Formatted Word Thesis Vikas

CH 1.
1 DEFINITIONS OF ADVERTISING
The term "ADVERTISING" originates from the Latin word

"advertere" which means to "turn the mind towards". The dictionary
meaning of the term advertising is "to give public notice or to announce
publicity". This suggests that ads are useful for drawing the attention of
people towards a specific product/service/manufacturer.
According to "DAVID POTTER", "The only institution we have for

instilling new needs, for training people to act as consumers, for
altering men's values and thus for hastening their adjustment to
potential abundance is advertising".
According to "DUNN AND BARBON" 'Advertising is a paid non-

personal communication through various media by business firms,non-
profits organisation and individuals who are in some way indentified
in the advertising message and who hope to inform or persuade
members of a particular audience'.
According to “DAVID OGILVY” ‘Advertising is evil when it advertises

evil things’
As said by JAGDEEP KAPOOR, Marketing Guru “JO DIKTA HAI, WOH
BIKTA HAI”
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CH 1.2 TWO DISTINCT SCHOOLS OF THOUGHT
What should be or what could be the objectives for advertising? A
controversy around this question is still running hot in the ad world.
One school holds that ad has to necessarily bring in more sales and
therefore ad objectives should certainly include sales growth.
The second and diametrically opposite view is that ad is essentially

a communication task and it should have only communication goals, or
goals intended to shape the awareness and attitudes of consumers
Advertising Objectives
Sales Oriented Objectives Communication Oriented Objectives
A to S: ADVERTISING TO SALES
What is the single thing you want your consumer to remember about
you and what is it that he or he most remembers about your competitor.
Multinationals selling fast moving consumer goods follow a simple
principle – a to s: advertising to sales. Your advertising budget comes out
of your sales figures. So when you sell more you get a chance to do bigger
and better ads that tell more. And depending on how you project the next
year's sales you balance your advertising budget accordingly. So you sell
more before you tell more.
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CH 1.3 ADVERTISING OBJECTIVES IN RELATION TO P L C.
After understanding the different models used for advertising

objectives, we can relate them to the product life cycle of a brand. It is
seen clearly from the following diagram. It also enlightens the three kinds
of advertisements, which is commonly used over the product life cycle.
This helps a marketer to understand where exactly his product lies, and
what kind of advertisements he needs in order to meet its objectives.
(P2)
Informative:
It is used to develop initial demand, typically used in the introductory
stage of the PLC Example: Print ad of a Printer giving details about its
specifications
Persuasive:
It is used to increase demand for an existing product. It has a
competitive type of promotion and is typically used in the growth and early
maturity stage of the PLC Example McDonald’s Print Ad
Reminder:
It is used to reinforce previous promotion by keeping the name of the
product before the market, typically used in the late maturity and decline stage
of the PLC Example: Chlormint, also Amul has constant reminder ads using
humour related to current events.
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CH 1.4 MEDIA IN ADVERTISING FOR FMCG’S
Advertising is dynamic. It changes with the changing market, changing

lifestyle, changing methods of distribution and changing patterns of
consumption. In the modern world of advertising, the marketers to
communicate about product and service to the customers as well as the
prospective buyers are putting different types of media into use.
In India, newspapers, magazines, radio, television, hoardings, cable

network, outdoor, dealer network, etc. constitute the important media put
to effective use by the manufacturers of consumer durables. Of the
various medias, television enjoys distinct superiority over the rest
because of its audio - visual impact. Newspapers, magazines, radio,
outdoor too play important role in advertisement efforts of the marketers.
The various advertising medias are:
NEWSPAPERS: Newspapers are of different types. They are

national, regional and local as far as their coverage is concerned.
Newspapers form the most popular advertising medium, due to the
versatility of its character. National newspapers can be used for a
wider appeal. Local newspapers afford the means for intensive
advertising. Newspapers are the best media for the sale of consumer
durables, articles of utilities, beauty and luxury.
Example: THE TIMES OF INDIA, THE ECONOMIC TIMES,
LOKSATTA, NAVBHARAT TIMES.
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MAGAZINES : Magazines also play a significant role in
advertising. The various types of magazines are consumer, farm,
business, trade, industrial & professional magazines. For articles
of utility, beauty and luxury, which the educated masses are
likely to demand more, the current newspapers and magazines
are more suitable.
Example: FEMINA, OUTLOOK, A & M, etc.
POSTERS : A poster is a sheet of paper containing a

message and is pasted on the face of a panel. The
advertisement is printed or painted on cardboards, metallic
sheets, hardboard, etc. and are exhibited at railway stations,
places of entertainment, busy streets, etc. Expert advertising
agencies are employed for preparing poster and for getting
suitable sites rented.
PAINTED DISPLAYS : These are similar in appeal like

posters, painted displays on boards or walls cannot be as
many as posters. Posters may be printed simultaneously in
thousands, whereas the walls or boards painted are limited in
number. Poster require replacement from whereas painted
displays are permanent.
NEON SIGNS : Glass tubes/signs with electric wiring are

gainfully employed to make the message attract the attention
of passers by the colourful lights on the dark background of
a night. Neon signs have glamour. They are bright and catchy
& they easily attract the attention and educate the prospect
even from a distance. Example: MCDONALDS.
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SANDWICH BOARDS : Sandwich board is one of the popular
methods of outdoor advertising in rural areas. The messengers
are appointed by the advertiser to carry advertising boards on the
sides of both the shoulders. The creation of dramatic effect is one
of the special merits.
DIRECT MAIL: Direct mail is advertising addressed to individuals

through the agency of post. These prospects are selected from
among the people in a particular locality on basis of mailing list.
RADIO : Radio is the cheapest and the most pervasive of all

media of mass communication. Radio publicity takes the form of
commercial songs, dramatic dialogues, opinions of popular figures
like cricket players, film stars, etc. Products like soaps, cosmetics,
confectionery, films, etc.
TELEVISION : The popularity of radio publicity has

gradually been taken over by television. T.V. provides a
scientific synchronization of features of sound, sight, motion
and quickness that no other medium has been able to provide
so far. A variety of techniques are available to the advertiser like
cartoons, documentary films.
FILMS : Film publicity means exhibition of films or slides in

cinema halls along with a picture or independently. This
medium has become more effective due to rapid
industrialization and competition. Luxury items, fancy articles,
speciality articles, etc are advertised in such theatres.
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WEB ADVERTISING : Web advertising incorporates the use
of web space allocated in the internet, which is widely used
in the modern world. In web advertising, the sponsorsers of the
product pay a nominal amount to the side hosts who allocate a
particular amount of space in their website to advertise the product.
POINT OF PURCHASE ADVERTISING : Point of Purchase

advertising means the advertising at a place and time when
the prospective buyer arrives in the market for purchasing
the goods finally. Point of Purchase advertising is the last
opportunity to an advertiser to promote a sale.
WINDOW DISPLAY: Window display media is used to attract

persons into the shop by sufficiently arousing their interest. This
display should watch the inside display.
Example: KHUSBOO, PAANERI .
EXHIBITIONS AND FAIRS: Many big manufacturers and

businessmen participate in the various exhibitions and fairs and
arrange shows by opening their stall. Exhibitions are useful for he
buyers, who can view in one place the different requirements of the
industry with which they are connected. Exhibitions may be
organized at local, national or international level.
SKY ADVERTISING: Under this form of advertising an aeroplane

writes the name of the product in the sky. Notices and other
advertisement material such as printed balloons etc. are dropped
from the sky.
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COUPONS : Coupon use has been very popular in recent
years. The coupon is an extension or variation of the consumer
deal strategy. Each coupon offers a price reduction on a
specific item in the manufacturer’s product line. The advantage
of coupon over special prices is that the product is never
marked at a price lower than the established one.
CONTESTS : Contests are also sponsored by some firm to

attract additional customers. Under contest, the consumer is
required to purchase one unit of the sponsor’s product, and the
entrant has equal chance to win prices which carry
considerable attractions. The success of a contest depends to a
great extent on how well consumers are informed of its
existence. Advertising can do a great deal to engender public
interest in a consumer contest.
PREMIUMS : Premiums are free gifts or bonus items

distributed free with the purchase of another product. For
example, “Buy Three, Get One Free”. Premium is tied to
current sales. The premium is offered to the customer as a
reason for buying the item, the premium comes as a gift.
Premium are used to stimulate industrial and trade buying.
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CH 2.1 CONCEPT OF FAST MOVING CONSUMER GOODS
The FMCG (Fast Moving Consumer Goods) Industry comprises of

goods which are mass use goods directly consumable, packaged and
branded having significant demand in low to middle income strata and
above all are highly price sensitive.
The FMCG Industry in India is the third largest Industry after

