Article 1 Consumer Communication Consumer Electronics COS Spend More 'Below-the- line WITH ad spends by corporates declining is below-the-line spend also falling? Not quite. If you take a look at the consumer electronics industry where below-the-line communication has played a crucial role in driving volumes. Mr Rajeev Karwal, Senior Vice- President, Philips India, says that almost 65 per cent of the annual advertising expenditure of around Rs 500 crore (2000- 01) was spent on below-the-line communication. This includes a host of activities such as relationship marketing, promotions, visual merchandising, point of sale, events, mailers and exhibitions among others. According to the latest data put out by the Centre for Monitor- ing Indian Economy (CMIE), in the consumer electronics industry, the average advertising cost as a percentage of sales for the year 2000-01 has gone up by 42 per cent over the previous year. Though this may not mean that there has been a direct increase in media spend, it is a definite indication that compa- nies are eamarking larger portions of their turnovers towards promotional activities. In fact, this allocation of funds is being cited as one of the reasons for the reduction in incomes for agencies. According to estimates, the total advertising spend across industries is around Rs 9,000 crore. The latest CMIE report reveals that the total media spend in 2000-01 was to the tune of Rs 6,500 crore. It also reveals that below-the-line spend has increased to about 50 per cent of the overall spend. "There has also been a marked shift in spends - that is the budgets allocated to spend on media (print, TV, radio, outdoor, intemet) vis-a-vis the money spent on below-the-line commu- nication," points out a media planner. For instance, Philips India, the 70-year-old player in the market spent around 4 per cent of its turnover on advertising in the year 2000-01. Of this, around 30 per cent was spent on below- the-line activities such as contests, promotions and events. Says Mr U. Jayraj Rau, Vice-President and Client Services Director, HTA, In the consumer electronics category, where the product quality has become parity, below-the-line messages at the retail outlet make a huge difference. Therefore, he says that there is also frequent brand switching pattems that one sees in this category. Almost every consumer electronics brand spends on advertising and offers promotions and price offstherefore what is crucial is the communication that happens at the retail outlet. "The POP displays and visual merchandising may be the clincher, says Mr Rau. Despite the fact the that companies are aggressive about below- the-line communication, Philips' Mr Karwal, predicts that there will actually be a decrease in below-the-line spends. There is a lot of wastage on tactical below-the-line spends, he says. He believes that as consolidation happens, brands will focus on integrated marketing communications, which includes both above and below the line. A typical communication programme would be an integrated package, which includes promotions, price-offs, POP displays and would thereby reduce wastage. But Mr Rau argues that wastage in below-the-line spend is the same as in any other media. Point out one medium where there is no wastage. The story continues in its generality - bad below-the-line, bad timing, bad implementation results in poor response and wastage, he adds. Read the articles found above and prepare slides on what you have discovered in regard of communication for effective marketing