BTL Spending Patterns

BTL SPENDING PATTERNS

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PROJECT REPORT ON

BTL SPENDING PATTERNS” ACROSS FMCG/TELECOM/CONSUMER DURABLES/BFSI SECTORS

SUBMITTED BY: MANISH SINGLA MOHIT JAWA FMG XVI PGDM

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FORE School of Management, New Delhi TABLE OF CONTENTS

EXECUTIVE SUMMARY………………… SUMMARY…………………………………………… …………………………………….iii ………….iii 1. CHAPTE CHAPTER R 1- INTRODUC INTRODUCTION TION………… …………………… …………………… …………………… ………….....6 .....6

1.1 Project Objective……………...……………………..…………………..6 Objective……………...……………………..…………………..6 1.2 Background...……………………………… Background...…………………………………………………………… ……………………………7 7 1.3 Relevance…………………………… Relevance……………………………………………………… ………………………………......8 ……......8 1.4 Limitations…………… Limitations……………………………………… …………………………………………………8 ………………………8 2. CHAPTE CHAPTER R 2 – LITERATU LITERATURE RE REVIEW… REVIEW…………… …………………… …………………… …………...9 ...9 3. CHAPTE CHAPTER R - METHOD METHODOLO OLOGY… GY…………… …………………… …………………… ………………... ……........1 .....16 6

3.1 Research Process…………………… Process………………………………………………… …………………………………...16 ……...16 3.2 Sample Selection………………… Selection……………………………………………… ……………………………………...16 ………...16 3.3 Sample Size……………………… Size………………………………………………… ……………………………………...17 …………...17 3.4 Sample Description………………… Description……………………………………………… …………………………………...17 ……...17 4. CHAPTE CHAPTER R 4 SECTOR SECTOR ANALYS ANALYSIS…… IS……………… …………………… …………………… ……………...1 …...18 8

4.1 Telecom………………………… Telecom…………………………………………………… ……………………………………….18 …………….18 4.2 FMCG………………… FMCG……………………………………………… ………………………………………………...25 …………………...25 4.3 Consumer Durables…………………… Durables……………………………………………… ………………………………...29 ……...29 4.4 BFSI………………… BFSI…………………………………………… …………………………………………………..33 ………………………..33 4.5 Overall…………………… Overall……………………………………………… ……………………………………………..37 …………………..37 5. CHAPTE CHAPTER6 R6 - CONCLUS CONCLUSION… ION…………… …………………. ……….………… …………..……… ..……………39 ……39 6. REFERE REFERENCE NCES……… S………………… …………………… …………………… ………….……… .………………… ………………45 ……45

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EXECUTIVE SUMMARY The Indian market is witnessing some major changes. More consumers, more buying power and more media reach. Then there is the rise of digital media, the fragmentation of mass media, the growing power of young consumers and the growing BTL activities.

Marketers acknowledge that advertising is just one variable that impacts sales among other including pricing, distributions etc. Products and services that are promotion elastic tend to be highly impacted by price-offs and discounts which increase the likelihood of consumer buying the same. In comparison, products and services that are advertising elastic see higher sales with increased advertising. Many successful categories and brands in Key Urban Towns (KUT) are price sensitive and hence promotion elastic. Marketers then choose to divert advertising budgets to on-ground promotions (including BTL and activation) that show a direct impact. In comparison, premium brands that have a greater uptake in metros (given higher purchasing power) tend to be advertising elastic which means that the more they are advertised, the higher is the likelihood of sales.

For marketers, the decision to enter a new market is dependent on a number of factors which help them select and prioritize markets. As shared by some of the leading Indian marketers, the key factors impacting their decisions for gauging market potential and allocating marketing spends are listed below.

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Exhibit 1– Factors impacting choice of market(s)

Once the market is selected then the marketer is faced with the decision to select the choice of medium for advertising. The factors are listed below:

Exhibit 2 – Factors impacting choice of media for advertising

During the course of the research we met some of India’s largest marketing spenders across categories including FMCG, consumer durables, banking and financial services and telecom telecom compani companies es amongs amongstt others others and domain domain experts experts such as media media planni planning ng and buying agencies and advertising agencies besides relying on available published data and in-house media experts.

One of the new directions taken by marketers in allocating ad spends that could be indicative of changes that can be expected in the future is a growing share of BTL in the total marketing spend. The average BTL spends across marketers met was about 35-40 % 4


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against about 15 % of marketing spends, just three years earlier. While in the metros, BTL is used because the clutter in mass media is too high and getting audience attention is difficult in Key Urban Towns (KUT), since media options are limited BTL gets a more than proportionate response from the inquisitive consumers. BTL could therefore be one of the factors that could better harness the marketing and media needs of KUT where marketers can use BTL effectively instead of focusing only on traditional media planks which may not be as readily accessible.

BTL activati activations ons can be strate strategic gical al or tactic tactical al in nature nature,, dependi depending ng upon the type type of activation. activation. BTL activations activations are most commonly used for sales promotions promotions,, branding, branding, produc productt launch launch,, channel channel partne partners rs appease appeasemen ment, t, channe channell expans expansion ion,, lead lead genera generati tion. on. Marketers have different objective for different activities. Some of the most common strategies are customer retention, customer acquisition, brand visibility etc.

This This rese resear arch ch repo report rt explo explore ress the the curr curren entt devel developm opment entss and and trend trendss in Belo Below w the the Line(BTL) marketing spend across the Indian market.

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CHAPTER 1 - INTRODUCTION 1.1

PROJECT OBJECTIVE 

To anal analys ysee

BTL BTL

(Bel (Below ow-T -The he-L -Lin ine) e) acti activa vati tion onss

acos acosss four four sect sector ors, s, and and

understanding the marketer’s strategy behind those activations.

1.2



To find out the seasonality (if any) of the BTL activations in those sectors.



To analyze why is trend shifting from ATL to BTL.

BACKGROUND OF OF TH THE ST STUDY

India is one of the fastest growing consumer markets in the world and as more than 300 mill millio ion n consu consume mers rs spen spend d on cars cars,, mobi mobile le phone phones, s, food food and and film filmss amon amongs gstt othe others rs,, marketers need to reach, remind, persuade and push them towards their brands. In 2006 Indian marketers spent about Rs 17,356 crores (billings) on advertising, and given around 8 % GDP growth rates, this market can only go up.