Textiles and Petroleum with a turnover of over Rs.80,000 crores. Its
participant profile is extensive and includes food and related products
such as tea, salt, tobacco, oils, fats and processed foods, personal care
products such as soaps, detergents, hair oils, toiletries and dental
products.
The FMCG value chain is vast covering farmers who manufacture the
primary products to the consumers who consume the ultimate finished
goods. The value chain includes transporters, manufacturers, carrying &
forwarding agents, distributors and retailers.
The market for consumer goods can be divided into 3 basic
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The FMCG sector consists mainly of sub segments viz. personal

care, oral care and household products. This can be further sub-divided
into oral care, soaps and detergents, Health and Hygiene products, beauty
cosmetics, hair care products, food and dairy-based products, cigarettes.
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CH 2.2 CHARACTERISTICS OF FMCG MARKET
The key characteristics of the Indian FMCG market are as follows:
 Heavy launch costs: Companies incur huge costs on the launch of

new products. The entire launch process goes through a series of
processes such as product development, market research, test
marketing. All this require huge cash outflow. Further, in order to
build brand awareness and develop franchise for a new brand initial
expenditure is incurred on launch advertisements, free samples and
product promotions. Launch costs are as high as 50-100% of revenue
in the first year and these costs progressively reduce as the brand
matures, gains consumer acceptance and turnover rises. For
established brands, advertisement expenditure varies from 5 - 12%
depending on the categories. It is common to give occasional push
by re-launches, which involves repositioning of brands with sizable
marketing support.
 Less capital intensive: The sector is not so capital intensive as

majority of the product classes require very low investment in fixed
assets. The sector is also characterized by high turnover to
investment ratio; turnover is typically five to eight times the
investment made in a Greenfield plant at full capacity. Another
reason for the sector being less capital intensive is that bulk of sales
from manufacturers takes place on a cash basis.
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 Contract Manufacturing: Manufacturing of products by third party
vendors is quite common. In order to keep a check on costs and
hence increase affordability of their products, companies in many
cases prefer to go for contract manufacturing by third party.
 Marketing Drive : Marketing assumes a significant place in the

brand building process of the industry players. This helps in
reaching out to a large consumer base and fight with the existing
brands. Even for an existing brand it requires constant marketing
efforts to keep the demand alive and kicking.
 Market Research: Before the launch of any new product,

conducting market research to gauge the consumers' reaction is very
important. This is because consumers' purchase decisions are based
on perceptions about brands and which keep on changing with
fashion, income and changes in lifestyle. Also in case of consumer
goods it is difficult to differentiate products on technical or
functional grounds, unlike in the case of industrial products. Now
with increasing competition, there is tremendous pressure on the
companies to do extensive market research, test market it before
coming out with any new product.
 Presence of a large unorganized market: The FMCG sector is

characterized by a huge unorganized market. Factors like low entry
barriers in terms of low capital investment, fiscal incentives from
government, low brand awareness, especially in rural areas led to
the mushrooming of the unorganized sector.
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CH 3.1 FMCG ‘SECTOR” IN INDIA
The FMCG segment is one of the fast growing sectors in India. The
presence of several multinational companies has added the growth
prospects considerably. Estimates show that the turn over of the FMCG
sector will be more than Rs 1 lakh crore. It is the third largest Industry.
This industry essentially caters to the every day need of population.
The participant profile of the FMCG sector is extensive and it
includes food and related products such as tea, salt, tobacco, oils, fats and
processed foods, personnel care products and cosmetic items etc. It
provides large employment both directly and indirectly.
The consumer product sector mainly consists of personal care,
cosmetics and home products segments. The sector can be further sub-
divided into dental care products, soaps, detergents, surface cleaning
products, skin care, and hair care products.
Market Segments, Size and Penetration

Segments Market size Penetration
(Rs bn) Urban Rural
Toilet soaps 46.0 95.0% 85.0%
Detergents 38.0 95.0% 85.0%
Hair color 2.4 20.0% 10.0%
Skin care 7 40.0% 10.0%
Oral care 21 75.0% 20.0%
The sector is divided into two distinct segments the premium

segment catering mostly to urban higher/upper middle class and the
popular segment with prices as low as 25% 30% of the premium segment,
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catering to mass segments in urban and rural markets. The premium
segment is less price sensitive and more brand conscious.
India's rural markets have seen a lot of activity in the last few years.
Since urban markets are saturated in most categories, future growth can
come only from deeper rural penetration. FMCG majors are aggressively
looking at rural India since it accounts for 70% of the total Indian
households.
 Raw material prices play an important role in determining the

pricing of the final product.
 The industry is volume driven and is characterized by low margins.
The products are branded and backed by marketing, heavy
advertising, slick packaging and strong distribution networks.
 Despite the strong presence of MNC players, the unorganised sector
has a significant presence in this industry.
 Branded goods comprise of 65% of sales in villages and the share of
non branded products is shrinking dramatically.
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CH 3.2 FMCG MARKETERS INDIAN CHALLENGES
The numbers are very tempting for an FMCG marketer. On top

of this you layer the one billion population, over 175 million households,
you can imagine the enormous opportunity. However all is not easy in the
Indian FMCG marketing scene.
The complex country throws several challenges which have been

tried to categorize into 10 types, for ease of understanding.
Challenge No 1: How do you define the market?
Several large markets in India are as yet highly underdeveloped.

Only 60% Indians use toothpaste. Only 5% of households use a floor
cleaner. Often it is necessary to go beyond “share of market’ to “share of
solution”. From that perspective we might discover over 30% of homes
use a normal household detergent for floor cleaning!
Challenge No. 2: How to target the market?
The 200 million middle class is a myth. How to identify the segment
to target? Often the lucrative segments are very small. And the large
segments do not have the deep pockets to buy a better FMCG product.
Challenge No. 3: How to understand the consumer?
India should be seen not as one country but as a sub-continent, with

many small countries. So consumer behaviour may vary from north to
south, big town to village. The conventional research methods need to be
layered with a sharp ‘feel’ for the market.
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Challenge No. 4: How to tailor the product?
Kellogg could not create a breakfast habit. But as a snack it is

finding favour. Tropicana had to educate consumers about its different
taste as ‘the taste of good health’. Brands like Nirma that offer a unique
proposition based on value will continue to flourish. FMCG marketers
who can tailor their product to unearth a key consumer need will reap rich
returns, ask Chik, Ujala, Moov!
Challenge No. 5: How to make the packaging work?
Indian consumers believe in reusing and recycling. So a throwaway

pack is seen as a waste. No wonder refill packs, pouch packs are bought
across all the income classes. Further, single use packs have helped
income the penetration of tea, shampoos and the ubiquitous pan masalas.
Challenge No. 6: How to price it right?
Value pricing. Penetration pricing. Skimming pricing. There are

many approaches to the pricing game but Indian consumers need to see
value. Halls sales dropped off the charts when price per lozenge moved
from 50p to 75p. The demand for the product category just disappeared.
Onjus lost the trust of dealers and consumers with its repeated price
hiker. A well thought out pricing strategy is critical, not just a pricing
strategy for entry.
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Challenge No. 7: How to reach the product to the consumer?
Trade can make or break an FMCG brand. You pamper them, you
become their slave. You mistreat them and they shun you. The presence of
the wholesale trade is yet another complexity. Marketers have to decide
on how to use these various channels to reach the consumers effectively.
Here again it is necessary to define the roles of the various channels, and
define your own rules.
Challenge No. 8: How to communicate?
What do Indians love? How to capture that in the communication?

