Advertisement Effect on Fast Moving Consumer Goods

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    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

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    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

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    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

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    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

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    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

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    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.

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    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

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    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.

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    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