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International Journal of Economic Issues, Vol. 8, No. 2 (July-December, 2015) : 79-84
© International Science Press
“IMPACT OF T. V. ADVERTISEMENT AND SALES
PROMOTION ON FMCG IN RURAL INDIA”
GARIMA MALIK AND AMIT JAIN
Amity Business School
Amity University, Noida
Email: [email protected]; [email protected]
In country like India, where the 70% of the people live in rural area, the rural market
holds a lot of marketing potential. There is a wide spread difference in the standard of
living between urban and rural India. In order to launch products and develop
advertising for rural market there is a need to understand both the rural context and
also the consumer very well. Promotion of brands in rural markets requires the special
measures. Due to the social and backward condition the personal selling efforts have a
challenging role to play in this regard. The word of mouth is an important message
carrier in rural areas. In fact the opinion leaders are the most influencing part of
promotion strategy of rural promotion efforts. The strong Indian brands have strong
brand equity, consumer demand-pull and efficient and dedicated dealer network which
have been created over a period of time. The rural market has a grip of strong country
shops, which affect the sale of various products in rural market. The companies are
trying to trigger growth in rural areas. They are identifying the fact that rural people
are now in the better position with disposable income. The low rate finance availability
has also increased the affordability of purchasing the costly products by the rural people.
Marketer should understand the price sensitivity of a consumer in a rural area. This
research paper will be therefore an attempt to study the Advertisement and Sales
Promotion impact on FMCG Sector in rural India and the overall potential of the rural
market.
Keywords: Rural, Advertisement, FMCG, Opinion Leader.
INTRODUCTION
Advertisements convey brand differentiation and this may be important in several
categories, which consist of several brands. In FMCG products like tea, coffee and
detergents, “differentiation awareness” can be created by television advertising, but in
certain categories there may be a need to demonstrate the effectiveness of brands.
Differentiation with which consumers cannot “connect” may have a negative
implication and if a brand “connects” consumers with its differentiation, it is likely to
also differentiate itself in terms of getting identified with the consumer. A detergent or
a washing machine, which claims “low water consumption”, has to demonstrate this
claim at a retail outlet especially given the fact that the quality of water varies across
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AMIT JAIN
areas even in a specific geographical region. It is also essential that a good
“differentiation proposition” result in a positive word-of-mouth.
In a certain situation, the company may have two offerings in a product-line and
there is a need to differentiate them clearly depending on the target segments involved.
This is a complex situation where differentiation decides the growth of the brand and
the perceived difference between the offerings. An added layer to the complexity is
the same brand name being used for the offerings. Fairness cream is a category in
which the benefit is the fairness of the complexion. A brand like Fair and Lovely built
over the years still has a strong association with the category but under tremendous
pressure from competitive brands and the most important criteria which these brands
is the herbal touch associated with them. Herbal ingredients are becoming popular
with consumers in several categories and personal care in rural India has a strong
tradition of herbal care. Fair and Lovely had to launch its herbal variant (it used the
same brand probably because of the brand equity built up over the years). The
interesting fact is the differentiation being conveyed by advertising. The original version
uses an aspiration route in which the brand’s ultimate benefit is success through
confidence.
Refer diagram 1
Estimates based on China’s current per capita Consumption, the Indian FMCG
market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. The
dominance of Indian rural markets by unbranded products, change in eating habits
and the increased affordability of the growing Indian rural population presents an
opportunity to makers of branded products, who can convert consumers to branded
products.
Penetration level in most product categories like jams, toothpaste, skin care, hair
wash etc in rural India is low. The contrast is particularly striking between the rural
and urban segments - the average consumption by rural households is much lower
than their urban counterparts. Low penetration indicates the existence of unsaturated
markets, which are likely to expand as the income levels rise. This provides an excellent
opportunity for the industry players in the form of a vastly untapped market. Moreover,
IMPACT OF T. V. ADVERTISEMENT AND SALES PROMOTION ON FMCG IN RURAL INDIA / 81
per capita consumption in most of the FMCG categories (including the high penetration
categories) in India is low as compared to both the developed markets and other
emerging economies. A rise in per capita consumption, with improvement in incomes
and affordability and change in tastes and preferences, is further expected to boost
FMCG demand. Growth is also likely to come from consumer “upgrading”, especially
in the matured product categories.
RESEARCH OBJECTIVES
The main objectives of the study are:
1. To assess current consumer sales promotion schemes in the market
2. To assess how consumers differentiate the products based on advertisements
3. To study consumer perceptions regarding various schemes in this category
and responses toward them.
4. To analyze the methodology adopted by companies to target end consumers.
5. To prepare new business strategies
RESEARCH METHODOLOGY
In order to address the above objective descriptive study was conducted. The idea was
to probe and get deeper insight into advertising and sales promotion scenario in FMCG
market and to tap perceptions of retailers and consumers. The target population for
this market survey included all the retailers, the youngsters (age group 19 to 24yr) and
the ladies who are the sole decision-makers for this category. The sampling frame for
this study was the list of the college going students, the families of Meerut in Uttar
Pradesh, the store managers/operations managers of the retail outlets (All the retailers
were located in the Meerut) are being covered during the survey. As the population
was limited in this case, a small sample of 50 respondents was taken and six retailers
ranging from small kirana store to supermarket were approached. For the purpose of
this survey, Convenience sampling was employed as the sample size was small and
fixed and the sampling unit was clearly defined. Primary Data was collected through
structured questionnaires, personal-interviews/discussions in context to the advertising
and sales promotion of FMCG products. Secondary Data was collected from Internet,
news articles, research paper, journals etc.
