BTL Spending Patterns

BTL SPENDING PATTERNS 2008

PROJECT REPORT

ON

BTL SPENDING PATTERNS”

ACROSS

FMCG/TELECOM/CONSUMER DURABLES/BFSI SECTORS

SUBMITTED BY:

MANISH SINGLAMOHIT 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

1.1 Project Objective……………...……………………..…………………..61.2 Background...……………………………………………………………71.3 Relevance……………………………………………………………......81.4 Limitations………………………………………………………………8

2. CHAPTER 2 – LITERATURE REVIEW…………………………………...9

3. CHAPTER - METHODOLOGY………………………………………........16

3.1 Research Process………………………………………………………...16 3.2 Sample Selection………………………………………………………...16

3.3 Sample Size……………………………………………………………...173.4 Sample Description……………………………………………………...17

4. CHAPTER 4 SECTOR ANALYSIS………………………………………...18

4.1 Telecom………………………………………………………………….18 4.2 FMCG…………………………………………………………………...25

4.3 Consumer Durables……………………………………………………...294.4 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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Exhibit 1– Factors impacting choice of market(s)

Once the market is selected then the marketer is faced with the decision to select the

choice of medium for advertising. The factors are listed below:

Exhibit 2 – Factors impacting choice of media for advertising

During the course of the research we met some of India’s largest marketing spenders

across categories including FMCG, consumer durables, banking and financial services

and telecom 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

1.1 PROJECT OBJECTIVE

To analyse BTL (Below-The-Line) activations acoss four sectors, and

understanding the marketer’s strategy behind those activations.

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

To analyze why is trend shifting from ATL to BTL.

1.2 BACKGROUND OF THE STUDY

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.

Marketers acknowledge that advertising is just one variable that impacts sales among

other including pricing, distributions etc. Products and services that are promotion elastic

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tend to be highly impacted by price-offs and discounts which increase the likelihood of

consumer buying the same. In comparison, products and services that are advertising

elastic see higher sales with increased advertising. Many successful categories and brands

in KUT are price sensitive and hence promotion elastic. Marketers then choose to divert

advertising budgets to on-ground promotions (including BTL and activation) that show a

direct impact. In comparison, premium brands that have a greater uptake in metros (given

higher purchasing power) tend to be advertising elastic which means that the more they

are advertised, the higher is the likelihood of sales.

1.3 RELEVANCE

Advertising and communication today is experiencing a transformation at a pace faster

than ever. It is evident in India more than anywhere else. The rising economy, increased

cash at hand for disposal and a consumerist mindset coupled with the changing lifestyle

and media hav made communicating with the consumers a daunting task.Shopping today

has evolved , and so has the consumer. While the consumer is being hammered through

means and methods of communication that pass through certain filters of his mind to

lodge the brand there, he is still vulnerable to various psychological factors and bran

selection inducements at the point of purchase. Good advertising is that which sells. and

in context of today's scenario the need is for a judicious and careful spend of marketing

budgets to gain maximum impact that converts into sales. Brands today need to go

beyond the share-of-mind to capture the share-of-wallet.

With mass-media's return on investment going down drastically because of audience

fragmentation and media-cost inflation, marketers are looking at BTL more and more to

deliver customized solutions for their brands. BTL in marketing is considered one of the

most effective tools of product promotion. BTL-events allow not only to create positive

image of the company, to get acquainted the customer with the product, to get interested

the prospects in product purchasing, but also helps to provide all necessary information

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on terms of purchase, using and storage of product/service. Visual presentation of a

product increases customer loyalty and allows for increasing product sales volumes.

1.4 LIMITATION OF THE STUDY

1. The sample 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:

Data availability constraint due to data confidentiality.

Time constraint.

