INTRODUCTION

Advertising during Recession

With most companies feeling the heat of reducing revenues and eroding net

worth, one of the first things that CEOs decide to “save money” is reduce the

advertising budget. Now this primarily depends on whether the company views

Advertisements as expense or investment.

But to me recession provides a wonderful opportunity for companies. Now

consider the few mindsets that most CEOs have;

Mindset 1 # All the companies are reducing the advertising budgets and

hence the competition doesn’t demand doing so much of advertising. Wrong –

This is just the right time for you to take charge and go one up against your

competition and so if your competition is not doing advertising during recession –

you have an opportunity

Mindset 2 # People don’t buy much during recession and hence advertising

wouldn’t reap in the benefits. Wrong – People don’t buy much during recession

and hence you need to do more aggressive advertising to get people to buy.

Also some of the recent studies show that recessions have only a 2% reduction in

people’s disposable income but despite that people tend to sit back and maintain

liquidity.

Worse is that companies don’t realize that by luring people through

advertising they can get them to buy your product; even during the recession.

“Study done by McGraw-Hill’s showed that a 13 page advertising during

recession increased company’s recognition from 32 to 45%. For 1980-85 recession

all those companies which did not reduce their advertising budgets increased sales

by 16 to 80% & most important was the fact that the increase in sales was not a

temporary thing but permanent.”

So though the question of advertising budgets during recession is

something which has been asked during every recession and studies have shown

1

that companies who did reduce suffered more and who maintained or increased

did smart business, not many have gone ahead and gone with the same or more

advertising. “In 1975 GM and Ford used two different strategies and where GM

kept with the same budget and Ford reduced budgets – so while GM increased the

sales and Ford’s sales went down by 14%.”

While these are undoubtedly uncertain times, the fear mongering of

attention seeking headlines would have you believe we are in the depths of another

great depression. While it certainly pays to stay abreast of the marketplace, there is

little evidence to suggest that it pays to shut up shop and weather the tide. On the

contrary, history has shown that with the right strategy, decisive action and a dose

of courage economic uncertainty can provide opportunities not seen under normal

conditions.

Now is the time to re-visit your strategy and adjust accordingly. The current

volatile times will provide incredible opportunity in certain market segments – it’s

a matter of looking for them. A recent Business Week article stated that 70% of

CEO and boards will ask the wrong questions facing economic uncertainty. That

being how to minimize the impact to current earnings forecasts, instead of asking

‘how can we take advantage of these times to grow the business?’ The latter being

a long term strategy- you can’t do both.

Market, Market, Market. Now is the time to step up your marketing efforts.

While the competition knee jerk and begin to pull back, the opportunity exists to

advance by investing in sales and marketing activities. This can be achieved by

cutting the fat not the meat. Reducing the standards of hotels, or traveling

economy makes sense, but eliminating all travel is a recipe for disaster because

customers need assurance now more than ever.

Invest in good advice and getting to know your customers.

Understand the difference between an investment and an expense

2

Formulating a decisive long term strategy, investing in marketing, focusing

innovation on customer processes takes guts. It requires leadership to implement.

Strategy rarely fails in the formulation, but in the execution. To quote Warren

Buffet, “We simply attempt to be fearful when others are greedy and to be greedy

only when others are fearful.” The right strategy, business model and flawless

execution are what set the businesses that thrive from those who fail. You need to

adjust your strategy to the conditions, and the current conditions are times of

opportunity.

Now that leaves us with a question – If we continue or increase our

advertising budget during the recession – wouldn’t that lead to controlling of

recession?

3

ITC Pvt. Ltd.

Profile:

ITC is one of India's foremost private sector companies with a market

capitalization of over US $ 22 billion and a turnover of US $ 6 billion.* ITC is

rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's

Most Reputable Companies by Forbes magazine, among India's Most Respected

Companies by Business World and among India's Most Valuable Companies by

Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands',

in a study conducted by Brand Finance and published by the Economic Times.

ITC also ranks among Asia's 50 best performing companies compiled by Business

Week.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty

Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information

Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and

other FMCG products. While ITC is an outstanding market leader in its traditional

businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is

rapidly gaining market share even in its nascent businesses of Packaged Foods &

Confectionery, Branded Apparel, Personal Care and Stationery.

As one of India's most valuable and respected corporations, ITC is widely

perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this

source of inspiration "a commitment beyond the market". In his own words: "ITC

believes that its aspiration to create enduring value for the nation provides the

motive force to sustain growing shareholder value. ITC practices this philosophy

by not only driving each of its businesses towards international competitiveness

but by also consciously contributing to enhancing the competitiveness of the larger

value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating

multiple drivers of growth anchored on its time-tested core competencies:

4

unmatched distribution reach, superior brand-building capabilities, effective

supply chain management and acknowledged service skills in hoteliering. Over

time, the strategic forays into new businesses are expected to garner a significant

share of these emerging high-growth markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural products.

ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in

the last decade). The Company's 'e-Choupal' initiative is enabling Indian

agriculture significantly enhance its competitiveness by empowering Indian

farmers through the power of the Internet. This transformational strategy, which

has already become the subject matter of a case study at Harvard Business School,

is expected to progressively create for ITC a huge rural distribution infrastructure,

significantly enhancing the Company's marketing reach.

ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Ltd,

provides IT services and solutions to leading global customers. ITC InfoTech has

carved a niche for itself by addressing customer challenges through innovative IT

solutions.

ITC's production facilities and hotels have won numerous national and

international awards for quality, productivity, safety and environment management

systems. ITC was the first company in India to voluntarily seek a corporate

governance rating.

ITC employs over 26,000 people at more than 60 locations across India. The

Company continuously endeavors to enhance its wealth generating capabilities in

a globalizing environment to consistently reward more than 3,58,000 shareholders,

fulfill the aspirations of its stakeholders and meet societal expectations. This over-

arching vision of the company is expressively captured in its corporate positioning

statement: "Enduring Value. For the nation. For the Shareholder."

5

OBJECTIVES

Values:

ITC’s Vision: Sustain ITC's position as one of India's most valuable corporations

through world class performance, creating growing value for the Indian economy

and the Company’s stakeholders.

ITC’s Mission: To enhance the wealth generating capability of the enterprise in a

globalizing environment, delivering superior and sustainable stakeholder value.

Leadership:

Flowing from the concept and principles of Corporate Governance adopted by the

Company, leadership within ITC is exercised at three levels. The Board of

Directors at the apex, as trustee of shareholders, carries the responsibility for

strategic supervision of the Company. The strategic management of the Company

rests with the Corporate Management Committee comprising the whole time

Directors and members drawn from senior management. The executive

management of each business division is vested with the Divisional Management

Committee (DMC), headed by the Chief Executive. Each DMC is responsible for

and totally focused on the management of its assigned business.

This three-tiered interlinked leadership process creates a wholesome balance

between the need for focus and executive freedom, and the need for supervision

and control.

6

Corporate Management Committee:

Divisional/ Strategic Business Unit (SBU) Management Committees, each headed

by a divisional/ SBU Chief Executive

Business includes:

FMCG, Hotels, Paperboards, Specialty Papers & Packaging, Agri Business

and Information Technology.

Corporate Functions, each headed by a HOD Corporate Functions include:

Planning and Treasury, Accounting, Taxation, Risk Management, Legal,

Secretarial, EHS, Human Resources, Corporate Communications, Corporate

Affairs, Internal Audit and Research & Development.

7

Board Of Directors

Audit Committee

Compensation Committee

Nomination Committee

Investor Service Committee

Sustainability Committee

Corporate Management Committee

FMCG Sector:

The Indian FMCG sector is the fourth largest sector in the economy with a total

market size in excess of US$ 13.1 billion. It has a strong MNC presence and is

characterized by a well established distribution network, intense competition

between the organized and unorganized segments and low operational cost.