Thoug Though h figur figures es vary vary on the the size size of the the BTL BTL mark market et -- enco encomp mpas assi sing ng prom promot otio ions ns,, exhibit exhibition ions, s, pointpoint-ofof-pur purchas chasee and retail retail merchan merchandis dising ing and on-gro on-ground und activi activitie tiess -industry estimates put a quarter of the Rs 17,356 crores annual ad spend by India Inc accounted by these activities.

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Marketers acknowledge that advertising is just one variable that impacts sales among other including pricing, distributions etc. Products and services that are promotion elastic tend to be highly impacted by price-offs and discounts which increase the likelihood of consumer buying the same. In comparison, products and services that are advertising elastic see higher sales with increased advertising. Many successful categories and brands in KUT are price sensitive and hence promotion elastic. Marketers then choose to divert advertising budgets to on-ground promotions (including BTL and activation) that show a direct impact. In comparison, premium brands that have a greater uptake in metros (given higher purchasing power) tend to be advertising elastic which means that the more they are advertised, the higher is the likelihood of sales.

1.3 RELEVANCE Advertising and communication today is experiencing a transformation at a pace faster than ever. It is evident in India more than anywhere else. The rising economy, increased cash at hand for disposal and a consumerist mindset coupled with the changing lifestyle and media hav made communicating with the consumers a daunting task.Shopping today has evolved , and so has the consumer. While the consumer is being hammered through means and methods of communication that pass through certain filters of his mind to lodge the brand there, he is still vulnerable to various psychological factors and bran selection inducements at the point of purchase. Good advertising is that which sells. and in context of today's scenario the need is for a judicious and careful spend of marketing budgets to gain maximum impact that converts into sales. Brands today need to go beyond the share-of-mind to capture the share-of-wallet. With mass-media's return on investment going down drastically because of audience fragmentati fragmentation on and media-cost inflation, inflation, marketers marketers are looking looking at BTL more and more to deliver deliver customized customized solutions solutions for their brands. BTL in marketing marketing is considered one of the most effective tools of product promotion. BTL-events allow not only to create positive image of the company, to get acquainted the customer with the product, to get interested 7


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the prospects in product purchasing, but also helps to provide all necessary information on terms of purchase, using and storage of product/service. Visual presentation of a product increases customer loyalty and allows for increasing product sales volumes.

1.4 LIMITATION OF THE STUDY 1. The sample sample size size taken by us for the study study may not not be a true true represen representat tative ive of the entire sector defined for the study.

2. The responses responses given by the responden respondents ts may not be true true or may may be biased. biased.

3. The The Samp Sample le is bias biased ed agai agains nstt the the sect sector orss due to nonnon- avail availabi abili lity ty of time time for for meeting related to the same. The sample size is small due to following reasons: 

Data availability constraint due to data confidentiality.



Time constraint.

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CHAPTER 2: LITERATURE "All the successful models we grew up with don't work. It used to be brands had all the power, and then they got sidelined by promotions.… Now it's become a consumer republic again. The consumer is boss – there's no more mass market – and is driving the flow of information." -- Kevin Roberts, CEO, Saatchi & Saatchi Worldwide "I believe today's marketing model is broken. We're applying antiquated thinking and work systems to a new world of possibilities." -- Jim Stengel, CMO, Procter & Gamble

2.1 ORIGIN OF THE” LINE”

The origin of term “BTL” is the following: an advertising manager of Procter & Gamble developed promotion campaign media-plan that included main media channels: TV, press, outdoor etc. He underlined underlined it, summarized summarized the expenses and only after recalled recalled about the board on fairy, souvenirs, gifts etc. He added these expenses to the list “below the line”. BTL is usually opposed/contrasted to ATL (above the line) – advertising in its traditional distribution channels: press, TV, radio, outdoor, movie, Internet. The annals of Marketing Management have witnessed a tug of war between advertising and sales promotion since inception. But in the early phase of twenty first century this war has taken a new avatar in form of Above - The- Line and Below - The- Line activities, widening both scope and intensity of this war. Above-the-line propagated traditional 9


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marketing channels that strive to reach a mass audience with messages that reinforce a brand brand commun communica icate te genera generall product product inform informati ation on or inspir inspiree an emotio emotional nal respons response. e. “Below-the-line” initiatives, by comparison, acts like traditional direct marketing efforts – they they aspi aspire re to esta establ blis ish h targ target eted ed rela relati tion onsh ship ipss betw betwee een n mark market eter erss and and indi indivi vidu dual al consumers, and offer comparable ease in measurability. With increase fragmentations and demographic along with the increased pressure to increase effectiveness of marketing communication soon BTL activities started substituting ATL activities and there has been a steady growth in BTL expenditure in this century . With its unique ability to personalize and customize communication this form of communication is slowly replacing the mass media advertising.

2.2 Introduction of the Topic

There are two kinds of marketing strategies that can be used to promote any product: "above-the-line" (ATL, essentially advertising in the mass media) and "below-the-line" (BTL). (BTL). These These catego category ry names names reflec reflectt the busine business ss practi practices ces of advert advertisi ising ng agenci agencies. es. Agencies generally make commission on placement of advertisements in newspapers, magazines magazines and cinema, cinema, and on television television,, radio and billboards billboards,, a fee that appears "above the line" on their bill. Traditionally, other forms of promotion—events, direct marketing, email promotions, text message promotions, premiums, price reductions, public relations activities, sponsorship, trade shows, exhibitions, sales literature and catalogues—were charged at a fixed fee and thus appeared "below the line Above-the-line propagated traditional marketing channels that strive to reach a mass audience with messages that reinforce a brand communicate general product information or inspire an emotional response. “Below-the-line” initiatives, by comparison, acts like tradit traditiona ionall direct direct market marketing ing effort effortss – they they aspir aspiree to establ establish ish target targeted ed relati relations onship hipss between marketers and individual consumers, and offer comparable ease in measurability. Traditionally ATL and BTL strategies have been considered distinct, and BTL the poor cousin. BTL activities were generally used to co mplement the main mass media marketing activities and usually a fraction of marketing resources were allocated for these activities. BTL activities first shot into prominence when ATL activities for products which have 10


unwholesome

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demand

w e re

proscribed by the Socio-legal restrictions. Even though BTL activities started off to fill in for ATL activi activitie ties, s, increa increasin singly gly,, BTL strate strategie giess are now recogni recognized zed as economi economical cal,, unique, and personal personal ways to achieve achieve "cut-through "cut-through"" in the supersatur supersaturated ated advertising advertising environment.