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CHAPTER 2: LITERATURE

"All the successful models we grew up with don't work. It used to be brands had all the power, and then they got sidelined by promotions.… Now it's become a consumer republic again. The consumer is boss – there's no more mass market – and is driving the flow of information."-- Kevin Roberts, CEO, Saatchi & Saatchi Worldwide

"I believe today's marketing model is broken. We're applying antiquated thinking and work systems to a new world of possibilities." -- Jim Stengel, CMO, Procter & Gamble

2.1 ORIGIN OF THE”LINE”

The origin of term “BTL” is the following: an advertising manager of Procter & Gamble

developed promotion campaign media-plan that included main media channels: TV,

press, outdoor etc. He underlined 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

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traditional marketing channels that strive to reach a mass audience with messages that

reinforce a brand communicate general product information or inspire an emotional

response. “Below-the-line” initiatives, by comparison, acts like 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.

2.2 Introduction of the Topic

There are two kinds of marketing strategies that can be used to promote any product:

"above-the-line" (ATL, essentially advertising in the mass media) and "below-the-line"

(BTL). These category names reflect the business practices of advertising agencies.

Agencies generally make commission on placement of advertisements in newspapers,

magazines and cinema, and on television, radio and billboards, a fee that appears "above

the line" on their bill. Traditionally, other forms of promotion—events, direct marketing,

email promotions, text message promotions, premiums, price reductions, public relations

activities, sponsorship, trade shows, exhibitions, sales literature and catalogues—were

charged at a fixed fee and thus appeared "below the line

Above-the-line propagated traditional marketing channels that strive to reach a mass

audience with messages that reinforce a brand communicate general product information

or inspire an emotional response. “Below-the-line” initiatives, by comparison, acts like

traditional direct marketing efforts – they aspire to establish targeted relationships

between marketers and individual consumers, and offer comparable ease in

measurability. Traditionally ATL and BTL strategies have been considered distinct, and

BTL the poor cousin. BTL activities were generally used to complement the main mass

media marketing activities and usually a fraction of marketing resources were allocated

for these activities. BTL activities first shot into prominence when ATL activities for

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products which have 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.

Figure 2.1 Channels of BTL and ATL activities

Above-the-Line Media Below-the-Line Media

1. Are tailored to reach a mass audience

Are targeted to individual consumers,

based on their expressed needs and

preferences

2. Establish brand identity or reinforce

emotional concepts surrounding a

product or brand

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

customer activity or tailored messages

about a product or brand

3. May or may not drive customer

responseDrive individual responses

4. Are difficult – if not impossible – to

measure with any accuracy

Are highly measurable, allowing

marketers insight into their return-on-

investment, as well as those tactics that

are (and are not) working

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5. Cater to the mass marketEstablish one-to-one relationships

between consumers and marketers

Figure 2.2 Differences in BTL and ATL activities

2.3 Evolution of below -the- line activities

In a market rapidly adapting to changes in technology, available information and

heightened consumer demand, traditional, brand-oriented advertising is no longer the

primary driver of customer behaviour. Whether it’s reflected in dwindling print

newspaper circulation or the stagnant market for network television commercials,

significant evidence suggests that the marketing landscape has fundamentally shifted –

from an “above-the-line” focus on reaching a broad population with emotionally-oriented

appeals, to a “below-the- line” approach that stresses targeted, customer-centric

communications, measurable results and concrete return-on-investment.

We believe that the metaphorical “line” separating marketing philosophies (often quoted,

but never precisely defined) is reflected in three key qualities that separate today’s

emerging promotional methods from the top-down advertising monologue of the past.

Acting in concert, they embody the universal elements of successful below-the-line

marketing efforts:

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

active participant in a marketing dialogue, rather than a target of an aggressive

direct sales or branding effort

Interaction – The extent to which consumers are empowered to respond to

marketing communications via preferred channels that are both convenient and

accessible

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

individual initiative, determine commensurate return-on-investment and adjust

future campaigns to provide for an enhanced chance of success

Figure 1.3 Framework of BTL activities

2.4 Channels of BTL activities

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

which can enhance prospect or customer data sources with unprecedented demographic,

lifestyle and transactional data. It can be utilized for tuning marketing offers targeted at

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new prospects -- and provide their current customers with products that more closely

match purchasing preferences and habits.

b)Mail marketing: It involves creation of compelling branded Mail/email templates and

campaign messages, and also our data driven services to develop precise targeting to

reach the highest number of quality prospects

c)Interactive 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.

