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A STUDY ON THE EVOLVING MEDIA IN FMCG OWING TO CHANGING RELATIONSHIPS BETWEEN CONSUMER AND BRAND
TABLE OF CONTENTS
CH # 1 Introduction 1.1 Introduction Pg no.
FMCG : A definition
Internet : Relevance to FMCG
Relationship between consumer and Brand
Consumer Decision Process
Revolution In Internet Marketing
Internet Ad Market
Internet Marketing In India
Research Design 3.1 3.2 Statement of Problem Objective of Study
Data Collection Research Methodology
4 Respondents’ profile
Analysis and Interpretation Recommendations
It is no longer new news that today’s media landscape is quite complex and changing at a rapid pace. It is widely known and understood that consumers have more choice and more control over what media they use, when and how.
And there is nothing new in the understanding that consumers can be less loyal and are sampling a great number of the many options, be they product, brand or media offerings, available to them today.
Unlike previous generations, the media behaviors, attitudes and relationships of Gen Y are often different than previous generations and need to be considered differently in the design of communications plans.
In a world where consumers continue to control more of the media experience, in terms of content and context, understanding media consumption, relationships and pathways are critical to surrounding the consumer with a relevant and lasting brand experience.
By new media I am referring to a variety of primarily digital media offerings, ranging from broadband internet access, to Bluetooth technologies, to TV on phone (a full detailed list in Appendix 1).
The last decade has witnessed a boom in the quantity and variety of marketing strategies and media outlets. The introduction of guerrilla and viral marketing campaigns, as well as the development of Internet social networking and blogging sites, has created a burgeoning landscape for the purchase, sale and exchange of products and ideas between companies and consumers, activists and citizens.
With the ever-increasing volume of marketing messages, diversity of media channels, and evolving media consumption habits,companies and organizations are faced with new challenges in their attempts to make messages authentic and memorable.
In this study I have tried to understand the demographic differences in digital media adoption, use and preference and in general media consumption habits among audience members to better formulate the strategy that many media planners are choosing by going for novel and unique media.
FMCG: a definition
• FMCG is an acronym for Fast Moving Consumer Goods. • FMCG is a classification that refers to a wide range of frequently purchased consumer products including: toiletries, soaps, cosmetics, teeth cleaning products, shaving products, detergents, other non-durables such as glassware, bulbs, batteries, and plastic goods such as buckets. • ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. The category may include pharmaceuticals, consumer electronics and packaged food products and drinks, although these are often categorized separately. • Three of the largest and most well known examples of FMCG companies are Nestlé, Unilever and Procter & Gamble.
Defining FMCG’s in the 2000’s
Traditionally, FMCG has been a term synonymous with supermarket packaged goods. These products typically attract high volume sales at a low dollar value. However the definition of fast moving consumer goods may in fact be in need of revision due to changing consumer buying patterns and the evolution of retailing. Supermarkets are offering consumers the choice of hot foods ready to go, chilled meal components and fully prepared meals. As the boundaries blur between retailers of groceries, liquor, petrol and fast foods we are seeing the rise of retail outlets offering a variety of products as never before, reflecting market forces in the deregulated market environment. Habitual buying behavior and low consumer involvement often present challenges to the marketer of FMCG brands. Certain other sectors may have these factors in common. Although fast food companies and oil companies offer a unique blend of products with an important service component and are in complete control of the selling environment, it could be argued that their brand management programmers are becoming very similar to those of packaged grocery brands. For the purpose of this research the boundaries of the definition of fast moving consumer goods have been widened to include wine, beer, fast food and Oil Company brands as well as the more conventional food and non-food packaged goods.
