06, 2014
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