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

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

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event such as a sporting or social event, designed to bring a product to the attention of the

public

f) Promotional Marketing: It is a non-personal promotional effort that is designed to

have an immediate impact on sales. Sales promotion is media and non-media marketing

communications employed for a pre-determined, limited time to increase consumer

demand, stimulate market demand or improve product availability.

Examples include:

Coupons

Discounts and sales

Contests

Point of purchase displays

Rebates

Free samples (in the case of food items)

Gifts and incentive items

Free travel, such as free flights

Sales 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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CHAPTER 3- METHODOLOGY – DATA

COLLECTED

3.1 RESEARCH PROCESS

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

First we got ourselves acquainted with the top 10 advertisers of various sectors to

gain knowledge regarding spends on 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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Taking our hypothesis for the study as spends on TV advertisement, we initiated

our research.

We created a questionnaire that was aimed at finding out the ratio of BTL spends

to ATL spends by various companies in the different sectors and the strategies

alignment for the same.

3.2 SAMPLE SELECTION

The sample was selected considering the marketing expenditures. Our aim was to include

the highest spenders across the sectors.

We segregated the FMCG sector into 9 sub-sectors namely food and beverages, personal

care, skin care, hair care, personal healthcare, household products, cosmetics, laundry

and personal accessories.

We also segregated the telecom sector into service providers and handset manufacturers.

We divided the consumer durables sector into white goods, kitchen appliances/brown goods, and consumer electronics.Keeping in mind the companies that were leaders in the sub-segments we approached

them with a detailed questionnaire.

3.3 SAMPLE SIZE

Size of the sample was 32 which consist of consultations with senior marketing

professionals of four sectors namely Banking Finance and Insurance Sector, Fast Moving

Consumer Durables Sector, Consumer Durables Sector, and Telecom Sector.

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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:

1. Data availability constraint due to data confidentiality.

2. Time constraint.

3.4 SAMPLE DESCRIPTION

See appendix.

CHAPTER IV: ANALYSIS

4.1 ANALYSIS OF THE TELECOM SECTOR

The segregation of the Telecom Sector:

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

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

Share of segments of Telecom sector.

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

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BTL: ATL Ratio

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

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

marketing expenditure.

Expected Rise in BTL

Service Providers

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Expected Average increase= 5%

Telephone Equipments:

Expected average increase=6.67%

BTL Activations Seasonality

Player Strategy QuarterIDEA

SERVICE PROVIDERRural Activation, (Increasing

customer base)Q1 and Q4

AIRTELSERVIC PROVIDER

STD Rates slashed, New scheme launched.

(Customer acquisition)

Q4

MOTOROLAEQUIPMENT

A Loyalty Program in which they invited their customers

for a dinner.(Customer Retention)

Q2 and Q4

VODAFONESERVICE PROVIDER

Magic Box Activity Q2 and Q4

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We segregated the calendar year into four quarters. Then we figured out the seasonality

of the BTL activations. Generally Quarter one, three and four emerged as the one in

which the telecom sector indulges themselves into the BTL activities.

Reason being in first quarter is to represent the higher growth rate and to have higher

number of sales figures 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.

Strategy behind BTL activations

Category Rural Strategy Urban strategyTelecom-Service Providers Customer Acquisitions Increasing ARPU through

VASTelecom-Handset Manafacturers

Brand building Customer Retention

For Service Providers

We have segregated their activation strategy under two heads i.e. Urban areas and Rural

Areas

Objective of BTL activation in METROS:

With so many schemes being launched one after another by every player, consumer is

flummoxed of what to choose or what not. It is therefore imperative for the service

provider to indulge its TG in ENGAGEMENT MARKETNG so that the customer engages

themselves into the new scheme and get to know about the features. These are done

generally through canopy activities in colleges, markets etc. While launching a new

scheme, they also indulge themselves in canter activities and some activities which are

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

Marketing.

