The Indian mutual fund industry is abuzz with a new advertising mantra, which is to create a pull factor as a new way of communication for funds, unlike the push factor, which existed earlier. This is post SEBI’s regulation where the commissioning is being made limited to the distributors. As a result, mutual fund companies are advertising heavily for their products to support the distributor in order to enable customers to understand their products. According to Nipun Kaushal, Head – Marketing, ICICI Prudential Mutual Fund, “The aim is mainly to reach out to more people and make products beneficial to them. We are currently not focusing on above-the-line activities.” In comparison to a regular fund requiring Rs.4-5 crores investment, a new fund offering usually requires 10-15% higher investment in terms of adspends on regular fund. Sarabjit Kaur Nangra, Vice President – Research, Angel Broking said, “Getting more investments depends on performance of stock markets (and not ads). If PSU-favourable funds look exciting, investors will obviously deploy more money into that fund which is heavily advertised. The other reason is that equity investments in retail is hardly anything in terms of asset allocation, although there is potential to garner money from retail investors.”
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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