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Friday, January 6, 2017

IMPACT OF FESTIVAL ON CONSUMER SPENDING HABITS

Prof. Manit Mishra
Associate Professor, Marketing
International Management Institute, Bhubaneswar

The festive season has arrived and the brands have decided to leverage it with “surgical strikes” on consumer wallets. To quote Jim Collins: “Greatness is not a function of circumstances. Greatness, it turns out, is largely a matter of conscious choice, and discipline.” The brands, retail as well as product, had made their choice in the run-up to festivities. The harbinger was the most unlikeliest and unpredictable ally a retailer can wish for: India Meteorological Department (IMD). With IMD predicting an “above normal” monsoon for 2016 in the month of April, and the actual monsoon not displaying a significant variance from it, the track was laid for the consumption carnival to begin. The government too pitched in and said – enough is enough, it is time to bless the babus with Lakshmi before the festive season. Lo and behold, the 7th pay commission said “tathastu” to almost a crore families directly. The cascading effect is likely to be staggered but exponential when you consider the downstream organizations – the state governments and the private sectors which are likely to follow suit, sooner or later. The final piece of the jigsaw puzzle was put together by none other than RBI. The icing on the cake, and just as you were about to placate your senses by gulping it down your salivating mouth, was provided by the Monetary Policy Committee (MPC) with a 25 basis point reduction in repurchase rate and thereby, easing the stress on your finances. Experts may vary on the absolute and relative impact of each of these factors on your discretionary income. However, there is considerable unanimity on one fact: all of these have contributed to a feel good factor, a positive euphoric vibe right before the onset of the festivities. A confident consumer is lapping it up with both hands, and with a carry-bag to spare too. The urge to splurge has gained momentum. Having said that, no points for guessing who is laughing all the way to the bank. While Amazon claimed an average of over 38 orders per second during its five day “Great Indian Festive Sale,” the Future Group is reported to have achieved 9-20% Y-on-Y same-store growth. It is a win-win situation. The buoyancy in the market landscape has strengthened India’s position as the only bright spot in a rather dull world economy. The objective factors influencing the spending apart, to their credit the marketers have left no stone unturned to subtly build a proclivity towards buying behaviour. The marketer generated stimuli has dominated the media with offers. Leveraging the strong association between festivals and buying, the marketer has cleverly supplemented emotions with reason – a perfect mix of use of central route of persuasion substantiated with peripheral cues. So there are full front-page advertisements in leading dailies which hint at all that I am going to lose if I fail to avail the opportunity within the mentioned time period. The good thing is, it doesn’t stop at that. The assimilation of buying behaviour with socio-cultural values is complete. So, if you do not belong to the community of buyers who have been smart enough to capitalize, you are a pariah. Consumer socialization initiated and sustained through sales promotion. To borrow a phrase uttered by Don Corleone in the blockbuster movie Godfather: “I’m gonna make him an offer he won’t refuse.” And indeed, the marketer has made an offer that the consumer has not been able to refuse.

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