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A

ResearchOn

Analytical analysis of association between Celebrity

Advertisement & Brand Recall on FMCG

In the partial fulfillment of comprehensive project study in

semester III of Two Years MBA Programme

Submitted To: Prof Sharif Memon

Sumittedd By:

Kandarp Prajapati

Enrollment Number: 107140592028

Roll No: GLS 1033

Batch: 2010-12

Harshil Shah

Enrollment Number: 107140592021

Roll No: GLS 1042

Batch: 2010-12

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Table of Content

Sr.No Content Page No.

1 Research Methodology 3

2 Literature Review 7

3 Introduction To Industry 18

4 Questionnaire 29

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Chapter 1

Research Methodology

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(1)Exploratory Research

(2)Descriptive research

(3)Causal Research

(1)Exploratory Research

An exploratory research focuses on the discoveries of ideas and is

generally based on secondary data. It is preliminary investigation that does not have

a rigid design.

(2)Descriptive Research

A descriptive study is undertaken then the researcher wants to know the

characteristics of certain groups such as age, sex, educational level, income,

occupation, etc. in contrast to exploratory studies, descriptive studies are well

structured.

(3)Causal Research

A causal research is undertaken when the researcher is interested in

knowing the cause and effect relationship between two or more variables. Such

studies are based on reasoning along well-tested lines.

Research design selected for this project is Descriptive. Descriptive research is based on

survey It is intended to find answers for questions like why, who, whom, where, what and

how much of the research which is on hand.

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SCOPE

Time Scope:

For completing this project we have taken a time period of three month with our

study of the 4th

semester.

Sample Design:

Sampling type:

In this project convenient sampling method is used for the selection of customer.

Sample Size:

Sample size will be of 200.

Methods of Data Collection:

Primary methods:

1. Questionnaire

Secondary methods:

1. Magazines.

2. Newspapers

3. Websites

4. Books

FIELDWORK

In order to gather the primary data associated with our survey of consumers over a

selected hub of areas in Ahmedabad, we have undergone an extensive fieldwork. The

basic purpose of the field work was obviously to record the responses of target

consumers.

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Chapter 2

Literature Review

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Literature Review

The air was laden with nervous excitement at Ballroom 1, Taj Lands End in Mumbai. It was

an unusual sweaty February afternoon and yet the room was full of journalists and the rest.

The press invite promised premiere of Compaq Presarioslatest blockbuster starring Indias

biggest superstar. The corporate communications people would not reveal anything

else, preferring to keep that you will be shocked andbewildered kind of smug expression on

their faces. The event started, HP Indias head honcho spoke briefly about the achievements

and emphasized how historic the day was. The music and lights at the back went berserk for a

brief while and out of the prop emerged Shahrukh Khan,the reigning Bollywood star, in ablack leather jacket.A hush descended upon the gathering, with the flashbulbsbursting ever so

rapidly. Shahrukh muttered a few words on Compaq and its affordable PCs for the Indian

market. Posed for a few more photo-ops, answered a few questions and zoomed away

presumably to his posh villa next door, leaving the gathering much content and overawed.

This is the effect celebrities have on Indian audiences. Even sane and serious individuals are

known to swoon in the presence of celebrities. The effect is most evident at airports: people

go in a tizzy whenever there is a cricketer or a Bollywood star around. To state that Indians

are starstruck would by no means be an exaggeration. We are an obsessed nation, keeping a

tab on what our stars do, what they eat, what they useLittle surprise then that celebrities

know their power and use them smartly too and the game is known as celebrity

endorsements. The trend caught on in the late eighties or so, when television truly arrived in

India. It was then that advertisers started using celebrities (namely film stars) to increase

awareness for their products. And just after the Indian cricket team trounced West Indies at

Lords by 43 runs to pick up the Prudential Cup in 1983, advertisers knew they had 11 more

people to peddle their products. Thus, Kapil Dev was signed up for a host of advertisements

ranging from BSA SLR bicycles to Palmolive shaving cream (Palmolive da jawaab nahin)

and so were his other teammates.