Availability of key raw materials, cheaper labour costs and presence across the

entire value chain gives India a competitive advantage.

The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4

billion in 2015. Penetration level as well as per capita consumption in most

product categories like jams, toothpaste, skin care, hair wash etc in India is low

indicating the untapped market potential. Burgeoning Indian population,

particularly the middle class and the rural segments, presents an opportunity to

makers of branded products to convert consumers to branded products.

Growth is also likely to come from consumer 'upgrading' in the matured product

categories. With 200 million people expected to shift to processed and packaged

food by 2010, India needs around US$ 28 billion of investment in the food-

processing industry.

8

Automatic investment approval (including foreign technology agreements within

specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and

Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food

processing sector.

Foods:

ITC made its entry into the branded & packaged Foods business in August 2001

with the launch of the Kitchens of India brand. A more broad-based entry has

been made since June 2002 with brand launches in the Confectionery, Staples and

Snack Foods segments.

The packaged foods business is an ideal avenue to leverage ITC's proven strengths

in the areas of hospitality and branded cuisine, contemporary packaging and

sourcing of agricultural commodities. ITC's world famous restaurants like the

Bukhara and the Dum Pukht, nurtured by the Company's Hotels business,

demonstrate that ITC has a deep understanding of the Indian palate and the

expertise required to translate this knowledge into delightful dining experiences

for the consumer. ITC has stood for quality products for over 98 years to the

Indian consumer and several of its brands are today internationally benchmarked

for quality.

9

The Foods business carries forward this proud tradition to deliver quality food

products to the consumer. All products of ITC's Foods business available in the

market today have been crafted based on consumer insights developed through

extensive market research. Apart from the current portfolio of products, several

new and innovative products are under development in ITC's state-of-the-art

Product Development facility located at Bengaluru.

Leadership in the Foods business requires a keen understanding of the supply

chain for agricultural produce. ITC has over the last 99 years established a very

close business relationship with the farming community in India and is currently in

the process of enhancing the Indian farmer's ability to link to global markets,

through the e-Choupal initiative, and produce the quality demanded by its

customers. This long-standing relationship is being leveraged in sourcing best

quality agricultural produce for ITC's Foods business.

The Foods business is today represented in 4 categories in the market. These are:

Ready To Eat Foods

10

Staples

Confectionery

Snack Foods

In order to assure consumers of the highest standards of food safety and hygiene,

ITC is engaged in assisting outsourced manufacturers in implementing world-class

hygiene standards through HACCP certification. The unwavering commitment to

internationally benchmarked quality standards enabled ITC to rapidly gain market

standing in all its 6 brands:

Kitchens of India

Aashirvaad

Sunfeast

Mint-o

Candyman

Bingo

Personal care:

In line with ITC's aspiration to be India's premier FMCG Company, recognized for

its world-class quality and enduring consumer trust, ITC forayed into the Personal

Care business in July 2005. In the short period since its entry, ITC has already

launched an array of brands, each of which offers a unique and superior value

proposition to discerning consumers. Anchored on extensive consumer research

and product development, ITC's personal care portfolio brings world-class

products with clearly differentiated benefits to quality-seeking consumers.

11

ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di Wills',

'Vivel Di Wills' 'Vivel UltraPro', 'Vivel' and 'Superia' brands has received

encouraging consumer response and is being progressively extended nationally.

Education & stationery:

ITC made its entry into the stationery business in the year 2002 with its premium

range of notebooks, followed in the year 2003 with the more popular range to

augment its offering.

Today, ITC continues to blend its core capabilities to market a growing range of

education and stationery products. These capabilities include,

12

a. Manufacturer of India's first Ozone treated environment friendly Elemental

Chlorine Free (ECF) pulp, paper and paperboard.

b. Knowledge of image processing, printing & conversion garnered from its

Packaging & Printing Business.

c. Brand Building & Trade Marketing & Distribution strengths resident in its

FMCG Business.

ITC's Education and Stationery Products are marketed under the brands

"Classmate" and "Paperkraft".

Cigarettes:

ITC is the market leader in cigarettes in India. With its wide range of invaluable

brands, it has a leadership position in every segment of the market. It's highly

13

popular portfolio of brands includes Insignia, India Kings, Classic, Gold

Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake.

The Company has been able to build on its leadership position because of its

single minded focus on value creation for the consumer through significant

investments in product design, innovation, manufacturing technology, quality,

marketing and distribution.

All initiatives are therefore worked upon with the intent to fortify market standing

in the long term. This in turns aids in designing products which are contemporary

and relevant to the changing attitudes and evolving socio economic profile of the

country. This strategic focus on the consumer has paid ITC handsome dividends.

14

ITC's pursuit of international competitiveness is reflected in its initiatives in the

overseas markets. In the extremely competitive US market, ITC offers high-

quality, value-priced cigarettes and Roll-your-own solutions. In West Asia, ITC

has become a key player in the GCC markets through growing volumes of its

brands.

ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru, Munger,

Saharanpur and Kolkata. These factories are known for their high levels of quality,

contemporary technology and work environment.

    

Tourism:

Sector which long lives even in recession. Even though there is a slowdown

in number of travellers, we can feel a considerable amount of growth year on year.

From the Advertising point of view, we all have overcome humpty number of

advertisements in newspapers and in Media. Ex: Thomas Cook, Cox & Kings etc

advertise very aggressively and they feel Advertising as a prime medium for

providing information and to pull the audience. They always believe in Pull

strategy.

People tend to do view leisure and Hang out as the way to overcome their

worries which leads to increase in local tourism destination. You may have not

gone through daily newspapers and magazines without a print advertisement

relating to some tour packages and Offers provided by tourism Brands. They

promote their brands with the strategy as “Why rest at home and keep worrying,

Join us and let’s forget Bad days”.

International Travel House is one of the largest total travel management

companies in India with a presence in 13 cities. It offers a range of services which

15

include corporate travel, car rental, destination management services, world class

holidays, incentive group travel, conference management and foreign exchange.

It is recognized and approved as a travel agent and tour operator by the IATA and

the Department of Tourism, Government of India. It is affiliated with key

professional bodies including the World Tourism Organization, Universal

Federation of Travel Agents Associations, American Society of Travel Agents,

International Congresses & Conventions Associations and the Travel Agents

Association of India.

The company is driven by its philosophy of excellence in operations. Towards this

end, it is currently setting up a web-based infrastructure to develop B2B e-

commerce solutions. The portal will offer clients the benefit of on-line reservation,

programmed planning, and management tools for MIS reporting.

In recognition of its commitment to excellence, Travel House has been the

recipient of several awards from industry associations and the Government of

India. It remains the only company to have been awarded three national tourism

awards in a year (1998-99) for outstanding performance as Travel Agent and Tour

Operator, Conference Organizer and Tourist Transporter in India It has also been

voted the "Best Travel Agency -India" by TTG Asia for the year 2005.

Lifestyle Sector:

Having built a powerful brand portfolio that is making waves across the

country, ITC's Lifestyle Retailing is poised to grow and build a dominant

presence in the country's fashion industry.

16

ITC’s Lifestyle Retailing Business Division has established a nationwide retailing

presence through its Wills Lifestyle chain of exclusive specialty stores. Wills

Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work

wear, Wills Sport relaxed wear, Wills Clublife evening wear, fashion accessories

and Essenza Di Wills – an exclusive range of fine fragrances and bath & body

care products and Fiama Di Wills - a range of premium shampoos and shower

gels. Wills Lifestyle has also introduced Wills Signature designer wear, designed

by the leading designers of the country.

With a distinctive presence across segments at the premium end, ITC has also

established John Players as a brand that offers a complete fashion wardrobe to the

male youth of today. With its brands, ITC is committed to build a dominant

presence in the apparel market through a robust portfolio of offerings.

