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Ramazan spending oils wheels of economy

July 22, 2013
- File Photo
- File Photo

The spiritually recharged Pakistan works less and spends more during Ramazan.

With increased household spending, the trading volume in the holy month goes up several times the size of the country’s Eid sales. In 2012, Eid business was reckoned to be worth Rs500 billion.

No wonder businesses take Ramazan so seriously. They strategise and invest aggressively for a bigger share of an expanding market.

The numbers are not available but relevant quarters confirm that companies scale up their budgets for promotional activities like public relations (PR) and advertising during the month. The distribution of Ramazan gifts with greetings and lavish Iftar dinners are arranged by many local foreign companies and multinationals as a part of their PR exercise.

To strike the right chord with their customers, many firms dress their promotional message green and strive to kosher the image of the product and the company all over again.

The family spending surges during Ramazan as people try to strike a balance between spiritualism and materialism. The number of meals in an average family fall but the kitchen budget doubles, anecdotal evidence suggests.

“ The families do not necessarily eat more but they eat better. Besides, spending on socialisation and throwing and attending Iftar parties has become a cultural norm. Social interaction entails a financial cost”, said a senior banker Nazia.

At malls, markets and roadside all over the country, products particularly popular in Ramazan are displayed on banners and billboards. Leading hotels and major food chains announce Sehr and Iftar deals.

The sweet merchants and bakers introduce Ramazan-specific items. Yaqoob, a small time caterer told Dawn that demand for bakeri items and mithai (traditional sweets) increase many fold. “Before Iftar, a number of makeshift stalls crop up to cater to the hike in demand for pakoras, jalebis and other such eatables. There is an eager flock of buyers ready to pay demand price for what they want”, he said.

The beverage companies entice young people with attractive offers. The cell phone service providers and makers of fast moving consumer goods (FMCG) try all kinds of innovative market tactics to boost their sales.

Reduced work hours mean more leisure. Television viewership spikes and special Ramazan transmission is aired by almost all local channels.

“In the month of fasting the country shifts gear to go slow mode of work. The state and the private sector slash working hours to almost half. The markets, advertisers and the electronic media, however, work almost round the clock to capitalise on one-month a year business during Ramazan”, an analyst commented.

“Many businessmen and professionals time their holidays during Ramazan because of slack work; in fact, often double the effort produces half the result. In Islamabad it is almost impossible to move a file during the month as irate officers quite often are not found on their seats that close at 2pm officially, a frustrated drug maker, who had some files stuck in a ministry in Islamabad, told Dawn.

“The efficiency level is low in the private sector as well,” he conceded.

There is an upswing in trade during Ramazan. “This is a growing trend as witnessed in the Gulf as opposed to Indian Subcontinent. All over Middle East, especially in Dubai, Ramazan is a booming trading season when markets stay open all night”, he said in support of his view.

Free market enthusiasts interpret hike in trading a healthy sign of growing economy. “What does it matters if people are spending to their heart content? It will move the wheel of the economy faster. This happens all over the world. Christmas, Easter, Diwali, etc., generate seasonal trading hikes elsewhere, so why worry if businesses try to capitalise on Ramazan trading in Pakistan”, a senior member of the economic team of the last government commented when reached over phone in Lahore.

“Like politicians companies peddle their messages from religious platforms set up for the purpose, businessed indulge media to make deeper impact on religiously inclined, television-addicted middle class. This class because of its growing numerical strength and collective purchasing power, influences the market trend more than any other segment”, another expert gave his take.

It explains why companies present themselves as champions of faith while promoting their brands. Huge investment goes into developing advertisements and media campaigns with a touch of religion with lucrative returns.

“It is a complex situation, but the corporate sector needs to be more discreet in selection of channels and programmes. They need to scrutinise the programmes they sponsor as, quite often, anchors in a bid to outperform competitors and achieve ratings, sell misery”, explained another marketing professional.

On the question of corporate social responsibility, marketing guru Adil said companies advertise on television to reach to their target largest number of consumers. They prefer to advertise more on popular channels and programmes.

“Companies base their preference on ratings based on peoples’ meter, a method to gauge viewership. For them what sells matters. They do not consider themselves responsible for the quality of content on TV channels.

“The local companies sometimes go overboard funding highly objectionable and sensational content that feeds regressive trends. I am, though, not sure how the issue can be handled without compromising the liberty to operate freely in the market place”, he said.