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A Heady Concoction:

Over the years, celebrity advertisements as a trend gained solid ground and evolved into

celebrity endorsements.The difference between the two, endorsement and advertisement,

is minor but significant. By endorsing a product, the celebrity not only appears in the adverts

(like in advertisements) but also becomes a brand ambassador of sorts. He or she is supposed

to know about the product and is often seen at different company events. Endorsements

are pretty common for white goods (like consumer durables) or the FMCG sector, as the

products require a higher brand recall. Thus a Coco Cola needed Hritik to

counter Pepsis Shahrukh. But an IT product company like HP signing on a celebrity is

indeed a surprise. The dynamics of the industry are quite different; a person would buy alaptop based on two main criteria, cost and configuration. Hence, debates were plenty on

whether Shahrukh would help Compaq. Some even suggested that the move was a defensive

one, in response to a Chinese companys push into Indian market.

Quite a Saif Choice

In 2005 a relatively unknown company from China, Lenovo, created a buzz across the world

by buying out IBMs PC division for $1.25 bn. Suddenly it was in the big league, and yet

it was not widely known. While in the Western markets the transition happened quite

steadily, the story in India was a wee bit different. Thanks to the dumping of products by

Chinese companies; the made inChina tag reads cheap and unreliable in India.

To counter this impression in India, Lenovo decided to enlist the services of Saif Ali Khan.

After quite many years, Saif had found his foothold in the Indian film industry

and was finally in the reckoning for the big league. Also, he had a much cleaner image in

comparison to his peers. Lenovo snapped him on, with sister Soha Ali Khan,

and splashed them all over town. The association with Saif is great. He has a healthy image

and, more importantly, is choosy about endorsing products. We did not want to associate with

a celebrity who was endorsing 35 different products. The result is there for all to see, says

Deepak Advani, senior VP and chief marketing officer, Lenovo. Lenovo was one

of the first few IT companies in India to use celebrities in a big way. Meanwhile, HP also

seems to be pretty happy with the response to the Shahrukh adverts. Shahrukh is the right

choice as his popularity cuts across gender, age, geographies. He is a technology buff, and a

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content Compaq user. The association helped us to leverage his popularity among the masses

to educate on the proposition of empowering people with their PCs, mentions Shuchi Sarkar,

head (Marketing), Personal Systems Group, Hewlett-Packard India.

Peaks and Pitfalls:

Using a celebrity is like treading a fine line, as there area variety of things one needs to assess

before going in for such endorsements. Do celebrity endorsements make sense for IT

products? They do make sense. If it is an Amitabh Bachchan, Shahrukh Khan or Hritik

Roshan, it surely makes sense, as they are known to be quite discerning in nature. Take

Aamir Khan for that matter, who is quite a clever guy, you could put him on a forum with a

bunch of industrialists and he will hold his own against them. These guys are very savvy in

terms of FMCG, hardware, computers, IT, etc. In fact Amitabh Bachchan is a known

collector of sophisticated toys, they enamor him to the extent that if you give him a new

gizmo, he will sit with it for hours to figure out how it works, says adman Prahlad Kakkar,

CEO, Genesis. He has been associated with celebrities for a long time with ads like Pepsi, et

al. A celebrity does not guarantee success. The main issue is the idea. I think Lenovo has

done a fine job in bringing the idea out and there is not much dependence on Saif. He is a part

of the whole story and not merely peddling a product. Take for instance the face recognition

commercial that is running now, it is a very straight benefit of how a computer recognizes

you. As I said earlier, it all depends on the idea that you have, says Piyush Pandey,

executive chairman and national creative director, O&M. He is renowned for the Fevicol and

Cadbury campaigns.

But adman Alyque Padamsee warns about selecting the right celebrity, as it can be quite

crucial to the message that is spread. The important thing is to choose the right

celebrity for the right product. Using tech savvy celebrities like Shahrukh and Saif for

computers is a good choice. But it would not be really advisable to enlist Sachin Tendulkar

to promote a computer brand, as his persona does not really match with the product, he says.

Finally, there must be a need for a celebrity. For instance, product launches suit well with

celebrity style endorsements. In this regards, Microsoft used Akshay Kumar and Yuvraj

Singh quite well to sell X-Box 360. The product instantly caught on the fancy of the Indian

users.