The brand is available across the country through a nation-wide network of over

225 exclusive stores and 1200 multi-brand outlets.

17

Hotels

ITC Welcomgroup, India’s premier chain of luxury hotels was launched on

October 18, 1975, with the opening of its first hotel - Chola Sheraton in Chennai.

Since then the ITC-Welcomgroup brand has become synonymous with Indian

hospitality. With over 100 hotels in more than 80 destinations, ITC-

Welcomgroup has set new standards of excellence in the hotel industry in

Accommodation, Cuisine, Environment and Guest Safety.

A leader in the premium hospitality segment, ITC-Welcomgroup Hotels have had

the privilege of hosting world leaders, Heads of State and discerning guests from

across the world and within.

As one of India’s most dynamic hospitality chains, ITC-Welcomgroup has set

standards for excellence in the hotel industry by pioneering the concept of branded

accommodation. The chain has developed three brands of accommodation ITC

One', 'Towers' and the 'Executive Club' to differentiate between the needs of

various travellers and provide high levels of service.

18

First to introduce branded cuisine, its restaurants Bukhara, Dakshin and

DumPukht are renowned for their delicious and authentic Indian cuisines from

the different regions of India. ITC-Welcomgroup also showcases international

cuisine in its specialty restaurants West View and Pan Asian.

19

ITC-Welcomgroup has strategically customized its hotels and appropriately

categorized them to fulfill the service and budgetary needs of travellers. With its

exclusive strategic tie up with Starwood for its top of the line premium brand the

'Luxury Collection', the group is strengthening its international marketing stance.

ITC-Welcomgroup was also instrumental in bringing the 'Sheraton' brand to India,

with which it enjoyed a three-decade exclusive partnership.

ITC-Welcomgroup's properties are classified under four distinct brands:

ITC Hotels – Luxury Collection

In 2007, ITC-Welcomgroup entered a new phase in its collaboration with

Starwood Hotels & Resorts. ITC-Welcomgroup now has an exclusive tie-up with

Starwood in bringing its premium brand, the 'Luxury Collection', to India. These

are super deluxe and premium hotels located at strategic business and leisure

locations. The seven hotels which are part of this collection are: ITC Maurya in

Delhi, ITC Maratha in Mumbai, ITC Sonar in Kolkata, ITC Grand Central in

Mumbai, ITC Windsor & ITC Royal Gardenia in Bengaluru, ITC Kakatiya in

Hyderabad and ITC Mughal in Agra.

WelcomHotels offer five-star hospitality for the discerning business and leisure

traveller. Currently there are three hotels under this brand namely, Welcom Hotel

20

Rama International Aurangabad, Welcom Hotel Vadodara and Welcom Hotel

Grand Bay Vishakhapatnam. Four other ITC-Welcomgroup Sheraton Hotels –

Sheraton Rajputana Hotel Jaipur, Sheraton Chola Hotel Chennai and

Sheraton New Delhi offer warm, comforting services to the global traveller and a

chance to connect.

Fortune Hotels offer full service properties all over India, including smaller

towns and cities, ideal for the budget traveller. Fortune Hotels have a strong

presence in Ahmedabad, Thiruvananthapuram, Calicut, Darjeeling, Jamshedpur,

Vapi, Hyderabad, Gurgaon, Indore, Ootacamund, Madurai, Jodhpur, Vijaywada,

Chennai, Visakhapatnam, Mahabalipuram, Kolkata, Bengaluru, Navi Mumbai,

Tirupati and Port Blair, while several more hotels are expected to be

commissioned soon in other key locations in India.

WelcomHeritage brings together a chain of palaces, forts, havelis and resorts that

offer a unique experience. WelcomHeritage endeavours to preserve ancient royal

homes and the historical Indian grandeur and opulence for the future Indian

generations. WelcomHeritage provides a fine range of hotel services inside these

architectural legacies present in Rajasthan, Madhya Pradesh, Uttarakhand,

Himachal Pradesh, Jammu & Kashmir, West Bengal, Karnataka, Tamil Nadu,

Punjab, Haryana, Assam, Sikkim, Meghalaya, Arunachal Pradesh, Uttar Pradesh,

Maharastra, Kerala, Andhra Pradesh and Puducherry

WelcomEnviron is ITC-Welcomgroup's vision for a green world. It's a multi-

faceted programme started in order to propagate environmental causes in the cities

where ITC-Welcomgroup's hotels are located. With the guiding principle of

'Reduce, Reuse and Recycle', each hotel has its own programme, encompassing

local participation, creating awareness among employees and internal

conservation.

21

ITC Green Centre

The ITC Green Centre in Gurgaon, the headquarters of ITC's Hotels Business is

the physical expression of this commitment to sustainability - Ecological, Social

and Economic. This building is one of the world's largest green buildings with

space of over 170,000 square feet and the first non-commercial complex in the

country to be awarded the United States Green Building Council-Leadership in

Energy and Environmental Design's (USGBC-LEED) platinum rating - the highest

in the order.

At ITC Green Centre, energy consumption has been reduced significantly through

design integration. The building has been designed to maximize the effect of

natural light during daytime, largely eliminating the need for artificial ones. At the

same time, the window glass, while allowing light inside, does not allow heat.

This not only keeps the office cool from inside during the day, but also decreases

the load on air-conditioners. Again, there is minimum exterior lighting to limit

night sky pollution. The water consumption has dropped by 40 per cent and, with a

water re-cycling plant, the building is now a zero water discharge building.

22

SHIFT IN ADVERTISING MEDIUM

BROADCAST

MEDIA

a)Television

b) Radio

INTERACTIVE

MEDIA

a)Online Advertising

b)Entertainment

Programmes

c)Mobile Advertising

d)KIOSKS

PRINT MEDIA

a)Magazines

b)Direct Mail

- Brouchers

- Catalogs

c) Newspapers

SUPPORTIVE

MEDIA

a)Trolley Advertising

b) Billboards & Posters

c) Directories

d) POP Displays

e) Event Sponsorships

1.Television

2.Radio

3.Online Advertising

4.Mobile Advertising

5.Newspapers

23

The above figure depicts the change in advertising medium from the healthier

times to recession times. The derived list of the mediums where highly used to

showcase the advertisements. Reason behind choosing the 5 mediums were,

1. Cost less

2. Reach and Frequency

3. Address mass number of people

4. Seasonal Ads

Newspaper Advertising had become a largest revenue generator compared to all

mediums. Thanks to all Realty, Telecom, Tourism, Automobile companies. With

respect to newspaper advertising, a smaller advertisement run repeatedly will do

better than a larger ad run less often. Familiarity = trust.

Rather tourism advertisements are termed as Seasonal. Because they do

advertise aggressively only in the month of March, April and May. You can’t

finish reading the paper skipping the ads relating to Tourism and Airlines. Look at

the samples below,

In contrast Shoppers read the Friday, Saturday and Sunday papers to plan

their weekend shopping. Saturday is the most important of the three, but Sunday is

the most widely read. For Example: Retail store, probably want newspaper

advertising to run on these days.Lastly, The public knows to read the paper on

certain days of the week to get certain information. If your competitors are all

running their newspaper advertising on Wednesday in the same section, there is a

reason. Shoppers know to look there for information about your type of business.

If you change your ad and your customers don’t recognize it, you will have

wasted all of the trust you have built up over time. Many companies never change

their basic newspaper advertising design. This is a good strategy as long as the ads

are working.

24

Attention is everything in newspaper advertising. The particular ad must

stand out from [contrast with] all of the others on the page. Conservative ads

won’t even get noticed. Before taking newspaper advertising as a medium in

turbulent times you should think a lot about it.

Television Advertising is used comparatively less in turbulent times. Most

companies look at television commercials as an advertising medium for big

companies alone. In fact, TV is a very affordable medium that can increase a

company's profits greatly. Effective TV commercials merge video and audio into a

powerful sales tool. But don't think one is more important than the other. Audio

and video go hand-in-hand.