The task of communication in FMCG marketing is to make the consumer
remember the brand, like the brand and try the brand. If that calls for a
song like the ‘Doodh Doodh’ jingle so be it. Let the advertising pass the
age old RUB text, relevant, unique, believable. In addition let it also pass
the Indian likeablility text - will you see the ad with your daughter and
your mother?
Challenge No.9: How to track the brand?
Using market research intelligently, not just blindly. The ideal way
to measure the success of the marketing mix is to do a real market
pressure text. Hindustan Lever tested Close-up in Tamil Nadu (a media
isolatable state) before taking on Colgate on the national playing field.
The rest is history.
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Challenge No. 10: How to use promotions better?
Is the promotion brand led or discount led? Rin gave away open soap
dishes, it helped the product usage since it dried better on an open dish.
Nescafe gave away shakers to popularize the coffee milk shake. Indian
FMCG market today has become a sales promotion mela. There are 2 for 1
offers, banded packs, 50% extra offers, 3 for 2 offers… all chasing the
discount buying tendency of Indian consumers. This phase will soon pass,
one hopes! Sales Promotions need to help in building the brand values, in
addition to generating short-term results.
The above 10 challenges are probably true of any market. But Indian
FMCG marketers face these challenges in different degrees in different
parts of the country. Being aware of the challenges will help them focus
their efforts better.
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CH 3.3 HISTORY OF FAST MOVING CONSUMER GOODS
Fast moving consumer goods companies need to rationalise costs, invest in

brand building and offer more value-added products. That is the recipe for success in
the competitive domestic FMCG industry. By Neural Jha
For those who might not know this....It was Dabur, which kick-started
in India what's today known as the fast moving consumer goods (FMCG)
industry. It was some 115 years ago, much before Hindustan Lever (HLL)
materialized on the scene. That Dabur could achieve neither the reach nor
the product depth of HLL is a different story altogether. Small wonder,
our curiosity refuses to go beyond HLL. How has the FMCG industry
metamorphosed in India?
THE FIFTIES AND BEYOND

Though multinational companies (MNC') were allowed to operate in
India, only HLL had manufacturing base at the time of India's
independence. For other global MNC's, the domestic market was too small
to bother about. Colgate and Nestle were there, but they were mainly into
trading. Though the 60’s saw many MNC’s setting up their manufacturing
base in the country, it was not a clear go for FMCG majors.
Cut to 1978.
That was when the new government earmarked several product
categories for the small-scale sector. The MNC’s then were asked to
choose between slashing their equity stake to 40 per cent, or forget India.
IBM and Coca-Cola opted for the latter and quit India. Only Unilever
stayed put with HLL around. Unilever managed to retain a 51 per cent
foreign stake by complying with the government conditions of minimum
10 per cent export and 60 per cent turnover from priority sectors. It got
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into the business of fertiliser and chemicals to meet the conditions for
staying on in India. HLL stayed on.
Lopsided growth
HLL might have stayed on, but the FMCG sector in India has had a
slow and lopsided growth. After so many years, quite a few product
segments in the industry still remain unrepresentative, and most segments
under-represented. Barring personal care and hygiene, no other product
segment has had an explosion of players. In food products, for instance,
there are only three major players - Pillsbury, Annapurna and Captain
Cook. Ditto for vegetable oil where again there are very few players.
What is the reason? One foremost reason has been that the FMCG
sector never got the centrality it deserved. Why, the FMCG sector has
been a victim of a definitional dilemma in India.
Says Michael Fernandes, senior engagement manager,
McKinsey & Company "In India, we never had a strong
d e f i n i t i o n o f t h e F M C G s e c t o r ."
All these years, the FMCG sector in India has been looked upon as an
MNC-dominated and high-price sector, which sold only luxury goods to
the rich. Even the government seemed to share this view, as its
regulations reflected.
Result: Most MNC's looked elsewhere. Says Fernandes: "When the MNC’s
prioritized India opportunities versus that of the world outside, they
found that doing business here was difficult. It did not make sense for
them to make huge investments in India." There were other reasons as
well, which made India an "extra tough" market in the eyes of the MNC’s.
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The need for localization was much here. It still is. The market too was
not open enough to allow free entry and exit.
THE DRAMATIC NINETIES
Things however began to change post-reforms during the nineties.

The floodgates were opened. And MNC’s with saturating home-markets
who were hungrily looking for markets elsewhere rushed in. Categories
within categories were created in products such as hair-oil and skincare,
and many new product categories were also created. Untouched facets of
the Indian consumer were explored.
The FMCG players had in front of them not only a vast untapped
market but also a market that was fast growing. Income-levels were rising.
A new class of upwardly mobile was emerging. Television and, satellite
and cable television were helping the market to grow further in rural areas
by changing aspirations and lifestyles.
The canvas did widen for the FMCG players, but so did the
challenges. Rules of the game changed. Strategies, in their true sense,
came to the fore. Quite unlike in the past, companies began looking for
ways to expand their product-portfolios and distribution reach.
Acquisition of brands became the order of the day as it gave the players
easy options of attaining growth in the FMCG sector. That is true of the
MNC’s who are known for their deep pockets.
HLL, for instance unleashed brands in a way it had never done before. Just in a span of
four years (1992-1996), it gobbled up Tomco, Kwality and Kissan. Lakme was bought off lock,
stock and barrel in 1995. HLL's game plan was to leverage Lakme's distribution channel. But,
problems remained. HLL's traditional distribution network, although one of the largest was not
tuned to market cosmetic products.
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Rivals were not sitting idle either. The Indian arm of Colgate-
Palmolive bought off the entire oral hygiene business of Hindustan Ciba
Geigy for Rs 1.31 billion, taking over Cibaca Top and Cibaca Flouride
toothpaste brands, and Supreme, Standard Angular and Deluxe Transparent
toothbrush brands. This purchase consideration was much more than twice
the turnover of these brands acquired.
The idea was simple:

One, the acquirer pre-empted rivals from acquiring the brands and
helped to consolidate its position. And Two, it increased market share.
For Colgate its market share more than doubled from 33 to 68 per cent. It
was increasingly becoming a market share game. Small gains made in
market shares were significant in a market characterized by intensifying
competition and polarization. Finally, it strengthened the distribution
network.
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CH 3.4 MAJOR PLAYERS IN THE FMCG SECTOR IN INDIA
1. Colgate Palmolive (India) Limited \\

Colgate Palmolive India Ltd is a 51% subsidiary of
Colgate Palmolive Company, USA. It is the market
leader in the Indian oral care market, with a 51%
market share in the toothpaste segment, 48% market share in the
toothpowder market and a 30% share in the toothbrush market. The
company also has a presence in the premium toilet soap segment and in
shaving products, which are sold under the Palmolive brand. Other well-
known consumer brands include Charmis skin cream and Axion dish wash.
Colgate has faced intense competition during the last 5 years

initially from no. 2 player HUL & more recently from small local players
(Meswak, Babool, Anchor) &other MNC's such as Smithkline (Aquafresh).
The company has been fighting back through new launches and
revitalization of flagship brand Colgate Dental Cream (CDC). In FY01,
the company launched 2 new brands Colgate Herbal & Colgate Cibaca
Top, which have been well received and have enabled the company to gain
market share. Both these brands have contributed to combined market
share of 7%, although a part of the gains have come through
cannibalization of flagship brand CDC.
The company has re-launched its Gel toothpaste Colgate Fresh Energy
Gel with an aggressive `Talk to Me' campaign with a view to revive
growth in the stagnant segment. Colgate has not been able to achieve any
significant success in expanding its non- oral care portfolio. The
Palmolive soap brand was re-launched last year in new transparent skin
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care variants with innovative see through packaging. Market shares in
other categories such as shaving products, skin creams and shampoo has
remained negligible. The company also launched a new shave gel
concentrate focussing on skin moisturizers in it.
2. Dabur India Limited

Dabur India is into the business of manufacturing & selling
of ayurvedic medicines, ayurvedic, natural and herbal
personal & health products & processed foods either directly
or indirectly through its subsidiaries. The company is among
top FMCG companies in the country. It is present in the Indian market for
past 115 years. Most of its ayurvedic/OTC brands are the market leaders
in their respective segments. Dabur has developed considerable expertise
in these traditional areas & has well understood the consumer preferences
for the traditional ayurvedic remedial measures. It was named after its
founder Dr. S V Burman. It also has its own advertising agency, Adbur. It
now sells its products in more than 50 countries.
The company has also established a strong brand equity in personal

products like hair oil, shampoo, etc. The company has diversified into the
foods business, directly and through joint ventures. Dabur's key growth
driving brands are Chyawanprash, PudinHara, Hajmola, Dabur Amla,
Dabur Vatika and Lal Dant Manjan.
The company hitherto had been a family run business but with
increasing competition the company has undertaken massive restructuring
over past 2 years and has exited form a number of low margin businesses.
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3. Godrej Consumer Products Limited
Godrej Consumer Products Ltd (GCPL) was formed on

