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India Corporations Cut Advertising Budgets

Jul 26, 2012 2:59 AM   By Dilipp S Nag
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RAPAPORT... Corporate India curtailed its advertisement budget for brand promotions by up to 45 percent in ‎the fiscal year that ended March 31, 2012, according to a survey by the Associated Chambers of ‎Commerce and Industry of India (ASSOCHAM).  Advertising budgets were cut due to the high ‎cost of credit, increased raw material prices, a hike in the interest rate and weak demand in domestic ‎and export markets.‎

The survey entitled, “Ad Budget of Corporate India for 2011-12,” noted that the banking, ‎telecom, financial services and insurance sectors, which account for a major share of ad ‎expenditures in India, all reduced spending in the fourth quarter that ended on March 31. The government also minimized its advertising spending, ASSOCHAM noted.‎

D. S. Rawat, the secretary general of ASSOCHAM, explained that interest rate hikes adversely ‎affected industry as the cost of borrowing rose, investments dried up and profit margins ‎tightened.‎

The research, which surveyed approximately 500 companies across the country, revealed that ‎big companies cut back on big brand advertising campaigns, opting instead for short-term sales ‎promotions such as issuance of  coupons and point-of- sale discount promotions to win over cash-strapped ‎consumers. Rawat claimed that television and radio networks are facing tougher times as ‎advertisers reduce their marketing budgets.‎

ASSOCHAM stated that the majority of companies are still hesitant to allocate more funds to their advertising and ‎entertainment budgets due to a decline in earnings for fiscal 2012. ‎
Tags: Advertisement, ASSOCHAM, brand, budget, Corporate India, Dilipp S Nag, gems, Gems and Jewelry, India, Jewelry, promotion, Rapaport
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