Selling in a slump

Even as the economic growth rate slowed down substantially during 1997-98, the Centre for Monitoring the Indian Economy8217;s CMIE Corporate Sector May 1999 report shows that advertising expenses rose in the case of most consumer products during the same financial year. This is despite the fact that profitability declined for the second consecutive year, the utilisation of assets and labour worsened for the first time in the Nineties and the interest cover deteriorated. In sectors like food products and automobiles, the rise in advertising expenditure was substantial. Soaps and detergents, however, saw a substantial drop in the ad spend, as compared to 1995-96. The advertising expenditure in the case of beer and alcohol dipped in 1996-97, but increased in 1997-98.