April 1, 2001 with the de-merger of the consumer business of the
erstwhile Godrej Soaps Ltd. GCPL has emerged as a focused FMCG
company. Its main product lines now consist of toilet soaps, liquid
detergent, cosmetics such as hair care, fairness creams, etc and men's
toiletries. The company also undertakes contract manufacturing of toilet
soap for third parties. All interests of the erstwhile Godrej Soaps in other
businesses such as industrial chemicals, medical diagnostics and financial
investments continued to remain in the existing entity, post de-merger and
the company has been renamed Godrej Industries Ltd (GIL) Post de-
merger, the equity capital of Godrej Consumer stands at Rs. 239.3 million,
while that of Godrej Industries is Rs. 358.5 million.
4. Himalaya Herbal Healthcare
It is a Bangalore based company, with business into

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pharmaceuticals and FMCG products. It was formerly known as The
Himalya Drug Company.
Today, its products, made from natural herbs after extensive research,
have found acceptance with medical fraternities and serve the health and
personal care needs of consumers in over 40 countries. The producer of
leading household brands such as Liv 52 and Ayurvedic Concepts has
recently decided to unify all its offerings under the single, global brand
`Himalaya.'
The company is planning to make 5 of its brands `Power Brands' for the
company. The five brands are Himalaya acne pimple cream, Himalaya
dandruff shampoo, Himalaya foot care cream, Himalaya hair oil and
Himalaya dental cream.
7. Hindustan Unilever
Hindustan Unilever, 51.6% subsidiary of Unilever Plc, is the largest

FMCG Company in the country, with a turnover of Rs. 190 billion. The
company's business sprawls from personal and household care products to
foods, beverages, specialty chemicals and animal feeds. The company has
a dominating market share in most categories that it operates in such as
toilet soaps, detergents, skincare, hair care, color cosmetics, etc. It is also
the leading player in food products such as branded packaged tea, coffee,
ice cream and other culinary products.
HUL grew at a fast pace in the mid 90's driven by its aggressive
acquisition spree. From a Rs. 38 billion turnover (contributed 70% by
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soaps, detergents and personal products), HUL's turnover has now grown
to Rs. 114 billion, with personal products contributing 53% to turnover &
beverages & food products contributing to 30% of turnover. While growth
during the last five years was being driven by fast growing personal
products business, the pace has slackened significantly since 2000.
Competitive position: HUL is the market leader in the detergent & soap
industry. Nirma is a close competitor in detergents & has been slowly
gaining ground in toilet soaps too. The other significant competitor in
detergents is P&G. In oral care segment, HUL has emerged as a strong No
2 player, giving stiff competition to the market leader Colgate. In the hair
care segment, HUL dominates the shampoo market & is the No 2 player in
hair oils. In the skin care market, HUL has also been losing share to south
based player Cavincare Ltd. In the foods business, Tata Tea in packet tea,
Nestle in coffee and culinary products, GCMMF (Amul) in ice creams, and
Godrej Pillsbury in staple food are the main competitors.
Profitable growth is the new mantra of the FMCG major's new

Chairman Vindi Banga., who took over the reins from Keki Dadiseth last
year. In contrast to Dadiseth's strategy of expansion through acquisition,
Mr Banga's strategy revolves around rationlization.
A focus on 30 power brands, which are major contributors to
profitability, seeking new avenues of expanding distribution reach,
improving profitability of Foods businesses, which is in the investment
phase are the thrust areas outlined by him. The non FMCG businesses are
either being are hived off or are being strengthened by partnerships with
players who have the technological expertise in those businesses.
8. Marico Industries Ltd (Marico)

Marico is the market leader in the hair oil segment, with its
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Parachute and Hair & Care brands. In the year 2009 it generated a
turnover of about 26.6 billions. It has also built up a strong equity in the
branded edible oil segment, niche fabric care products and food products
like jams and sauces. Presently the company has 8 brands and a number of
brand extensions in its portfolio and has its business ranging across areas
of Edible oil, Hair care, processed foods and niche fabric care segments.
Besides Marico, Dabur and HUL are the two leading players at the
national level. There are several other players with a regional focus.
Branded edible oil, today accounts for just 35% of total edible oil
consumption. However the relative proportion of edible oil sold in
packaged/branded form has been rising steadily with increasing awareness
about health & hygiene. In the fabric care segment, Marico is the pioneer
& the only player catering to niche Indian requirements such as starching.
Parachute and Saffola, accounting for more than 60% of Marico's

turnover, have been transferred from Bombay Oil to the listed company
for a consideration of Rs. 300 million in FY00. Marico is following the
strategy of strengthening the brand equity of existing brands by launch of
new variants, expanding product portfolio through acquisitions and
leveraging upon its large network by entering into distribution
arrangements. However an aggressive onslaught of competition from HLL
in the hair oil segment can affect Marico adversely.
9. Nirma
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Nirma manufactures detergents, toilet soaps and other
industrial chemicals. It has backward integrated by setting up a 75000
TPA LAB plant, a 65000 TPA N Paraffin plant and a 0.42mn TPA soda ash
plant. The first FMCG Company to have forayed into such large capex
backward integration projects, Nirma's strategy is to emerge as one of the
lowest cost detergent manufacturer in the world. The company has also
strengthened its position in the toilet soap category and achieved
phenomenal success in the last one year through launch of a new brand
Nima.
In detergents market Nirma and Hindustan UniLever are close

competitors with 38% market share each. Nirma leads the popular
segment, while HLL leads the premium detergent powder segment. P&G
and Henkel Spic are the other key competitors in the detergent market. In
toilet soaps, HLL has a dominating 63% market share. Nirma has also
garnered a significant 22% market share in a short time.
Other major players in the segment are Godrej Soaps and P&G.
Nirma is reaping the benefits of the large investments made in the last 4
years. Operating margin recorded an improvement in FY00 and has further
risen by 450 basis points from 18% to 22.5% during the first quarter of
FY01. Sales in Q1 grew by 55% yoy to Rs5.5bn, driven partly by the
merger of group company
Kissan Industries and continuing strong growth in toilet soap. Even
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after excluding the impact of the Kissan merger (estimated annual
turnover of Rs2bn) Nirma's sales growth would have been a robust 35%
yoy. The success of the Nima brand has contributed significantly to this
robust growth.
Strategy
Nirma's large capex backward integration projects had been
undertaken with a strategy to become the lowest cost detergent
manufacturer in the world. Self-sufficiency in key raw materials will give
protection against commodity cycles besides yielding substantial savings
in raw material cost. The company estimates a total cost saving of 25% in
material and handling costs due to the backward integration projects.
The company makes extensive use of wall paintings for advertising.
10. Procter and Gamble
P&G, 65% subsidiary of P&G USA (P&G), is mainly engaged

in the businesses of health care and feminine hygiene. The parent has
identified anticold products (Vicks range) and feminine sanitary products
(Whisper) as the focus area for its listed Indian subsidiary. The company
also manufactures detergent for the parent's 100% subsidiary, Procter &
Gamble Home Products (PGHP). Other businesses include men's toiletries
and skin care products.
Vicks is the dominant leader in the anti cold OTC segment. Main
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competition is from domestic local brands like Amrutanjan, Zandu, etc in
rubs and balms and from MNC brands such as Halls, Strepsils in cough
lozenges segment. A recent entrant Paras Products has been giving stiff
competition to Vicks Vaporub, by aggressive advertising and competitive
pricing of its products.
The parent, Proctor & Gamble, USA operates in India through three
entities. 65% subsidiary Procter & Gamble Hygiene & Healthcare (PGHH),
which is focused on Anticold (Vicks), and Feminine Hygiene (Whisper).
This subsidiary also manufactures detergents and Mens Toiletries products
(Old Spice). 100% subsidiary Procter & Gamble Home Products (PGHP)
is focused on the Detergent (Ariel, Tide), Hair Care (Pantene, Head &
Shoulders), Baby care (Pampers), Snack Food (Pringles) business.
Distribution of products is carried out by another subsidiary Procter &
Gamble Distribution Company, which is jointly owned by PGHH and
PGHP. The management is highly opaque and does not share any of its
growth plans or strategic decisions. The company declared a whopping
400% dividend in F6/99 and in F6/01, the largest beneficiary of which
besides the small investors has been the parent company.
Also venture into new product segments, where P&G has a
technology edge (shampoos. detergents, toothpaste) are undertaken
through the 100% subsidiary PGHP.
CH 4.1 WHY ADVERTISING IS REQUIRED IN FMCG SECTOR
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These are the different reasons why a company needs to advertise
their communication objectives
 Introduction of new products : For the new products or services,