INTERNET: RELEVANCE TO FMCG
Literature searches reveal a number of electronic commerce success stories, notably in book retailing and in the banking sector but there is a range of opinion on the usefulness and impact of electronic commerce in the wider marketing environment. Everyone can, and does, take part in Internet provided they have access to Internet. It is emerging as a primary destination for information, entertainment and social networking – particularly for the young with broadband playing a major catalyst. This has led to shortening of adoption curve –and we have experts within a week. The relevance to FMCG can be understood by the basic premise that a segment of the customer base is spending time online performing a multitude of tasks for the obvious benefits or functions of Internet which can be summed as –
Information Entertainment Leisure Networking Shopping and Research
THE RELATIONSHIP BETWEEN CONSUMER AND BRAND HAS CHANGED
Consumer habits are changing, brands must change with them. Smart brands become a part of their lives, not just the shopping trolley – i.e. what brands should aspire for. Consumers want increasing control of the relationship talk to them, but only if they invite you to. The consumer is increasingly in control, and are becoming much more demanding.
12 0 % 10 0 % 80% TV Consumption Index 60% 40% 20%
+5% + 5%
In c r e a s e D u e t o + 8 % P o p u la tio n G r o w t h
-2 % In c r e a s e D u e t o H o u s e h o ld T V C o n s um ptio n G r o w th B a s e li n e - T o d a y 's T V C o n s u m p tio n L e ss D V R U s a g e
0% 2 00 6 2 00 7 2 0 08 2 0 09 2 0 10 2 0 11
DVR : Digital Video Recorder
THE CONSUMER DECISION PROCESS AND SUPPORTING COMMUNICATIONS
REVOLUTION IN INTERNET MARKETING TECHNOLOGIES
Three broad impacts: Internet has broadened the scope of marketing communications Internet has increased the richness of marketing communications Internet has greatly expanded the information intensity of the marketplace
*These figures reflect media consumption for households.
INTERNET AD MARKET SEGMENTS
New internet users usually young, hop from site to site. Impulsive
decisions and buying right off the net.
Spend a lot of time online as part of their business activity, usually at their
workplace. This forms 60% of internet user population in India.
Users who access network from homes- families, offers opportunities to
retail, entertainment industry. 30% of internet users.
Although Internet advertising has become a major new issue for marketers, retailing via the Internet and business-to-business applications are considered to be the two main uses of e-commerce. Interactive marketing which utilizes the Internet, CD-ROMs or interactive television for public relations, advertising, promotion and direct mail is unlikely to be appropriate for every product and situation but does represent a new opportunity (Swinfen-Green,1996). There is general agreement that new technology is revolutionizing the way business is conducted although few businesses are showing leadership in using the Internet to develop their business and create competitive advantage.
MODELS OF INTERNET ADVERTISING
1. Banners 2. Sponsored Contents 3. Screen savers and Push Broadcasting 4. Corporate Website 5. Interstitials 6. Superstitials 7. Opt-In’s ( direct e-mail marketing)
Banner ads were the first internet ads. 60% of e-marketing space (i.e. website content delivery) is occupied by advertising. Majority of it is in form of banners. Banners are small graphics link placed on a web page. They represent the purest application of traditional advertising skills- persuasive enticement in a very small space: full , half, vertical, button, micro, skyscraper banners. Banner ads are precisely measurable by ‘click-through’ rates. Click-through rates decline with no. of exposures- 1st exposure =3.6%, next two = 2.5%, next 6 = 1%. Keep changing banners. Banner space is less than 10% of screen space “Frame” web page is subdivided into regions- like windows – with separate scrolling GIF – animated graphics info format increases banner effectiveness by 25% . “Talking Head” on the banner are offering answer to intriguing question like “Do you know how….”. Cross-linking of sites is common i.e.. two advertisers agree to carry each other’s banners Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or an alert.
It is of two types : Content co-branding - The sponsor’s message can be woven throughout the content of a sponsored web page e.g. a sponsorship deal between a golf equipment manufacturer and the website covering sports information.
Microsite : It acts like a newspaper insert. Set of smaller pages. Also
called ‘cuckoos’ as they are like eggs placed in another bird’s nest.
SCREEN SAVERS & PUSH BROADCASTERS
Screen savers usually capture passing attention. Push Broadcasters: User’s preference of being informed about changes and updates to the material of their choice.
