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Promo power

Ratna Bhushan

It's a windfall for consumers as more corporates go in for promotions that have a whole bag of goodies on offer. Catalyst examines what the thinking behind big-time promotions is.

Two decades ago, Thums Up gave away autographed miniature cricket bats along with the beverage as part of a consumer promotion. The scheme boosted the brand's sales and recall by several points, and was recorded in history books as a classic marketing ef fort.

More recently, Pepsi Foods Ltd has been doling out cash prizes of amounts ranging from Rs 10,000 to Rs 10 lakh under its Mera number ayega promotion. Electrolux-Kelvinator gave away a Mercedes Benz to Delhiite Savita as part of a Rs 25-crore Kelvinator K hul ja sim sim offer last year. Videocon has just unveiled a scheme to ``celebrate its achievement of a five crore user base'', with gold coins as assured gifts and Rs 1 crore as the big prize.

A fortnight ago, Epson India concluded its scratch card offer to coincide with its digital cloning campaign, as part of which it gave away five Epson digital cameras and 20 Motorola mobile phones, among other spoils. At a recent Swatch party to mark the inauguration of a company showroom, invitees could pick any Swatch model of their choice, free, of course. Cargill Foods is currently distributing two lakh half-kg sample packs of Nature Fresh atta to demonstrate the flour's `intangible uniqueness'.

And, there's Star Plus' magnum opus -- Kaun Banega Crorepati (KBC) -- which wants to make crorepatis out of just about anyone. In a nutshell, everyone -- from marketers of bidis to saris to TV shows -- is offering Maruti cars, holidays abroad and gift co upons, without so much as batting an eyelid.

Welcome to the age of king-sized consumerism where not only are the spoils getting bigger, but giving them away has become more the norm than the exception. Corporates, irrespective of their profiles, are giving out attractive freebies to lucky winners a lmost as if it were obligatory.

Behind the gold rush

So, what explains this surge to spoil the consumer?

Says I. Natarajan, Chief Economist, NCAER: ``It's imperative, because competition is fierce and companies need their products to be seen and heard. Put differently, it's an alternate way of advertising and a good way to get noticed.'' And, while agreeing that consumer expectations are on the rise, he also points out that promotions are no longer viewed with trepidation. ``These days it's almost expected of companies to offer giveaways every once in a while,'' he adds.

Also, running big time schemes no longer means that the company is suffering sales slumps. ``Such exercises don't take away from the value of the brand in any which way,'' points out Paramjit Singh Puri, Senior Country Manager, Epson India.

Anand Bhardwaj, Vice-President-Marketing, AB Electrolux, offers another perspective. ``Not only is our entire environment one of increased competition, but promotions have also got a lot bigger in the past three years. Given that backdrop, corporates can 't afford to offer lukewarm schemes; they have to run promotions that stand out,'' he says. Electrolux ensured that with last year's Mercedes scheme. The idea was to offer one mega prize instead of a thousand small ones. ``We probably spent the same amou nt of money as other consumer durables. But, giving away a Mercedes was a clever move,'' explains Bhardwaj.

IT-related companies are another category that have jumped on to the bandwagon of big-time giveaways. Observes Puri: ``IT products need to be marketed on the same lines as, say, consumer electronics. Especially, if the promotion is aimed at the SOHO segm ent. By initiating such exercises, we help potential consumers make up their minds faster.''

Another line of activity that's `in' is indulging potential consumers by hosting big bashes. The Swatch group has been particularly upbeat on this front. Omega, Swatch and Longines associate themselves with high-profile fashion and lifestyle dos consiste ntly, while Rado has been focusing on art-related events. Explains Ravi Thakran, Regional General Manager, South Asia of The Swatch group, ``We have 16 watch brands and one of our biggest tasks is to differentiate one from the other. Through upscale prom otions, we try and give vibrant images to Omega and Swatch.'' Last year the Swatch group spent Rs 3 crore on Omega's communication and promotion package, and Rs 1.5 crore has already been pumped into the Swatch brand this year. ``At a time when the media is so cluttered, eventing is certainly catching up,'' comments Thakran.

What about long-term tangible benefits to corporates? In case of dealer promotions, the dealers are expected to achieve certain targets. But, in the case of consumer schemes, promotions don't necessarily guarantee a consumer for life. Not on the face of it, but subtly, yes, say market watchers. Says V.V. Ranganathan, Partner at Ernst & Young: ``Big promotions result in increasing top-of-mind brand presence not only among participants, but even among non-participants. It's a question of creating high cus tomer relationship management. Take the KBC show. It's a prudent model which takes brand recall to a phenomenal level.''

Bhardwaj agrees that promotions not only result in temporary spurts in sales but also bring in long-term brand building benefits.

Shortly after winning Rs 10 lakh from Pepsi through its Mera number ayega promotion, 24-year-old Suresh Gowda, a waiter in Mumbai's Lakshmi Vilas restaurant, told Catalyst that he's a Pepsi consumer for life. ``So is my immediate family,'' he exults.

And, while Gowda can't believe his luck, it's a gain for the company that claims to have spent `nothing out of the ordinary' for the promotion. The scheme has impacted sales by 10 per cent already, says Vibha Rishi, Executive Director (Marketing), Pepsi Foods.

Real value

An indication that promotions as an industry is gaining more importance than, say, even two years ago is apparent from the recently held Promo Power 2000, a seminar dedicated to promotional marketing. Hosted by Kidstuff Promos & Events on a budget of Rs 60 lakh, the event attracted 300 delegates. According to Pankaj Wadhwa, Managing Director, Kidstuff, worldwide, for every dollar spent on advertising a brand, $14 are spent on promotions. Though the Indian scenario is far from achieving that status, mark et figures suggest a 50-80 per cent growth in the domestic industry now. ``Just two years back, 80 per cent of marketing budgets were spent on mainline advertising. Today, that figure has been reduced to 60 per cent, in favour of consumer promotions,'' o bserves Wadhwa.

Thus, while there's Pepsi, already consistent on the brand-related promotion front, promising to roll out at least one mega scheme every year, Electrolux's Bhardwaj reckons a grand-scale scheme is being planned for this Diwali season. And, according to T hakran, budgets for promoting Omega, Swatch & Co are certainly being upped, while Epson's Puri says the company is gearing up for an `innovative' promotion that won't necessarily be on the same lines as its summer scheme, but equally attractive.

So, while corporates scratch their heads to come up with that one triumphant promotion, the Indian consumer continues to revel in the attention he's attracting.

Pepsi's `number' game

It was model and MTV VJ, Cyrus' image of a loser that made Pepsi zero in on him for the Mera number... contest, according to Pepsi officials. So, there is a wacky, goofy and delightfully funny Cyrus losing everything but hope, in the contest ads runnin g on prominent television channels.

Pepsi has chosen to invest in a series of 12 different ad films, eight of which have already been aired. While some of the films feature Cyrus directly, others are based on testimonials. One, for example, has Vinod Kumar, winner of Rs 50,000, consoling a dejected Cyrus.

Of the 1,000 potential winners under the scheme, about 700 have already been announced. The promotion, which has been on since the second week of June, will run till Diwali.

That the promotion has worked is an understatement. According to Rishi, the Mera number... scheme is on par with last year's World Cup promo which flew winners to London. She adds that it could overshadow all earlier promotions run by Pepsi.