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Cover story

What does gurus say..

On celebrity endorsements

Obviously, it works. Otherwise they would not be used as regularly. Though, let me tell you,

that a great majority of advertisements are not celebrity driven, I have a feeling that not more

than 10-12% are actually celebrity driven and the rest are your everyday ads. Now look at the

power of celebrity endorsements, the perception today is that 90% of all ads are celebrity

driven though it is quite the opposite. That means that the only ads that one remembers are

the ones that have celebrities in them. Thus, celebrity endorsements do work, otherwise

people would not be paying that kind of money to a celebrity, the difference is too huge.

Celebrity endorsements do pay otherwise businesses would not shell out so much money for

them.

Celebrity towering over the brand

There is a danger in that aspect also, the celebrity is so big that it completely vampires the

product. That is a creative solution, if your creative is weak then the celebrity will tower over

and if the creative is strong then he or she becomes part of the whole presentation. You

cannot be lazy just because you have a celebrity, in fact one has to work all the more harder

to justify the presence as the brand needs to stand shoulder-to-shoulder and not five step

behind.

Celebrity endorsementsdo make sense for IT

products. If it is an

Amitabh Bachchan,Shahrukh Khan or HritikRoshan, it surely makes

sense, as they are known

to be quite discerning in

nature. These guys are

very savvy in terms of

FMCG, hardware,computers, IT, etc

Prahlad Kakkar, CEO, Genesis

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Piyush pandeyexecutive chairman and national creative director, O&M

On IT and celebrity

Celebrity and computers are quite a credible match, as everyone uses a computer. The

important issue is the idea.

Big money at stake

If you are paying that kind of money, you should be working very hard on it. It is like havinga bad movie script and signing on Amitabh Bachchan. As no Mr Bachchan can really save

you if your script is really bad. So all depends on how good is the match between the brand

and the celebrity and what is the best balance between the brand, the celebrity and the idea.

Celebrity endorsements in India

Lot of celebrities are used in America, ditto for South East Asia. It is like this, if you have a

good idea, who would not want a good actor? But yet again, let me emphasize on the need fora good script otherwise nobody benefitsneither the brand nor the celebrity. When a

celebrity gets accolades for those lovely ads,take the case of Abhishek Bachchan for

Motorola, then you feel it is a win-win situation for every one.

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Alyque Padmsee

On celebrity endorsements

Celebrity endorsements work in India.The important thing is to choose theright celebrity for

the right product. Usingtech savvy celebrities like Shahrukh andSaif is a good choice. But it

would notbe really advisable to say use SachinTendulkar to promote a computer product, as

his persona does notreally match with the product. There must be a kind of bonhomie

between the product and the celebrity.

Challenges

The challenges can be quite daunting as one needs to pay attention to the idea and not get

carried away with the celebrity, and this is where many falter.

Big money at stake

Celebrities come at a price. The choice of a celebrity is dependent on the business needs. Are

you launching a product, or is it a branding exercise? It is important to weigh the cost of

using a celebrity vis--vis the expected returns.

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Mobility Wars

While IT companies might be new entrant in the celebrity endorsements game, mobile

companies, both operators and OEMs, have been cavorting celebrities for sometime now.

Airtel has extensively used celebrities in the past and continues to do so. The company used

both Shahrukh and Sachin to spread the word about its products. Hutch was relatively slow

on the celebrity front, letting its pug talk about the benefits. Even then, Hutch has employed

the Indian cricket captain, Rahul Dravid, for endorsements. It used Dravid for the launch of

its voice services and special brand promotions like World Cup Jao etc. Tata Indicom has

also decided to woo the Indian audience in a big way through the Bollywood couple, Ajay

Devgan and Kajol. In the past the company had signed on Saurav Ganguly and Irfan Pathan,

but since both of them went through a slump, the company simply dumped them for the

Devgans. In fact, at the launch of Tata Indicoms online store, Daryl Green, CEO, Tata