Present basic information registering the company, research papers, white papers etc.
They can be understood to be like in between like TV commercials. The display of a page of ads before the requested content. They appear in between screen activities like pushing a button, transition of the screen and last for about 10 seconds like A mini commercial pop-up after every 5-6 questions in an interactive game.
SUPERSTITIALS (POP-UNDER, RICH MEDIA AD)
This does not interfere with the web site content loading. Once all content has been loaded, and user is browsing, the superstitial is cached in the browser’s cache in the background. These ads are played when the user decides to move to another page. The ad never competes for the bandwidth with the web content. The ad remains visible until the user closes it.
OPT-INS or E-MAIL MARKETING
E-mail based ads when users specifically opt to receive ads i.e. Users register for some services.
INTERNET ADVERTISING AND MARKETING IN INDIA
Key Facts : 60% of e-marketing space is occupied by advertising. Global digital advertising market = $ 30 billion. Interactive ads are 8% of media spend. No. of SE advertisers = 6.5 lakhs. India = Rs 500 crores with growth rate of 50% Interactive ads are 1.5% of media spend SE advertising = Rs. 236 cr. SE advertisers = 41,000
MOBILE MARKETING IN INDIA
Key Facts : Annual Revenues from Mobile Mktg., 2008 = Rs. 50 cr. Est. 2013 = Rs 500 cr. Mobile advertising = $3 billion*.
Table on the Ad Spend In India
MEDIUM PRINT TV OUTDOOR INTERNET MOBILE
SPEND (in Rs. crores) 7000 6000 700 200 8
Several studies have been undertaken related to the topic of this research. A few important ones which guided the course of this study are briefly described below :
ComScore's study (2002)i confirmed that online marketing can increase purchase
intent, brand awareness and advertising awareness among Consumer Packaged Goods (CPG) consumers. Performed in conjunction with Nestlé Purina PetCare Company, comScore's research was based on a study of integrated online and offline behavioral data for a large sample of opt-in consumers – a global panel of more than 1.5 million continuously measured, opt-in Internet users. The study was designed to address three core questions frequently raised by CPG marketers in weighing the benefits of incorporating the Internet into their marketing mix: • • • Do people that buy specific brands actually use those brands' Web sites? Should specific brands use the Internet as an advertising vehicle to reach their core consumers? If online marketing is a smart investment for a brand, with which Web sites should partnership and advertising dollars be invested?
The findings included: • • • Web site succeeds in attracting consumers who buy products of that company. Such consumers are almost 2/3 more likely than the average Internet user to go to use the web site. The banner ads raised consumer awareness of the brand taking the brand to be top-of-the mind. This exposure resulted in their likelihood of buying that brand better than those who didn’t see the advertising.
Accenture Global Research and Insights (2004)ii released a report that
Consumers worldwide increasingly regard the traditional television set as just one option
for consuming video content as the boundaries among TV, mobile handsets and PCs blur by the day. As this shift in consumption behavior increases, massive change is underway. This will ultimately transform the content production and distribution marketplace around the globe. Advances in distribution technologies and devices is enabling new content offerings, which is driving new consumption habits among consumers of all ages in all geographies. While all consumers are joining the move toward new modes of consuming content, younger consumers are spearheading this shift, especially those under 25. These consumers are more dissatisfied with current television options and more likely to watch content on alternative devices, and more likely to prefer watching content on demand.
Deighton A. John (2007)iii examined the sense that erupted ten years ago, not
misplaced that the Internet was going to disrupt the settled practices of marketing. The new marketing tools could be imagined as very powerful, very inexpensive, and very responsive direct marketing tools but which would turn the slow, clumsy and artless action-reaction sequence of then telephonic and envelope responses into many cycles of deft action and reaction.
The questions they asked were - Where would the center of marketing power reside after the Internet blossomed? Would the status quo survive, with power continuing to sit with the producer as owner of brands, or did the Internet portend revolution, with devolution of power to the channel, commoditization and diminution of the authority of brands? ‘Who owns the customer, brand or channel?’