reminder advertising is clearly inapplicable. Here the task is one of
basic education – informing potential customers of the benefits they
will reap by purchasing the new product.
Example: LIVON SILKY POTION, when introduced, the ads
differentiated the product from the shampoos & conditioners by
explaining usage the product, positioning it to be better than the
conditioners. How hair becomes manageable & silky after using it.
 Overcoming Resistance/Changing Attitude: Many companies seem

to assume that the public is merely waiting for a suitable advertising
message to stimulate them into buying the product. But the people
are wary of buying unfamiliar products & the retailers are equally
shy of stocking the lines unknown to their customers.
Example: In the case of KAMASUTRA condoms – people were
against the use & had a negative impression of using condoms. Their
approach was that of being high resistance. This was because they
saw condoms as a means of protection. Hence KAMASUTRA had a
task of selling not only the product, but also the desire of ‘The
pleasure of making love’. Hence in all their advertisements they
have brought the factor.
 Reminding customers: A company has to constantly remind users of

their wares. The human memory is very short & frequent reminders
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are necessary. Moreover, there are innumerable distracting factors,
which soon make memory fade. There is also competition for
attention faced from the makers of totally different products. Taking
a still wider view of the many selling influences at work to make
people forget your product – the latest news at home or abroad, the
activities of family and friends, new events at work and the latest
films and television programmes- all make the consumers mind
divert and forget your product.
The manufacturer who wants his product and name to be remembered
amid the host of competing products and brand names will go for
high public attention. Further more, constant reminders through
advertisements can enhance the company’s reputation and standing
and play their part in cementing customer loyalty.
Example SANTOOR constantly touched the consumer with its theme
of ‘mistaken identity’. It raised the aspirations of a woman of
looking younger.
 Reinforcement advertising: Related to reminder advertising is

reinforcement advertising, which seeks to assure current purchasers
that they have made the right choice. Automobile Ads often depict
satisfied customers enjoying special features of their new car.
Example: HYUNDAI SANTRO had some ads quoting how customers
were satisfied with the ‘Mobile’ service that helped them in a
difficult situation. This is a classic example of reinforcement
advertising.
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 New customers from other brands: One must try to find out which
existing users of the competing brand are the most dissatisfied with
it and target these switch able consumers. Alternatively one should
try to acquire those customers of the competing brand who are the
most likely to grow their sales volume in the years to come. And/or
are the most profitable. For many product categories about 20% of
the customers (heavy users) are likely to account for 50% of the
sales volume and profits and are clearly worth focusing on as new
brand users.
Example: ARIEL v/s SURF: When Ariel was launched, it showed
comparisons between itself and a known detergent (Surf packet
without its name). Through its ads, it showed how it was better than
Surf and thus wanting to shift the Surf users to Ariel.
 New customers from other categories: Another approach is to

attract people from those not now using the product class. The firm
in the industry that has the highest market share, the largest
distribution, the biggest sales force and the highest awareness is the
one most likely to get the sale from a customer just entering the
product category.
Example: PEPSI might conclude that it is easier to get young
coffee drinkers to switch from coffee to PEPSI, than it is to switch
COKE drinkers to PEPSI
UJALA, when it entered the market, proved itself better than Neel
(blue) and made the users shift to it.
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On the other hand such a strategy makes much less sense for a
smaller firm that runs the risk that the segment member who is
induced to try the product class may buy from a larger competitor.
Example: A small cellular phone manufacturer might waste its

money if it ran ads telling people why cellular phones in general
were useful for personal or business reasons. A consumer seeing
those ads might decide that, yes they need a cellular phone, but
might then end up buying the better-known MOTOROLA or
NOKIA.
 Brand Image / Company Image: The Company needs to have a

favourable image of it brand in the eyes of the customers. For this
reason, the company undertakes various campaigns to build the
brand and the company. This will enhance the preference of the
customers to use the particular brand in the market of numerous
brands. There are various factors that contribute to the favourable
brand image. They are:
 Unique Selling Proposition

Example: SAFFOLA previously advertised the feature of its oil,
which said that its consumption would not lead to any heart
problems.
 Brand Personality
Example: MCDONALDS - Family oriented, Genuine, wholesome,
cheerful, fun
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Performance
Example: MRF Tyres run huge ads in print media on the onset of
monsoon, telling users to trust MRF for monsoon. Also, in all its ads
it talks about the awards it has won over the years, as ‘the best tyres
for Indian roads’.
 Creating awareness of new products/brands and new

developments in the company:
Present customers may know the products of a company, but
they may not know the improvements made or the new lines added to
their range. Firms devote a great deal of time, money and effort in
improving their products, but this is of little purpose if the
customers are left in the dark about them. Potential customers will
not become purchasers unless they know of the new developments
and advertising helps to keep them informed. Furthermore, changes
in you product line may open up new market segments for whom the
earlier products were not of interest.
Example: PERK introduced the “PERK XL and PERK XXL” at the
competitive price. They have used ‘Priety Zinta’ in their
advertisements.
PONDS have a range of product, which was introduced
consecutively, and it is constantly advertised on television and other
mediums.
 Increasing usage: It is possible to increase the usage of existing

customers in the product class. In essence the goal would be to
increase the amount consumed per usage occasion.
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Example: CLINIC PLUS – recommended through its advertisement,
that its shampoo must be used 3 times in a week –“Tuesday,
Thursday, Sunday.”
ZANDU BALM – the advertisement depicted the various pains that
could be relived through Zandu Balm, without even visiting the
doctor.
CADBURY’S DAIRY MILK – which showed the marriage scenario
and how people consumed Dairy Milk instead of the usual Mithais .
 Umbrella campaigns: Many organizations are found active in many

activities and have multiple brands for different categories, with
separate divisions marketing separate products to separate markets
via separate advertising and selling campaigns. Many such
organizations realize that linking their self-contained business
operations would benefit all component companies. Hence through
one advertising campaign, all the products of the company are
exposed to the audience. This also builds up the image of the
company and all its brands.
Example: AMUL - REAL TASTE OF INDIA campaign that was
quite successful.
Other umbrella campaigns are that of CAMLIN, WIPRO, ADITYA
BIRLA GROUP, PARLE ‘world of happiness’, etc.
 Campaign to push declining sales: The purpose of the campaign

may not be to increase or stabilize sales, but to hold off a decline.
This overall category masks various types of decline for which
different advertising approaches are necessary. One advertising
campaign may have as its purpose countering the natural decline in
the market. Another purpose might be to sustain an existing brand
against competition.
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Where the market for the company’s product is steadily
diminishing, it is unwise to expect advertising to work miracles and
reverse the permanent trend: it may however be able to make some
contribution by slowing the rate of decline, thus giving the company
time to seek new opportunities in other directions.
Whereas advertising can make a far more positive contribution

is in countering temporary falls in sales. Positive advertising,
emphasizing value for money, can help people adjust more swiftly to
the new conditions.
Example: RASNA was a declining product even after being in the
market for 4 years and even though it was an entirely new concept
of a branded soft drink concentrate. In 1982 non-aerated soft drink
market was estimated at around Rs 13 crores. Squashes and syrups
were the leading product categories, accounting for 84% of the
market. Soft drink concentrates had a share of 7% only. It was
recognized that there existed a good potential market for RASNA, if
advertised properly.
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CH 5.1 ADVERTISING COMPONENTS OF FMCG INDUSTRY
Advertisements consists of various components. These components

create a distinct identity for the product. In certain cases, these
components themselves have become brands.
The various components of advertising are as follows:
 MASCOT : A mascot is a trade character or trade figure. The

mascot is usually a fictitious character. It stands for the
company or the product. It has immense advertising value.
When the character becomes popular, it reminds one of the
company or the products instantly. It acts as a symbol so
unique that no one can imitate or claim it. Some of the well
- known mascots are the Amul moppet, Air - India Maharaja,
Gattu (Asian Paints), MRF man, Ambuja Cement man, Onida
devil, Kelvinator penguin, Milkmaid lady, etc.
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 LOGO : The display of the company name, seal or trademark
is called a logotype and is a common part of most
advertisements. These logos have created a distinct identity for
the brand. Many reputed companies enjoy recognition among the
masses with the aid of their logo. Some well - known logos
are :
 SLOGAN : Most companies have used slogans for several years

