Académique Documents
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PROJECT REPORT
ON
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……………………………………………………….iii
1. CHAPTER 1- INTRODUCTION………………………………………….....6
3. CHAPTER - METHODOLOGY………………………………………........16
4.1 Telecom………………………………………………………………….18
4.2 FMCG…………………………………………………………………...25
4.3 Consumer Durables……………………………………………………...29
4.4 BFSI……………………………………………………………………..33
4.5 Overall…………………………………………………………………..37
5. CHAPTER6 - CONCLUSION…………………….…………..……………39
6. REFERENCES……………………………………….………………………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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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:
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 companies amongst others and domain experts such as media planning 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 %
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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 activations can be strategical or tactical in nature, depending upon the type of
activation. BTL activations are most commonly used for sales promotions, branding,
product launch, channel partners appeasement, channel expansion, lead generation.
Marketers have different objective for different activities. Some of the most common
strategies are customer retention, customer acquisition, brand visibility etc.
This research report explores the current developments and trends in Below the
Line(BTL) marketing spend across the Indian market.
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CHAPTER 1 - INTRODUCTION
To find out the seasonality (if any) of the BTL activations in those sectors.
India is one of the fastest growing consumer markets in the world and as more than 300
million consumers spend on cars, mobile phones, food and films amongst others,
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.
Though figures vary on the size of the BTL market -- encompassing promotions,
exhibitions, point-of-purchase and retail merchandising and on-ground activities --
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
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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. The sample size taken by us for the study may not be a true representative of the
entire sector defined for the study.
2. The responses given by the respondents may not be true or may be biased.
3. The Sample is biased against the sectors 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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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
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 it, summarized the expenses and only after 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
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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 traditional direct marketing efforts –
they aspire to establish targeted relationships between marketers and individual
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.
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unwholesome demand were
proscribed by the Socio-legal restrictions. Even though BTL activities started off to fill in
for ATL activities, increasingly, BTL strategies are now recognized as economical,
unique, and personal ways to achieve "cut-through" in the supersaturated advertising
environment.
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• Measurability – The extent to which a marketer can track the results of an
individual initiative, determine commensurate return-on-investment and adjust
future campaigns to provide for an enhanced chance of success
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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 services: By designing online campaigns that generate valuable and
conversions by the use of Web Properties, Affiliate Network and Search Engine
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.
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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 promotions can be directed at the customer, sales staff, or distribution channel
members (such as retailers). Sales promotions targeted at the consumer are called
consumer sales promotions. Sales promotions targeted at retailers and wholesale are called
trade sales promotions.
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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 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
sectors (which we got from AD-Ex India website) and then found out their
rankings in the particular sub-sector. This data was extracted from the secondary
sources.
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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.
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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See appendix.
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• Telecom sector has seen a rise of 61 per cent in TV advertising during 2007 over
2006.
(Source: Adexindia).
Top five advertisers under the Telecom Segments.
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Expected Average increase= 5%
Telephone Equipments:
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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 in the balance sheet, lot of sales promotion activities are 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.
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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.
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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.
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. Similarly for 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
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.
Gillette does BTL activations at the beginning of Q2 due to allocation 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.
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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.
ATL
(Source: Adexindia).
(Source: Adexindia).
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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.
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Expected Rise in BTL
OVERALL SECTOR:
Time has changes and so has this sector. Few years back this sector was concentrating
primarily on consumers while now it’s not the case. Channel partners are equally
important in the chain. Marketers now-a-days do not want to leave any opportunity to
persuade the customer. Moreover in this sector distribution network also 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.
Activities like touring, events, giving incentives, increasing credit are some 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.
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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
activations are carried out by the companies which are directed towards the 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.
Major chunk of money on BTL activations are directed to the annual meetings,
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
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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
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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 in their hometown i.e.South for this 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 providing car loans,like ICICI Lombard they should get in talks with
corporate for schemes that can be routed through the BTL agencies at this time of the
year.
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target festival time of Diwali
.
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.
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2. Almost all the players in each sector are tapping onto Rural 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 is increasing over the years. For the industry average it is 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 activations can be tactical or strategical in nature depending upon the type of
activations. It is the misconception that they are only tactical in nature.
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5. Companies are giving a lot of importance to their channel partners. In some 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 less bang for the above-the-line (ATL) buck. The other more important 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.
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trends that are directly impacting the allocation of marketing budgets for both ATL and
BTL campaigns. They include:
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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.
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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-the-
line 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.
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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
connection, according to Jupiter Research, and approximately 80 percent 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, Gilles, Jean-Noel Kapferer, and Francoise Roussel (1995), "The
Underlying Structure of Brand Awareness Scores," Marketing Science, 14
(No. 3, Part 2
7. Day, George S. and Robert W. Pratt (1971), "Stability of Appliance Brand
Awareness," Journal of Marketing Research, 8 (February),.
8. Dall'Olmo Riley, F., A.S.C. Ehrenberg, S.B. Castleberry, T.P. Barwise,
and N.R. Barnard (1997), "The Variability of Attitudinal Repeat-Rates,"
International Journal of Research in Marketing, 437-50
9. Aaker, David A. (1991), Managing Brand Equity. New York: The Free
Press
SAMPLE DESCRIPTION
The following Table gives the details regarding the selected sample:
Table 1
S.No. Sector Company Name
1 Consumer Durables Sony India Ltd.
2 -do- Whirlpool
3 -do- Electrolux
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4 -do- Voltas
5 -do- Carrier
6 -do- L.G.
7 -do- Samsung
8 -do- Shalimar Paints
9 FMCG Perfetti
10 -do- Gillette
11 -do- Hul
12 -do- Itc
13 -do- Marico
14 -do- Dabur
15 -do- G.S.K.
16 -do- Pepsi
17 NBFC-BFSI Amex
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26 -do- Idea
27 -do- Vodaphone
28 -do- Reliance
Communications
29 TelecomHandsetManafacture Fly Mobiles
r
30 -do- Nokia
31 -do- Reliance
32 -do- Motorola
Table 2
Consumer Trade
Consumer
Durable 55 45
sony 60 40
Electrolux 60 40
Whirlpool 50 50
voltas 50 50
Table 3
Importance
Concept 70
Price 20
Quality of
Material 10
Table 3
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Consumer Durable
Table 4
Telecom BTL ATL Increase
Idea 35 65 40
Airtel 30 70 35
vodafone 30 70 35
Motorola 40 60 50
Nokia 35 65 40
fly mobiles 30 70 35
Table 5
FMCG
Gillete 65 35 70
GSK 50 50 50
Marico 40 60 40
Pepsi 10 90 15
Perfetti 20 80 25
HUL 30 70 35
Table 6
Consumer to trade promotion in Telecom
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Idea
50:50
Airtel 80:20
70:30
Motorola
Fly 50:50
Table 7
Table 8
Increase: 2007 to 2008
Birla sunlife 40 45
Max New York 12.5 37.5
ING Vysa 60 75
Amex 33 38
Bajaj allianz 35 45
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