For example, turn down the volume on any commercial. You should be

able to identify the benefits of purchasing a product just from the video. Example:

Airtel which rely on emotions. The same holds true for audio. Close your eyes and

listen to the announcer. If the audio doesn't explain the product in detail, then the

commercial isn't effective. Potential customers should be able to hear your

message even if they're not in the room to see it.

For example let’s consider we are going to advertise for a multimedia

headset. Your video could actually explain the product clarity, No noise

disturbance. You'd also use video to show someone struggling with a regular,

headphone - fussing with cords and which has heavy noise influence while you are

on music.

Use your audio to explain the advantages of owning your product. You'd

use words like "convenient, good fit to ears, and lightweight." Later display a

message asking your target customer to call a particular number to know the

details. Order now and Visit your local dealer. Your video must match your audio

to drive home your selling points. Your message gets distorted. The viewer gets

confused. And you lose the sale.

25

Take an example of KFC restaurant ad. They don’t stop showing the

restaurant location alone. They go one step ahead and show the product in screen

makes the people say a word “WOW that’s crispy”

Mobile Advertising is the new buzz word which companies across all sectors

looking out for. It provides a new way to explore the world. Mobile Advertising

can be done through SMS service, launching applications etc. We all get

advertisements relating to Job Offers, Real estate Offers day in and day out. But

still there are segment of people who treat these type of services as

DISTURBANCE factor.

Advantages are,

1. You can cater the message to particular segment

2. Low Cost

3. Reach and Frequency will be more

PRODUCT LIFE CYCLE vs. ADVERTISEMENT STRATEGIES:

Advertising strategies change with the change in stages of a product life. As

we all know every product goes through a series of stages, namely the

introduction, growth, maturity, decline.

After the production stage gets over, it is introduced or launched into the

market thereby it gains more and more customers as it grow. Later eventually the

market stabilizes and the product becomes mature; then after a period of time the

product is overtaken by development and the introduction of competitors, it goes

into decline and is eventually withdrawn. However, most products fail in the

26

introduction phase. Others have very cyclical maturity phases where declines see

the product promoted to regain customers.

Introduction Stage of PLC

In this stage we offer and provide information to the customers about the

new launch of the product. Advertisers like to position the product by explaining

the new features and benefits we get out of it. Here need of immediate profit is not

the measure. Advertising will be focused mainly on differentiating products.

Growth stage of PLC  

In this stage a product overcome too much of Competitors thereby it will be

attracted into the market with very similar offerings. Here Advertising spend is

high and focuses upon building brand image.

Maturity stage of PLC  

This is the stage where a product manages to live for a long time and

thereby everyone will be aware of the product and its respective Brand name. Now

companies will use push strategy and make Advertisements showing their

offerings at lower prices compared to others. This will help the organizations to

clear out the stocks and plan for next extension.

Decline stage of PLC  

At this point there is a downturn in the market. For example more

innovative products are introduced or consumer tastes have changed. There is

intense price-cutting and many more products are withdrawn from the market.

Here it will be of Defensive Advertising strategy to maintain the Brand Image they

have created.The Below listed are various types of messages which depict from

type of advertising we overcome day by day. Various concepts are,

1. Beliefs and Traditions - Pothys

27

2. Fun and Cartoons - Vodafone

3. Love and Emotions – Airtel, Nokia, Coca cola

4. Pricing and Benefits – Head & shoulders, Maruti Suzuki, Chevrolet, Sugar

Free, Kellogs, India Infoline etc

5. Social Attraction – Fair & lovely, Axe, Slice

6. Awareness concentrated – CNN, Times now

7. Fear & Anxiety – Mc afee Antivirus,

Among all these we can clearly see the advertisements which we overcome during

turbulent times are of “Pricing and Benefits concentrated”. The simple strategy

beside this concept is that, people have less money to spend in this recession and

they need the best brand to be consumed always. No one will go to retailer and

admit “Sir I have only Rs.3 so please tell me a shampoo sachet of that price?

Instead they will sit back and decide based on the commercials. This way there are

many brands which are benefited from providing Pricing and benefits as their ad

developing strategy.

Brands which advertised more in this slowdown are ,

1. Airtel

2. Aircel

3. Vodafone

4. DLF

5. Reliance

6. Herohonda

7. Kingfisher

8. magicbricks.com

9. Tourism and Airline Brands

28

Brands which are benefited by maintaining their Frequencies are ,

1. Airtel

2. Vodafone

3. Purvankara

4. www.magicbricks.com

5. MARG

6. Diaper and Detergent brands

7. Tea and Coffee Brands

8. Candies and Gum

9. AVIVA

29

LITERATURE REVIEW

Even as the economy settled into a grim picture of a slowdown-turning-

into-a-recession, the smartest of the spenders of the Rs 6,000 crore that corporate

India poured into advertising in 1997 stood out for their ability to leave the deepest

impression on the unresponsive consciousness of the customer. While the majority

responded to their drooping top- and bottom-lines by attacking their advertising

budgets-and substituting luxurious lavishness with stark realism in their

commercials-the champions of recession advertising showed that a slowdown is

not a threat, but an opportunity.

“When The Times Are Good, You Need To Advertise To Stand Apart. When The

Times Are Bad, You Need To Advertise To Gain An Unbeatable Advantage.”

Good Strategy for Bad Times

During difficult times it's more important than ever to be practical and

realistic about what you're trying to achieve by spending money on advertising.

We have certain principles we guide our company by (you can find them in Bob's

book, The Ad Contrarian.) Two are particularly relevant in times like these:

First, create advertising that is focused on changing behavior, not attitudes.

Trying to change attitudes is a difficult and expensive proposition under

the best of circumstances, and this ain't them. For the time being, ignore your

agency’s brand babble and focus on giving your customer a practical reason to try

you now. (By the way, getting them to try your product is the best way to build

your brand, but that's another story.) Give her a good reason to change her

behavior. She will respond to a good deal; a service enhancement; a special offer;

meaningful product differentiation; innovations; new benefits, etc.

Second, target the heavy user (high-yield customer) in your category.

30

For example, in the fast food category, one-third of the customers account

for between 70 and 80% of sales volume. In many categories the same is true.

Now is the time to go after this heavy-using, high-yield customer. Economic

conditions are causing them to re-think their habits. They are willing to reconsider

entrenched brand loyalties. You have a unique opportunity to get them to give you

a try. Find out who they are, and design your advertising to appeal to them.

Advertising during tough economic times is not for the timid. You’re going

to be asked a lot of difficult questions by those in your company. However, if you

have a good reason to advertise, and a clear, sensible and practical strategy,

advertising can be a major asset in seeing you through these times.

Change in Advertising Trend

Advertising trends are changing every day. Marketers are always in search

for new and effective ways to reach the target market before the competitors.

However, if you monitor the changes in advertising and marketing trends for a few

years, you will be able to see some regular changes. For example, online

advertising is an unavoidable element in any marketing mix. Just to add, these

developments do not occur all of a sudden. These are often a continuous growth or

development over a long period.

 So what are the advertising trends in 2010?

If you look at the advertising trends of 2009, you would see that many

companies are investing on green marketing. In addition, we can see the same

trend growing in bigger number in 2010. Especially if you look at the car

branding, many companies are coming up with environment friendly cars that run

on alternative fuels. Many experienced marketers think that this Going Green is

not just a fancy trend any more. People have already started believing in this

concept and the immediate need of taking some action. However, we would some

changes as the Go Green concept runs. Today it is not enough that you advertise

31

the Go Green concept. You must add a comprehensive story and show that your

business or organization is actually supporting the cause.

As far as market segment is concerned, baby boomers are still the most

important marketing demographics. More than 80% marketing professionals rank

the boomers in top as an important or the most important demographics to target.