and the slogans have become a symbol of identification for
the company. Most of the consumers identify the product as
soon as they hear the slogan. Many companies use the slogan
of their well - known products in order to advertise their
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other products and to gain brand recognition. Some well -
known slogans are
 Coca - Cola: Thanda Matlab Coca - Cola.
 Britannia: Eat Healthy, Think Better.
 Amul: The Taste Of India.
 Videocon: Bring Home The Leader.
As we know FMCG SECTOR is full of innovations and creativity
and these innovations and creativity are used in the promotional schemes
and advertising with a motive of customers brand recall which indirectly
helps the company to increase it’s sales and the growth of the company
Here are some of the other advertising components/ ways of using

these components which helps to increase the recall factor
1. Slogans: The Slogans /Punch lines which the company uses or attaches
to the advertising and the brands can be used in the following ways which
may increase the recall factor
 Not satisfied with your dates

o Yeh dil mangey more (Pepsi)
 If you are going to propose to a girl, chances are

o 50-50 (Britannia)
 A guy having a number of girl friends

o The Complete Man(Raymonds)
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2. Sounds/Songs: Some brands have a tune or a sound associated with
their brand, which helps and plays an important role in increasing the
recall factor of the product.
Eg’s
Britannia: “TING TING TI TING”
Nescafe: “PA PARAPE PA RA RA”
Liril: “LA LALALA LA LA LALA A LA LA LA”
3. Ringtones: Companies have used their sounds or song as the ringtones

of the mobile as these is found to be the best and most effective way of
recall factor as these ringtones are preferred by most of the people cause
these ringtones can be transferred or forwarded as messages and used by
most of the mobile users.
Eg.
NESCAFE
ZANDU BALM
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CH 6.1 SWOT ANALYSIS OF FMCG INDUSTRY
STRENGTHS:
 Well-established distribution network extending to rural areas.
 Strong brands in the FMCG sector.
 Low cost operations
WEAKNESSES:
 Low export levels.
 Small scale sector reservations limit ability to invest in technology and
achieve economies of scale.
 Several "me-too’’ products.
OPPORTUNITIES:
 Large domestic market.
 Export potential
 Increasing income levels will result in faster revenue growth.
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THREATS :
 Imports
 Tax and regulatory structure
 Slowdown in rural demand
CH 7.1 CASE STUDY : BRAND STORY “LIRIL”
LIRIL
The freshness of lime coupled with a shower of cool water- does
this bring a picture to your mind or does it ring LA LA LA LA, LA LA
LA…! LA….LALALALA…LA?? The perfect combination of a refreshing
bath that can be symbolized by India’s most refreshing soap- liril!
L i r i l w a s l
associate themselves with the brand that because it
gives them psychological gratification. In the early
70s a market research agency found out that
housewives had typical ‘needs of fantasizing’. Their
fantasy was turned into reality in the Liril ad.
At least 30 years ago, a team of managers appointed by Jagdish

Chopra’ the then marketing director of Hindustan UniLever (HUL), to
create freshness soap in premium price segment attempted a blue soap that
promised fresh mountain breeze. A brainstorming session steered by late
marketing guru shunu sen was held to find out what ‘freshness’ meant:
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like walking barefoot on marble’ being spayed with a jet of water, like icy
blue and the like, they came up with icy blue. While test marketing in
Nashik and Indore, the blue liril failed and the idea have to be shelved.
So, they took the help of the young, British marketing head and created a
green marble soap. It was a regular lime soap owned by lever.
The team’s aim was to get into households with a bang. Extensive
research conducted on young women and housewives helped them gain an
interesting insight; it was found that an average Indian woman who lived
with her husband’s family had to undergo a lot of pressures in her daily
life due to her duties and responsibilities towards the family and
households.
Apparently the only time she had her for herself was the 10-15
minutes that she was in the shower. This thought provoked the liril
advertisement created by Neena merchant, with the help of alyque
padamsee, the then director of Lintas featuring a green swimsuit clad girl,
frolicking enthusiastically under a waterfall.
The moment of liberation that liril provided was well accepted by

the women of India and not only did the ad became popular; liril became
premium soap overnight. The brand became a market leader in the
category of ‘premium freshness soaps’ within a year of its launch,
overtaking brands like Cinthol and Mysore sandal.
In his book ‘ a double life’, alyque padamsee, the godfather of

Indian advertising talks a lot about his most successful campaigns and the
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ideas that went into making them. He says that great communication is
when there is fusion between the word and the picture. Padamsee who
tends to think in visuals asserts that the shot of the girl under the
waterfall in the liril film is more important than the forgettable headline
‘come alive with liril freshness!’
THE FIRST LIRIL AD

The first liril ad was a masterpiece of its own caliber, a product
of alyque Padamsee’s imagination. It was shot in Kodaikanal at a
waterfall a little beyond Guna caves.
Karen Lunel, the first liril girl reigned for a long time and was
succeeded by Anoosha Dalal and many more including the latest Priety
Zinta. But even though the scenes, girls and the choreography changed, a
part of the original music was still retained.
The liril girl is one of the brand’s strongest advertising properties.

Try as they might, HUL and Lowe have not been able to the liril girl from
her position. As a result, certain amount of drudgery began to set into ads.
Meanwhile the market was heading towards niche segmentation where
products were positioned in the consumer’s mind in such a way as to offer
a particular benefit. Eg. Lifebuoy - the health soap. Pears – the gentle
soap. Liril’s idea of ‘freedom the usual routine’ failed to create an idea of
freedom as against the ads of the competitors that ideated well to single
benefit being offered to consumer. Liril lost a major chunk of its sales,
nearly 50 crores in value because of competition from Nirma that banked
on it’s scent of roses. Liril weathered rough waters with rejuvenated ads
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addresses tonew generation women living fast paced career-oriented life
thus recovering much of lost market share.
Liril’s bold communication is well known even till date, 25 years

after its birth. It’s a symbol of juvenenile exuberance and an expression
OF FREEDOM AND FRESHNESS. ITS SONIC BRANDING ‘ LA ………
lalala LA ……la la la la lalala’ works wonders on the consumer’s brain
cells and is tantamount to the graphic, logo and lime!
Just the sound of the jingle transcends a whole new world of liril
freshness freedom.
The parent company Hindustan UniLever (HUL) has several leading

toilet soap brands in different price segments and dominates at least 63 %
of the market share in the toilet soap market. Lifebuoy, Haman, Liril,
Lux, Pears – are all HUL’s leading brands. Lifebuoy is the largest selling
soap in India. Soaps like Liril, Rexona and Lux were re-launched in 1998-
99 to help gain the losing market share. HUL’s power brand Strategy
helped beat the declining market and post strong growth in 2002.
With innovative strategies to win consumer attention, there was a

leap in quality and market activation that lead to double-digit growth for
Lifebuoy, Liril and Lux. Liril’s growth was sparkled by the new addition
– Liril Icy Cool Mint. ‘Icy Try Karoge?’ this new variant has refreshed
the 25 year old brand’s equity of ‘freshness and exuberance of youth’ thus
giving it double-digit growth. The tingling menthol offers a unique
cooling sensation to the skin. To open up a new premium segment, liril
has also ventured into body Wash – ‘Shower Gel’.
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From ‘come alive with freshness’ to Ice Try Karoge?’ Liril has come
a long way, grown as a brand and found a space for itself in the
consumer’s mind.
CH 7.2 CASE ANALYSIS : GASPING FOR SURVIVAL
Why didn't the mouthwash category bite in India?
In the mid1990s mouthwash manufacturers put their money where

the mouth was. Multinationals like Johnson & Johnson and Parke Davis
with their brands Reach and Listerine respectively slugged it out in the
market along with local players like Elder Pharmaceuticals' Am Pm and
Parle Products' Prudent.
By the end of the decade, most of the combatants had to eat their
words. Today only Listerine and Am Pm are still breathing; others like
Reach and Prudent (later sold to Gillette) have done the vanishing act. As
for the category, it seems to be gasping for breath.
And the sound of the death knell is loud & clear. As volume sales
dipped to just 895 tonnes in Jan Dec 2000, compared with 943 tonnes in
the same period of 1999, the only way analysts see the category going is
down.
Analysts, mouthwash manufacturers and toothpaste manufacturers
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unanimously say that this was inevitable. According to them, Indian
consumers never felt the need for a mouthwash. Considering that there are
a number of products that scored hits even though Indian consumers didn't
feel the need for them, where was it that mouthwash marketers failed?
The admission of one industry source suggests a more accurate
answer: We never understood the business enough to reap the benefits. In
India, mouthwash is essentially considered a therapeutic rather than a
cosmetic product. Like other pharma products, even mouthwash is sold
through two routes prescription and OTC (over the counter).