Figure 2.1 Channels of BTL and ATL activities Above-the-Line Media

Below-the-Line Media

Are targeted to individual consumers, 1. Are tailor tailored ed to reach reach a mass mass audienc audiencee

based on their expressed needs and preferences

2. Establ Establish ish bran brand d identi identity ty or rein reinfor force ce

Issue a “call-to-action,” inspiring specific

emotional concepts surrounding a

customer activity or tailored messages

product or brand

about a product or brand

3. May May or may may not not dri drive ve cust custom omer er response

Drive individual responses Are highly measurable, allowing

4. Are diff difficu icult lt – if if not imposs impossibl iblee – to measure with any accuracy

marketers insight into their return-oninvestment, as well as those tactics that are (and are not) working

5. Cate Caterr to to the the mas masss mar market ket

Establish one-to-one relationships between consumers and marketers 11


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Figure 2.2 Differences in BTL and ATL activities

2.3 Evolution of below -the- line activities

In a mark market et rapi rapidl dly y adapt adaptin ing g to chan change gess in tech technol nology ogy,, avai availa labl blee info inform rmat atio ion n and and heightened heightened consumer consumer demand, demand, traditiona traditional, l, brand-orient brand-oriented ed advertising advertising is no longer the primary driver of customer behaviour. Whether it’s reflected in dwindling print newspaper circul circulati ation on or the stagna stagnant nt market market for networ network k televi televisio sion n commer commercia cials, ls, signif significa icant nt evidence suggests that the marketing landscape has fundamentally shifted – from an “above-the-line” focus on reaching a broad population with emotionally-oriented appeals, to a “below-the- line” approach that stresses targeted, customer-centric communications, measurable results and concrete return-on-investment. We believe that the metaphorical “line” separating marketing philosophies (often quoted, but never never precis precisely ely define defined) d) is reflec reflected ted in three three key qualiti qualities es that that separa separate te today’ today’ss emerging promotional methods from the top-down advertising monologue of the past. Acting Acting in concer concert, t, they they embody embody the univer universal sal element elementss of succes successfu sfull below-t below-thehe-lin linee marketing efforts:

•

Perception – The extent to which a consumer feels that he or she is engaged as an

active participant in a marketing dialogue, rather than a target of an aggressive direct sales or branding effort

•

Interaction – The The exte extent nt to whic which h consu consume mers rs are are empo empowe were red d to resp respon ond d to

marketing communications via preferred channels that are both convenient and accessible

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Measurability – The extent to which a marketer can track the results of an

individual individual initiativ initiative, e, determine determine commensurat commensuratee return-on-i return-on-investm nvestment ent and adjust adjust future campaigns to provide for an enhanced chance of success

Figure 1.3 Framework of BTL activities

2.4 Channels of BTL activities

a)Database a)Database marketing: marketing: It involves use of proprietary database of consumer records

which can enhance prospect or customer data sources with unprecedented demographic, lifestyle and transactional data. It can be utilized for tuning marketing offers targeted at

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new prospects -- and provide their current customers with products that more closely match purchasing preferences and habits. b)Mail marketing : It involves creation of compelling branded Mail/email templates and

campaign messages, and also our data driven services to develop precise targeting to reach the highest number of quality prospects c)Interactive c)Interactive services: services: By design designing ing online online campai campaigns gns that that generat generatee valuabl valuablee and

conve convers rsio ions ns by the the use use of We Web b Prope Propert rtie ies, s, Affi Affili liat atee Netw Networ ork k and Sear Search ch Engi Engine ne Marketing d)Affinity marketing: Enhancing brand value and gaining new customers by affinity

programs like collaborations with •

Veteran's Organizations

•

Sportsmen's Organizations

•

Conservation and Wildlife Advocacy Organizations

•

Seniors Advocacy Organizations

•

Political Organizations

•

Religious Organizations

•

Youth Activity Organizations

•

Ethnic Group Advocacy Organizations

•

Cause Based Organizations

Direct Response Print: It’s most common form today is infomercials. It is achieved by eliciting a direct response via television presentations. Viewers respond via telephone or internet, credit card in hand. Other media, such as magazines, newspapers, radio, and e-mail can be used to elicit the response, but they tend to achieve lower response rates than television.

e)Event Marketing: It involves a strategic-based face-to-face contact designed to impact

a brand's perception among its constituents. It is set of promotional activities involving an

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event such as a sporting or social event, designed to bring a product to the attention of the public f) Promotional Marketing: It is a non-personal promotional effort that is designed to

have an immediate impact on sales. Sales promotion is media and non-media marketing communications employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include: •

Coupons

•

Discounts and sales

•

Contests

•

Point of purchase displays

•

Rebates

•

Free samples (in the case of food items)

•

Gifts and incentive items

•

Free travel, such as free flights

Sales Sales promot promotion ionss can be direct directed ed at the custom customer, er, sales sales staff, staff, or distri distribut bution ion channel channel member memberss (such (such as retail retailers ers). ). Sales Sales promot promotion ionss target targeted ed at the consum consumer er are called called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions.

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CHAPTER 3- METHODOLOGY – DATA COLLECTED 3.1 RESEARCH PROCESS

The Research Methodology adopted to meet the objectives of this study are:

•

First we got ourselves acquainted with the top 10 advertisers of various sectors to gain knowledge regarding spends on o n TV advertising undertaken by these sectors.

•

Then we zeroed down to the target sample for our project. The data relating to the sample included data of percentage spend by various companies in the specific sector sectorss (which (which we got from AD-Ex AD-Ex India India websit website) e) and then then found found out their rankings rankings in the particular particular sub-sector. sub-sector. This data was extracted from the secondary sources.