Teleservices, was unusually joyful in the company of Kajol, stating that he was grateful to the

couple for endorsing the products. The brand association has been a resounding success, he

said. Meanwhile, Kajol could not even recall the Tata Indicom phone that she used, it is a

nice black one, she stated. Reliance is another company that has used celebrities extensively:first it was Virender Sehwag and now it is Mahendra Singh Dhoni. Though it was not really

renowned for the creative aspect in its campaigns. On the OEM front a resurgent Motorola

signed on Abhishek Bachchan to reach the youth. Somehow the campaign does not seem to

have been much of a success, as they are back to using creative without celebrities. Nokia and

Sony, meanwhile, seem to be fairly reluctant to use a celebrity to promote their brand. The

small players are also using celebrities, albeit the not so shining ones. Take the case of Fly

Telecom, it used Malaika Arora-Khan for launching their product. And therein lies another

Money and More Money:

Celebrities dont come cheap, even the Indian ones. According to media reports, Shahrukh

charges around Rs 5 crore per annum for brand endorsement, whereas Saif charges around Rs

2 crore. The Lenovo adverts also feature Soha Ali Khan, who is believed to charge Rs 35-

50 lakh for an endorsement deal. Now that Lenovo has signed up Saif and Soha again, there

must have been a revision in those rates. In fact, now specialist celebrity management

companies have emerged that mainly deal with managing a celebritys endorsement deals.

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But does all this money make sense? There is a greasy baniya sitting behind each company

and if he ready to pay so much, then indeed it must be making sense, says Kakkar in his

inimitable style.

Innovative Trends:

If you thought that glitzy commercials were all that were there to celebrity endorsements,

then you couldnt be more mistaken. A lot of IT companies use celebrities for a small stint,

without really signing them on. For instance, Microsoft hosted a Bollywood extravaganza,

with stars like Akshay Kumar, Kareena Kapoor, Priyanka Chopra, etc to mark the launch of

Vista in India. IBM had enlisted the services of Dia Mirza for emceeing their event, when

Sam Palmisano had come visiting. Sun Microsystems had also taken on Perizad Zorabian for

a dealer event. Compaq has innovated a product placement strategy on the Kaun Banega

Crorepati show. Not only is the Lenovo computerji replaced by a Compaq, host Shahrukh

frequently requests Compaq daro (brother in Tamil and otherregional languages) to check

the answers given by the contestants KBC is a new thing we have just done with SRK.

Watch this space for some more exciting stuff, promises Sarkar.

The naked truth about celebrity endorsements :

The pitfalls of the celebrity endorsement were thrown into sharp relief yesterday with the

news that two of its brightest (and most expensive) stars do not use the products they

advertise.

The pitfalls of the celebrity endorsement were thrown into sharp relief yesterday with the

news that two of its brightest (and most expensive) stars do not use the products they

advertise.

In the US, a lawsuit filed by a consumer group forced sports giant Nike to admit Tiger Woods

does not use the Nike Tour Accuracy golf balls he is paid 694,000 a year to endorse.

In his recent run of victories, he has used a modified ball, created specially for him. The

lawsuit, brought by a non-profit organisation called Public Remedies Inc, claims Nike was

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Matthew Patten, chief executive of M&C Saatchi Sponsorship, said: "If you look at sport and

entertainment, coverage used to be about the sport, or the entertainment. Now it's all about

personalities, which makes endorsement all the more effective."

Savvy marketing men are ensuring their "celebrity"is never likely to misbehave, by using

techno-personalities, such as Lara Croft in Lucozade ads, or even dead celebrities, such as

those in an ad for After Eights.

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Chapter 3

Introduction To FMCG Industry

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Introduction To FMCG Industry

Products which have a quick turnover, and relatively low cost are known as Fast Moving

Consumer Goods (FMCG). FMCG products are those that get replaced within a year.

Examples of FMCG generally include a wide range of frequently purchased consumer

products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and

detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products,

and plastic goods. FMCG may also include pharmaceuticals, consumer electronics,

packaged food products, soft drinks, tissue paper, and chocolate bars. Indias FMCG sector is

the fourth largest sector in the economy and creates employment for more than three million

people in downstream activities. Its principal constituents are Household Care, Personal Care

and Food & Beverages. The total FMCG market is in excess of Rs. 85,000 Crores. It is

currently growing at double digit growth rate and is expected to maintain a high growth rate.

