Marketing is a very sentiment-driven business in India. Having said that, though, it has a direct correlation to the economic growth of the country. As already established in the two preceding around the upcoming budget (media agency expectations; print, radio, TV expectations), anything that drives GDP growth also drives up marketing spends.
This year, more than ever, marketers are hoping for a growth-oriented budget, one that creates more job opportunities for consumers thereby increasing their disposable income and propelling spends. As brands look forward to India resuming its aggressive GDP growth, here’s a look at the marketers’ state-of-mind, and their speculations and anticipations from the Upcoming Union Budget 2021 that’s slated to be announced on February 1.
As the consumer’s purchasing power decreased, the demand for brands went down significantly. Further, the pandemic forced several businesses to shut shop. Amidst this crisis, marketers were forced to put on their thinking caps and move into unchartered waters with innovative solutions to simply breakeven, let alone be profitable.
Although the virus has altered the overall advertising and marketing paradigm across all sectors, it is safe to say that the psyche of marketers, too, has seen an overhaul. After a tough year, brands are now hoping that the government will give them some respite and enable them to spearhead their comeback.
Expectations from the budget
Speaking about the areas that can play a game-changer to the marketing sector, Pankaj Gulati, chief people and marketing officer, Fincare SFB says, “The Marketing food chain can benefit from a more rationalised GST ecosystem, rates, filing and procedures, included. A change in approach can send a positive signal to the entire food chain and give a psychological push for the companies to spend more. Higher spends equate higher sentiment and right now the economy can do with a dose of animal spirit besides the vaccine.”
Some marketers believe that the huge shift towards online buying in metro cities as well as in smaller towns will continue, especially for low involvement products. Speaking about this phenomenon, Dinesh Aggarwal, joint managing director, Panasonic Life Solutions India is certain that many companies who are not very active in the online advertising space or on social media channels will have to divert spends from TV to the new mediums.
“To help faster and higher adoption, it is recommended that in the upcoming budget some tax concessions should be made for an online advertisement. This will enable companies to get better exposure for their products and services and thus accelerate the demand towards a level beyond the pre-COVID levels,” he added, explaining that the acceleration of OTT platforms has weakened the shift for choice of content, especially in cities that have an adequate bandwidth.
Talking about the respite that can be provided to the sector, Gulati is leaning heavily on the urgency of tax reliefs. “Bringing down direct tax rates and increasing exemptions in some forms, for both, corporates and individuals noticeably and immediately may give impetus to a thrift-mindset.”
There are several businesses that also spend money on the creation of awareness about their products and services through newspapers, local TV channels, and the internet. “If concessional tax slabs for various advertising services can be created for such small businesses, it will help them enhance their presence and also their business through higher consumption,” added Aggarwal, whose business is also enhanced by authorised dealers and system integrators.
Gulati on the other hand, is stern that the budget could help accelerate the digital infrastructure in the country, by enabling real-time information exchange and democratising opportunities.
Seeing the light at the end of the tunnel, although with doubts of his own, Aggarwal says, “While FY2021 will be a better year in comparison to FY2020, the GDP growth will remain slow. To accelerate consumption, such fiscal support will be very helpful.”
While brands are now vying for a secure place in the consumer’s mind, they also require them to have a purchasing power for sale conversions. However dismal times have been, marketers are cautiously optimistic and banking on the much-awaited announcement to decide their fate. On to February 1, then!