However, generation X and Y are following them very closely. In addition, in

2010, the same trend will continue without much change.

These are some trends that we may see in marketing and advertising

industries in 2010. However, irrespective of your advertising strategy, we would

recommend you to develop a comprehensive and believable story around your

brand.  These stories will set you apart from your competitors.

If you are interested in advertising then you must have noticed that the

trends in advertising are changing over time. The competition is going tough day

by day. So marketers are trying to find out more effective ways to reach the target

audience. But if you notice carefully you will understand that the changes have not

occurred suddenly. There is a continuous growth in advertising trends with the

passing time. While some old trends have been modified some new trends have

evolved.

So let's take a look at the advertising trends of this year.

The old advertising trends indicate a very simple equation i.e. more

people=more sale. In the previous years the marketers were concerned about

reaching more target audience. According to the market trend of the earlier days

the marketers equate more customers with more business. But this had been an

outdated policy for 2010.

As the advertising trend reports of 2010 show marketers are concentrating

on customer satisfaction these days. Instead of attracting more customers they

are interested in retaining their existing customers. This differs from the earlier

32

market trends. The marketers are working hard to offer better customer

satisfaction. They are focusing on the niche because being focused can earn them

better return on investment.

Marketers are no more concentrating on a single medium. They are

exploring various avenues to reach their target market. Online advertising is

gaining more popularity day by day. Social networks as well as social media

promotion are getting more prominence. In fact the marketers are looking for more

personalized ways to reach the consumers. They have started preferring one to one

solution instead of the same solution for all.

In addition to this the advertising trends of 2010 you will see more

emphasis on quality than on quantity. Rather than mass production the

salespersons will focus on quality production because people are becoming more

conscious about what they buy. If the quality is not good they will never buy it

again.

This is the reason that even the smallest company is trying to develop brand

loyalty. Brand loyalty is not only indicated through repeat purchase. If a marketer

can successfully develop brand loyalty the customers are sure to do word-of-

mouth promotion for that company. They will even be less sensitive towards price

change if they know that the money is worth the product. So marketers are putting

a lot of effort to reduce the cost per customer.

Also, the research indicates that during recessions, advances in sales can be

made by shifting emphasis within advertising executions. Advertisements during a

recession tend to stress quality and value, as well as new uses for old brands. This

is primarily driven by the fact that commercials and advertising in general need to

reflect the current consumer mentality, regardless of the status of current means.

With these introductory comments, let us look at the data available on advertising

during a recession.

The Issues And The Opportunities

33

The question of advertising during a recession is one that has been asked

many times over many years. Interestingly, the answer still does not seem clear to

enough marketers.

The answer to the question is that advertising during a recession provides a

unique window of opportunity for investment purposes to:

1) Build equity

2) Solidify your customer base;

3) Gain new customers; and

4) Make inroads on your competitors who have cut their advertising during the

recession period.

This window of opportunity is created by the understanding that advertising

is an investment, not an expense. However, it is easily understood why many

people do not view advertising as an investment, but treat it as an expense. It is

because advertising frequently does not represent a fixed cost, like capital

expenditures, which are investments. Given the above stated opportunities, one

would logically ask: Why do advertiser’s cut their budgets during recessions.

Excuses For Not Advertising

The three most commonly mentioned excuses for not advertising during a

recession are:

"People do not have money, so our advertising would be wasted";

"We can afford to slash, since competitors are doing the same"; and

"The money saved on advertising helps us to pay dividends to stockholders."

The following are three discussions that refute the above excuses:

34

Rebuttal# 1:

People do not have the money, so our advertising would be wasted."

Studies of every recession since 1940 indicate that recessions have little adverse

impact on total employment (the size of the employed labor force has never

declined by more than 2 percent) and, similarly, little adverse impact on

disposable income. (Real disposable personal income per capita has never declined

by more than 2 percent.)

The pessimism among advertisers is mainly myth, hardly warranted by

facts. Because families start curtailing their purchases during a recession, not less

but more advertising is required to prevent consumption from eroding-particularly

since both employment and income are holding up reasonably well.

Rebuttal #2:

"We can afford to slash, since competitors are doing the same." Equally

fallacious is the rationale that a company can afford reducing its advertising

spending because everybody else is cutting back. Rather than waiting for business

to return to normal, top executives should cash in on the opportunity that the rival

companies are creating for them. The company courageous enough to stay in and

fight when everyone else is playing safe can bring about a dramatic improvement

in market position.

Some progressive companies have recognized this. Instead of withdrawing

"into their shells" and waiting for something to happen, they expand their

programs during slowdowns. As a result, they better position themselves to benefit

when the eventual upturn occurs.

Rebuttal #3:

"The money saved on advertising helps us to pay dividends to

stockholders." Even more tenuous is the third argument-that advertising should be

cut in order to release funds for dividends. Attempting to regain a favorable 35

position lost during a recession costs more in the long run than to retain it by

continuing to advertise. There is likely to be a fast erosion of the consumer

franchise that the advertiser has taken years, even decades, to build. It is near

impossible to regain the old customers once they have adopted competitive brands.

And, of course, firms can more readily explain a drop in dividends if the money

was used as an investment to protect market share.

36

RESEARCH METHODOLOGY

Types of Research Design used:

1. Conclusive Research Design (Descriptive Research)

2. Construction and Completion Techniques (Qualitative Research – Indirect

Approach)

3. Primary Data collection through Questionnaires

4. Secondary Data collection through Published Materials

SCOPE:

This report explains the current scenario of few industries in India and

tracks their advertising strategies in the period of Global slowdown.

- Tourism Sector

- Realty Sector

- Key challenges and Hurdles today

- Future Potential and challenges ahead in India

Scaling Techniques Used

1. Rank Order Scaling

2. Likert Scaling

3. Open Ended Questions

4. Closed Ended Questions

5. Multiple Choice Questions

37

RESEARCH ANALYSIS

QUESTIONNAIRE TO CONSUMERS – ANALYSIS

1. First we would like to start with liking of consumers towards seeing an

advertisement based on FMCG products and the Hospitality Sector. So first

question had been framed like, Do you like to watch advertisements relating to

FMCG products and the Hospitality? The responses were surprising. Out of 70

respondents, 52 people have recorded their choice as YES and rest 18 people

have made their option as NO.

YES NO

52 18

Response Sheet 1

38

52

18

0

10

20

30

40

50

60

Yes No

2. Coming next to advertising medium, we have more mediums emerging today

which brands use to reach their target audience. Starting from Radio to over

Internet we can list many but to understand the people ease in viewing an

advertisement relating to FMCG products and the Hospitality sector. So the next

question framed as, what medium of advertising which you think makes more

influence for a Buyer to make decision?

Response Graph 2

18

8

24

8

12

0 5 10 15 20 25 30

New spapers andMagazines

Online Advertising

Television Commercials

Radio Jingles

SMS Ads

The responses gives a startling reading. The above graph depicts that SMS alerts

stand second to TV Commercials, in which Mobile Advertising made entry into

expedition with FMCG brand promotions and now it is really making a bang with

Hospitality sector too.

39

3. As of now I am done with general analysis with Advertisements and Consumers. So

let’s move into Recession and its blow into advertising lying on which whole thesis relies

into. This question stands as an eye opener between consumers view and a marketer

view. How much you rate the relevance between Advertising and Recession? The given

options run to 0% to 90% above at regular intervals.

OPTION RESPONSES

0 to 30% 12

30 to 60% 43

60-90% 11

90% and above 4

Response Graph 3

12

43

11

4

0

5

10

15

20

25

30

35

40

45

50

0 to 30% 30 to 60% 60-90% 90% and above

Out of 70 respondents above graph describe 43 people have chosen the relevancy

between advertisements and recession as 30 to 60% which includes possibility of

more than 50%.