FMCG Industry is characterized by a well established distribution network, low penetration

levels, low operating cost, lower per capita consumption and intense competition between the

organized and unorganized segments. The Rs 85,000-crore Indian FMCG industry is

expected to register a healthy growth in the third quarter of 2008-09 despite the economic

downturn. The industry is expected to register a 15% growth in Q3 2008-09 as compared

to the corresponding period last year. Unlike other sectors, the FMCG industry did not slow

down since Q2 2008. the industry is doing pretty well, bucking the trend. As it is meeting the

every-day demands of consumers, it will continue to grow. In the last two months, input costs

have come down and this will reflect in Q3 and Q4 results. Market share movements indicate

that companies such as Marico Ltd and Nestle India Ltd, with domination in their key

categories, have improved their market shares and outperformed peers in the FMCG sector.This has been also aided by the lack of competition in the respective categories.

Singleproduct leaders such as Colgate Palmolive India Ltd and Britannia Industries Ltd have

also witnessed strength in their respective categories, aided by innovations and strong

distribution. Strong players in the economy segment like Godrej Consumer Products Ltd in

soaps and Dabur in toothpastes have also posted market share improvement, with revived

growth in semi-urban and rural markets.

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Industry Category and Products

Household Care

Personal Wash:-

The market size of personal wash is estimated to be around Rs. 8,300 Cr. The personal wash

can be segregated into three segments: Premium, Economy and Popular. The penetration

level of soaps is ~92 per cent. It is available in 5 million retail stores, out of which, 75 per

cent are in the rural areas. HUL is the leader with market share of ~53 per cent; Godrej

occupies second position with market share of ~10 per cent. With increase in disposable

incomes, growth in rural demand is expected to increase because consumers are moving up

towards premium products. However, in the recent past there has not been much change in

the volume of premium soaps in proportion to economy soaps, increase in prices has led

some consumers to look for cheaper substitutes.

Detergents:-

The size of the detergent market is estimated to be Rs. 12,000 Cr. Household care segment ischaracterized by high degree of competition and high level of penetration. With rapid

urbanization, emergence of small pack size and sachets, the demand for the household care

products is flourishing. The demand for detergents has been growing but the regional and

small

unorganized players account for a major share of the total volume of the detergent market. In

washing powder HUL is the leader with ~38 per cent of market share. Other major players

are Nirma, Henkel and Proctor & Gamble.

Personal Care

Skin Care:-

The total skin care market is estimated to be around Rs. 3,400 Cr. The skin care market is at a

primary stage in India. The penetration level of this segment in India is around 20 per cent.

With changing life styles, increase in disposableincomes, greater product choice and

availability, people are becoming aware about personal grooming. The major players in this

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segment are Hindustan Unilever with a market share of ~54 per cent, fol-lowed by CavinKare

with amarket share of ~12 per cent and Godrej with a market share of ~3 per cent.

Hair Care:-

The hair care market in India is estimated at around Rs. 3,800 Cr. The hair care market can be

segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels. Marico is

the leader in Hair Oil segment with market share of ~ 33 per cent; Dabur occu-pies second

position at ~17 per cent.

Shampoos:-

The Indian shampoo market is estimated to be around Rs. 2,700 Cr. It has the penetration

level of only 13 per cent in India. Sachet makes up to 40 per cent of the total shampoo sale. It

has low penetration level even in metros. Again the market is dominated by HUL with around

~47 per cent market share; P&G occupies second position with market share of around ~23

per cent. Antidandruff segment constitutes around 15 per cent of the total shampoo

market.The market is further expected to increase due to increased marketing by players and

availability of shampoos in affordable sachets.

Oral Care:-

The oral care market can be segmented into toothpaste - 60 per cent; toothpowder - 23 per

cent; toothbrushes - 17 per cent. The total toothpaste market is estimated to be around Rs.

3,500 Cr. The penetration level of toothpowder/toothpaste in urban areas is three times that of

rural areas. This segment is dominated by Colgate-Palmolive with market share of ~49 per

cent, while HUL occupies second position with market share of ~30 per cent. In

toothpowders market, Colgate and Dabur are the major players. The oral care market, es-

pecially toothpastes, remains under penetrated in India with penetration level ~50 per cent.

