As consumer spending limps back to normalcy next year, India's leading tyre manufacturers may spend more than Rs 700 crore in advertising, Srinivasu Allaphan, Director, Sales and Marketing, JK Tyre and Industries, told BestMediaInfo.com.
With higher preference for personal transport and preference to buy online, he thinks consumer sentiment is coming back. Though commercial vehicles are lagging behind, he is still bullish that 2021 should be a positive growth year for the auto sector.
Allaphan said the company plans to increase its marketing spends by 25% in the next fiscal across TV, digital and print, adding newspapers will make a comeback next year with better readership numbers.
Other than increasing spends on digital, the brand will try to find digital solutions to routine problems, which otherwise was being done outside the digital space.
Allaphan said short videos on digital will gain more prominence going ahead.
The brand also plans to strengthen its presence in motorsports next year from the marketing point of view.
2020 has been a tough year for every industry. What sort of a recovery are you looking at?
I think overall some segments are doing well now; if you talk about two and three-wheelers and passenger vehicles. Because of a change in consumer behaviour, the preference for personal transport has gone up and I expect this trend to continue in 2021. So they will be positive in terms of growth. But if you look at commercial, the segment is lagging behind. Farm is doing very well on the back of the early demand.
The overall auto sector as such, if you look on a volume basis, may be down by minus 10-12% for the year. But the tyre industry in my view will have anywhere between 0 and 1% growth. This is fundamentally driven by some tailwind from external environment such as infra push being done by the government and restrictions on tyre imports.
The rural consumer, meanwhile, has been driving growth. Urban demand is likely to come back next year. I'm a little bullish that 2021 should be a positive year for the auto sector.
What are your expectations from 2021?
I think we're all looking at getting back to normalcy. We are looking for extra spends coming in terms of consumer spending. So some sectors, which are still trailing behind, such as travel, tourism, restaurants, will definitely see a flurry of activity once normalcy comes in. And I hope that normalcy will come in by quarter two, mid next year. This should increase the level of spending, which will spur demand. Otherwise, as a marketer, I'm looking at a stronger digital ecosystem. And, of course, there will be better budgets, supported with topline growth.
We are currently spending maybe 20-30% less than last year. I'm looking forward to better brand spend and more investments and actions in the brand and motorsports space. We're very active in motorsports. It's taken a little bit of backseat this year because live events are not happening. We are kicking off the first event this month. We will get more intense next year in that space from the marketing point of view.
Are you looking at increasing your marketing budget for next year?
There should be at least about a 20-25% increase in marketing spends next year, compared to this year.
What sort of a media mix are you looking at?
Digital media obviously is very important to us at JK. We've been pretty active in the digital space. And as per the industry standards, we spend a fairly disproportionate amount on the digital space. Having said that, the conventional medium is also important to us, especially television. Newspapers will also come back, hopefully next year, with better readership.
How much do you think the tyre industry is likely to spend as adex next year?
I don't have the exact number but my guess is that the entire industry may spend close to Rs 700 crore.
What have been your learnings from the pandemic?
Well. One is better scenario planning ability. I think it's very important to work with scenarios, rather than just one situation. We must build our response capability. So it's important to be capable and have a good response system to handle such situations. And third, definitely, we are looking at strengthening our digital ecosystem.
We are trying to figure out how we can find digital solutions to routine problems.
What sort of a change have you seen in consumer behaviour?
The preference for personal transport has been growing, along with the preference to buy online. Consumer sentiment is slowly turning positive. I would be really cautiously optimistic on the sentiment part. I think once we find a solution to Covid-19, then the sentiment will drastically improve.
Digital has become big now. What sort of trends are you witnessing there in terms of marketing?
I think as far as content is concerned, I would say social media content would be the most significant going forward. As of now, videos are the most used format. Short videos will gain traction going forward. Podcast I think is happening, but it's still a little bit of a time away, unless it's a very specialised utility that we are talking about. The span of attention is very low these days. Videos are six-seven seconds on social media platforms such as Instagram or Facebook, and not more than 20-30 seconds on YouTube. So now the challenge is to create a video and tell your story within that short span of time.