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White goods firms see festive bonanza

Payal Verma in New Delhi | September01, 2003 10:16 IST

White goods and automobile makers are hoping to cash in on the coming festival season as a good monsoon and a seemingly stable economy have boosted consumer confidence across the country.

The upswing in demand during the Onam in Kerala and the Ganesh festival in Maharashtra has prompted companies to firm up new promotional schemes and below-the-line activities, which includes price-offs, freebies like VCD players or software, exchange offers, zero per cent finance schemes, for the festivals ahead.

"The mood is upbeat. We have witnessed a massive growth of colour television sales for Onam and the Ganesh festival. We are confident about the consumer spending patterns continuing during the Dussehera and Diwali," says Ravinder Zutshi, director (sales), Samsung India Electronics.

According to Samsung, CTV volumes for the three months of the festival season -- September to November -- will match the sales in the first quarter, if not more.

In the first quarter, 2.1 million CTVs were sold mainly because of the heavy demand for the cricket World Cup. In the subsequent quarter, however, sales declined to 1.5 million.

Industry sources say special schemes are being worked out keeping the rural consumer in mind. Several low-cost products are likely to be launched next month, with special finance schemes. But they refused to elaborate on the schemes.

Videocon, which has been offering DVD players or CD players free with television sets under its "Monsoon Hangama" campaign is likely to extend this for the festival season.

Says Anil Arora, head of marketing at LG Electronics India Ltd: "Under the festival campaign for Onam, we are offering redemption schemes and assured gifts. We may consider extending these to the national level. But we have not taken a decision as yet."

For Onam, white goods major Whirlpool has come out with a scheme that rewards the homemaker with the "Aishvarya Deepam" -- a traditional brass lamp -- on purchase of a Whirlpool appliance.

"The rural market accounts for around 20-30 per cent of our consumer products sale. In consumer durables too the rural market is important. With a good monsoon, agricultural output is likely to be good. We are expecting a 7-10 per cent agricultural growth during this year. Our growth this year will be twice as much as the GDP growth," said Adi Godrej, chairman, Godrej.

Car dealers say they are hoping major discounts as volumes are likely to go up. "We do not expect car companies to drop prices since the input costs are already high. But the consumer will not go without heavy discounts from dealers and freebies like stereo system and accessories, " said a Maruti dealer.

Motorcycle manufacturers have already announced a slew of products. Several of these and more models are expected to hit the market by the end-September or in October. Some companies have announced exchange schemes for their range of bikes.

Similar schemes are expected to be launched by other companies as well. Price-offs are not being ruled out.

Analysts say last year the advertising expenditure were to the tune of Rs 10,000 crore (Rs 100 billion).

According to Navroze Dhondy, a good monsoon and a stable stock market have increased the excitement among advertisers.

"The companies are expected to increase their ad-spends by 15 per cent during the festival season. About 70 per cent of the total spend takes place between September and February," he said.


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