All the mobile advertisements which are a part of BTL activity only are directed towards

in making the belief stronger that the service provider is having the powerful coverage

area. Through this their main aim is the Customer Retention.

Objective of BTL activation in Rural India: A Big Market

All the telecom players whom we have interviewed see an immense potential in an

untapped market of rural India. Infrastructure is developing and moreover the per capita

income is also increasing. Moreover with not much scope of growth in metros the

marketers are left with no other choice to tap on this huge market. All the players have

started their activations in one way or the other. What we understood from our analysis is

that all the service players are doing the activations just to make rural India realise the

fact that their network coverage area is strong in you region. Secondly with activities

like “Nukad Naatika” they are able to connect with consumers i.e. Brand Connect.

Therefore we can say that in rural India the strategy is the Customer acquisition.

For Telephone Equipments

Switching: A consumer now-a-days changes his/her mobile phone every year or two.

Therefore a marketer through BTL activation tries to persuade consumer as to why they

should switch to same company’s mobile phone. They hold some loyalty programs for

them. Ex- Motorola conducted a loyalty program in which they invited their customers

for the dinner party.

New Product Launch: Technology is updating itself every year. Therefore one sees a lot

of new handsets rolling year after year. A lot of BTL activations are done in order to get

the consumer know about the product features.

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4.2 FMCG SECTOR

OVERALL SECTOR:

25

Sr. No

Sub CategorySr. No

Sub Category

1 Baby Care 6 Laundry

2 Cosmetics 7 Personal Accessories

3Food and Beverages

8 Personal Care/Hygiene

4 Hair Care 9 Personal Healthcare

5 Household Products


Ad volumes of FMCG sector grew by 39% in 2006.

Most of the companies indulges in two types of promotion i.e. consumer and trade.

Especially in FMCG sector it is seen that trade promotion is on the higher side than the

consumer promotion. For ex- Marico spends in the ration of 90:10 in favour of trade

promotion. Therefore it is evident of how the companies are realizing the importance of

channel partners.

BTL: ATL Ratio

Industry average: ATL : BTL= 64:36

Fact: Pepsi is having very low ratio of BTL to ATL.

One important fact that we came across is that in ATL is that F&B sector emerged as the

highest expenditure sub category while in BTL this category is very bearish. Just because

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of the fact that people are very sceptical when it comes to food and beverages. They do

not want to be tested in any of the BTL activation when it comes to F&B.

Fact: Gillette is having very high BTL ratio as compared to ATL.

Personal care and hygiene includes cosmetics is very bullish on the BTL activations.

Fact: GSK is having the ratio of 50:50 in BTL to ATL.

In Personal healthcare segment ATL is on the low side while the BTL is very high


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.

28


Now-a-days HUL is spending heavy on corporate branding therefore other players in the

same segment might follow the same strategy.


Trade related activation:

It includes the dealers meet; incentives provided to channel partners etc. Marketing

campaign aimed at building demand at the middleman (distribution channel) level. In a

trade promotion, wholesalers and/or retailers are offered special price discounts (often in

addition to a trade allowance), subsidized or free display racks or stands, gifts, or other

incentives.

Consumer related activation

Most of the companies in this sector do one or two major campaigns every year. Those

campaigns are meant to be related to branding. These are very strategical in nature. For

products like alpenliebe, the objective behind BTL activations is Brand Salience.

Although most of the campaigns are tactical in nature. These are sales oriented only. In

this they provide various promotional offers to the consumers so that they try their

product.

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4.3 CONSUMER DURABLE

ATL

(Source: Adexindia).

30



BTL: ATL Ratio

Industry average: ATL:BTL= 65:35


Seasonality is always product specific. We have subdivided this sector into 3 categories

i.e. White goods, Consumer electronics and others.

In white goods category we have picked Electrolux, Voltas, carrier and whirlpool.

Further we analysed four products i.e. AC, Refrigerators, Washing machine and

Microwave. For AC and Refrigerators the best season is just before summers for any kind

of BTL activations.

