8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

1/71

ON

ADVERTISEMENT EFFECT ON FAST MOVING

CONSUMER GOODS

SUBMITTED TO

PUNJAB TECHNICAL UNIVERSITY, JALANDHAR

In the partial Fulfillment

for the degree of

MASTER OF BUSINESS ADMINISTRATION (M.B.A.)

Submitted By-

Randeep Baweja

University Roll no.-618221298

DEPARTMENT OF BUSINESS MANAGEMENT

Guru Nanak Institute of Management & Technology

Model Town, Ludhiana 141 002

1

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

2/71

ACKNOWLEDGEMENT

The big task of undertaking such a work is not singly possible,

m y p ro je ct r ep or t o n a dv er ti se me nt e ff ec t o n f as t m ov in g

consumer goods is a result of contribution of lot of persons who

provided me with their indispensable guidance, to all those who

were connected wi th the p repara t ions o f th is p ro ject repor t.

Witho ut the ir o verwhe lmin g s up po rt and co-op erat io n the

presentation of this report would not have been possible.

I extend my sincere and whole hearted thanks to

MR. L.DEV RAJAN(Company Head),ING VASAYA BANKand

for the encouragement, guidance and co-operat ing self less ly at

all times for many valuable discussion.

RANDEEP BAWEJA

2

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

3/71

PREFACE

MBA is stepping stone to management career. In order to achieve practical,

positive and concrete results, the classroom learning need to be effectively fed

to the realities of the situation existing outside the classroom. This is practical

true for manage.

To develop healthy managerial and administrative skills in the potential

managers it is necessary that theoretical knowledge must be supplemented

with exposure of real environment. Actually it is very vital for the

management and it is in the practical training that the measuring of

management is itself realized.

I took summer training in well-managed organization and was fortunate to get

a good exposure. In this project report an attempt has been made to cover

different aspects of my training.

RANDEEP BAWEJA

618221298

3

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

4/71

Certificate I

This is to certify entitled

A study of

ADVERTISEMENT EFFECT ON FAST MOVING

CONSUMER GOODS

Submitted in partial fulfillment of the requirement

For the degree of

Master of Business Administration (M.B.A.) of

Punjab Technical University, Jalandhar

By

RANDEEP BAWEJA

University Roll No. 618221298

Has been prepared under my supervision and guidance and no part of it has

been submitted for the awarded of the any other degree and that the work has

not been published in any journal, magazine or book.

Faculty Signature

Mrs. Inderpreet Kaur

Sen. Lecturer

GNIMT

4

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

5/71

CONTENTS

I ADVERTISEMENT EFFECT ON FMCG : AN INTRODUCTION

II. FMCG INDUSTRYIII. STRUCTURE OF INDIAN MARKET

IV. BUDGET PROPOSAL AND ITS IMPACT ON FMCG

V. CURRENT INDUSTRY POSITION

VI. MAJOR PLAYERS IN FMCG INDUSTRY

a. Hindustan lever ltd.

b. Dabur India ltd.

VII. RESEARCH METHODOLOGY

VIII. NEED AND IMPORTANCE OF THE RESEARCH

IX. TOOTHPASTE MARKET

a. analysis of data

b. finding of study

X. SHAMPOO MARKET

a. analysis of data

b. finding of study

XI. LIMITATIONS OF THE STUDY

XII. CONCLUSION

XIII. QUESTIONNAIRES

5

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

6/71

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

7/71

Penetration test

Error-in-recognition measurement

Triple association test etc.

Other way to judge ad effectiveness is through questionnaire survey.

Ad stimuli come in consumer mind and how consumer react to it depends

upon consumer black box. consumer decision to purchase is shaped by culture,

sub culture , social group , reference group , family , age , life cycle stage ,

occupation , learning , life style , economic condition etc . These effects are

studied concentrating on:

Toothpaste

Shampoo

The study gives the knowledge about the fast moving consumer good industry,

major player in Indian market and budget effect on FMCGs.

