The role of testimonial advertising in Fmcg sector

In today’s intensely competitive, rapidly changing and highly complex environment characterize by diminishing customer loyalty, the need to be market -focused and customer centric is more critical and is gaining importance than any other time in past. Testimonial advertising is usually very effective and is frequently used. It is basically a promotional method in which one or more testimonials from satisfied customers are used.

The satisfied customers may be well know or famous personality or may be a common customer. The statement of men and women who are well and favourably known in society tend to influence others in the community to buy a particular product or article which others have used successfully.

Hence, the main purpose of the study is to understand the effect of this type of adverstising on FMCG industry.

1.3 SIGNIFICANCE OF STUDY

The study will help to understand the impact and the importance of testimonial advertising as a marketing tool in FMCG sector.

CHAPTER 2 LITERATURE REVIEW

2.1 What is Advertising ??

Advertising is a form of communication intended to persuade an audience (viewers, readers or listeners) to take some action. It is the business which draws the attention of public to goods and services. The product name is generally included in advertising. It also explains how that product could prove to be beneficial to the consumer. Advertising helps in persuading a target market to purchase or to consume a particular brand. It serves to communicate an idea to a large number of people. It attempts to convince a group a people to take some certain action. It is a type of communication who aims at informing potential customers about products and services.

Commercial advertiser’s main aim is to increase the consumption of their products and/or services. This can be done through branding. Branding includes the repetition of an image or product name in an effort to associate related qualities with the brand.

Non-commercial advertisers spend money to advertise items other than a consumer product or service. These non commercial advertisers may include political parties, interest groups, religious organizations and governmental agencies. 

With the rise of mass production , modern advertising came into existence. Mass media can be defined as any media meant to reach a mass amount of people. To deliver the different and various types of messages, different types of media can be used. Traditional media such as newspapers, magazines, television, radio, outdoor; or new media like a websites and text messages can be used.

2.2 Advertising and its various modes

Advertising is one of the important aspects which need to be considered in business. Advertising decides how much a product or service will be successful. Different mediums can be used for advertising purposes.

Advertising promotes the product and services of a company and drive its sales. It also builds brand identity and also communicates changes of new product /services to the customers. Advertising has become an essential element.

The reasons for advertising are ;

New product introduced

Sales increases

Change in product line.

Brand builing.

There are various media which can be used for advertising based on the several reasons. Several b ranches of advertising can be made based on these criterias. The various categories or types of advertising are mentioned below:

2.2.1 Print Advertising

The print advertising includes newspapers, magazines, brochures, fliers etc. The print media have always been a famous and popular way of advertising. It is the most convenient and the most commonly used way of advertising. Depending upon the area occupied by the advertisement and also the position of the advertisement like front page/ middle page etc, these newspapers and magazines sell the advertising space. It is also affected by the readership of the publications. Like for example the cost of giving an advertisement in a new and comparatively less popular newspaper will be less than the one which is more popular and has more readerships.

The type of supplement also affects the price of the print ads. The advertisement in the glossy supplement costs much higher than normal paper.

The problem of ads in newspapers and magazines is that they can only attract the reader’s eyes. It is not visible to a person who is not a reader.

This problem can be solved by considering several factors:

Use right-hand pages for newspaper adverts.

The colour also plays an important role.

The layout and the text are also very important parts of newspaper adverts. The layout may take the readers look at the main information, and the text is just to inform interested people.

Print advertising is equally effective in creating an impact on the masses. But another problem that can arise is that it can address only the educated people. Even though there is a large section of people who indulge in reading newspapers or even simply browsing through the headlines and in the mean time they will take a look at the advertisement which will serve the purpose indeed. 

2.2.2 Outdoor Advertising

Another popular way of advertising is outdoor ads. It uses several different tools and techniques to attract the customers outdoor. The various types of outdoor advertising can be billboards, kiosks and several events organised by a company. The billboard advertising is the popular of all and grabs the maximum attention of the passers by. The kiosks promote the company’s products. The company’s can organize various events for publicising their product.

2.2.3 Broadcast advertising

Broadcast advertising includes television, radio and the internet. Anything that can be broadcasted using digital means to a large mass comes under broadcast advertising. It is a very popular advertising medium. Television advertising has been popular since the time television came into existence. The duration and the time of the ads decides the cost of the ads. It helps when you want to give a very detailed information of the product. They have proved to have more stonger impact as compared to the others. The radio lost its importance to the new age media but it still remains the choice of the small sc ale advertisers.

2.2.4 Celebrity advertising

The most effective way of influencing people is celebrity advertising Although a larger part of the audience has got immune to the varied claims made in a majority of advertisements, there is still a large part of costomers that still relies upon celebrities for advertising their products.