While if we talk about consumer electronics we anaylsed three companies i.e. Sony,

Samsung and LG. And there were unanimous when it comes to seasonality of BTL

activation. At the time of fourth quarter i.e. Festive time is the time when everyone vie

each other. While Shalimar paints does some of the BTL activities at the time of Diwali.

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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.

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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.

Some strange facts were witnessed during our course of study. Since dealers network

play an important role in this sector so many players from time to time do the channel

expansion. Huge chunk of money goes into channel expansion and this is a part of BTL

expenditure only.

SUMMARY OF THE CONSUMER DURABLES SECTOR:

Category Short-term Strategy Long-term strategyConsumer Durables-White Goods

Product launch by in-store branding and Brand visibility

Increasing customer base

Consumer Durables-Consumer Electronics(Sony)

Channel expansion Increasing customer base.

Consumer Durables-Others(Paints)

Customer retention and brand awareness.

Increasing customer base.

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4.4 BANKING/FINANCIALSERVICES/INSURANCE

ATL


34



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

35


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

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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Expected Increase in BTL


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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Player Strategy SeasonalitySBI Life Insurance

Category-Life InsuranceEmployee Motivation,

Increasing customer base.Q2 due to result

announcement and acknowledgement for the best performer, Q1 due to

closing of the financial year and tax saving benefit.

Am-ExCategory-NBFC

Brand visibility Q4 due to festival time and so effort for markets to be

branded put in.DSP Merill LynchCategory-Mutual Fund

Brand awareness, Product launch, Distributors appeasement as they are the interface of the company.

Q2 because new budgets are allocated, also when new NFO is launched and, also for the distributors meet done monthly generally.

ICICI Pru Life InsuranceCategory-Life Insurance

99.26% Brand awareness and 77% Brand recall was achieved by them according to a latest research agency report for a BTL campaign.

Same for the whole insurance industry except for players like Ing Vysya that are dominant in the specific region like south to target festival time of Diwali .

4.5 COMMON TO ALL SECTORS: QUESTIONS RELATED TO BTL

AGENCIES

IMPORTANT PARAMETERS FOR COMPANIES

38


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.

When asked about the problems they faced while dealing with any BTL agency then 90%

of the players said that Execution is the most important issue. Distribution and logistics,

timely execution at different places at same time are the most one to occur.

Consumer to trade promotion

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Chapter fIVE Conclusion

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1. Most of the companies are doing multichannel promotions and marketers

endeavour to align their ATL and BTL strategy.

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.

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.

41


Even though media options are limited in many KUT, yet because consumers are looking

for new products or services, BTL gets a more than proportionate response. In existing

product categories BTL in KUT has helped push up revenue contributions.

5.1 Current Scenario in the field of BTL activities

Expenditure estimates say a lot about where sophisticated marketers are focusing their

efforts, but they don’t address the more fundamental question of why. Why, after so

many years of success with above-the-line methods, are marketers finally changing

their approach to reaching customers and fostering profitable relationships? And

why do customers appear so willing to accept this new communications

philosophy? The following seven trends explore the factors, both external and internal,

that are contributing to this emerging marketing emphasis. Specifically, it identifies seven

key trends that are directly impacting the allocation of marketing budgets for both ATL

and BTL campaigns. They include:

1. Changing consumer demographics decrease the influence of traditional mass

media (i.e. ”one-size-fits-all”) marketing messages

2. Growing consumer sophistication heightens the demand for channel-agnostic

communications

3. Widespread marketing “clutter” diminishes the impact of commercial messages

that don’t address specific and individually relevant consumer needs

4. Enhanced information availability empowers both marketers and consumers with

insight that allows for precise customer targeting and intelligent purchase

decisions

5. Heightened client pressure to deliver quantifiable value by evaluation of ROI of

the marketing initiatives , forces marketing service providers – especially

agencies – to re-evaluate services platforms

6. Growing effectiveness of “multi channel” campaigns (those that cross multiple

media) reinforces demand for tactics that establish one-to-one relationships

between marketers and consumers

42


7. Rapid technological advances allow for consumer/marketer interactions that are

frequent, easier and more relevant than previously possible

5.2 Trends Impacting BTL Marketing Budgets

1.) Changing consumer demographics decrease the influence of traditional mass-

media (i.e. "one-size-fits-all”) marketing messages.