The OTC category has brands like Listerine, Am Pm and the recently
launched Colgate Total Plax (until recently Reach and Prudent were also
sold through this route). While the overall category is valued at Rs 37
crore, according to figures for January December 2000, OTC sales account
for approximately Rs 5 crore a dismal performance if you consider that
the turnover was nearly the same in 1996.
The remaining Rs. 32 crore of sales take place from the ethical route
prescribed by medical practitioners through brands like Betadine by
Delhibased Win Medicare, Wokadine of Wockhardt, Hexidine, Piodin,
Clohex and several others.
Betadine, the market leader of the ethical category, is also the

overall category leader. With a 28.8 per cent share of the market, along
with its variant Betadine Gargle with a 9.1 per cent share, Betadine
corners a healthy 37.1 per cent volume share.
Listerine, the first mouthwash brand in the world and the most
popular OTC brand in the country comes a poor second with a 12.6 per
cent share. Its variant Listerine Cool Mint adds another 6.9 per cent
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taking Listerine's share to 19.5 per cent of the total category.
The situation is even more grim in the OTC segment. Though

Listerine commands a healthy 82 per cent share of the OTC category, it is
only a Rs 4 crore brand.
Further, demand in the category is driven by compulsion rather than

desire. Use of a mouthwash is advised by medical practitioners mainly as
a cure for oral health problems like gingivitis (inflammation of the

gums) and halitosis (bad breath).
Once the problem subsides, the mouthwash is no longer used. In

contrast, in western countries, mouthwash falls under the habitual usage
category. It is used by consumers as a routine after smoking or after
meals. A brand manager with an OTC mouthwash manufacturer says, In
the West, use of mouthwash is a prevention rather than a cure.
In India, marketers did little to create this kind of need for their
products. Mouthwash was always a complementary product and never a
substitute for basic oral care (brushing teeth). In a country where modern
dental cleaning agents like toothpaste, or even toothpowder, are used by
only six out of 10 people and that too, sparingly. Mouthwash was
considered an additional expense.
According to ColgatePalmolive, the consumption of toothpaste in

India is just 82 grams (153 grams in urban India) per head compared to
the US at 518 grams. Even countries like Thailand and Mexico record
consumption patterns of 262 grams and 376 grams per head respectively.
49 | P a g e
Mouthwash manufacturers made a tough market situation worse by
pricing mouthwash at the higher end. A customer had to shell out Rs 27
for an 85 ml bottle that could be used only on four occasions (20 ml per
usage) and Rs 45 for a 250 ml bottle. In comparison, consumers could buy
a stock of toothpaste for a family of four for an entire month at that cost.
Compounding this was a tight leash on advertising and promotion

budgets, which did nothing to improve awareness of the category.
Compare this with what, for example, Hindustan Lever did to create
a market for Fair and Lovely.
If lack of awareness was a major problem, marketers could have

induced trials by offering smaller packs. Here, manufacturers could have
taken a cue from shampoo manufacturers who had faced a similar problem
in the country.
Till the late eighties shampoos were sold only in plastic bottles and
were highly priced. In the early nineties, shampoo marketers started
selling shampoo in sachets that cost just Re 1 or Rs 2, and led to a virtual
explosion of the market.
The result was a high amount of trial purchases that ultimately

increased volumes for the category. The success story is there for all to
see; even today sachets account for 70 per cent of shampoo sales in India.
Instead, mouthwash manufacturers in India chose to sell on their

own terms volumes first and new initiatives afterwards rather than on
those of the consumer.
50 | P a g e
For the manufacturers themselves, there was a dearth of interest in a
category as minute as mouthwash. While Parke Davis invested time, money
and effort on other successful OTC brands like Benadryl or Gelusil, others
like Elder Pharmaceuticals had more profitable brands like Tiger Balm,
which got all the attention. As a consequence, their respective mouthwash
brands suffered.
This was not surprising. Listerine accounts for just two per cent of
ParkeDavis' turnover. As an executive remarks, Marketers were caught in
a chickenandegg situation should they increase marketing and advertising
spends first or wait for sales to pick up.
Internationally, however, the 121yearold brand Listerine developed

by Dr Joseph Lister in 1879 sells in alternative packages like 20 ml
sachets and in the form of strips (packs of 25 strips in a thumb sized
container, the strips dissolve in the mouth). But for Indian markets these
initiatives were ignored. Instead, Listerine sold in its vintage packaging
of medicinal bottles available in sizes of 200 ml and 85 ml.
This was a conscious packaging decision to re enforce the

therapeutic benefits of the brand. But the dull packaging never generated
the kind of interest that would induce trials. Even though Listerine
changed over to a trendy PET packaging in 2000, it could have been a
change that came a bit too late.
But other brands like Prudent launched around 1993 by Parle

Products and later sold to Gillette and Johnson and Johnson's Reach
launched around the same time that were sold with innovative PET
51 | P a g e
packaging in their hey days never attained the awareness levels of
Listerine, which had a head start of a century
Even as mouthwash manufacturers failed to build demand, a second

whammy came from toothpaste manufacturers when they launched their
gel variants. Hindustan Lever's Close Up was the first to famously cash in
on the fresh breath USP to establish itself. Together with Colgate's Fresh
Energy Gel, these toothpastes, thus, offered benefits similar to that of a
mouthwash.
The success of the gel category of toothpaste showed that, despite
mouthwash manufacturers' claims, there definitely was a market for oral
refresheners. In the end, however, toothpastes swallowed up the
mouthwash market.
And nothing drove home the point better than the success of such
seemingly unrelated products as Nestle's Polo mint, and Pass Pass mouth
freshener from a Delhibased condiment manufacturer. To combat the
competition, Listerine launched a variant Cool Mint in early 1995. But it
did little to improve matters and though Cool Mint increased Listerine's
share by four to five per cent, the mother brand was stagnating. By this
time, Nestle's Polo and Clorets were available at every hole inthewall
outlet.
The lethal blow came from the specialists the medical practitioners.
According to a Mumbai based dentist, there is no genuine need for a
mouthwash among Indian consumers as the idea of oral hygiene among
Indians is far removed from the western concept.
Moreover, Indian consumers visited dentists only if there is a

52 | P a g e
problem as opposed to the US where dental check ups are mandatory. And
other western habits like flossing on a weekly basis (removing deposits
between teeth and gums with a silk thread) were unheard of in India.
What sealed the fate of the category were distribution problems.

Mouthwash in its therapeutic form could be sold only through
pharmacists. Prudent proposed to be different. Decidedly a cosmetic
product, Prudent could retail through the FMCG route. This gave it a
definite distribution edge, but then; Prudent had a trade off in that it
offered no therapeutic benefit.
Brands like Listerine have launched low budget promotions for
increasing usage of mouthwash in institutions, by offering them
complimentary supplies of mouthwash in their office for a week, and
Elder's AmPm is expected to take the promo plunge soon. But the tide is
certainly against the players.
53 | P a g e
QUESTIONNAIRE
1) What would you prefer more?

a) Attractive ads b) Information of product
2) Are you brand conscious

a) Yes b) No
3) What influences you to buy a product?

a) Advertising b) Price c) Promotional schemes d) Product utility
4) The success of a product depends upon?

a) Advertising b) Brand name c) Product d) Price e) Promotional schemes
5) What do you feel is the recall factor of a product?

a) Logo/brand name b) Advertising c) Slogan d) Product utility e) Schemes
6) Would your buying decision be affected by the advertisement?

a) Yes b) No
7) Among the following media’s, which do you find the most effective?
a) TV b) Press c) Online d) Outdoors e) Radio f) Others (please specify)
8) Are ads sufficient for you to be pulled to buy a product?

[ ] Yes [ ] No
9) Do Celebrity endorsements attract you for a particular FMCG product?

