The fast moving consumer goods (FMCG) sector is a rapidly evolving one, where companies have to literally ‘move fast’ to ensure they are ahead of the competition. While advertising and promotion costs are high, companies have to frequently launch new products to expand their market share. Leading FMCG players have a vast portfolio of products and brands that keeps growing by the day. Leading FMCG firms like HUL, ITC, Nestle, Procter & Gamble and GlaxoSmithKline Healthcare – which account for almost 70 per cent of FMCG revenues in the country – spend almost 10 per cent of their turnover on advertising and brand promotion. They also focus a great deal on new product launches. With growing competition in the sector, it is natural that ad spends keep rising.
Recent research In FMCG has identified that 50% of company profits are generated by products launched in the past three years, where life cycles are decreasing in duration and brand loyalty decreasing in strength. This may be due to less than ideal FMCG brand management, but also a function of our changing environment. Either way, growing pressure means even more importance in the use of and management of advanced FMCG marketing methods.