40

4. With this question just tried to trigger the consumers more towards the marketer

view in their mindset. It made me to ask, do you agree advertising in recession

period makes Brand popular? But the results shocked me during the tabulation. It

shows 46 people have said YES and rest stayed with NO. From this we can

comprehend even consumers have a preference watching advertisements in

recession period which in turn makes the brand popular. When they were used

with loads of commercials daily and if brands stopped their relay suddenly,

obviously people may thing brands which advertise has more stability.

YES NO

46 24

Response Graph 4

5. Well we have understood the importance of advertising in recession and extras.

Now we move on into brands and their frequency of their advertisements. In spite

of medium any advertisement needs a reach and frequency to make an impact in 41

YES, 46

NO, 24

decision making. On this point of view the following question has been framed

with the options as brands from FMCG products and the Hospitality sector

running to ten popular brands. Brands listed as options are Wills Lifestyle,

Aashirvaad, Bingo, Sunfeast, Vivel, Fiama Di Wills, ITC Welcomgroup, John

Players, Classmate, AIM.

Response Graph 5

0

2

4

6

8

10

12

Bingo Vivel FiamaDi Wills

WillsLifestyle

Aashirvaad Classmate Sunfeast JohnPlayers

ITCWelcomgroup

AIM

42

6. From now on the questions were focused on our two scope sectors, FMCG

products and Hospitality. To start with, FMCG consumers were asked the

question, how often you overcome an advertisement related to FMCG

products? To refine the result we got from the before question, this particular

question was framed to measure frequency with respect to FMCG

advertisements.

OPTIONS RESPONSES

Frequently 24

Less Frequently

7

More Frequently 36

Cant Answer 3

Response Graph 6

7. In which medium you came across advertisements relating to FMCG?

OPTIONS RESPONSES

43

24, 34%

7, 10%

36, 52%

3, 4%

Frequently

Less Frequently

More Frequently

Can't Say

Newspapers 38

Magazines 8

Television 24

Internet 0

Response Graph 7

The above graph depicts 55% respondents recorded the option as newspapers,

34% respondents opted for Television, 11% respondents opted for Magazines.

May be this medium is preferred because it costs less than other medium available.

44

38, 55%

8, 11%

24, 34%

0, 0%

Newspapers

Magazines

Television

Internet

8. With this question we try to measure and know the impact the FMCG

advertisements made during the recession. Do you feel FMCG ads benefited the

Brand and People? From these responses we can depict that most of the

respondents agree that advertisements made brand popular and also it made an

impact in the minds of consumers. So advertisements made by FMCG brands in

the recession have helped both people and brand themselves.

37, 53%28, 40%

5, 7%

Yes

No

Can't Say

YES NO CAN’T SAY

37 28 5

45

9. To continue with Hospitality sector we made a question, how often you

overcome an advertisement related to Hotels? To refine the result we got from the

before questions in general, this particular question was framed to measure frequency

with respect to real estate advertisements.

OPTIONS RESPONSES

Frequently 38

Less Frequently 9

More Frequently 21

Cant Answer 2

Response Graph 9

38

9

21

2

0 5 10 15 20 25 30 35 40

Frequently

Less Frequently

More Frequently

Can't Say

46

10. In which medium of advertisement did you come across ads relating to Hotels?

OPTIONS RESPONSES

Newspapers 33

Magazines 6

Television 16

Internet 15

Response Graph 10

The above table and graph depicts that more than 30% of target audience

overcome hotel advertisements in newspapers. May be these companies prefer

newspaper as a medium because it costs less compared to other mediums also this

medium possess more reach.

47

33

6

16

15

Newspapers

Magazines

Television

Internet

11. With this question we try to measure and know level of impact the hotel

advertisements made during the recession. Do you feel hotel advertisements

benefited the Brand and People? From these responses we can depict that most of

the respondents agree that advertisements made brand popular and also it made an

impact in the minds of consumers. So advertisements made by FMCG brands in the

recession have helped both people and brand themselves.

YES NO CAN’T SAY

31 22 17

31, 45%

22, 31%

17, 24%

Yes

No

Can't Say

48

12. Through the earlier questions we have done with understanding their responses

towards FMCG and hotel advertisements in specific. So with this question we try to

figure out the consumers taste in message strategy followed by advertisements in

recession. With that in mind the options have been included with Beliefs and Traditions

based advertisements, Fun and Cartoon based advertisements , Love and Emotions based

advertisements, Pricing and Benefits based Advertisements. Day in and day out we

overcome commercials based on these strategies and the respondents say they prefer

watching advertisements based on pricing and Benefits. This clearly depicts the

importance they give on each penny they spend during the recession.

OPTIONS RESPONSES

Beliefs and Tradition 4

Fun and Cartoons 12

Love and Emotions 25

Pricing and Benefits 28

Others 1

Response Graph 12

49

4

12

25

28

1

0

5

10

15

20

25

30

Beliefs and Tradition Fun and Cartoons Love and Emotions Pricing and Benefits Others

13. Few questions before, we had asked consumers to rank the advertisements for

their reach and its impact. But with this question we put forth ten brands which

include FMCG brands and hotels, and understand consumers view on brands being

popular. The options are running between Advertisement, Quality and Price.

OPTIONS RESPONSES

Advertisement Quality Price

Aashiravaad 27 32 11

Welcom Group 10 38 22

Fiama Di Wills 35 10 25

John Players 16 30 24

Wills Lifestyle 32 22 16

Bingo 42 20 8

AIM 22 20 28

50

Sunfeast 36 8 26

Classmate 32 14 24

Vivel 30 34 6

Response Graph 13

14. With regards to thesis scope we covered each and every aspect relating three

factors, Consumers, advertisements and recession. Coming to the last question we

tried to dig more information from consumer mind by asking him the question, Do

you think this recession affected any brands listed above? If so mention the brand

names. The answers we recorded with before question portray many brands which

satisfied consumer well did not advertise more. So this question responds us the

brands in particular which realized a slowdown with economy.

OPTIONS RESPONSES

No Answer 14

0

5

10

15

20

25

30

35

40

45

Advertisement 27 10 35 16 32 42 22 36 32 30

Quality 32 38 10 30 22 20 20 8 14 34

Price 11 22 25 24 16 8 28 26 24 6

Aashirvaad Welcom Group

Fiama Di Wills

John Players

Wills Lifestyle

BingoAIM

Sunfeast Classmate Vivel l

51

Aashirvaad 9

Welcom Group 16

Wills Lifestyle 12

Sunfeast 9

Fiama Di Wills 10

Response Graph 14

QUESTIONNAIRE ON BRANDS – ANALYSIS

The brands to which we made research are only from FMCG & Hospitality

sectors. Totally Reponses have been collected from 20 brands and the result is

tabulated.

The 20 brands are as follows,

1. Aashirvaad

2. Bingo

14

9

16

12

9

10

0 2 4 6 8 10 12 14 16 18

No Answer

Aashirvaad

Welcom Group

Wills Lifestyle

Sunfeast

Fiama Di Wills

52

3. Mint-O

4. Candyman

5. Essenza Di Wills

6. Fiama Di Wills

7. Vivel

8. John Players

9. Wills Lifestyle

10. AIM

11. Classmate

12. Mangaldeep

13. Paperkraft

14. Kitchens of India

15. Superia

16. Welcom Group

17. India Kings

18. Navy Cut

19. Classic

20. Sunfeast

53

1. Does your company view advertising as an expense or an investment?

Out of 20 brands, 18 have said they consider it as an investment and rest 2 brands

feel it as an expense.

INVESTMENT EXPENSE

18 2

Response Graph 15

18

2

INVESTMENT

EXPENSE

54

2. What type of media you use to reach most effectively your target audience?

a. Newspapers (7)

b. Internet Advertising (3)

c. Radio Jingles (2)

d. TV Commercials (8)

e. Others (0)

Response Graph 16

The above graph depicts most of the brands prefer Internet advertising as a cost

effective medium in promotion their product rather than relying on other mediums.