•

Taking our hypothesis for the study as spends on TV advertisement, we initiated our research. 16


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We created a questionnaire that was aimed at finding out the ratio of BTL spends to ATL spends by various companies in the different sectors and the strategies alignment for the same.

3.2 SAMPLE SELECTION The sample was selected considering the marketing expenditures. Our aim was to include the highest spenders across the sectors. We segregated the FMCG sector into 9 sub-sectors namely food namely food and beverages, personal care, skin care, hair care, personal healthcare, household products, cosmetics, laundry and personal accessories. We also segregated the telecom sector into service into service providers and handset manufacturers. We divided the consumer durables du rables sector into white goods, kitchen appliances/brown goods, and consumer electronics. Keeping in mind the companies that were leaders in the sub-segments we approached them with a detailed questionnaire.

3.3 SAMPLE SIZE Size of the sample was 32 which consist of consultations with senior marketing professionals of four sectors namely Banking Finance and Insurance Sector, Fast Moving Consumer Durables Sector, Consumer Durables Sector, and Telecom Sector.

The Sample is biased against Telecom Sector due to non- availability of time for meeting related to the same. The sample size is small due to following reasons:

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1. Data availa availabilit bility y constraint constraint due to data confide confidential ntiality. ity. 2. Time Time cons constr trai aint nt..

3.4

SAMPLE DE DESCRIPTION

See appendix.

CHAPTER IV: ANALYSIS 4.1 ANALYSIS OF THE TELECOM SECTOR The segregation of the Telecom Sector:

Growth in ad volumes of Telecom sector (Source: Adexindia)

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Telecom sector has seen a rise of 61 per cent in TV advertising during 2007 over 2006.

Share of segments of Telecom sector.

(Source: Adexindia). Top five advertisers under the Telecom Segments.

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BTL: ATL Ratio

In service poviders category BTL:ATL average comes out to be 31.5 : 68.5.

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In service poviders category BTL:ATL average comes out to be 33 : 67. It is evident from the above graphs that telecom service providers are very bullish in marketing expenditure.

Expected Rise in BTL

Service Providers

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Expected Average increase= 5% Telephone Equipments:

Expected average increase=6.67%

BTL Activations Seasonality

Player IDEA SERVICE PROVIDER AIRTEL SERVIC PROVIDER

Strategy Rural Activation, (Increasing customer base) STD Rates slashed, New scheme launched. (Customer acquisition)

Quarter Q1 and Q4

MOTOROLA EQUIPMENT

A Loyalty Program in which they invited their customers for a dinner. (Customer Retention) Magic Box Activity

Q2 and Q4

VODAFONE SERVICE PROVIDER

Q4

Q2 and Q4

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We segregated the calendar year into four quarters. Then we figured out the seasonality of the BTL activations. Generally Quarter one, three and four emerged as the one in which the telecom sector indulges themselves into the BTL activities. Reason being in first quarter is to represent the higher growth rate and to have higher number of sales figures figures in the balance sheet, lot of sales promotion promotion activities activities are carried carried out. Quarter two is also important for the fact that, as per the financial year new budgets are allocated in this quarter only, hence new marketing plans is formulated and therefore new activations are required. Moreover there are maximum product launches therefore to get the brand closer BTL activation is required. Quarter four being the favourite ones among the telecom sector as it’s the festive season.

Strategy behind BTL activations

Category Telecom-S om-Seervice Providers ers

Rural Strategy Customer Acqu cquisitions

Telecom-Handset Manafacturers

Brand building

Urban strategy Increasing ARPU through VAS Customer Retention

For Service Providers

We have segregated their activation strategy under two heads i.e. Urban areas and Rural Areas Objective of BTL activation in METROS:

With so many schemes being launched one after another by every player, consumer is flummoxed of what to choose or what not. It is therefore imperative for the service provider to indulge its TG in ENGAGEMENT in ENGAGEMENT MARKETNG so that the customer engages themselves into the new scheme and get to know about the features. These are done general generally ly through through canopy canopy activi activiti ties es in colleg colleges, es, market marketss etc. etc. While While launchi launching ng a new scheme, they also indulge themselves in canter activities and some activities which are

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directed towards youth only. Their main aim is the word of mouth publicity or Viral Marketing .

All the mobile advertisements which are a part of BTL activity only are directed towards in making the belief stronger that the service provider is having the powerful coverage area. Through this their main aim is the Customer Retention.

Objective of BTL activation in Rural India: A Big Market

All the telecom players whom we have interviewed see an immense potential in an untapped untapped market market of rural India. India. Infrastru Infrastructure cture is developing developing and moreover moreover the per capita income income is also also increa increasin sing. g. Moreov Moreover er with with not much scope scope of growth growth in metros metros the marketers are left with no other choice to tap on this huge market. All the players have started their activations in one way or the other. What we understood from our analysis is that all the service players are doing the activations just to make rural India realise the fact that their network coverage area is strong in you region. Secondly with activities like “Nukad Naatika” they are able to connect with consumers i.e. Brand Connect. Therefore we can say that in rural India the strategy is the Customer acquisition.

For Telephone Equipments

Switching: A consumer now-a-days changes his/her mobile phone every year or two. Therefore a marketer through BTL activation tries to persuade consumer as to why they should switch to same company’s mobile phone. They hold some loyalty programs for them. Ex- Motorola conducted a loyalty program in which they invited their customers for the dinner party. New Product Launch : Technology is updating itself every year. Therefore one sees a lot

of new handsets handsets rolling year after year. A lot of BTL activations activations are done in order to get the consumer know about the product features.

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4.2 FMCG SECTOR OVERALL SECTOR: Sr. No

Sub Category

Sr. No

1

Baby Care

6

Laundry

2

Cosmetics

7

Personal Accessories

3

Food and Beverages

8

Personal Care/Hygiene

4

Hair Care

9

Personal Healthcare

5

Household Products

Sub Category

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Ad volumes of FMCG sector grew by 39% in 2006. Most of the companies indulges in two types of promotion i.e. consumer and trade. Especially in FMCG sector it is seen that trade promotion is on the higher side than the consumer promotion. For ex- Marico spends in the ration of 90:10 in favour of trade promotion. Therefore it is evident of how the companies are realizing the importance of channel partners.

