Struggling Companies to Boost Festive Marketing by 30% to Spark Sales Revival

Marketing Budgets Leap: Slump-Hit Companies to Spend Up to 30% More on Revival Hopes

Companies making electronics, cars, and fast-moving consumer goods (FMCG), along with retailers, plan to increase their marketing budgets by up to 30% for the festive season to recover from a sales slump. However, sales of low-cost products might remain low due to inflation, with low-income consumers sticking to essential purchases.

Middle-income consumers are expected to drive recovery by purchasing premium products, thanks to income tax rate cuts in the recent budget. Additionally, nearly 50 auspicious wedding days in the second half of the fiscal year are expected to boost spending.

Festive Season: Key for Sales

India’s festive season, starting with Onam in early September and continuing through Navratri and Diwali in November, is the biggest sales period, making up over a third of annual sales for many consumer goods.

Tactical Advertising

Demand for cars, motorcycles, and scooters is down, with inventories at their highest in over two years. This is pushing manufacturers to increase promotions and advertising. Although fewer new products are being launched, companies are focusing on tactical advertising—campaigns centered on offers and promotions to encourage spending, which makes up 40% of the auto industry’s ad spend.

Retailers Jump In

Retail chains like Lifestyle and Shoppers Stop, appliance makers like LG India and Godrej, and FMCG companies like Adani Wilmar and Parle Products are all boosting their marketing budgets. Auto companies plan to increase their marketing spend by 20% compared to last year.

“October-December will require more marketing spend as we expect a recovery in demand during the festive season and many weddings,” said Devaranjan Iyer, CEO of Lifestyle. “There has already been some recovery in July, with single-digit growth in same-store sales. If this continues, the festive season should be promising.”