They also portray that television stands next to Internet advertising wherein they

reach large segment of people to explore their promotions.

7

2

8

3

0

0 1 2 3 4 5 6 7 8 9

Newspapers

Radio Jingles

Internet Advertising

TV Commercials

Others

55

3. What is the type of advertising campaign you will run?

a) To promote a new product? (4)

b) To place a familiar product in front of your target audience? (12)

c) To promote a special service or activity? (2)

d) Others (2)

It was really shocking to know brands thrive to place a familiar product in front of

their target audience rather than promoting a special service or activity. Who cares

about activity in recession? We cannot neglect this option so, because two brands

have responded as they promote special service or activity through their

advertising.

Response Graph 16

56

4

12

2

2

0 2 4 6 8 10 12 14

Promote a new product

Place a Familiar Product

Promote a Special service

Others

4. What is the advertising style that best suits your products and/or services? Yet

the question is of open type the responses were listed out in points and grouped

generically rather than making a tabulation or graph.

Visual Ads -> As it gives more recall of the brand (1)

Print Media (1)

Pictorial Representation (1)

Through Online and Social Media (1)

TV Commercials , Newspapers and Road shows (7)

TV Commercials Alone (5)

Left Blank (4)

5. How do you reach the most people (within your defined market) for your

advertising (Every Rupee Spent?)

Cost per campaign with sales revenue (1)

Through brand recall (4)

Right Approach to Right people at Right Time (1)

By choosing the proper channel (1)

Through Newspapers (6)

Through Online Advertisements (5)

Left Blank (2)

6. What you think are the major risks that the advertisements will not generate

enough sales to justify the costs of the campaign?

Competition Counter attack (1)

Durability of the campaign vs. The product (1)

Competitors attach via advertisements with more features (1)

Not Defining the target audience and Improper positioning (6)

Cost revenue mismatch (6)

More Cost less benefit (1)

57

Right medium and proper advertising to the target customers will not

create the risk (1)

Not True (3)

7. How have you as a company succeeded during the current recessionary trend?

Through our advertising partner (1)

We were able to maintain as it was before. But no increase in sales (1)

By running on many online events (1)

Came out with new product suiting market needs (2)

Doing Business as usual (3)

Yes, we have succeeded (7)

No Answer (5)

8. Did the advertising make a difference during this phase & how?

Yes we got increase in our sales volume (8)

No considerable improvement (4)

Yes, without that we might have lost a part of our market share (1)

Yes, we got 20% increase in sales volume, but of course we reduced the

price a bit. But advertisement made it to increase sales volume. (1)

Yes, it does make a difference, since we can target market which really is

not affected due to recession (1)

No, According to market trend and traffic we advertised (1)

No Answer (4)

QUESTIONNAIRE ON AD AGENCIES-ANALYSIS

The research has been made on ten advertising agencies in Chennai. They are,

1) One point Size

58

2) Crewind Communications

3) SEOEDGE

4) Redifussion advertising Ltd.

5) Kannan Ads

6) Finger prints advertising

7) WOC Advertising Enterprize

8) Ogilvy and Mather India

9) JWT

10)Gold wire Communications

1. How do you demonstrate your value as an Ad agency during slow economies,

when your clients pay more attention on the advertising spend?

Its value for money. The ad that we will be doing for them need to be

more profitable for them. (1)

Spend more to get more attention with proper channel and message which

will bring more prospects. (1)

It is irrelevant of saying so, because when the economy is slow we need to

spend more on advertising. (1)

Our Clients keep forcing us for more creative ads. (1)

We promote creativity in all ads and so client stay with us (3)

Our value is increased during slowdown because we deliver good quality

advertisements. (1)

No answer (2)

2. What kind of customer benefits do you talk about to your clients?

It is entirely based on the client business and season of advertising (5)

59

Mutual co-ordination, More penetration results in more sale (1)

Proper statistical analysis of the campaign to find out where and all to

improve

Assured sales increase with online tracking system. (1)

Majority of our clients are from FMCG and we advice to go for pricing

strategy to be in advertisements (1)

Its completely rely on mutual views. (1)

No answer (1)

3. What kind of comprehensive plans you showcase to your clients?

By working with the client at their place for easy understanding (1)

Our project management system that can be accessed by our clients

throughout out project. (1)

Our past goals and achievement. (4)

Obviously to spend more on advertising (3)

Will portray the flipside in absence of advertising. (1)

4. How do you help clients in retooling their message to reach-out to their

customers?

By conducting the research among the audience. (1)

Initially with a pilot survey, then by putting control mechanism at regular

interval. (1)

By putting the experts in the analysis (1)

Depends on the problem they face (4)

No answer (3)

5. How well as an agency you understand competitive positioning and present

creative solutions for client advertising needs?

Both are same as now everyone needs to be competitive to sustain. (1)

To become competitive you need to have the best creative solutions for

your clients. (1)

60

Both play the vital role, but creative solutions given more priority. (2)

As for as we being creative there is no word of competition (1)

As our clients even we face competition in our field but we define

statement in more creative manner. (1)

No answer (2)

We understood well about the positioning and working towards our best

to provide creative solutions to our clients. (1)

Our business is renowned to be creative and positioning is done on that

basis (1)

RECOMMENDATIONS

When times get tough, as they are today, many companies begin cutting back.

Sometimes they let employees go and stop there. Other times, they eliminate their

marketing is a bad move says the research & customer feedback.“The public has

to be reminded about who you are and what you're selling . . . Instead of cutting

back on marketing, be more aggressive.”

61

Also it’s a researched fact that, “When companies cease touting themselves via the

media, opportunities are created for their competitors to step into the spotlight . . .”

Staying in front of your customers and prospects is vital - even in a recession.

During uncertain times, when people are not spending, marketers should consider

investing further in their marketing instead of waiting for a change in market

conditions.

“It might even be tempting to “ride it out” - to do nothing until things turn around.

This passive approach yields passive results. Nothing will happen while you're

waiting and when things do turn around, the business will go to the people who've

been doing something all along. The people who will get the lion's share of the

business - both now and in the future - are the ones who work to build

relationships,”

Don't let people forget who you are . . . where you are . . . how you can be

reached. Do what you can to maintain a presence. Stay in touch with your

customers, be it via phone, “snail,” or e-mail. Ask them what they want and need

during this time. And remember, if potential customers are out there looking for

your product or service and your name is visible, when your competition's is not,

your marketing efforts will invite them to call you.

While it may be smart business to cut back during tough economic times the first

area most companies reduce is their marketing budget in order to save money and

try to keep a normal level of profitability. A common assumption is because

money is tight everywhere, customers will be spending less; and therefore, money

spent on advertising will be wasted. The fact is families will continue to eat,

entertain themselves and buy other goods and services.

But it’s more than simply maintaining or increasing advertising investments, you

must have a sound strategy.

62

Examine Your Competition

It is times like these that you must keep a watchful eye on your competition.

Follow the changes they make to their advertising plans. If they start to cu t back

or make their message more conservative, this could be a great opportunity for

your company to capture a stronger market share.The bold and savvy advertisers

are the ones that look at a recession as an opportunity to increase their market

share because their competition makes cut-backs.

Wisely Expand Your Reach

As many advertisers cut back on placements, this can be a great time to become

more visible in a dwindling advertising landscape. Another advantage is that

businesses might get better deals for premium placements where there is less of a

demand.

Regardless of the approach used to take advantage of this time to expand a

business’s reach, advertisers must keep a watchful eye on the progress and ROI for

their advertising strategies.

It’s vital that advertisers measure the impact their campaigns are having and

optimize according to what they find. These findings may conclude that using

advertising efforts such as TV, radio, online, etc will have a clear and proven

return on investment and are critical in expanding reach. Other venues such as

trade shows have a hard time proving any measurable success.