Food & Beverages

Food Segment :-

The foods category in FMCG is gaining popularity with a swing of launches by HUL, ITC,

Godrej, and others. This category has 18 major brands aggregating Rs. 4,600 Cr. Nestle and

Amul slug it out in the powders segment. The food category has also seen innovations like

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softies in ice creams, ready to eat rice by HUL and pizzas by both GCMMF and Godrej

Pillsbury.

Tea :-

The major share of tea market is dominated by unorganized players. More than 50 per cent of

the market share is capture by unorganized players. Leading branded tea players are HUL and

Tata Tea.

Coffee :-

The Indian beverage industry faces over supply in segments like coffee and tea. However,

more than 50 per cent of the market share is in unpacked or loose form. The major players in

this segment are Nestl, HUL and Tata Tea.

Growth Prospect

Large Market

India has a population of more than 1.150 Billions which is just behind China. According to

the estimates, by 2030 India population will be around 1.450 Billion and will surpass China

to become the World largest in terms of population. FMCG Industry which is directly related

to the population is expected to maintain a robust growth rate.

Spending Pattern

An increase is spending pattern has been witnessed in Indian FMCG market. There is an

upward trend in urban as well as rural market and also an increase in spending in organ-ized

retail sector. An increase in disposable income, of household mainly because of in-crease in

nuclear family where both the husband and wife are earning, has leads to growth rate in

FMCG goods.

Changing Profile and Mind Set of Consumer

People are becoming conscious about health and hygienic. There is a change in the mind set

of the Consumer and now looking at Money for Value rather than Value for Money. We

have seen willingness in consumers to move to evolved products/ brands, because of

changing lifestyles, rising disposable income etc. Consumers are switching from economy to

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premium product even we have witnessed a sharp increase in the sales of packaged water and

water

purifier. Findings according to a recent survey by A. C. Nielsen shows about 71 percent of

Indian take notice of packaged goods labels containing nutritional information compared to

two years ago which was only 59 per cent.

Advantages To The Sector

Governmental Policy

Indian Government has enacted policies aimed at attaining international competitiveness

through lifting of the quantitative restrictions, reducing excise\ duties, automatic foreign in-

vestment and food laws resulting in an environment that fosters growth. 100 per cent ex-port

oriented units can be setup by government approval and use of foreign brand names is now

freely permitted.

India is second largest Central & State Initiatives

Recently Government has announced a cut of 4 per cent in excise duty to fight with the

slowdown of the Economy. This announcement has a positive impact on the industry. But the

benefit from the 4 per cent reduction in excise duty is not likely to be uniform across FMCG

categories or players. The changes in excise duty do not impact cigarettes (ITC, Godfrey

Phillips), biscuits (Britannia Industries, ITC) or ready-to-eat foods, as these prod-ucts are

either subject to specific duty or are exempt from excise. Even players with manu-facturing

facilities located mainly in tax-free zones will also not see material excise duty savings. Only

large FMCG-makers may be the key ones to bet and gain on excise cut.

Foreign Direct Investment (FDI)

Automatic investment approval (including foreign technology agreements within specified

norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate

Bodies (OCBs) investment, is allowed for most of the food processing sector except malted

food, alcoholic beverages and those reserved for small scale industries (SSI). There is a

continuous growth in net FDI Inflow. There is an increase of about 150 per cent in Net Inflow

for Vegetable Oils & Vanaspati for the year 2008.

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Market Opportunities

Vast Rural Market

Rural India accounts for more than 700 Million consumers, or ~70 per cent of the Indian

population and accounts for ~50 per cent of the total FMCG market. The working rural

population is approximately 400 Millions. And an average citizen in rural India has less then

half of the purchasing power as compare to his urban counterpart. Still there is an untapped

market and most of the FMCG Companies are taking different steps to capture rural market

share.

The market for FMCG products in rural India is esti-mated ~ 52 per cent and is projected to

touch ~ 60 per cent within a year. Hindustan Unilever Ltd is the largest player in the industry

and has the widest market coverage.

