The amiable M G Parameswaran aka Ambi, CEO of Draft FCB Ulka, is one of a kind in the crazy world of advertising. A chemical engineer, he’s an alumnus of the Indian Institute of Technology, Chennai, who later studied management at IIM-Kolkata. He received the Distinguished Alumnus Award — 2009 from IIT-Chennai for “professional accomplishments, outstanding leadership qualities and contribution to the advertising industry”. The author of three books on branding and advertising told Sapna Agarwal that a slowdown is the best time to launch new products and create excitement. Excerpts:
In view of the slowdown, what are the new marketing dynamics that come into play as creative agencies cater to marketers who want more bang for the buck?
We have always considered ourselves to be strategic partners to our clients and are closely aligned with their businesses to understand what is happening with them. When the slowdown came into effect last September/ October, one of the first things we did was to carry out a comprehensive survey across 200 top chief executive officers and chief marketing officers from corporate India to map the macro-economic environment in the country in the near future through our consulting services arm — Cognito. Such value-added offerings are helping us address our clients’ needs.
Can you tell us more about the study?
The study was released earlier this year and it addresses one of the topmost questions on decision-makers minds — “what can we expect next year?” The participant profile in the study included 46 per cent CEO's/ management board members, 42 per cent sales and marketing heads, six per cent finance heads and six per cent heads of departments like HR, project and production. Over 85 per cent of the members had more than 20 years of experience. Again, industry wise — 35 per cent of the participants were from fast moving consumer goods or packaged goods sector, 35 per cent from consumer durables and the remaining from the services sector.
So, what can we expect this year?
The GDP growth in 2009-10 is estimated to be lower than that in the year 2008-09 at 5 per cent to 5.8 per cent. However, this 5-6 per cent growth is comparable to what we had witnessed in pre-2000 and is not bad, most respondents said. The report estimates the FMCG and durables sector to decline in 2009-10 and the services sector to have a marginal recovery.
The topline of companies would be marginally lower this financial year. Also, companies are expected to maintain their prices or increase them marginally in 2009-10. As such, margins will continue to remain under pressure. However, lower input costs, softening commodity prices, lower crude oil rates and interest rates is good news for the industry.
When is recovery expected?
On an optimistic note, full recovery is expected by September 2009 and the more pessimistic view is April 2010. We were the last to get impacted by the global financial crisis and will be the first to recover from it.
What is your advice to your clients?
With media rates rationalising, consumers can get 120 per cent return for every Rs 100 spent. This is the right time to launch new products and create excitement. We feel this is the right time to increase market share and build brand leadership. You will see this happening for most of our brands. For example, with Santoor, which is the third largest soap brand in India, we are launching new campaigns and new products.