RECOMMENDATIONS
1. Companies have to increase the awareness level in buyers through TV
advertisement. An advertisement since it is one of the main sources of awareness
and securing Information.
2. Effective advertising is necessary to confirm the public about the product at the
right time through the right medium.
3. Although product benefits can be shown most effectively by TV. It should not
mislead the consumers. The advertisement is judged by its impact and by its
acceptance by the consumers. What it promises must be there in the advertisement.
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4. Identifying the right Celebrities for different products and the degree of influence
these celebrities have in different stages of decision making. The ad agencies should
use simple ads to convey the message of the brand. It should also be creative and
focus on 1 or 2 points. Innovative methods should be used to make advertising
effective.
CONCLUSION
Advertisement, the foregoing discussion show, is a sharp double edged weapon. When
the claims of an advertisement correspond with the features of a product purchased as
a consequence of such advertisement, the advertisement is bound to create a positive
attitude among the Consumers in the long run. On the other hand, when the features
of the product purchased do not corroborate the claims made in advertisement, those
advertisements are sure to create a negative attitude among the consumers. It is therefore
essentials that an advertisement aims to create faith and goodwill in the minds of
consumer about the product featured by conforming to the core principles of
believability, uniqueness, reputation and reasonable claims.
Advertising serves many generic purposes, but for specific categories like FMCG,
the involvement of all stakeholders is vital to the success of an advertising strategy.
Innovation and creativity are pillars of great advertising strategies, but equally
important are the content and delivery of the advertisement. All compels the advertisers
to innovate and develop new techniques to attract the customers. We can say that the
advertisers use these different means of advertising in order to lure the customers to
buy their products. It is not necessary to use only one aspect of advertising in an
advertisement. Instead, multiple aspects of advertising are being used to make sure
that the consumers buy the respective company’s product. Briefly, we can say that the
different aspects of advertising are quite beneficial for promoting a product. Every
advertisement has some multiplier effect which gives a greater benefit with respect to
the amount spent. Recall of an advertisement varies from individual to individual,
and a company may calculate its advertisement multiplier for measuring its
advertisement effectiveness. An attempt is made to identify the level of awareness
among the respondents towards TV advertising. From the study it is inferred that TV
commercials have considerable influence on the Buying decision as well as Brand
preference of the consumers. The celebrity endorsement is also considered to be an
important part of advertisements to make them more creative and innovative in their
reach to the consumers and their attempt to capture their attention. Following
observations are made after making an analysis of data collected from various
respondents and from general discussions with them:
(1) TV ads are considered as a most important source of information among the
respondents. This highlights the role of TV commercials play in molding the
buyer behavior. Thus, purchase decision of the people is definitely impacted
by advertisements.
(2) Almost half of the segment of respondents likes to watch ads regularly. This
means TV outperforms other Medias as far as effective presentation is
concerned. It is capable of attracting attention immediately.
IMPACT OF T. V. ADVERTISEMENT AND SALES PROMOTION ON FMCG IN RURAL INDIA / 83
(3) A significant portion of the people prefers to watch ads because of the ‘
informative content. This is because of “evocation of experience” i.e. TV
advertising easily stimulates the experience of using and owning the product.
(4) Brand preference is considered to be one of the prerequisite for brand salienceto create the Top of the Mind Brand Awareness. TV commercials go a long
way in achieving this as also indicated by the study. Advertising works by
reinforcing Brand preference for mature brands.
(5) A small segment of the respondents think that the advertisements are totally
true or reliable. All the rest of them think that they are either sometimes
deceptive or mostly deceptive.
(6) Major chunk of the respondents feel that celebrities ‘presence in the ads is
highly required. They feel models are familiar and their presence is reassuring.
Moreover, because of the high positive image of the celebrities consumers feel
the genuineness of the product/ brand. Celebrity endorsement is generally
preferred for such products as soft drinks, cars, suiting’s, premium range
products and luxurious items.
(7) More than half of the consumers are not able to relate themselves with the
lifestyle shown in the TV ads. This is because the people are not able to confirm
the exaggeration shown in the respect of product benefits to their own picture
of reality.
(8) When asked to recall an advertisement in respect of any FMCG, almost all the
respondents were able to recall only one or two advertisements or the tag
lines of their favorite brands. They could also immediately relate the celebrities
they have seen in the respective ads.
(9) TV advertising provides a unique blend of sight, color, movement, sound,
repetition and presentation of the products. This helps TV commercials to gain
advantage over other Medias.
(10) Although informative content is more liked by the respondents but with the
advent of too many satellite TV channels, the use of celebrities has become an
important issue for the advertiser. This is to make the consumer more conscious
and attract towards the product.
(11) Consumer needs somewhat extra benefit as compared to the other brands
and they want the offers and scheme should be more to attract the customers.
Today, creating a different differentiation is becoming difficult and problematic.
Product differentiation should be strong enough to create a wide gap between two
brands. If a differentiation technique does not create a wide gap between the two brands,
then the customer is not able to differentiate the same leading to less brand loyalty.
This is what is happening in FMGC sector especially in soap industry, where the
customer is not able to differentiate between two soaps. Lux, Cinthol appears to be
same which was not the case earlier. As the product differentiation technique does
not create a wider gap between one brand and the other, customer loyalty is getting
eroded.
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AMIT JAIN
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