BTL: ATL Ratio

Industry average: ATL : BTL= 64:36 Fact: Pepsi is having very low ratio of BTL to ATL. One important fact that we came across is that in ATL is that F&B sector emerged as the highest expenditure sub category while in BTL this category is very bearish. Just because

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of the fact that people are very sceptical when it comes to food and beverages. They do not want to be tested in any of the BTL activation when it comes to F&B. Fact: Gillette is having very high BTL ratio as compared to ATL. Personal care and hygiene includes cosmetics is very bullish on the BTL activations.

Fact: GSK is having the ratio of 50:50 in BTL to ATL. In Personal healthcare segment ATL is on the low side while the BTL is very ve ry high BTL Activations Seasonality

If we talk about overall FMCG sector then we have analysed that quarter two and quarter four emerges as winner in terms of highest BTL spending. Primarily because in quarter two, fresh budgets are allocated and hence new plans are executed. Moreover due to the festive time, quarter four is the favourite one for the marketers. However there are tons of products and each product category has its own seasonality. For example- in soups category, favourite season for marketers is just before the winters due to increase in demand in winters. winters. Similarly Similarly for mosquito mosquito repellent then season would be just before the summers/monsoon. Marico being second best in the hair care industry can be targeted during summers summers as well as winters as it does product-specific BTL activations. During summers it does BTL activities for perfumed hair-oils that are preferred in summers and during winters the advanced hair oil that has base of coconut is preferred as it does not get freezed. Gille Gillette tte does does BT BTL L activa activatio tions ns at the beginn beginning ing of Q2 due to alloc allocati ation on of new budgets. Common trend across the FMCG sector observed was that during festival time the festive discount schemes are the lifeline of the companies. Exception noted for this sector was for Perfetti that is focussing now on branding and has no seasonal factor involved

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(Source: Adexindia)


Most of the companies were skeptical about increase in BTL expenditure as it is already very high in this area. Moreover competitor’s action also plays a very important role. 28


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Now-a-days HUL is spending heavy on corporate branding therefore other players in the same segment might follow the same strategy. Strategy behind BTL activations

Trade related activation: It includ includes es the dealer dealerss meet; meet; incent incentives ives provid provided ed to channel channel partne partners rs etc. etc. Market Marketing ing campaign aimed at building demand at the middleman (distribution channel) level. In a trade promotion, wholesalers and/or retailers are offered special price discounts (often in addition to a trade allowance), subsidized or free display racks or stands, gifts, or other incentives.

Consumer related activation Most of the companies in this sector do one or two major campaigns every year. Those campaigns are meant to be related to branding. These are very strategical in nature. For products like alpenliebe, the objective behind BTL activations is Brand is Brand Salience. Although most of the campaigns are tactical in nature. These are sales oriented only. In this this they they provid providee variou variouss promot promotion ional al offers offers to the consum consumers ers so that that they they try their product.

4.3 CONSUMER DURABLE 29


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ATL

(Source: Adexindia).

(Source: Adexindia). BTL: ATL Ratio 30


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Industry average: ATL:BTL= 65:35


Seasonality is always product specific. We have subdivided this sector into 3 categories i.e. White goods, Consumer electronics and others. In white goods category we have picked Electrolux, Voltas, carrier and whirlpool. Further we analysed four products i.e. AC, Refrigerators, Washing machine and Microwave. For AC and Refrigerators the best season is just before summers for any kind of BTL activations. While if we talk about consumer electronics we anaylsed three companies i.e. Sony, Samsung and LG. And there were unanimous when it comes to seasonality of BTL activation. At the time of fourth quarter i.e. Festive time is the time when everyone vie each other. While Shalimar paints does some of the BTL activities at the time of Diwali. D iwali.

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Strategy behind BTL activations

OVERALL SECTOR: Time has changes and so has this sector. Few years back this sector was concentrating prima primaril rily y on consume consumers rs while while now it’s not the case. case. Channel Channel partners partners are equally equally important in the chain. Marketers now-a-days do not want to leave any opportunity to persua persuade de the custom customer. er. Moreov Moreover er in this this sector sector distri distribut bution ion networ network k also also plays plays an important role. On one side companies are spending huge money on ATL campaigns and on the other side they are counting on BTL activations to get the sales. In these sector companies indulge in in-shop branding. This is the most used activation strategy adopted by many players. They have their own ISD (in-shop-demonstrator) which convinces the customer as to why he should try that product. In shop branding includes putting banners, flex, danglers etc. Other kind of BTL activations which are customer centric are also employed by the companies. These includes coupons, various promotional schemes etc. Other BTL activations which are trade centric are also employed equally in this sector. Activi Activitie tiess like like tourin touring, g, events events,, giving giving incent incentive ives, s, increa increasin sing g credit credit are some some kind kind of activations that this sector indulges itself.

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Some strange facts were witnessed during our course of study. Since dealers network play an important role in this sector so many players from time to time do the channel expansion. Huge chunk of money goes into channel expansion and this is a part of BTL expenditure only.

SUMMARY OF THE CONSUMER DURABLES SECTOR: Category Consumer Durables-White Goods Consumer DurablesConsumer Electronics(Sony) Consumer DurablesOthers(Paints)

Short-term Strategy Product launch by in-store branding and Brand visibility Channel expansion

Long-term strategy Increasing customer base

Customer retention and brand awareness.

Increasing customer base.

Increasing customer base.

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4.4 BANKING/FINANCIALSERVICES/INSURANCE ATL

(Source: Adexindia).

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(Source: Adexindia). Insurance and Mutual Fund Industry

Specifically talking for the Mutual Fund Sector there is a 3-tier hierarchy, company, agency then the consumer. All the dealings are routed through the distributors. Trade promotion is high but less compared to insurance sector. For the insurance sector, there are self-employed agents, company’s representatives at the banks and finally the direct dealers employed by the company. So trade promotion is more. Companies like Religare, Karvy etc have the wide network having its reach to national level. Their employees act like the agents to these companies. Therefore most of the BTL activations are targeted to these companies only. All the meets, conferences, events are conducted for them only. There is no Consumer interaction. Although some of the BTL activ activati ation onss are are carr carrie ied d out by the the comp compan anie iess whic which h are are dire direct cted ed towa toward rdss the the end end consumers. These initiatives are taken by at the company end only. These generally includes the canopy activities outside the malls, corporate offices etc. They serve dual purpose. The main objective behind those activations is to register the brand in the minds of the consumer i.e. brand visibility. And other one is sales promotion. They also do events, employees’ motivations kind of activities from time to time.

