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Crompton increases advertising spend from Rs 10 to 60 crore to improve brand recall

Crompton Greaves Consumer Electricals Ltd, which demerged from Crompton Greaves Ltd about two-and-half-years ago, has spiked its spend to about 3% of its sales to match market standards

Click on the Image to watch the TVC.

Crompton Greaves Consumer Electricals Ltd, which demerged from Crompton Greaves Ltd about two-and-a-half years ago, has increased its advertising spend from Rs 10 crore to Rs 60 crore ever since it became independent.

The company, which used to spend hardly a half of its overall revenue on advertising, has increased the same to about 3% of its sales to match market standards.

Mathew Job

“For the past two years, our advertising spends have been at par with the big players in the industry. Earlier, we were spending less than half a per cent, now it has increased to about 3% of the sales. Our objective behind this increased spend is to have a reasonable share of voice and we believe that if we keep our spends at this level, that objective should be met,” said Mathew Job, CEO, Crompton Greaves Consumer Electricals Ltd (CGCEL).

According to Job, eliminating wasteful costs has enabled them to re-invest that amount in advertising.

“In the last two years, we have been able to take out more than Rs 150 crore in wasteful costs and we have invested that amount back in advertising,” Job said.

The company has also launched its newest campaigns, for its ‘Air 360’ fan and the ‘Tricool’ window cooler. Conceptualised by BBDO India, the campaigns made its debut during IPL. Working on the idea ‘Hang out at home’, both the campaigns highlight Crompton’s presence in the lives of young couples of today and emphasise the fact how they are finding ways to make their homes the ideal place to hang out. Through the new campaign, the brand also intends to target a younger audience.

The TVC:

“A brand is like a bank account. You can keep removing from it but if you don’t put something into the bank account, at some point you will have no balance. Crompton is a well-known brand but we realised that the brand’s connect with the older audience is much better than with the younger audience. If you look at the age group of 25-35, their connect with the brand is not very strong. Therefore, two years back, we decided to start investing in building the brand. We especially wanted to make the brand more relevant to the younger audience,” said Job.

While Job agreed that summer was the peak season for the brand as far as sales of fans and coolers were concerned, he refused to give the details of the business that happens during this season.

“Summer is definitely a high season for us and in the last two years, a lot of money has been spent during this season,” said Job.

Crompton, which had a market share of about 25% in the fans segment two-and-a-half-years ago, has increased that number to 28% in the last quarter (October-December). They are, according to Job, the market leaders in the fans segment.

“We increased our market share in the fans segment by three percentage points and 90% of this gain has come from premium fans. About a year-and-a-half back, we launched a new concept called ‘anti-dust’ fans. Almost all the growth in market in fans has primarily come because of premium fans and that too because of anti-dust fans,” said Job.

The fans business is also the biggest contributor to the brand’s overall business.

The brand, which was number five in the lighting category, has managed to nudge its way up to number two and managed to increase its market share in the LED lights business from about 2% to 9%.

Speaking about the future plans, Job said, “The first focus for us is to grow the business that we are already in. We are already strong in the fans and residential pumps category and therefore we are trying to understand how we can grow significantly faster than the market in these segments. In lighting, we went from being number five to number two but now we want to be a strong number two. We also want to grow our agro pumps and appliances category and a lot of that will depend on meaningful innovation. We always look at allied areas assuming that it is an area where we think we can become a sizeable player. 80% of the value in any category is only among the top four. If you are not among the top four, you don’t have meaningful value. Therefore, we only look at categories where we are sure to get that meaningful position in a reasonable time frame,” said Job.

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