They confirmed some of the emergent interactive forums over others from the perspective of marketing. In particular, the most potent of the new media are those that enable cultural exchange, media currently exemplified by the functionality of Youtube and Facebook. What matters, this analysis concludes, is that the form of interactivity most attractive to marketing is that which can facilitate peoples’ identity projects and contribute to the collective making of meaning.
Jashen Chen (2008)iv proposes that five VEM elements have positive effects on both
the consumer’s browse and purchase intentions which will have a positive effect on customer loyalty. When the web site’s atmosphere appeals to the consumer’s senses, interaction, pleasure, flow and community, positive attitudes toward the business and its products and services will develop. Consequently, these positive attitudes increase his/her online browse and purchase intentions, which lead to customer loyalty. The model proposes that three moderating variables, economic and convenience (shopping) orientation and Internet experience, enhance the effects of the VEM elements on browse and purchase intention.
(Lillian Clark)v, researched differences between online consumer from its terrestrial
counterpart studying parameters of technology adoption, convenience, empowerment and market dynamics other than trust and loyalty. Online consumer behavior could be best predicted by Internet self-efficacy, followed by perceived financial benefits, previous adoption of telephone shopping, and perceived convenience. For online consumers, factors such as lower search costs and greater availability of information can increase the extent of searching done and the amount of information gathered, allowing the online consumer to consider more alternatives that their terrestrial counterpart.
(Advertising Perceptions)vi, a research firm which surveyed 25,000 people, looking
at a broad range of websites, TV networks and other media reported that consumers expressed a stronger intent to buy a particular product after they had been exposed to ads for it on more than one medium. Thus lending strong support to media buyers looking to justify cross-media ad spend, especially since "intent to buy" is considered an important way to measure a campaign's success. While TV produced weak intent to buy on its own, exposure to an online ad for the same product shot the likelihood of intent. Adding online exposure to print campaigns similarly impacted consumer intent.
The study examined a number of product categories, including beer, apparel, automotive, consumer electronics and toiletries. Results varied between product types, but all showed lift when two or more media were included. Intent to buy also went up when brand names were perceived to be of high quality, suggesting that, like persuasive and ubiquitous ad efforts, brand equity also plays a role in shaping consumer behavior.
Magna (2008)vii examined the advent of new media and digital revolution and gave
out the verdict that traditional media specifically TV will never die. The key information from the study is represented graphically as follows:
Media Reach By Country
100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Newspapers Radio TV Magazines Internet
Young Audiences' TV Viewing Trends
Hours of Viewing Per Week 29.0 27.0 25.0 23.0 21.0 19.0 17.0 15.0 1991-92 1992-93 1993-94 1994-95 1995-96 2002-03 2003-04 2004-05 2005-06 2006-07 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 P6-11 P12-17 P18-34 P2-5
• Largest advertisers drive TV, smaller advertisers drive online
Fast moving consumer goods in India is in turmoil due to proliferation of brands in various categories. Using unique media vehicles and messages to differentiate oneself has become an order of the day in matured urban markets where visibility is difficult to find. More and more budget is allocated to these activates in order to lure the consumers. In such a scenario, it is very essential to study how consumers make their choices in FMCG category where there are several brands in the consolidation set of a consumer. The financial risk being low, consumers do not mind switching from one brand to another due to sales promotion offer. Hence it would be of interest to a marketer to learn about consumer preferences with respect to media to learn about products, brands, uses and importantly schemes. This has to be considered by a manager while designing a scheme.
STATEMENT OF PROBLEM : The Media Consumption Of Consumers Is Changing Rapidly Making It Complex For The Marketers To Craft Marketing Messages Standing Out On Different Media Vehicles.
OBJECTIVE OF THE STUDY:
Thus the present study is planned with following objectives:
1) To study consumer preferences with respect to online marketing and novel media. 2) To examine relative importance of different attributes (aspects consumers evaluate) while responding to a marketing message. 3) To study variations in the preferences across different demographic variables. 4) To understand the media habits of the consumers.