Banking Industry

In this industry BTL activation is bare minimum. BTL activations are generally associated at the time of product launch, or service launch. Majo Majorr chunk chunk of money money on BTL BTL acti activa vati tion onss are are dire direct cted ed to the the annua annuall meet meetin ings gs,, conferences etc. Brand visibility in the realm of increasing competition is the strategy that is the driver of Am-Ex. Campaign by Amex: As in regard to an event in south-ex approx. 1 year back wherein they persuaded the shopkeepers to keep Am-ex cards giving them special incentives in the form of giving 35


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their sales a boost in a way that they would give the consumers a discount which would get the consumers to their shops, they made sure they followed it up by a banner posting in the area to bring out a sense of pride and increase brand awareness that it is present everywhere and acceptance is the sole criteria which they based their campaign on. BTL:ATL

Expected Increase in BTL


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Analysing the BFSI sector we came out with the consensus on analysing Ing Vysya Bank that banks that have a strong brand identity identity in their their hometown i.e.South i.e.South for this bank bank specifically henceforth would not require BTL activations as it is already registered in the minds of the consumers over there but to carve a name for itself in the national arena it needs to turn the tables by not entering the clutter through mass media but by doing activations that people can associate with and can remember as good brand experience. This is where BTL activation agencies should leverage on. So instead of focussing on South festivals like Onam etc. companies should target the festival time of Diwali and other regional festivals to take lead. Going by our consultations with the experts in the domain, we realized that during Quarter 1,companies provide incentives to the top brasses by giving them automobiles which they need to pay through by getting deduction done systematically and take loans for the same so for banks providin providing g car loans,li loans,like ke ICICI ICICI Lombar Lombard d they they should should get in talks talks with with corporate for schemes that can be routed through the BTL agencies at this time of the year.

Player SBI Life Insurance Category-Life Insurance

Am-Ex Category-NBFC DSP Merill Lynch Category-Mutual Fund

ICICI Pru Life Insurance Category-Life Insurance

Strategy Employee Motivation, Increasing customer base.

Seasonality Q2 due to result announcement and acknowledgement for the best performer, Q1 due to closing of the financial year and tax saving benefit. Brand visibility Q4 due to festival time and so effort for markets to be branded put in. Brand awareness, Product Q2 because new budgets are launch, Distributors allocated, also when new appeasement as they are the NFO is launched and, also interface of the company. for the distributors meet done monthly generally. 99.26% Brand awareness Same for the whole and 77% Brand recall was insurance industry except achieved by them according for players like Ing Vysya to a latest research agency that are dominant in the report for a BTL campaign. specific region like south to 37


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target festival time of Diwali .

4.5 COMMON TO ALL SECTORS: QUESTIONS RELATED TO BTL AGENCIES IMPORTANT PARAMETERS FOR COMPANIES

70% of the players said that concept is the most important factor in determining the BTL agency. After that 20% said that the price is the most important factor after concept and then came the quality of material used.

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When asked about the problems they faced while dealing with any BTL agency then 90% of the players said that Execution is the most important issue. Distribution and logistics, timely execution at different places at same time are the most one to occur. Consumer to trade promotion

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Chapter fIVE Conclusion 1. Most Most of the the comp compan anie iess are are doin doing g mult multic icha hann nnel el prom promot otio ions ns and and mark market eter erss endeavour to align their ATL and BTL strategy. 2. Almost Almost all all the players players in each sector sector are tapping tapping onto onto Rural India India as they see an immense opportunity. Since mass media has limited reach over their hence a lot of BTL activations are done. 3. BTL to ATL ratio ratio is increa increasin sing g over the years. years. For the industr industry y average average it is near near 35:65, which was just about 15:85 three years back. With marketers looking for cost effective marketing campaigning, BTL industry is bound to increase. 4. BTL activation activationss can be tactical tactical or strateg strategical ical in nature nature depending depending upon the the type of activations. It is the misconception that they are only tactical in nature.

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5. Companies Companies are giving giving a lot of of importance importance to their their channel channel partners partners.. In some cases cases they are treated equally to customers. A new direction taken by marketers in allocating funds that has been highlighted through our research is the significant jump in the investments going into below-the-line (BTL) marketing. Across the board, marketers are spending anywhere between 10-50 % of their total budgets on direct marketing, events, activation and other BTL activities depending on the nature of the product / service and market of choice. The average BTL spends across marketers met during the course of the research was closer to 40 % against about 15 %, just three years earlier. One reason of course is mass media fragmentation and therefore therefore less bang for the above-the-line above-the-line (ATL) buck. The other more important important reason reason however isthe pressure on brand managers for a better return on marketing investments made. This rise in BTL is resulting in a better connect with small-town India because a larger portion of the increased BTL is going to KUT as per marketers.

In the metros, BTL is used because the clutter in mass media is too high and getting audience attention is difficult. The logic for using BTL in KUT, however, is different. Even though media options are limited in many KUT, yet because consumers are looking for new products or services, BTL gets a more than proportionate response. In existing product categories BTL in KUT has helped push up revenue contributions.