Export - Leveraging the Cost Advantage

Cheap labor and quality product & services have helped India to represent as a cost ad-

vantage over other Countries. Even the Government has offered zero import duty on capital

goods and raw material for 100% export oriented units. Multi National Companies out-source

its product requirements from its Indian company to have a cost advantage. India is the

largest producer of livestock, milk, sugarcane, coconut, spices and cashew apart from being

the second largest producer of rice, wheat, fruits &vegetables. It adds a cost advantage as

well as easily available raw materials.

Sectoral Opportunities

Major Key Sectoral opportunities for Indian FMCG Sector are mentioned below:

Dairy Based Products

India is the largest milk producer in the world, yet only around 15 per cent of the milk is

processed. The organized liquid milk business is in its infancy and also has large long-term

growth potential. Even investment opportunities exist in value-added products like desserts,

puddings etc.

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Packaged Food

Only about 10-12 per cent of output is processed and consumed in packaged form, thus

highlighting the huge potential for expansion of this industry.

Oral Care

The oral care industry, especially toothpastes, remains under penetrated in India with

penetration rates around 50 per cent. With rise in per capita incomes and awareness of oral

hygiene, the growth potential is huge. Lower price and smaller packs are also likely to drive

Beverages

Indian tea market is dominated by unorganized players. More than 50% of the market share is

capture by unorganized players highlighting high potential for organized players.

Company Prospects

Hindustan Unilever Limited

Unilever is lowering its expenditure on packaging across its portfolio of food brands as part

of a wider cost-cutting drive. HUL has pared down the colour palette used for print-ing across

many products. The system has been used to reduce printed packaging costs for Unilevers

products. It is also eco-friendly because it reduces waste in the printing process. HUL is

taking different steps to reduce the cost and increase the margin.

Hindustan Unilevers product - Pureit (a water purifier) has received the UNESCO Water

Digest Water Award 2008-2009 in the category of best domestic non-electric water puri-fier.

Pureit received the award for outstanding contribution in the field of water in India. The

product

is available across 21 Indian states and has reached more than 1 million homes in India giving

them access to microbiologically safe drinking water. Pureits performance has been tested

by leading international & national medical, scien-tific & public health institutions and meets

the

germ-kill criteria of the Environmental Pro-tection Agency, the drinking water regulatory

agency in the USA.

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Procter & Gamble Hygiene & Health Care Limited (P&G)

The Company has 21 product categories out of which only 8 product have presence in India.

The company is planning to launch the rest 13 product in India. The company expects to see a

growth in other categories.

The company has an aggressive plan to set up 20 new factories across the World out of

which 19 is expected to come in emerging markets and most of them would be seen in Brazil,

Russia, India, and China (BRIC) nations.

Whisper which is one of the companys power brands has recorded 50 per cent market share

in urban India.

Godrej Consumer Products Limited (Godrej)

The Board of Directors of Godrej Consumer Products Limited (GCPL) has approved the

acquisition of 50 per cent stake of its joint venture partner SCA Hygiene Products stake in

Godrej SCA Hygiene Limited. After the transaction, the Joint Venture which owns the

Snuggy brand of baby diapers will become a 100 per cent subsidiary of GCPL.

Godrej Consumer Products Limited has acquired 100 per cent stake in the Kinky Group

Limited, South Africa. Kinky is among one of the largest brand into hair segment with

product portfolio.

Dabur India Limited (Dabur)

Dabur has entered into the malted food drink market with the launch of a new health drink

Dabur Chyawan Junior. According to the company, they expect to capture a market share

of 10 per cent of the Rs. 1,900 Crores malted food drink market over the next two years.

Dabur has acquired 72.15 per cent of Fem Care Pharma Ltd (FCPL), a leading player in the

womens skin care products market, for Rs 203.7 Crores in an all-cash deal. The Company is

expected to create synergy by this deal.

Dabur got approval from Government of Himachal Pradesh to set up another medicine

manufacturing unit. The project has an expected investment of Rs. 130 Crores.