An integral component of a research design is the sampling plan. Specially, it address three questions: whom to survey (the sample unit), how many to survey (the sample size), and how to select them (the sampling procedure). Making the census study of the entire universe will be impossible on the account of limitations of time and money. Hence sampling becomes inevitable. A sample is only the portion of the population. Properly done, sampling produces representative data of the entire population.
Method of Sampling:
1. Probability Sampling
2. Non-Probability Sampling
Probability Sampling is also known as ‘random sampling’ or ‘chance sampling’.
Under this sampling design every items of the universe has an equal chance or probability, of being chosen for samples. Probability samples may take the form of: • Sample Random Sampling • Systematic Sampling • Stratified Sampling • Cluster and Area Sampling • Sequential Sampling • Multi stage Sampling
Non Probability Sampling is also known as deliberate sampling, purposive and
judgmental sampling. Non-probability samplings are those that do not provide every item in the universe with a known chance of being included in the sample.
Non-probability samplings are of following type: • Convenience Sampling • Quota Sampling • Judgment Sampling • Panel Sampling
The Sampling method used here is Non-Probability Sampling in which
Judgment Sampling has been used. Judgment Sampling method has been adopted. Area
Sampling method and Snow Ball Sampling methods were also used for the research process.
Data gathering can be summarized as below : • Primary data from FMCG consumers, companies, media agencies. (through interview with questionnaire) Secondary data – Internet, journals, magazines, newspaper.
- Questionnaire A
Sample size : 100 Administered to consumers with judgment sampling.
- Questionnaire B
Sample size : 20 Administered to professionals in media agencies by way of online surveys again with random sampling
Focus groups were conducted to explore potential differences in media consumption by different demographic groups. Because the information collected through these groups is based on a small group of respondents, it is not projectable to the entire population. The intent of this research was to investigate the “going-in” hypotheses and to develop some new hypotheses and patterns of behavior that may ultimately be tested in a larger scale study. Participants for the groups were selected on the basis of two characteristics: age and tendency toward either traditional or non-traditional media usage. The three age categories of interest for this research were Gen Y (ages 18-29), Gen X (ages 30-44). An individual fell into either the high media consumer or low media consumer group based on the media usage information they gave. “High” media consumption was defined as exposure to any given media for more than four hours a day, while “Low” media consumption was marked by media consumption for lesser than four hours. In most cases, an individual consumed both traditional and non-traditional media in a typical day. Individuals in the Guru Gobind Singh Indraprastha University campus area were randomly called in order to be screened. with 2 sets of questionnaires which were administered to consumers and companies (media agencies in particular). This questionnaire was administered to 100 people making sure that they had access to internet and mobile phone. So, this study really does not focus on general population for Internet itself is in its infancy in our country with just a 3% penetration. PC penetration itself will take time to hit 20%. Keeping this in view one can safely assume this sample of 150 people to represent the population which consumes novel media online, and is connected wireless and assimilates and acts upon only that information which it finds worthy enough of after being exposed to various forms of media. The second questionnaire was administered to professionals in different media agencies
A certain degree of control was sacrificed for the opportunity to collect data in a natural environment. In terms of this study, the loss of control may have impacted survey response, especially for those questions that dealt with attitude toward the ad. One concern during data collection was inter-participant bias, as some of the respondents were amongst friends while completing the survey and may have been swayed by peer input. A future experimental design might address this by only approaching individuals who are alone.
Because the information collected through the focus groups is based on a small group of respondents, it is not projectable to the entire population.
Conducted in the spirit of trial and error, this study has helped identify elements of the experimental design that were effective as well as those which need to be adapted for future research.
Respondents tend to lay about their income those results in statistical errors.
1. Gender Profile of Respondents
Out of the 150 respondents interviewd through questionnaire Interview, 55% male and the rest 45% were females.
2. Marital Status
Most of the respndents about 80% were not married only 20% were married.