2.2.5 Public Service Advertising

The advertising for social cause is called public service advertising. Public service advertising is a technique that uses ads to effectively communicate to the general public and make them aware about matters like illiteracy, poverty, AIDS, energy conservation deforestation etc.

2.3 Importance of advertising

The main aim of any business is to maximize its sales resulting into a lot of revenue and profits for the company. Advertising helps in increasing the sales of any business. The second importance is that the product of a specific brand ends up becoming a household name. For example Coke or coca-cola is a house hold brand name. Same is the case of Pepsi. Such popular brand names have huge customer base that is loyal to the brand and continues to purchase the product for a prolonged time period. The craving to purchase and own a particular commodity only arises if people are aware about its existence. This can only happen if the product is advertised properly.

2.3.1 Importance of advertising in marketing

Advertising helps in gaining a good loyal customer base. It not only markets the brand but also conveys the financial details about the brand to the customer. The details of pricing often tend to generate an interest in a person’s mind. Discount offers often prove to be successful in advertising. Offers like buy 1 get 1 free prove to be quite instrumental for clearance sales etc and result into a spurt of sales. Hence, advertising plays a quite comprehensive role in marketing policies.

2.3.2 Importance of advertising in business

Advertising not only just optimizes sales and product promotion but also creates goodwill of the specific brand which is an important asset. A very well known brand not only creates a good customer base but also a good ground to introduce new products under the same banner. The probability of people to buy the new product out of curiosity is very high. Once a good reputation is gained, it helps the business throughout the life time. The effect of one cause leads to the other. Advertising leads to awareness. When people are aware of the product they tend to pay attention to its newer advertisements and the probability that the person will buy the product will increase. Hence, we can say that advertising helps business gain loyal customers as well as a good platform in the entire market. 

2.4 IMC

Integrated Marketing Communications (IMC) coordinates and integrates all marketing tools like avenues, functions and sources within a company into a seamless program that maximizes the impact on consumers and other end users at a minimal cost.

Marketing efforts incorporate marketing mix. The marketing mix consists of the four P’s of marketing viz product, place, price, promotion. Promotion activities can be done in a variety of ways like sales promotion, personal selling activities etc. It also includes internet marketing, direct marketing, database marketing and public relations. There are various levels of integration such as the horizontal, vertical, external, internal and data integration. They all help to strengthen integrated communications. Horizontal Integration occurs across the marketing mix and across business functions. On the other hand, External Integration,, requires external partners such as advertising and PR agencies to work closely together to deliver a single solution. Integrated marketing communications includes online and offline marketing channels. By online marketing channels we mean e-marketing campaigns, programs, podcast, internet radio, internet tv etc. Whereas, billboards, television traditional radio mail order, traditional print etc come under offline marketing channels. IMC is a data driven approach whose main focus is to identify consumer insights and to develop a strategy with the right combination of channels to build a strong brand consumer relationship

2.4.1 Importance of IMC

IMC requires a lot of efforts to ultimately deliver many benefits. It saves money, boosts the profits and sales of the company and creates a competitive advantage. It improves communications with the customer and helps them to move through the different stages of the buying process.

This ‘Relationship Marketing’ creates a strong bond of loyalty with the customers and helps in protecting them from inevitable competition. Retaining a customer for life proves to be a powerful competitive advantage. Because of its increased effectiveness, IMC helps in increasing profits.

 IMC can boost sales by stretching messages across several communications tools to create more avenues for customers to become aware, aroused, and ultimately, to make a purchase.

Finally, IMC helps in eliminating duplication in graphics and photography, which can be used in advertising, exhibitions and sales literature and thus saves money.

2.5 Testimonial advertising

Testimonial advertising can be defined as a promotional method in which one or more testimonials from satisfied customers are used.

It is a very effective form of advertising. It involves statement of men and women who are well and favourably known in the society to influence other people to buy the particular product. This is usually done by speaking good and favourable things about the product to prove the handiness of the product in use. It can be done through any form of media like print, radio, television etc. However television proves to be most successful because it involves both audio and visual components. Seeing the person use the product makes us believe more than just reading or hearing about it.

Very big companies use this type of advertising as a promotional method to increase their customer base and also their profits.

A few examples to testimonial advertising which proved to be very successful in the recent past are-

The “lalitaji” campaign used by Hindustan UniLiver, or the repositioning of lifebuoy, or the media strategy used by HLL for close-up, or the brand management strategy used by dabur for vatika, or horlicks by gsk, or the “desh ka namak” campaign for tata salt by HLL.

2.6 Importance of customer testimonials

To achieve desired behavioural response, marketers use influential marketing methods like the word of mouth communications etc. Customer reviews and testimonials prove to be very powerful when it comes to advertising and especially in case of FMCG sector. They offer a sense of security in the minds of new customers and build credibility. The most challenging task is to get your customers provide you the review which you are expecting. A good review by the customer or a good testimonial is beneficial to the customer in many ways.

