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Impact of Brand Awareness,

Advertising, Word-of-mouth and


Experiential learning on Purchase
intention towards Patanjali
1. The FMCG Market Scene in India
The FMCG market has always been one of enormous potential in India,
owing majorly to its huge population. However, from the 1950s through
the 1980s, investments and growth in the industry were very limited,
because of the low purchasing power of the population and the
governments preference for the small-scale sector. The liberalization of
the economy boosted the incomes and living standards of the people and
brought in an influx of Fast Moving Consumer Goods in the market.

SL Rao (2001) relates the growth in the GDP, agriculture and industry
over the post-liberalization period, corresponding with a growth in
consumer goods production. The peak growth of consumer goods
production (during the 90s) was in 1995-96 when the Index showed a
growth of 12.8 per cent, declining thereafter for three years, rising to 6
per cent in 1999-2000 and 8 per cent in 2000-01.

There was a surge of foreign companies into the market, like Hindustan
Unilever Limited, Marico, Henkel, Procter & Gamble, Cadbury and Reckitt
Benckiser, with their wide range of goods, trying to attract and capture
the Indian consumers. The competition has been both between the
domestic companies (like Dabur, Emami and Amul) and the foreign
companies, and that among the foreign companies themselves. Products
range from toiletries, pharmaceuticals, cosmetics, bulbs, packaged food
products, house care products, plastic goods, white goods, consumer non-
durables, etc.

The arrival of Patanjali into the Indian FMCG market in 2006 marked a
turning point in its timeline, and the years that followed presented a rare
case where a domestic brand was about to continually outperform its
foreign competitors, grow manifold over the years, and even create a loyal
base of customers with its marketing, which was a fading concept among
FMCG products.

2. The purchase intention of consumers and its


determinants
The Hierarchy-of-effects theory (1961) proposed that cognitive
activity (non-evaluative thinking) causes affective activity (evaluative
mental activity), which causes conative activity (plans for actions and the
actions themselves). It selected various variables which were indicative of
the various stages in the hierarchy- Advertising, Attitude, Awareness,
Confidence, Favorableness, Intention, Knowledge, Purchase, Use and
Word-of-mouth.
Terrence V. O'Brien (1971) tried to establish what the thoughts of a
customer are as he learns about a brand, how he forms his purchase
decision and why he picks one brand over another. His findings showed a
significant positive impact of word-of-mouth on subsequent purchase
intention. Surprisingly, his research concluded that advertising has no
direct influence on ultimate purchase for the product studied. That could
however, be attributed to the primitive form of advertising used back
then, compared to now.

Case in point, Sharma & Sharma (2007) identified that advertising,


sales promotion, publicity and public relation were the most efficient tools
available that could be accessed by a marketing manager to identify its
products and services among competitors.

Parikshat Singh Manhas and Vivel Sharma (2011) ascertained that


branding and promotion are integral components regarding fast moving
consumer goods, and influences the purchase patterns of consumers in
India. They noticed that Indian companies are continually
spending greater amounts of resources on building brand equity.
Marketers and shareholders have come to realize that the most valuable
and enduring asset a company can own is its own brand. This brand needs
to be continually nurtured through promotional activity in above-the-line
and below-the-line communications.

Consumers in emerging markets like India are different from their


counterparts in developed markets. Our markets are often characterized
by specific local needs, limited purchasing power and high price
sensitivity. (Prahalad and Lieberthal, 1998).

Khanna and Palepu (1997) have illustrated that firms in the wake of
inadequately-developed markets for labor and capital, in an emergent
market like India, firms must go through numerous constraints and
challenges from all fronts, to cope up with the competitive environment of
FMCG.

G. Nagarajan and J. Khaja Sheriff (2013) have highlighted some more


challenges in the FMCG sector and identifies promotion- advertising, trade
shows, promotional literature, technical literature, samples, incentives,
Web site, seminars, public relations, as one of the areas to work upon to
make a mark in the market.
Positive word-of-mouth has been considered by researchers, time and
time again, as one of the oldest and most effective forms of marketing
communication, whether from the vendors, experts, or friends and family.
Empirical data collected by Ennew, Banerjee and Li (2000) and the
models drawn from them suggested that the integration of word-of-mouth
into the marketing strategy may be beneficial and help develop a more
customer-centric approach to marketing.