3. Eductional and Occupational Profile
All the respondents were graduate with 80% students and 20% employed.
4. Age profile
AGE GROUPS : 18 to 29 30 to 44 45 o 64 65 or older
The sample size was 150. 89% of the respondents fall in the age bracket of 18-29. 6% of the respondents fall in the age bracket of 20-44. 5% of the respondents fall in the age bracket of 45-64. None of the respondents fall in the age group of 65 and above.
ComScore Study, 2002, “Strong Connection Between Online Marketing, Offline Buying And Purchase Intent”, Advertising Research Foundation's 48th Annual Convention, New York City. http://www.comscore.com/press/release.asp?press=69
Accenture Global Research and Insights on http://www.accenture.com/Global/Research_and_Insights/By_Industry/Media_an d_Entertainment/Entertainment/BroadcastSurvey.htm
Deighton John & Kornfeld Leona, 2007, “Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers”, Harvard Business Review.
Jashen Chen & Russell K.H. Ching, 2008, “Virtual Experiential Marketing on Online Customer Intentions and Loyalty”, Proceedings of the 41st Hawaii International Conference on System Sciences - 2008
Lillian Clark, Peter Wright , “ review of common approaches to Understanding online consumer behavior”, University of York, Heslington, York.
Advertiser Perceptions, “Cross Media Builds Purchase Intent” http://www.marketingvox.com/advertiser-perceptions-cross-media-buildspurchase-intent-038988/
Magna, “Evolving media economy”, www.magnainsights.com
1. 2. • • 3.
Do you have access to Internet ? What do you use to stay online? (tick both if required) PC Mobile How much time do you spend online and watching TV? Please mention separately.
4. • • • • • • 5. • • • • • 6.
Rank the following in terms of usage. Rank 1 for the most used and 6 for the least. TV Newspaper Magazines Radio Internet Mobile How do you feel when an ad or pop up appears when you are online? Irritated Ignore Hindrance to Work Excited Neutral Tick the ones you read or watch (tick both if required)
• • • •
Newspapers : TV: channel Magazines: Radio:
English Cable English English
Local/Vernacular DD Local/Vernacular National(Hindi)
Please indicate the importance of following parameters regarding a marketing message about a brand, a product or its use and schemes :
Very ImportantImportant Better if it isNeutralNot importantEntertainingEffective InterestingAttractiveInformativeProfessional 7. Please indicate your evaluation of ads on following media vehicles:
RadioMobileTVNewspaperInternetOut of Home MediaAttractiveInteresting InformativeProfessionalEntertainingEffective
8. How well do you remember ads on the following media vehicles? TVMobileNewspaperInternetOut Of HomeRadioDon’t remember at allRemember company but not product or adRemember company and product but not adRemember ad Are you: ___ - Male - Female and are you...__ -Married -Single
Your age is...__ • • • • 18 to 29 30 to 44 45 to 64 65 or older Where do you access internet? • • Home Work/ College
Cyber café/ Web Kiosk
Cite as many ads that you like, love or remember at the moment…Please mention where you saw it – TV, Billboard, Internet etc.
APPENDIX #2 – QUSETIONNAIRE A
1. Have you witnessed a change in marketing strategies with new media outlets? Yes No
2. How do you classify this change? Quantity wise Variety wise Both
3. Do you employ non-traditional advertising methods ? If yes please name them.
4. How would you classify your consumers based on the media consumption?
High media consumers (Individuals exposed to media for more than four hours a day) Low media consumers
5. Do you consider non- traditional media (internet, cell phones) as a better avenue to reach different or diverse consumers? Yes No
6. Do you think advent of new media has led consumers to become resistant towards
traditional marketing tactics ? Yes No
7. Is media consumption related to attitude towards the ad? If yes, how?
8. Do you see an initial media consumption event pushing the user to consume another media (for example, if reading a magazine pushed the reader to watching television or go to the Web, etc.). Please site such possible events you acknowledge.
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