7

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

8/71

FAST MOVING CONSUMER GOODS INDUSTRY

The FMCG (Fast Moving Consumer Goods) Industry comprises of goods,

which are mass use goods directly consumable, packaged and branded

having significant demand in low to middle income strata and above all

highly price sensitive.

Fast-Moving-Consumer-Goods, commonly referred to as FMCG's, are all

those products that are on the shelf one minute and gone the next. They are the

types of products which the regular consumer, like you or I, encounter on a

daily basis. In the morning you clean your teeth with toothpaste, you wash

down you breakfast with orange juice, and you race out the door grabbing

your copy of the daily newspaper. . . . You get the idea? There really are an

infinite number of FMCG's in today's market place, and if you blink for too

long you will miss the launch of another one (or a whole new range).

Essentially, they are the types of products found in retail outlets such as New

World Supermarkets, the rapidly sprouting Star-Mart convenience stores, and

the corner dairy. The FMCG (Fast Moving Consumer Goods) industry

comprises of goods, which are mass use goods directly consumable, packaged

and branded having significant demand in low to middle income strata and

above all highly price sensitive.

The FMCG Industry in India is the third largest Industry after Textiles and

Petroleum with a turnover of over Rs. 86,000 cores. Its participant profile is

8

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

9/71

extensive and includes food and related products such as tea, salt, tobacco,

oils, fats and processed foods, personal care products such as soaps,

detergents, hair oils, and toiletries and dental products. Other goods include

batteries, sanitary napkins, shoe polish, insecticides and liquor. The Industry

contributes to the exchequer by way of Income Tax and Central Excise to the

extent of 9% and 16% respectively of the total collection. It provides large

employment both, direct and indirect and in terms of the 1994 data, it provided

6% of the total 9.1 million. It directly provides employment with a multiplier

of 5.5. Each manufacturing employee supports 7 people downstream. The

Industry has a significant rural bias and accounts for 56% of the total rural

demand.

Expenditure on consumer durables like washing machines, refrigerators, and

color televisions has shown an impressive growth during the 1990's. In 1993-

94 households owned 586 million durable goods, which increased to 705

million by the year 1995-96, Le. a rise of about 20.3 percent in two years.

Even allowing for increase in population, the average ownership per

household went up from 3.72 percent in 199394 to 4.27 percent in 1995-96.

The rural share of the market for durable goods has been growing steadily

over the last few years, from 54.24% in 1989-90 to 56.6% in 199293 and to

57.9% in 1995-96. This share went up to 59.3% in 1997-98. For some

products, like bicycles, mechanical wristwatches and radios, the rural share

was in excess of 75%. In 1989-90 only 6 products had a share of over 50%, in

1995-96, this jumped to 10 products.

During 1997-98, there were 11 products having more than 50% of its market

in rural areas.

9

8/3/2019 Advertisement Effect on Fast Moving Consumer Goods

10/71

STRUCTURE OF THE INDIAN MARKET

Consumer group Household income Number (million)

The very rich Above rs 215000 1.2The consuming class Rs 45,001-215,000 32.5

The climbers Rs 22,001-45,000 54.1

The aspirants Rs 16,001-22,000 44

The destitute Below rs 16,000 33

RURAL MARKET

Rural areas where nearly 70 percent of Indians live , have witnessed rapid

market growth in recent times , driven largely by agricultural growth , income

distribution , and inroads made by audio-visual media. The rural share of the

market for durables goods has grown steadily over the last few years , from

54.2 percent in 1980-90 to 57.9 percent in 1995-1996 , while for a large

variety of items such as bicycles , mechanical wrist watches , radio/transistors

etc., the share of the rural market was in excess of 75 per.

products Sales in rural markets(in percent )

Radio/transistor 75.2

Bicycle 78.08

Mechanical watches 76.59Sewing machine 64.34

Table fans 61.89

Quartz watches 54.00

Black & white TVs 62.65

Cassette recorder 55.03

Motorcycles 47.87

Pressure cookers 51.51

Ceiling fans 50.36

Electric iron 43.85

Tooth paste 39.98Talcum powder 45.25

The economic liberalization has given enormous opportunities it the fast

moving consumer goods than any other segment. the increased penetration of

sever