Bharadwaj et al. (1993) had previously suggested that when women


buyers cannot evaluate the qualities of various products and decide on
one, they might go for the brand with more reputation on word-of-mouth.

Building a successful brand is something that takes a lifetime of


commitment with enormous time planning and perseverance. Only then
can a brand be big and fruitful enough to attract customers and create
that impression just by its name.

Bhimrao M. Ghodeswar (2008) studies how brands like Archies,


Boroline, Dabur Vatika have been able to create a strong positioning for
themselves, and the brand name, as a result, is enough for the consumers
to know that they are the best in greeting cards, antiseptic creams and
hair care shampoos respectively.

David C. Edelman (2010) emphasized the importance of branding in the


digital age. They pointed out how, for instance, while consideration
online, a customer can add or remove a brand entirely from his selection
while evaluating his products. Customer reviews have also become a huge
influencing factor in the digital age, and proper branding can have
immense positive effect on the reception and success of the brand among
its customers.

SL Rao (2001) observed that the Indian consumers were noticing that
what one brand had to offer was not too different from that of another
brand, and as a result, were willing to try out other brands as well,
weakening the forces of brand loyalty in the FMCG sector.

3. The arrival of Patanjali

Patanjali Ayurved Limited arrived into the Indian FMCG market in 2006. It
was founded by Baba Ramdev and Acharya Balkrishna, and the company
mainly focused on herbal and mineral products during the initial years,
eventually expanding into a much wider array of consumer goods like
cosmetics, spices, chocolate bars, biscuits, juices, cornflakes etc. which
put it in direct competition with many established brands in the country.
Patanjali has, however, only grown stronger over the years; its revenue
has grown from Rupees 163 crores in 2009-10 to Rupees 5,000 crores in
2015-16. According to an article on india.com (8th feb 2016), Patanjali
plans on providing jobs for 8000 youths.
3.1 Brand Strategy: Patanjalis strategy has evolved with time.
What started as a company making herbal products and ayurvedic
medicine, has now become a dominant player in the Indian FMCG
market, manufacturing 444 types of products. One thing has
however remained constant- Patanjali sells all its products under the
name Patanjali, instead of emphasizing on distinct names for each
product. In addition, it is associated with a famous personality, takes
pride in being a swadeshi product, spreads the message of purity,
and marked its presence in the e-commerce sector.
3.2 Brand Positioning: Patanjali has positioned itself on the
pillars of purity. It emphasizes the absence of any harmful chemicals
or adulteration in its products, while simultaneously emphasizing
the shortcomings of competitor products in that field. The usage of
the word zeher (meaning poison) for its competitors products has
been a key strategy on Patanjalis part to settle the idea on its
consumers minds. Patanjali also emphasizes that a huge chunk of
its revenue goes to charity, and its consumers are helping the
country in the process of buying its products. Lately, Patanjali has
even started appealing to the nationalism in its consumers,
spreading the message of how foreign companies are taking the
countrys capital away from the country, and has started a pitch to
throw all foreign companies out of the Indian market in the coming
years. It tries to convince its customers that the Rupees 5,000 crore
revenue is also a victory for them and the country, and that the
trend must continue, until all its competition is wiped out.
3.3 Brand Personality: The name Patanjali is derived from that of an
ancient Sanskrit author, of works like Mahabhasya and Yoga Sutras,
and the name thus carries a sense of spirituality to it. The prominent
face behind the brand is yoga guru Baba Ramdev, a respected saint
in the country. The personality of the brand speaks of nature, yoga,
ayurveda, purity and absence of any harmful condiment- qualities
that denote its sincerity. At the same time, the brand also stresses
on its effectiveness and reliability- qualities that propagate its
competence.