FMCG companies ramp up advertising spends

Written by Lalitha Srinivasan | Mumbai, Apr 29 | Updated: Apr 30 2008, 06:01am hrs
Enthused by the feel-good FY08 results, Indian FMCG majors are hiking their advertising budgets to gain high visibility for their brands in an increasingly competitive market. ITC Foods is planning to increase its ad budget by 60% to promote its flagship brands Bingo and Sunfeast while Godrej Consumer Products Ltd (GCPL) is hiking its ad spend by 50% to drive volumes this fiscal.

In line with its revenue growth in FY08, Wipro Consumer Care & Lighting is increasing its ad spend by 30% to gain market share. FMCG major Marico Ltd is also planning to hike its ad spend in accordance with its sales growth in FY08. To pump up volumes, CavinKare is increasing its ad spend by 30% this year, according to C K Ranganathan, managing director of CavinKare Private Ltd. 'Seeing is believing' seems to be mantra for success in the Indian FMCG industry.

On the companys ad budget, Adi Godrej, chairman of GCPL, said, We will be hiking our ad spend by around 50% to popularise our consumer products this. We will be announcing our relaunches and new launches through advertising campaigns.

As for Wipros ad strategy, Anil Chugh, senior vice president of Wipro Consumer Care & Lighting, said, "Our Indian business has grown by 25% this fiscal. There will be an increase of 30% in our ad spend as we allocate 10 to 11% of our revenue into advertising. We will be revamping our ad strategy to pump up volumes.

Marico Ltd has reported a 50 % increase in its net profit at Rs 169 core for the year ended March 31 and turned in a revenue of Rs 1907 crore during FY08. On Maricos strategy, Harsh Mariwala, chairman & managing director of Marico Ltd, said, "Our advertising and promotions will continue to be a part of our sales growth. But the absolute amount in our budget will go up to fight competition.

With increasing competition in the Rs 69,000 crore Indian FMCG sector, major players are now hiking their ad spend to stand out from a clutter, according to analysts. The sector has become highly competitive and fragmented. To take on both regional and international brands, major players are now investing more on advertising and promotions, added analysts.