Colgate-Palmolive (India) Limited

Colgate Palmolive (India) Ltd, which is currently holding 75 per cent of the share capital of

SS Oral Hygiene Products Private Ltd, Hyderabad, has acquired the remaining 25 per cent

share capital from the local shareholders at an aggregate price of Rs 77.70 lakh.

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Consequently, SS Oral Hygiene Products has become a wholly owned subsidiary of the

company.

Nestle India Limited

Nestle is planning to invest Rs 6 billion in India in 2009 for expansion of its business in the

country.The company which has allotted an investment of Rs 3 billion in the Indian market in

2008, would be doubling the investment in 2009 as part of its business strategy. Nestle

International is reinvesting and expanding in India and Nestle India will have all the financial

resources to expand and grow from the parent company.

Nestle India reported a good increase in its standalone net profit for the second

quarter.During the quarter, the profit of the company rose 26.54% to Rs 1,210.90 million

from Rs 956.90 million in the same quarter, last year. The company posted earnings of Rs

12.56 a share during the quarter, registering 26.61% growth over prior year period. Net sales

for the quarter rose 23.45% to Rs 10,356.30 million, while total income for the quarter rose

23.78% to Rs 10,423.40 million, when compared with the prior year period.

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Swot Analysis

Strengths:

Low operational costs

Presence of established distribution networks in both urban and rural areas

Presence of well-known brands in FMCG sector

Weaknesses:

Lower scope of investing in technology and achieving economies of scale, especially in

small sectors

Low exports levels

"Me-too products, which illegally mimic the labels of the established brands. These

products narrow the scope of FMCG products in rural and semi-urban market.

Opportunities:

Untapped rural market

Rising income levels, i.e. increase in purchasing power of consumers

Large domestic market- a population of over one billion.

Export potential

High consumer goods spending

Threats:

Removal of import restrictions resulting in replacing of domestic brands

Slowdown in rural demand

Tax and regulatory structure

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Chapter 4

Questionnaire

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I am the student of GLS-ICT, Ahmadabad pursuing Master of Administrations,

conducting a survey on Association between Celebrity Endorsement and Brand recall. Please, co-

operate me in this survey by giving your responses, your views will be used only for purpose ofacademic research.

Name: ______________________________________________________________________________

Age: _________________________ Occupation: _____________________________________

1. Through which media, you come to know about the FMCG product?

a. Print Media (News paper, Magazine) c. Electronic Media (TV, Internet)

b. Word of Mouth d. Other (Radio, Bill Board, Banner,

Hoardings)

2. Which is your favourite Celebrity?a. Amitabh Bachchan d. Katrina Kaif

b. M S Dhoni e. Aishwarya rai

c. Shahrukh Khan f. Other_________

3. Do you purchase the product because of your favourite celebrity endorsing it?

a. Yes b. No

4. If yes, which particular brand do you prefer in FMCG sector? (Put product name)

a. Cold Drink: _________________________________

b. Food: _________________________________c. Chocolate: _________________________________

d. Body/Beauty Care: 1. Soap: _________________________________

2. Shampoo: _________________________________

3. Cream: _________________________________

5. During purchase what influences your purchase? (Rank it 1 to 5)

a. Cost / Price _________________

b. Celebrity Advertisement _________________

c. Quality & Quantity ________________

d. Experience _________________

e. Other (Packaging, Trial) _________________

6. Do you think, products sales are higher because of celebrity Advertisement?

a. Yes b. No c. May be

7. Do you think that, Celebrity give a true picture of products through Advertisement?

a. Yes b. No c. May be

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8. How often is your purchase decision based on Celebrity Advertisement recall?

a. Mostly c. Rarely

b.

Often d. Never

9. Which Product comes to your mind, from when you think of the following Celebrities?

(Put product name)

a. Amitabh Bachchan ___________________________________________

b. Shahrukh Khan ___________________________________________

c. Aishwarya rai ___________________________________________

d. M S Dhoni ___________________________________________

e. Sachin Tendulkar ___________________________________________

10.Do you believe that, Celebrity Endorsement on advertisement motivate you to purchase?

a. Strongly Agree c. Agree e. Neutral

b. Strongly Disagree d. Disagree