Marketing Brew

The CEO of Electronic Arts (don’t tell me you are googling Electronic Arts!) said at a recent conference that the recession is actually a good thing as it will take all the ‘junk’ off the shelves. While that may be true in the gaming world, I am inclined to think otherwise for most other industries. 

It is important to understand that for the average consumer a recession is not just a bunch of statistics or an inconsequential but recurring headline. It is a very real phenomenon which forces him to rationalize his consumption behaviour to a far greater extent than he would have in the good days. It is a time when the average consumer, if lucky is holding on to a job with dear life otherwise the worst has already happened, in either case though, is worried about his future income stream and is desperate to cut inches of his bills.

Now the problem is this – cutting inches of bills is also the first thing that strikes every VP, MD, CEO worth his corner office. ‘Cut Costs’ comes the proverbial inter-department memo and nothing takes the axe quite like the marketing budget does. Speaking at the recent FRAMES summit organized by FICCI, Punitha Arumugam, CEO of Madison noted that the Indian advertising industry grew by 17% in 2008 and then came crashing down by 20-30% in Nov\Dec, Jan-09 saw another 30% dip in advertising revenues. This is testament to probably several such ‘cut costs’ memos floating around in various corporate offices.
Couple the two together – a company trying to hold back marketing & advertising expenditure and a consumer trying to trim his expenses – what do you get? A lot of demand for regional brands, which are almost always a better value offering for the consumer. This presents a huge opportunity for them to get a foothold in the consumer mind space, slowly but surely nudging out the big national brands.

Are the big national brands just going to sit back and watch?

Well, while the obvious strategy for national brands would be to continue focussing on reinforcing the brand values and keeping the connect with consumers alive, the fact remains that coming from a year of rising costs and seeing your profits disappear over night, concepts like brand equity and consumer connect do start sounding a little abstract, especially when you have a bunch of shareholders demanding some answers to some rather unpleasant questions.

So I reckon this sequence of events is not about to change some time soon, which brings me back to the almost vulgarly huge opportunity the regional brands are hence presented. This is their day in the sun and I think they should go full hog. Make product quality improvements, bring packaging up to speed, pump up distribution. Nothing will connect with consumers quite like ‘value’ in this trying time and this is what the regional brands need to shout. This is the plank that most regional brands have always operated on but somehow this voice got lost in the loud intonations of the Shahrukh Khans and the Sachin Tendulkars.

This is the much awaited breather, a private space and a listening consumer. It is indeed a blessing, but the need of the hour is to act fast as this window of opportunity might not last long.