Understanding the conventions of culture as well as the individual cultural differences

and similarities of target locales empowers marketing professionals to realize that one

universal message—whether verbal or visual, can never reach a global audience. One

global culture comprised of people with identical values does not exist—not even within

the confines of our own country as the recent elections illustrate. Differences in learning

and thinking patterns influence the way people process information, as demonstrated in

their innate responses to marketing communications. Audiences differ in the way they

perceive and value concepts of time, space, money, relationships, power, risk, and even

the protocols of gender roles. It is important to note that when attempting to customize

communications with cultural differences in mind, it is just as important to recognize the

cultural similarities. As much as localization vendors like to overemphasize "extreme

customization", cultural similarities do exist, and are deeply imbedded in the core values

of your products and service offerings.

2. Growing consumer sophistication heightens the demand for channel-agnostic

communications.

Advances in marketing and communications haven’t just served to benefit marketers –

consumers, too, have learned to exploit technology, information and available media

channels for their benefit. Among other capabilities, the sophisticated modern consumer

is adept at:

• Using the Internet to compare product prices

• Screening out unwanted outbound telemarketing calls (or telemarketing calls altogether

– through participation on the National Do-Not-Call list)

43


• Skipping past television commercials – the lifeblood of above-the-line marketing – with

TiVo and other digital video recording technologies

• Bypassing traditional print advertisements through online newspaper

subscriptions and opt-in “headlines” e-mails that provide a selected snapshot of relevant

news with only a fraction of the advertising interference.

Collectively, these practices speak to the active participation of consumers in the

marketing process, a phenomenon made possible by the same innovations that many

marketers expected would cement their authority in customers’ daily lives. They demand

marketing responses that are concise, relevant and universal across all media – so that

consumers who choose to interact via multiple channels (say, researching available

products online and then completing the purchase in-store) are exposed to a consistent

fundamental buying experience.

3. Widespread marketing “clutter” diminishes the impact of commercial messages

that don’t address specific and individually relevant consumer needs.

Rapid advances in the quality of available marketing media have had at least one

deleterious effect: a saturated media consumption landscape, plus a resultant consumer

backlash against advertising messages that are perceived as intrusive or otherwise

irrelevant.

4. Enhanced information availability empowers both marketers and consumers with

insight that allows for precise customer targeting and intelligent purchase decisions.

Significant advances in database marketing, analytics and customer relationship

management (CRM) platforms have spawned an informational avalanche, allowing

marketers the opportunity to build a comprehensive, 360-degree view of the

customer and their transaction history. By maximizing the complex array of available

information, leading-edge marketers are reaching prospects with offers targeted to their

expressed (or expected) wants and desires – and driving significantly enhanced response

rates and lifetime customer value.

44


Not to be outdone, consumers are arming themselves with an array of enhanced

informational tools to make smarter buying decisions. Web sites reinforce the movement

to obtain information and apply it through stricter scrutiny of the available market.

5. Heightened client pressure to deliver quantifiable value forces marketing service

providers – especially agencies – to re-evaluate services platforms.

Among traditional advertising agencies, average client tenure now stands at less than18

months per account. In a timeframe shorter than many ad campaigns themselves,

marketers are increasingly deciding that these trusted strategic advisers – once thought of

as the standard-bearers of marketing strategy, conception and delivery – can easily be

replaced by others whose strategic, creative and, most notably, financial objectives better

align with their own.

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.

6. Growing effectiveness of “multichannel” campaigns (those that cross multiple

media) reinforces demand for tactics that establish one-to-one relationships between

marketers and consumers.

