PRESENTATION REPORT

“IMPACT
“IMPACTOF
OFCELEBRITY
CELEBRITYENDORSEMENT
ENDORSEMENTONON
CONSUMER
CONSUMERBUYING
BUYINGBEHAVIOUR
BEHAVIOURIN
INFMCG
FMCG
SECTOR”
SECTOR”

Guided by: Submitted by :

Prof. Devesh Awasthi Mirza Danish Baig
Term: 5(A)
Roll No: 2018001107
 INTRODUCTION TO FMCG INDUSTRY

India is one of the largest emerging markets, with a population of over one billion. India is

one of the largest economies in the world in terms of purchasing power and has a strong

middle class fourth largest sector in the economy with a total market size in excess of Rs.

60,000 Crore. This industry essentially comprises Consumer se of 300 million. The Fast

Moving Consumer Goods (FMCG) sector is the Non Durable (CND) products and caters to

the everyday need of the population.

FMCG INDUSTRY CHARACTERISTICS

Branding: Creating strong brands is important for FMCG companies and they devote

considerable money and effort in developing bands. With differentiation on functional

attributes being difficult to achieve in this competitive market, branding results in consumer

loyalty and sales growth.

Distribution Network: Given the fragmented nature of the Indian retailing industry and the

problems of infrastructure, FMCG companies need to develop extensive distribution

networks to achieve a high level of penetration in both the urban and rural markets. Once

they are able to create a strong distribution network, it gives them significant advantages over

their competitors.

Contract manufacturing: As FMCG companies concentrate on brand building, product

development and creating distribution networks, they are at the same time outsourcing their

production requirements to third party manufacturers. Moreover, with several items reserved

for the small-scale industry and with these SSI units enjoying tax incentives, the contract-

manufacturing route has grown in importance and popularity.

LARGE UNORGANIZED SECTOR: The unorganised sector has a presence in most product

categories of the FMCG sector. Small companies from this sector have used their locational

advantages and regional presence to reach out to remote areas where large consumer

products have only limited presence. Their low cost structure also gives them an advantage.
 

FMCG KEY PLAYERS

There is a strong MNC presence in the Indian FMCG market and out of the top 10 FMCG

companies; four are multinationals while two others have significant MNC shareholdings.

MAJOR PLAYERS
 

• Hindustan Lever Ltd. • I T C Ltd. • Nirma Ltd.

• Nestle India Ltd. • Britannia Industries Ltd. • Colgate-Palmolive (India) Ltd

• Godfrey Phillips India Ltd. • Dabur India Ltd. • Smithkline Beecham Consumer
 PRODUCT CHARACTERISTICS

Products belonging to the FMCG segment generally have the following characteristics:

• They are used at least once a month

• They are used directly by the end-consumer

• They are non-durable

• They are sold in packaged form

• They are branded

INDIA - A LARGE CONSUMER GOODS SPENDER

An average Indian spends around 40 per cent of his income on grocery and 8 per cent on

personal care products. The large share of fast moving consumer goods (FMCG) in total

individual spending along with the large population base is another factor that makes India one

of the largest FMCG markets.

 FMCG SALIENT FEATURES

The FMCG sector is a key component of India’s GDP and is a significant direct and indirect

employer. It is the fourth largest sector in the economy and is responsible for five per cent of total

factory employment in the country. The sector also creates employment for three million people in

downstream activities, much of which is disbursed in small towns and rural India.

Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite, in

reality the sector meets the every day needs of the masses, across the country. Low priced products

contribute the majority of the sales volume and lower income and lower middle-income groups

account for over 60 per cent of the sector’s sales. Moreover, rural markets account for 56 per cent

of total domestic FMCG demand and FMCG outlets reach more villages than any other basic

facility such as primary schools or bus facilities.

The FMCG sector has several other salient features. It has strong links with agriculture and 71

per cent of sales come from agro-based products; it is a significant value creator with a market

capitalisation second only to the IT sector and it is a key contributor to the exchequer.
 CELEBRITY ENDORSEMENT
McCracken's (1989) definition of a celebrity endorser is, "any individual who enjoys public

recognition and who uses this recognition on behalf of a consumer good by appearing with it in an

advertisement (marcoms), is useful, because when celebrities are depicted in marcoms, they bring

their own culturally related meanings, thereto, irrespective of the required promotional role."

Friedman and Friedman (1979) found empirical evidence that, in the promotion of products high

in psychological and/or social risk, use of celebrity endorser would lead to greater believability, a

more favorable evaluation of the product and advertisement, and a significantly more positive

purchase intention.

The society that we live in can not only be called secular or democratic, it should be more

appropriately termed as over-communicated these days. There are around 130 television channels

in India broadcasting over 3 million television commercials each year in India. The media-

explosion can thus be easily demonstrated. Moreover, people forget 80% of the information in just

24 hours! 'Celebrity Endorsement' for the brand is solution to it.

  SCOPE OF CELEBRITY ENDORSEMENT

The use of testimonials by advertisers dates back to the 19th century when medicines

were patented. Firms have been juxtaposing their brands and themselves with

celebrity endorsers (e.g., athletes, actors) in the hope that celebrities may boost

effectiveness of their marketing. The increasing number of endorsements throws a

valid question to the consumers. Is there a science behind the choice of these endorsers

or is it just by the popularity measurement? What are the reasons which lead to impact

of celebrity endorsement on brands? Greater the score of the below parameters,

greater are the chances of getting close to the desired impact.

