Happy Valentine’s Day! These three words definitely rings a bell in everyone’s heart. Suppose you propose a girl, with cupid’s blessings, and the pretty creation unfortunately breaks your heart. You must be feeling terrible! But so what? There must be a greeting card or a song specifically for the moment. So in essence, your cash outflow is guaranteed whether the girl's response is positive or negative, creating a cash pool that every marketer will like to have a greater share of.
Though the occasion of Valentine’s Day was being celebrated from as early as 498 AD, it was not until the 15th century that it became associated with celebration of love. In modern era, the marketers were quick to grasp the opportunity and transform a single day event into a week-long carnival starting with Rose day, followed by Proposal Day, Chocolate Day, Teddy Day, Promise Day, Kiss Day, Hug Day and finally Valentine's Day (Feb 14). Thus, enhancing the spending potential of a couple by seven to eight times while celebrating their single true love (if it exists)! Welcome to the business of Valentine.
The first commercial V-Day card was designed in US by Esther A. Howland in 1840s whereas the first Valentine’s Day Box of Chocolates was made by Richard Cadbury in the year 1868. The logic behind the commercialisation was simple: Can you buy love? If we go purely by numbers, they suggest yes. Valentine’s Day, this year, is expected to generate revenues for retailers in US in the tune of 18 billion USD . In India, the market is much smaller but is growing at a rate of 10% on an annual basis with sales expected to touch 15 billion INR this year, according to a New York Times Report. Furthermore, Indian males spend twice as much as their female counterparts for the occasion.
As a marketing manager, Valentine’s Day is one of those perfect occasions for the following reasons:
1. Good, bad or ugly – Everything sells: It is one of those occasions when if you can package your product well, it will sell. The quality will not be a factor at the point of sale though it may affect brand loyalty. Product placement combined with creative visual merchandising holds the key.
2. Price promotions – Don’t matter!! Ironically most brands end up with a price promotion strategy to get a higher share of the pie like X% off and bundled offers. In my view, such offers are actually not needed and it is important to retain a premium image during this period to drive sales.
3. Time to get premium: If a consumer normally spends Rs. 100, he will end up spending Rs. 1000 when in love. It is this psychology that marketers need to target by driving commercial sales in the premium segment.
The average Indian consumer is expected to spend anywhere between USD 10 to USD 1000 in this occasion. Major portion of this consumer segment consists of two categories:
Spending: USD 20 ( INR 1000) to USD 1000 (INR 50000)
Spending: USD 10 ( INR 500) to USD 200 ( INR 10000)
India today, is a very young country with 50% of the population under the age of 25, further indicating the market potential. Furthermore, this event is still mostly celebrated only in urban India while more than 65% of the population reside in rural part of the country.
In India, Archies cards are one of the most sold greeting cards for this occasion with almost 30% of their annual sales being generated during this period. Cosmetics retail outlet Body Shop offers discounts on customised Valentine’s Day packs. Romantic Bollywood movies are also planned for release during the Valentine’s Day weekend to make maximum gains from the event. Overall, the situation is such that it has assumed the form of a carnival and not celebration of an individual’s attraction for another. Whether it is Chocolates, Wine, Jewellery or Travel – every company has a solution customised just for you and your loved one! As a shareholder or someone who closely tracks the equity markets, it is that time of the year when these stocks behave most dynamically.
In countries like Korea, even March 14 is celebrated as the Reply Day creating another occasion for the marketers. Perhaps, the Indian Government too can boost tourism through this period by adopting the strategy followed by its Chinese counterpart. China during its Golden Week holidays last year removed the toll taxes on its roads, leading to per capita travel spending of 79 USD with approximately 81 million people travelling the roads each day. India can follow a similar strategy during the Valentine week targeting its young population.
In some ways, Valentine’s Day is today synonymous with business. If you are still planning to buy a gift for someone, just remember: your cash outflow is someone else’s sales target bonus. So spend wisely! Till then, let’s just enjoy the day.[/sociallocker]