Reassure the Consumer

63

Advertisers must gain an understanding of what impact the economy is having on

their target audience, and use that information to evaluate their advertising plan

from creative to the very last placement. Consumers are looking for safe, strong

companies to invest in, shop with, and do business with. Tailor your message

around what consumers are dealing with, but do it in a way to not remind them of

the difficulties they are facing.

Creative that builds trust in consumers and makes them feel more positive about a

company’s commitment to its product and services will have much greater

success. Also, portray strength and success during time of cutbacks.

Scrutinize your marketing budget to make sure you're not wasting money, but

don't stop marketing or advertising completely. While weathering the recession is

priority one for businesses, it is important to understand how not cutting back on

your advertising will multiply your return when the recession ends. It will afford

you to have an upper hand on your competitors that drastically cut their marketing

dollars back during the tough economic times.

"The best strategy for coping with a recession is balanced exploitation of ad

spending for long-term consumer motivation, plus promotion for short term sales

boosts."

In difficult economic times, businesses and consumers don't stop spending money

altogether. They do, however, spend less and tend to want to spend it on brands

with which they are familiar and comfortable. By aggressively advertising during

an economic downturn, you can remain visible and legitimate to your customers,

especially as your competitors pull back. This is what this study has enforced by

way of the responses that were drawn during the research.

As Henry Ford said, “A man who stops advertising to save money is like a man

who stops a clock to save time

64

CONCLUSION

Many clients, like consumers are nervous over our economic condition, and

rightfully so.  But now is not the time to cut back advertising, promotion, and

marketing. In fact research has shown that companies that take advantage of these

times can dominate market share and here are a few reasons why.

Your competition is probably scaling back.  This creates less clutter for attention.

Your message can stand out and create more awareness.

Deals are to be had.  Media outlets are more likely to negotiate right now for

advertising rates.

If you are advertising, brand identity begins to drop off immediately when you cut

back.

It costs more to re-build brand identity than to continue it during tough times

If others are cutting back and you are maintaining or increasing advertising,

promotions, your position as a market leader is enhanced.  It sends a message your

company is strong, confident, and is maintaining its course of success and market

domination.

Now, having said that, it may also be a good time to look at media that gets the

most bang for your buck.  Here’s a list of things you may want to consider during

economic stress:

What marketers can do during a recession?

Focus on advertising with clear and proven return on investment, such as Internet

and promotional advertising.

65

Be prepared to cut budget bloaters like trade shows, which have a harder time

proving ROI.

Focus on a brand’s core base, instead of going after more expensive new

customers

If a brand has made its bones on humor, don’t be quick to change that.

“Acknowledging bad times might feel right, particularly if a recession is

protracted, but consumers may not want to be reminded of that fact. And a little

entertainment can go a long way, ‘If humor was right for your brand in good

times, it’s even more right for your brand in bad,’

Market position is hard to get, and maintain, don’t lose it.  And if you haven’t yet

established a market position, now may be the best time to get started.  Remember,

as I’ve posted many times here, market position is one of the single most

important marketing activities you can do. Establish it now, while your

competition is laying low.  Do it smart, do it effectively, and do it with

confidence.  Recessions do not last forever, and the companies that come out with

a head start will be positioned to gain more market share than those that have been

on the sidelines.

Remember, nothing happens until a sale takes place, and supporting your sales

force with effective marketing has never been more important than it is right now.

These survey results, as well as the recommendations offered with it will,

encourage one to stop thinking of the recession as merely a time of slower sales

and start thinking of it as a unique and temporary window of opportunity. Instead

of viewing the recession as just a sales problem, see it as a time of strategic

opportunity, when investments of time and energy can result in significant long-

term gains.

66

BIBILOGRAPHY

Website Sources:

1. http://www.itc.com

2. http://google.com

3. http://blogs.bnet.com/intercom

Book Source:

1. Advertising and integrated brand promotion by O’Guinn.Allen.Semenik.4E

2. Advertising Express Magazine

67

ANNEXURE

Questionnaire on Consumers

1. Do you like watching advertisements relating to FMCG & hospitality?

a. Yes

b. No

2. What media of advertising which you think makes more influence for a

Buyer to make decision?

a. Newspapers & Magazines

b. Online Advertising

c. Television Commercials

d. Radio Jingles

e. Mobile SMS Ads

3. How much you rate the relevance between Advertising and Recession?

a. 0%

b. 0-30%

c. 30-60%

d. 60-90%

68

e. 90% above

4. Do you agree advertising in recession period makes Brand popular?

a. Yes

b. No

5. How do your rank the advertisements frequency for the following brands?

a. Aashirvaad _______________

b. Wills Lifestyle _______________

c. John Players _______________

d. Vivel _______________

e. Fiama Di Wills _______________

f. Sunfeast _______________

g. AIM _______________

h. Classmate _______________

i. Welcom Group _______________

j. Bingo _______________

6. How often you overcome an advertisement related to FMCG products?

a. Frequently

b. Less Frequently

c. More Frequently

69

d. Can’t say

7. In which medium you came across advertisements relating to FMCG

products?

a. Newspapers

b. Magazines

c. Television

d. Internet

8. Do you feel FMCG ads benefited the Brand and People?

a. Yes B. No C. Can’t say

9. 10. How often you overcome a advertisement relate to Hotels?

a. Frequently

b. Less Frequently

c. More Frequently

d. Can’t say

10.In which medium of advertisement you came across ads relating to Hotels?

a. Newspapers

b. Magazines

c. Television

d. Internet

70

11.DO you feel Hotel ads benefited the Brand and People?

a. Yes B. No C. Can’t say

12.What type of advertisements you like to see often?

a. Beliefs and Traditions

b. Fun and Cartoons

c. Love and Emotions

d. Pricing and Benefits

e. Others,___________________

13.What made the following Brands popular?

Advertisement Quality

Price

a. Aashirvaad

b. Wills Lifestyle

c. John Players

d. Vivel

e. Fiama Di Wills

f. Sunfeast

g. AIM

h. Classmate

i. Welcom Group

j. Bingo

71

14. Do you think recession affected any of the brands listed above? If so

mention the brand names,

____________________________________________________________

Name:

Age:

Thank you for filling up this Questionnaire. We value your opinions.

Questionnaire to the Brands

1. Does your company view advertising as an expense or an investment?

________________________________________________________

2. What type of media you use to reach most effectively your target

audience?

a. Newspapers

b. TV Commercials

c. Radio Jingles

d. Internet Advertising

e. Others______________

3. What is the type of advertising campaign you will run?

e) To promote a new product?

f) To place a familiar product in front of your target audience?

g) To promote a special service or activity?

h) Others,__________________________

4. What is the advertising style that best suits your products and/or services?

____________________________________________________________

72

5. How do you reach the most people (within your defined market) for your

advertising (Every Rupee spent)

_____________________________________________________________

6. What you think are the major risks that the advertisements will not

generate enough sales to justify the costs of the campaign?

_____________________________________________________________

7. How have you as a company succeeded during the current recessionary

trend?

__________________________________________________________

8. Did the advertising make a difference during this phase & how?

____________________________________________________________

____________________________________________________________

73

Questionnaire to the Ad Agencies

1) How do u demonstrate your value as an Ad agency during slow

economies, when your clients pay more attention on the advertising

spend?

___________________________________________________________

___________________________________________________________

2) What kind of customer benefits do you talk about to your clients?

___________________________________________________________

___________________________________________________________

3) What kind of comprehensive plans you showcase to your clients?

___________________________________________________________

___________________________________________________________

4) How do you help clients in retooling their message to reach-out to their

customers?

___________________________________________________________

5) How well as an agency you understand competitive positioning and

present creative solutions for client advertising needs?

_________________________________________________________________

_________________________________________________________________

74