 LITERATURE REVIEW
According to Source Credibility Theory, acceptance of the message depends on 'Expertness' and

Trustworthiness' of the source. Expertness is defined as the perceived ability of the source to make

valid assertions. Trustworthiness is defined as the perceived willingness of the source to make

valid assertions. Audience acceptance increases with the expertness of the source and the ability of

the audience to evaluate the product. According to Source Attractiveness Theory, which is based

on social psychological research, the acceptance of the message depends on familiarity, likeability

and similarity. Familiarity is the audience's knowledge of the source through exposure; likeability

is the affection for the source's physical appearance and behavior while similarity is the

resemblance between source and receiver. This theory explains the message acceptance in two

ways: Identification and Conditioning. Identification is when the receiver or the target audience of

the communication begins to identify with the source's attractiveness, and hence tends to accept

his opinions, beliefs, habits, attitudes etc.

ARTICLE:

“SELECTING CELEBRITY ENDORSERS: THE PRACTITIONER'S PERSPECTIVE”

Author: B. Zafer Erdogan, Michael J. Baker, Stephen Tagg

Summary: There are several reasons for such extensive use of celebrities. Because of their high

profile, celebrities may help advertisements stand out from surrounding clutter, thus improving

their communicative ability (Atkin and Block, 1983; Sherman, 1985). Celebrities may also

generate extensive PR leverage for brands. For example, when Revlon launched the "Won't kiss

off test" for its Colorstay lipsticks in 1994 with Cindy Crawford kissing reporters, the campaign

featured on almost every major news channel 1. Article: “Selecting Celebrity Endorsers: The

Practitioner's Perspective.” and equally widely in the press. Although research findings are

equivocal about the ability of celebrities to generate actual purchase behavior, positive impact on

economic returns of sponsoring companies.

 OBJECTIVES OF THE STUDY

To understand the concept of FMCG products.

To know and understand the scope of marketing FMCG products in India.

To identify the factors affecting consumer buying behaviour and consumer decision making

process.

To conclude and suggest strategies for effective marketing of FMCG products.

  RESEARCH METHODOLOGY

METHODS OF DATA COLLECTION

There are two types of data collection methods which are as following:-
Primary Research
Secondary Research

PRIMARY RESEARCH

Primary Research (also called Field Research) involves the collection of data that does not

already exist. This can be through numerous forms, including Questionnaires & Telephone

Interviews amongst others.

SECONDARY RESEARCH

Secondary research (also called desk research) involves the summary, collation and/or

synthesis of existing research rather than primary research, where data is collected from, for

example, research subjects or experiments.

 • In doing this research the both methods are being used.

• The Questionnaires are being prepared and filled by the people who are investing in

FMCG Sector.

The Secondary data is being collected from different magazines, newspaper & Journals. For the

Literature of review certain online journals has also been collected.

In doing this research the Questionnaire is used to collect the data.

SAMPLE:

A subgroup of the elements of the population selected for participation in the study.

SAMPLING UNIT:

The sampling unit in this research is all the people of Lucknow.

SAMPLE SIZE:

The Sample Size for this study is 100.

 CONCLUSION
People don’t believe such ads because the celebrities these days are endorsing any product as

long as it pays a lot. People tend to lose faith in such products and in the long run the actor. The

popularity and the credibility of the actors play a very important role in convincing people.

Since, actors these days endorse a lot of products people are losing their faith in them. Even

though the impact of celebrity endorsements focus on business growth, the brands without

celebrities and popular personalities have been equally received by the customers. The attractive

advertising campaign and product tag lines and captions have a major influence on the

customers to avail these products. Despite dependence on celebrity endorsements, few brands

have embedded their image on consumers' psyche as the most consistent source.
This is particularly strong in few aspects like:

• Body-care products like Himalaya and Dove

• Cosmetics like VLCC products, Lotus

• Beverages like Tata tea, three roses tea

• Washing powders and detergents like Ghadi, Tide, and Ariel

• TV sets like Onida.

The customers buy the products on the basis of the product’s quality and the consistency of the

quality. So, what the marketers need to do is, find a way that is more suitable. Have

advertisements that are meaningful from the point of view of the consumers and do not add to

the cost of the product. Because the celebrities endorse more than one product, brand recall for

people becomes difficult for the consumers. But, we can see that celebrity advertising is not

going to go away any time soon but the impact on the buying behavior of people because of it is

reducing considerably.
 REFERENCES
BOOKS:

• Beri G.C: “Marketing Research” Tata Mc Graw-Hill Publishing company Ltd.

Third Edition, 2003.

• Schiffman & Kanuk (1997) “Consumer Behaviour”, 6th Eddition, PHI, pp.215-223.

• Marketing Management Philip Kotler 12e

WEB SITES:

• www.thedayaftertomorrow.com

• www.synovate.com

• www.magindia.com

• www.blonnet.com

• www.rediff.com – article by Country head, O&M India

THANK YOU