MUMBAI: How do marketers deal with the inexplicable slowdown the Indian market is going through? Run for cover? Hide behind a door? Well, Madison Media has come out with some 10 recommendations for marketers to deal with the slowdown which it has put out in a playbook, it released earlier this month.
Temper expectations from rural market: Nielsen figures show the brakes have been felt less on the urban market with it showing a growth of eight per cent in Q3 2019 as against five per cent for the rural areas. InQ3 2018, rural had clocked 20 per cent growth as against 14 per cent for urban. Hence, marketers need to focus their energies on urban India until farm incomes rise and rural gets back into higher gear.
Pick your markets: Much like the current politics, the growth in consumption will not be secular across the country. As per a Bain and Company’s report, consumption will be led by 10 “breakthrough” states -- Kerala, Karnataka, Andhra Pradesh, Telangana, Tamil Nadu, Delhi, Haryana, Punjab, Maharashtra, and Gujarat. Therefore, marketers will have to repolarise their traditional market prioritisation methodology. Focus on TV investments should be on regional languages channels rather than Hindi GECs.
Go for premiumisation: Industry estimates indicate that India will be an economy led by the middle class by 2030. The middle class will be driving 75 per cent of the consumer spending, plus 10 years from now. Therefore, premiumisation and category addition can drive a significant share of incremental spent on categories including F&B, dining out, personal care, and cellphones, etc.
Focus on modern trade and e-commerce: The Indian heartland is embracing modern trade with open arms. As per property management company, JLL, 50-60 per cent of the new modern trade outlets are coming up in tier II and tier Ill cities. Brands and marketers should also drive the wave by shifting substantial trade promotion monies to e-commerce portals and managing categories with modern trade.
Invest in brand love: During slowdown, brands have a temptation of running promotions rather than building the "Brand Love”, which can prove to be a fatal exercise. A study conducted by the Institute of Practitioners in Advertising [IPA] suggests that emotional campaigns work nearly twice as hard as rational campaigns. It would be wise to synchronise and invest in "bottom funnel" campaign probably using digital media. Such an approach will ensure Share of Mind is translated to Share of Market.
Manage brand portfolio: To maximise the ROI, marketers should devise and adopt a brand portfolio management approach. Brand portfolio management is all about developing and maximizing halos (cross brand elasticity). Rigorous analytics can help to identify the donors and recipients of "Halos" and thus develop a portfolio strategy that adds to the marketing ROI.
Do not under-invest: As widely known, advertising has an ‘S-shaped’ response graph on a plane. If marketers invest below the threshold point-- determined by brand size, category, and advertising copy, the entire advertising budget gets wasted. Hence, it is very important to invest in analytics to identify the threshold point and plan advertising spends accordingly. And if a brand is unable to invest at threshold levels, it would be a better strategy to remain silent and mount a BTL campaign. Thus, a proportional slashing of budgets in the wake of slowdown induced budget cuts is not recommended.
Play ESOV game: It is very common for marketers to slash advertising budgets during slowdown but data suggests that the opposite should be done. Excess SOV (ESOV = SOV - SOM) metric developed by Neilsen indicates that ESOV had a definitive correlation with share growth. On average, a 10 point difference between SOV and SOM led to 0.5 per cent of extra market share growth. However, ESOV was found to be working harder for brands with greater emotional appeal and those who had a higher share of market. For every brand, analytics can help calculate the required Excess SOV for the target market share gain. Downturn is the best time to mount a share gain exercise with ESOV as category heat is expected to be moderate.
Milk Existing Assets: To maximise Rol of marketing monies, advertisers could resist the need to change creative assets and instead find ways to extract more out of existing assets. It is only a promotion led campaign that has definitive shelflife. Millward Brown had conducted a global study and articulated that true "wear out" of a TV ad is rare, and many TV ads could have a longer useful life than advertisers realise.
TV and Digital to be go-to media: Recent study by Accenture titled "Cross-channel advertising attribution report" has quantified the halo impact of TV on digital performance campaigns. Without TV, standalone ROI of digital campaigns comes down by 18 per cent. For a branding campaign, digital adds to the incremental reach of TV at higher frequency at a lower cost, thus increasing the campaign ROI.