Given the proper tools, consumers prefer to engage with marketers through a

combination of available media (including retail stores, the Internet, catalogs, direct mail

and direct response television) thus relegating single-channel categorizations such as”

catalog buyer” and “online shopper” to the business archive. But these customers offer

more than just a challenge to marketing strategists – they also offer greater profit

potential. According to the Internet Advertising Bureau, well-executed multichannel

marketing campaigns generate a sales lift ranging from 7 to 34 percent. Viewed from

45


another perspective, that spells trouble for single- channel marketers (such as those

hoping that traditional television advertisements will fuel visits to retail stores).

7. Rapid technological advances allow for consumer/marketer interactions that are

more frequent, easier and more relevant than previously possible.

Long ago cited as the most significant factor inhibiting the growth of BTL marketing, the

recent proliferation of appropriate, cost-effective technologies – for both marketers

and consumers – has finally reached the critical mass necessary to fuel campaigns that

cross multiple media and stand out from the mass-oriented messages proffered by

traditional advertising.

The scope of technological advance spans all media, but perhaps the most significant

advance involves the widespread adoption of high-speed, broadband Internet

connections – allowing consumers to surf the Internet effortlessly and manage rich,

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.

46


REFERENCES

1. www.agencyfaqs.com

2. www.eventfaqs.com

3. www.exchange4media.com

4. www.adexindia.com

5. www.indiantelevision.com

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

10. Keller, Kevin Lane (2003). “Brand Synthesis: The Multidimensionality of

Brand Knowledge,” Journal of Consumer Research, 29 (4), 595-600

11. Leuthesser, L., C.S. Kohli and K.R. Harich (1995). “Brand Equity: The

Halo Effect Measure,” European Journal of Marketing, 29 (4), 57-66.

12. Keller, Kevin Lane (1993). “Conceptualizing, Measuring, and Managing

Customer-Based Brand Equity,” Journal of Marketing, 57 (January) 1-22

47

http://www.indiantelevision.com/

http://www.adexindia.com/

http://www.exchange4media.com/

http://www.eventfaqs.com/

http://www.agencyfaqs.com/


SAMPLE DESCRIPTIONThe 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

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

48


14 -do- Dabur

15 -do- G.S.K.

16 -do- Pepsi

17 NBFC-BFSI Amex

18 Banking-BFSI Centurion bank of

Punjab

19 Banking-BFSI Bajaj allianz-general

20 Mutual Fund-BFSI Dsp merill lynch

21 Mutual Fund-BFSI Birla Sun Life

22 Life Insurance-BFSI ING Vysya

23 Life Insurance-BFSI ICICI Pru

24 Life Insurance-BFSI Max new york Life

25 TelecomServiceProvider Airtel

26 -do- Idea

27 -do- Vodaphone

28 -do- Reliance

Communications

29 TelecomHandsetManafacture

r

Fly Mobiles

49


30 -do- Nokia

31 -do- Reliance

32 -do- Motorola

Table 2

Consumer TradeConsumer Durable 55 45

sony 60 40Electrolux 60 40Whirlpool 50 50voltas 50 50

Table 3

ImportanceConcept 70Price 20Quality of Material 10

Table 3Consumer Durable

50


Table 4Telecom BTL ATL IncreaseIdea 35 65 40Airtel 30 70 35vodafone 30 70 35Motorola 40 60 50Nokia 35 65 40fly mobiles 30 70 35

Table 5FMCG Gillete 65 35 70GSK 50 50 50Marico 40 60 40Pepsi 10 90 15Perfetti 20 80 25HUL 30 70 35

Table 6Consumer to trade promotion in TelecomIdea

50:50Airtel 80:20

Motorola 70:30

Fly 50:50

Table 7

Company BTL ATLBirla sunlife 40 60Max New York 12.5 87.5

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LifeING Vysa 60 40Amex 33 67Bajaj allianz 35 65

Table 8Increase: 2007 to 2008Birla sunlife 40 45Max New York 12.5 37.5ING Vysa 60 75Amex 33 38Bajaj allianz 35 45

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Documents

BTL Spending Patterns