Indian firms chant sponsorship mantra to up sales
NEW DELHI: Lakme strives to revamp its image as contemporary, premium and stylish. And instead of spending millions on imagery ads, it partners in creating the Lakme India Fashion Week.
"The rest is history," says Andre Nair, CEO (South Asia) of WPP Marketing Communications.
"The high profile event has been generating enough media interest for the last three years to keep the Lakme brand alive for six to eight months."
Boosting the sale of products through sponsorship of sporting and a host of other events is slowly becoming the new marketing mantra for consumer goods companies in India.
"With sales going up every post fashion week season by over 20 percent, Lakme is certainly on the right track," Nair told IANS on the sidelines of a marketing summit organised by the Confederation of Indian Industry (CII) here.
"Instead of being just another event, Lakme India Fashion Week has gone on to become the core of the company's brand activation platform."
If Nike and Adidas fight bitterly for bagging sponsorship rights for world cup soccer overseas, in India its Pepsi, Coca-Cola, LG, Samsung, Hero Honda and a horde of others battling it out for World Cup cricket.
Sponsorships are no longer charitable contributions, philanthropy, or grants. Companies are vying with each other to sponsor events for a variety of reasons, including to increase sales, target market, and enhance branding.
Over the past 10 years, sponsorships expenditures have increased by approximately 250 percent in North America.
"In India, sponsorship expenditures are very small but it is likely to grow rapidly over the next few years with many new companies battling for sponsoring events," said Jamie Stewart, director of International Merchandising Corp (IMG).
In 2003, worldwide sponsorship is projected to hit $26.2 billion, representing a growth of 7.4 percent over the previous year. This is higher than the projected growth rate of advertising spends.
"Sponsorship allows embedded advertising. It has high consumer acceptance as sponsorship is seen as advertising that gives something back and makes positive contribution to society," said Stewart.
"It has an ability to influence buying decisions. During the cricket world cup this year, 50 percent of consumers surveyed in four countries said they would rather buy a product with world cup logo than a similar product without the logo."
Little wonder then that companies like Hero Honda Motors, India's largest motorcycle maker, has exponentially increased sponsorship expenditures in the last couple of years.
"Normal advertising chases viewers but in sponsorship the viewer chases the event. For certain brands, sponsorships can be a quicker and accurate way of creating awareness," said Pawan Munjal, CEO of Hero Honda Motors.
"Sponsorship is part of our overall strategy of building Hero Honda as one of the leading automobile brands in India. We look to sports to add value to the brand proposition.
"For example, we sponsor cricketing events to associate with youth and their aspirations and golf for corporate image building. We also sponsor a host of entertainment events."
Hero Honda was one of the sponsors of the ICC World Cup Cricket 2003. The company has also roped in leading Indian cricketers and film stars as brand ambassadors.
Stewart of IMG said sponsorships allow companies to meet and talk directly with customers, obtaining a feedback on everything, from spending habits to suggestions for products or service improvements.
"With the unique benefits of sponsorship being more clearly and readily identifiable, they are becoming a much more integral part of the marketing mix," he said.
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