5.1 Current Scenario in the field of BTL activities

Expenditure estimates say a lot about where sophisticated marketers are focusing their efforts, but they don’t address the more fundamental question of why. Why, after so many years of success with above-the-line methods, are marketers finally changing their approach approach to reaching reaching customers customers and fostering fostering profitable profitable relationshi relationships? ps? And why do customers appear so willing to accept this new communications philosophy? The follow following ing seven seven trends trends explore explore the factor factors, s, both both extern external al and intern internal, al, that that are contributing to this emerging marketing emphasis. Specifically, it identifies seven key

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trends that are directly impacting the allocation of marketing budgets for both ATL and BTL campaigns. They include:

1. Chan Changi ging ng cons consum umer er demo demogr grap aphi hics cs decr decrea ease se the the infl influe uenc ncee of tradi traditi tiona onall mass mass media (i.e. ”one-size-fits-all”) marketing messages 2. Growi Growing ng cons consum umer er sophi sophist stic icat atio ion n heig height hten enss the the dema demand nd for for chan channel nel-a -agno gnost stic ic communications 3. Wides Widespre pread ad market marketing ing “clutter “clutter”” dimini diminishe shess the impact impact of commer commercia ciall messag messages es that don’t address specific and individually relevant consumer n eeds 4. Enhanced Enhanced informati information on availabilit availability y empowers empowers both markete marketers rs and consumers consumers with with insi insight ght that that allo allows ws for for prec precis isee cust custom omer er targ target etin ing g and and inte intell llig igen entt purc purcha hase se decisions 5. Height Heightene ened d client client pressur pressuree to deliver deliver quantifi quantifiabl ablee value value by evalua evaluati tion on of ROI of the marketing initiatives , forces marketing service providers – especially agencies – to re-evaluate services platforms 6. Growin Growing g effect effective ivenes nesss of “multi “multi channel channel”” campai campaigns gns (those (those that that cross cross multiple multiple media) media) reinfo reinforce rcess demand demand for tacti tactics cs that that establ establish ish one-toone-to-one one relati relations onship hipss between marketers and consumers 7. Rapid Rapid techno technolog logica icall advance advancess allow allow for consumer consumer/ma /marke rketer ter interact interaction ionss that that are frequent, easier and more relevant than previously possible

5.2 Trends Impacting BTL Marketing Budgets

1.) Changing consumer demographics decrease the influence of traditional massmedia (i.e. "one-size-fits-all”) marketing messages.

Understanding the conventions of culture as well as the individual cultural differences and simila similarit rities ies of target target locale localess empower empowerss market marketing ing profes professio sional nalss to realiz realizee that that one universal message—whether verbal or visual, can never reach a global audience. One global culture comprised of people with identical values does not exist—not even within the confines of our own country as the recent elections illustrate. Differences in learning and thinking patterns influence the way people process information, as demonstrated in 42


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their innate responses to marketing communications. Audiences differ in the way they perceive and value concepts of time, space, money, relationships, power, risk, and even the protocols of gender roles. It is important to note that when attempting to customize communications with cultural differences in mind, it is just as important to recognize the cultural similarities. As much as localization vendors like to overemphasize "extreme customization", cultural similarities do exist, and are deeply imbedded in the core values of your products and service offerings.

2. Growing Growing consume consumerr sophisti sophisticati cation on heighten heightenss the demand demand for channe channel-ag l-agnost nostic ic communications .

Advances in marketing and communications haven’t just served to benefit marketers – consumers, consumers, too, have learned to exploit exploit technology, technology, information information and available available media channels for their benefit. Among other capabilities, the sophisticated modern consumer is adept at:

• Using the Internet to compare product prices • Screening out unwanted outbound telemarketing calls (or telemarketing calls altogether – through

participation on the National Do-Not-Call list)

• Skipping past television commercials – the lifeblood of above-the-line marketing – with TiVo and other digital video recording technologies • Bypassing Bypassing

traditiona traditionall

print

advertisem advertisements ents

through through

online online

newspaper newspaper

subscripti subscriptions ons and opt-in opt-in “headlines” “headlines” e-mails that provide a selected selected snapshot of relevant relevant news with only a fraction of the advertising interference. Collec Collectiv tively ely,, these these practi practices ces speak speak to the active active partic participa ipati tion on of consume consumers rs in the marketing process, a phenomenon made possible by the same innovations that many marketers expected would cement their authority in customers’ daily lives. They demand marketing responses that are concise, relevant and universal across all media – so that consume consumers rs who choose choose to intera interact ct via multip multiple le channel channelss (say, (say, resear researchi ching ng availa available ble products online and then completing the purchase in-store) are exposed to a consistent fundamental buying experience. 43


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3. Widespread marketing “clutter” diminishes the impact of commercial messages that don’t address specific and individually relevant consumer needs.

Rapid Rapid adva advance ncess in the the quali quality ty of avail availabl ablee mark market etin ing g medi mediaa have have had had at leas leastt one deleterious deleterious effect: effect: a saturated saturated media consumption consumption landscape, plus a resultant consumer consumer backla backlash sh agains againstt adverti advertisin sing g messag messages es that that are percei perceived ved as intrus intrusive ive or otherw otherwise ise irrelevant.

4. Enhanced Enhanced information information availability empowers both marketers and consumers consumers with insight that allows for precise customer targeting and intelligent purchase decisions.

Signi Signifi fica cant nt adva advance ncess in data databas basee mark market etin ing, g, anal analyt ytic icss and cust custom omer er rela relati tion onsh ship ip managem management ent (CRM) (CRM) platf platform ormss have spawned spawned an inform informati ational onal avalanc avalanche, he, allowi allowing ng marketers the opportunity to build a comprehensive, 360-degree view of the customer and their transaction history. By maximizing the complex array of available information, leading-edge marketers are reaching prospects with offers targeted to their expressed (or expected) wants and desires – and driving significantly enhanced response rates and lifetime customer value. Not Not to be outd outdon one, e, cons consum umer erss are are armi arming ng them themse selv lves es with with an arra array y of enha enhance nced d informational tools to make smarter buying decisions. Web sites reinforce the movement to obtain information and apply it through stricter scrutiny of the available market.

5. Heightened client pressure to deliver quantifiable value forces marketing service providers – especially agencies – to re-evaluate services platforms.

Among traditional advertising agencies, average client tenure now stands at less than18 mont months hs per per acco account unt.. In a time timefr fram amee shor shorte terr than than many many ad camp campai aigns gns them themse selv lves es,, marketers are increasingly deciding that these trusted strategic advisers – once thought of as the standard-bearers of marketing strategy, conception and delivery – can easily be replaced by others whose strategic, creative and, most notably, financial objectives better align with their own.

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While shoddy creative work is often cited as the reason, more often, the actual fuel for this rapid agency turnover is a lack of concrete delivery. In the face of alternative below-theline media that offer the benefits of personalization and measurable return-on-investment, the vast investment required to sustain solo ATL campaigns (as well as the agencies from which they originate) is increasingly seen as excessive in the eyes of bottom-line focused executives.

