Niche brands slash ad budget to opt for big retail entry
13 Feb '06
1 min read
Major brands are increasingly cutting down their advertising budget to focus on retail investments.
International brand Zara turned a leading brand after spending just 1-2 percent of its profits on advertising, which is much lower than the international standards of 3-4 percent.
Madura garments plans to reduce its ad spend from present nine percent to bring it closer to international standards.
Madura opened 7000 square feet Van Heusen flagship store at Connaught Place in New Delhi, late last year and followed up with a 5000 square feet store for Louis Philippe at Bandra in Mumbai.
Company is expected to invest more in retail business.
In the past two years, Benetton India, has seen its advertising spend drop to 2.5-3 percent of the approximate revenue from 8-9 percent.
Hence, retail is rapidly grabbing share of advertising expenses.
Yet, the advertising Guru, Prahlad Kakkar, does not agree with the trend.
He explains that even for people to be aware of the new stores, advertising should lead the the Advertising and Marketing (A&M) efforts.
Thus, both advertising and retail go hand-in-hand.
marketing@alchempro.com
