In a game of betting, the thumb rule is: when you reach your goal, quit and walk away. LG Electronics India Ltd (LGEIL) is apparently doing just that. Ever since the company set foot in India, it saw an opportunity in cricket and entered into a seven-year tie-up with ICC. That agreement winds down soon after the World Cup 2007.
After that the company sees "no strategic gain" in renewing the deal. Obviously, it has realised that the marketability of cricket stars rises and falls more erratically than the stock index. "Cricket has done its job for us. Now, we are in the process of re-evaluating our marketing strategy," says Girish Rao, vice-president, sales and marketing, LG Electronics India Ltd. "For this series however, our commitment remains high-both on ground as well as on air. We are going full haul and spending almost Rs 80 crore on the series," he adds.
The problem with cricket, or any sport for that matter, according to marketers, is that the fortunes of the star players tend to waver and the game outcomes are equally unpredictable. "Bad performance is a high risk factor for us, resulting in immediate tapering of interest," says Sugato Gupta, head, marketing, Marico.
Another factor unique to this year's series is the time-it's going to be night telecast for Indian viewers. So, while TVRs may remain high, "eventually everything has to be balanced against the cost factor, which becomes steeper each year," says Gupta. The cost of advertising during cricket telecast is so high these days that only those with deep pockets can build it into their media plan, according to Gupta. Perfetti, for instance, has signed a Rs 100-crore deal with Neo Sports that would allow it to beam 350-400 30-second spots until 2010. Prakash Wakankar, managing director of Perfetti Van Melle India told FE sometime ago, "Cricket has always been a strategic investment for us. Earlier, the cricket calendar kept changing, resulting in ad-hoc media planning. However, this time, we saw an opportunity to plan better. With this team we hope to build properties, which will have a close fit with our brands and their baselines."
For those who do not command the same financial clout as Perfetti or LGEIL, Sugato Gupta recommends another marketing strategy: "Look for indirect opportunities, in the form of promos or endorsements. If you spend smartly, you can cut a cost-effective deal, especially during the