6. Growing Growing effe effectiv ctivenes enesss of “multic “multichann hannel” el” campaig campaigns ns (those (those that cross cross multipl multiplee media) reinforces demand for tactics that establish establish one-to-one one-to-one relationships relationships between marketers and consumers .

Given the proper tools, consumers prefer to engage with marketers through a combination of available media (including retail stores, the Internet, catalogs, direct mail and direct response television) thus relegating single-channel categorizations such as” catalog buyer” and “online shopper” to the business archive. But these customers offer more than just a challenge to marketing strategists strategists – they also offer offer greater profit potential. potential. According to the Intern Internet et Advert Advertisi ising ng Bureau Bureau,, well-e well-execu xecuted ted multic multichan hannel nel market marketing ing campai campaigns gns generate a sales lift ranging from 7 to 34 percent. Viewed from another perspective, that spells spells troubl troublee for single single-- channel channel market marketers ers (such (such as those those hoping hoping that that tradit tradition ional al television advertisements will fuel visits to retail stores).

7. Rapid technological advances allow for consumer/marketer interactions that are more frequent, easier and more relevant than previously possible.

Long ago cited as the most significant factor inhibiting the growth of BTL marketing, the recent proliferation of appropriate, cost-effective technologies – for both marketers and consumers consumers – has finally finally reached the critical critical mass necessary necessary to fuel campaigns campaigns that cross multiple multiple media and stand out from the mass-orien mass-oriented ted messages messages proffered proffered by traditional advertising. The scope of technological advance spans all media, but perhaps the most significant advance involves the widespread adoption of high-speed, broadband Internet connect connection ionss – allowi allowing ng consume consumers rs to surf surf the Intern Internet et effort effortles lessly sly and manage manage rich, rich, 45


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HTML-coded e-mail and online messages that inspire click-through and greater response. More than 43 percent of U.S. households now connect to the Internet through a broadband connect connection ion,, accord according ing to Jupit Jupiter er Resear Research, ch, and approx approxima imatel tely y 80 percent percent will will be on broadband by 2010.

REFERENCES 1. www.agencyfaqs.com 2. www.eventfaqs.com 3. www.exchange4media.com 4. www.adexindia.com 5. www.indiantelevision.com

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6. Laurent, Laurent, Gilles, Gilles, Jean-Noe Jean-Noell Kapferer, Kapferer, and and Francoise Francoise Rousse Roussell (1995), (1995), "The Underlying Structure of Brand Awareness Scores," Marketing Science, 14 (No. 3, Part 2 7. Day, George George S. S. and Robert Robert W. Pratt Pratt (1971), (1971), "Stabilit "Stability y of Appliance Appliance Brand Brand Awareness," Journal of Marketing Research, 8 (February),. 8.

Dall'Olmo Dall'Olmo Riley, Riley, F., F., A.S.C. Ehrenbe Ehrenberg, rg, S.B. S.B. Castleberr Castleberry, y, T.P. Barwise, Barwise, and N.R. Barnard (1997), "The Variability of Attitudinal Repeat-Rates," International Journal of Research in Marketing, 437-50

9. Aaker, David A. A. (1991), (1991), Managing Managing Brand Brand Equity Equity.. New York: York: The The Free Free Press 10. Keller, Kevin Lane (2003). “Brand Synthesis: Synthesis: The Multidimensionality Multidimensionality of Brand Knowledge,” Journal of Consumer Research, 29 (4), 595-600 11. Leuthesser, L., C.S. Kohli and K.R. Harich Harich (1995). “Brand Equity: The Halo Effect Measure,” European Journal of Marketing, 29 (4), 57-66. 12. Keller, Kevin Lane (1993). “Conceptualizing, “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity,” Journal of Marketing, 57 (January) 1-22

SAMPLE DESCRIPTION The following Table gives the details regarding the selected sample:

Table 1

S.No. 1 2 3

Sector Consumer Durables -do-do-

Company Name Sony India Ltd. Whirlpool Electrolux 47


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4 5 6 7 8 9

-do-do-do-do-doFMCG

Voltas Carrier L.G. Samsung Shalimar Paints Perfetti

10

-do-

Gillette

11 12

-do-do-

Hul Itc

13

-do-

Marico

14 15 16 17

-do-do-doNBFC-BFSI

Dabur G.S.K. Pepsi Amex

18

Banking-BFSI

Centurion bank of

Punjab 19

Banking-BFSI

Bajaj allianz-general

20

Mutual Fund-BFSI

Dsp merill lynch

21 22 23 24 25

Mutual Fund-BFSI Life Insurance-BFSI Life Insurance-BFSI Life Insurance-BFSI TelecomServiceProvider

Birla Sun Life ING Vysya ICICI Pru Max new york Life Airtel 48


26 27 28

200 8

-do-do-do-

Idea Vodaphone Reliance

29

TelecomHandsetManafacture

Communications Fly Mobiles

30 31 32

r -do-do-do-

Nokia Reliance Motorola

Table 2 Consum Consumer er

Trade Trade

Consumer Durable

55

45 45

sony Electrolux Whirlpool voltas

60 60 50 50

40 40 50 50

Table 3 Importance Concept Price Quality of Material

70 20 10

Table 3

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Consumer Durable

Table 4 Telecom

Idea Airtel vodafone Motorola Nokia fly mobiles

BTL

ATL

Increase

35 30 30 40 35 30

65 70 70 60 65 70

40 35 35 50 50 40 35

65 50 40 10 20 30

35 50 60 90 80 70

70 50 40 15 25 35

Table 5 FMCG

Gillete GSK Marico Pepsi Perfetti HUL

Table 6 Consumer to trade promotion in Telecom

50


Idea 50:50 Airtel

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80:20 70:30

Motorola Fly

50:50

Table 7 Company Birla sunlife Max New York Life ING Vysa Amex Bajaj allianz

BTL

Table 8 Increase: 2007 to 2008 Birla sunlife Max New York ING Vysa Amex Bajaj allianz

ATL 40

60

12.5 60 33 35

87.5 40 67 65

40 12.5 60 33 35

45 37.5 75 38 45

51

BTL Spending Patterns

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