[ ] Yes [ ] No
10) Which soap would you prefer the most

a) Lux b) Rexona c) Dettol d) Pears
54 | P a g e
11) Which factors mostly affects your decision while purchasing any FMCG products?
a) Friends b) Advertisement c) Parents d) Others
12) Which company’s ads you like most?

a) HUL b) ITC c) P & G d) Dabur
ANALYSIS
1) What would you prefer more?
a) Attractive ads b) Information of product
80%
70%
60%
50%
40%
30%
20%
10%
0%
attractive ads Information of Product
55 | P a g e
The analysis done suggests that 70% of the people would prefer more attractive ads over
informative ads
2.) Are you brand conscious
b) Yes b) No
Percentage
35%
Yes
No
65%
The study suggests that 65% of the people are brand conscious.
56 | P a g e
3) What influences you to buy a product?
c) Advertising b) Price c) Promotional schemes d) Product utility
Influence
10
25
55
10
The research suggests that 55% of the people get influenced by advertising as compared to
others.
57 | P a g e
(G3)
4) The success of a product depends upon?
a. Advertising b) Brand name c) Product d) Price e) Promotional

schemes
Promotional schemes 20
Price 5
Product 5
Brand name 35
Advertising 35
58 | P a g e
(T11)
This
The analysis shows that Brand name and Advertising are the major factors for the
success of the product in the market
5) What do you feel is the recall factor of a product?
a. Logo/brand name b) Advertising c) Slogan d) Product utility e)

Schemes
45% 35%
10%
5% This shows
5%
that Brand
name and
Logo/brand name Advertising Slogan Product utility Schemes

Advertising
59 | P a g e
are the recall factors of the product. The product is remembered by their name or their
creative ad’s.
6) Would your buying decision be affected by the advertisement?
a) Yes b) No
Percentage
70%
60%
50% Percentage
40%
30%
20%
10%
0%
Yes No
60 | P a g e
Nearly 70%% of the people said that their buying decision is influenced for the
product by creative advertising and promotional schemes.
7) Among the following media’s, which do you find the most effective?
a. TV b) Press c) Online d) Outdoors e) Radio f) Others (please

specify)
40
35 34
30
25 24
20 18
15 12
10
10
5 2
0
TV ss e rs io s
e nl
in o ad er
Pr do R th
O ut O
O
61 | P a g e
Of the various media’s TV is found to be the most influenced and source of information
about the product to the customers followed by Press
8) Are ads sufficient for you to be pulled to buy a product?
[ ] Yes [ ] No
Chart Title
Column2
No
Yes
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
62 | P a g e
The study done shows that the advertisement plays about 80% roles in pulling a person’s
attention
9) Do Celebrity endorsements attract you for a particular FMCG product?
[ ] Yes [ ] No
percentage
45%
yes
no
55%
63 | P a g e
The research done reveals that 55% of the people buy a product due to influence of celebrities
10) Which soap would you prefer the most
a. Lux b) Rexona c) Dettol d) Pears
Percentage
35%
30%
25%
20%
Percentage
15%
10%
5%
0%
lux
Rexona
Dettol
Pears
64 | P a g e
The study shows that, given a choice, 35% of the people would choose Dettol as compared to
any other soaps.
11) Which factors mostly affects your decision while purchasing any FMCG
products?
a. Friends b) Advertisement c) Parents d) Others
Percentage
Others
Parents
Percentage
Advertisement
Friends
0% 5% 10% 15% 20% 25% 30% 35%
65 | P a g e
According to the study, 35% of the peoples buying behavior is influenced by advertising.
12) Which company’s ads you like most?
a. HUL b) ITC c) P & G d) Dabur
Percentage
40%
35%
30%
25%
Percentage
20%
15%
10%
5%
0%
HUL ITC P&G DABUR
On the basis of the research, HUL advertisements are most liked by the people followed
by ITC.
66 | P a g e
ANCHOR HEALTH AND BEAUTY CARE PVT. LTD
ANCHOR – THE GROUP

It was way back in 1963 that two brothers, Jadhavji Shah and Damji
Shah setup Anchor Electricals.
As a part of it’s on going growth process Anchor set up Anchor
health and Beauty Care on October 12 th 1992. This company has
successfully launched FMCG Products and is selling a wide range of
toiletries, cosmetics, confectioneries & herbal products and has a 8 %
market share today.
The driving force behind Anchor is the motto; “To market is to
serve Better”.
Competitors:
Colgate Palmolive’s Colgate;
Hindustan Unilever Pepsodent
Anchor has gained second position in two states i.e. Rajasthan and
Gujarat against competition with HUL’s Pepsodent.
Product: Anchor White Tooth Paste. The Toothpaste is 100% vegetarian.
67 | P a g e
Price: Anchor White Tooth paste is priced at Rs 50/- for 150 gms
Place: The Company has a market share of 11-14 % in urban and in the
rural sectors of India, as the company had its base in the rural sector it
started to grow from the rural sector and emerged in the urban market
giving strong competition to the major players of this sector.
Promotions: The MRP for 200 gram anchor toothpaste and toothbrush is
Rs 54 and Rs 15 respectively, the combipack is now offered at only Rs 25.
It’s advertising budgets are allocated in the following manner

Print media - 50%
Electronic Media - 20%
Point of Purchase - 20%
Outdoor - 10%
Some other ways of promotions, which are used by the company, are
shown as follows
68 | P a g e
69 | P a g e

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CH 1.

The term "ADVERTISING" originates from the Latin word

According to "DAVID POTTER", "The only institution we have for

According to "DUNN AND BARBON" 'Advertising is a paid non-

According to “DAVID OGILVY” ‘Advertising is evil when it advertises

The second and diametrically opposite view is that ad is essentially

Sales Oriented Objectives Communication Oriented Objectives

After understanding the different models used for advertising

Advertising is dynamic. It changes with the changing market, changing

In India, newspapers, magazines, radio, television, hoardings, cable

The various advertising medias are:

NEWSPAPERS: Newspapers are of different types. They are

POSTERS : A poster is a sheet of paper containing a

PAINTED DISPLAYS : These are similar in appeal like

NEON SIGNS : Glass tubes/signs with electric wiring are

DIRECT MAIL: Direct mail is advertising addressed to individuals

RADIO : Radio is the cheapest and the most pervasive of all

TELEVISION : The popularity of radio publicity has

FILMS : Film publicity means exhibition of films or slides in

POINT OF PURCHASE ADVERTISING : Point of Purchase

WINDOW DISPLAY: Window display media is used to attract

EXHIBITIONS AND FAIRS: Many big manufacturers and

SKY ADVERTISING: Under this form of advertising an aeroplane

CONTESTS : Contests are also sponsored by some firm to

PREMIUMS : Premiums are free gifts or bonus items

The FMCG (Fast Moving Consumer Goods) Industry comprises of

The FMCG Industry in India is the third largest Industry after

The market for consumer goods can be divided into 3 basic

The FMCG sector consists mainly of sub segments viz. personal

The key characteristics of the Indian FMCG market are as follows:

 Heavy launch costs: Companies incur huge costs on the launch of

 Less capital intensive: The sector is not so capital intensive as

 Marketing Drive : Marketing assumes a significant place in the

 Market Research: Before the launch of any new product,

 Presence of a large unorganized market: The FMCG sector is

Market Segments, Size and Penetration

The sector is divided into two distinct segments the premium

 Raw material prices play an important role in determining the

The numbers are very tempting for an FMCG marketer. On top

The complex country throws several challenges which have been

Challenge No 1: How do you define the market?

Several large markets in India are as yet highly underdeveloped.

Challenge No. 2: How to target the market?

Challenge No. 3: How to understand the consumer?

India should be seen not as one country but as a sub-continent, with

Kellogg could not create a breakfast habit. But as a snack it is

Challenge No. 5: How to make the packaging work?

Indian consumers believe in reusing and recycling. So a throwaway

Challenge No. 6: How to price it right?

Value pricing. Penetration pricing. Skimming pricing. There are

Challenge No. 8: How to communicate?

What do Indians love? How to capture that in the communication?

Challenge No.9: How to track the brand?

Fast moving consumer goods companies need to rationalise costs, invest in

THE FIFTIES AND BEYOND

THE DRAMATIC NINETIES

Things however began to change post-reforms during the nineties.

The idea was simple:

1. Colgate Palmolive (India) Limited \\

Colgate has faced intense competition during the last 5 years

2. Dabur India Limited

The company has also established a strong brand equity in personal

Godrej Consumer Products Ltd (GCPL) was formed on