2.7 FMCG industry

Fast Moving Consumer Goods (FMCG) goods are also known as consumer packaged goods. They range from soaps , detergents, household stuffs, accessories etc.

The items are usually the ones which come in handy in regular basis.the consumption of these products is very high and is still increasing day by day.

2.7.1 What is FMCG ??

FMCG products usually have a high turnover ratio. They are low to medium range products. It mainly deals with the marketing and distribution of consumer goods.

They are required by the consumer on daily basis and hence leads to high sales.

2.7.2 Common FMCG products

Some common FMCG product categories include food, glassware, paper , pharmaceuticals, consumer electronics, packaged food products, plastic goods, printing and stationery, household products, photography, drinks etc. And also soaps, shampoos, cells etc.

2.7.3 Major companies in FMCG

Hindustan Unilever Ltd

ITC

Dabur India

Nestle India

Cadbury India

Procter and gamble

Marico Industries

Britannia

CHAPTER 3

DATA COLLECTION

This report will be totally focusing on the FMCG companies’ preferences towards testimonial advertising and the effect and influence of testimonial advertising on the FMCG sector.

As the advertising techniques are used for the marketing of the product so the research will be done in the area of marketing.

3.1 Data sources

One of the major challenges in any research is the data collection. It is not only important to collect data but also to know how to use it. There can be two types of data which can be used in any survey

Primary data

Secondary data

Primary data is the information collected from original sources for the first time. Primary data is usually specific, relevant and is current. Its main disadvantage is its high cost and the amout of time takes.

Secondary data is information that already exits which was collected by somebody for other purposes and is now available to the researcher as a secondary source of information. It gives an overview of the market. Secondary data does not take as much time as primary data and involves less cost. Secondary data is usually collected from the documents like published articles and the Internet. But internet lacks reliability.

For this report I have taken secondary data sources as a data collection method.

3.1.1 Secondary Data Sources

A) Literature Review

To understand the general concept of advertising and how testimonial advertising is used in FMCG sector

B) Internet: to gather information regarding various types of companies in FMCG Sector.

C) Newspaper: it is a good medium for disseminating information to millions of people.

In Newspapers, one can see the advertisement of various FMCG products.

CHAPTER 4

ANALYSIS

4.1 SWOT analysis

The SWOT-model ( strengths, weaknesses, opportunity, threats) gives the internal strength and weaknesses of the company It also reflects the external factors from the market . The SWOT analysis can be described as follows

4.1.1 Strengths

Well known brands are present in FMCG sector.

Distribution network is good

Operational costs are low.

4.1.2 Weaknesses

Scope of investing in technology is low.

Duplication of products of well established brands.

Export levels are low.

4.1.3 Opportunities

High consumer goods spending

Untapped market (rural).

Domestic market is very large.

Purchasing power of consumer is increasing.

4.1.4 Threats

Import restrictions mite be removed from domestic brands

4.2 Case study

4.2.1 Lalitaji

Hindustan unilever launched “lalitaji” in the year a 1959. She was used for the endorsement of surf. Soon after the launch of lalitaji, surf became a synonym of detergents and powders. It remained the largest selling detergent powder for long time. Then came the launch of Nirma by Karsanbhai patel. To respond to the low priced nirma, they came up with a memorable advertising strategy. It featured a middle class housewife Kavita Choudhary.soon the lalitaji could ne identified by the people even on the streets. Overnight it gained importance. She could be seen in almost every role. Like a daughter, wife, neighbour, daughter in-law, mother. It taught us the difference between “sasti cheez ans asli cheez”. HLL’s main target was the middle class housewives. Lalitaji clearly portrayed a strong headed and strong willed character.

An ironic twist occurred and soon the common lalitaji became larger than the brand itself. But later in 1980’s Nirma also launced a similar figure called deepika ji.

HLL later launced surf ultra with lalitaji. And then the famous ad “dhoondh te reh jaoge” came in the picture.

Later in the 1990’s HLL was backed by surf excel. The lalitaji was now a working modern women. May be a lawyer, journalist, or a business women. What was retained was her spotless white garb.the inevitable stains was reassured by those who looked at her shopping bag surf excel hai na.

Lalitaji was gone but the brand clicked the segment et again.

The campaign reflected the changing role of Indian women. Surf hence became generic and many people refer to detergent as surf.

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Chapter 5

Conclusion

5.1 The future of FMCG

FMCG is expected to grow to Rs 400,000-crore industry by 2020. The consumption pattern of people has evolved rapidly in the past few years. The consumer’s are curious to experience what they have not experienced till now. The quest for the new still continues. The “needs” are soon getting replaced by the wants.

The FMCG sector witnessed robust year-on-year growth of approximately 11 per cent in the last decade, almost tripling in size from Rs 47,000 crore in 2000-01 to Rs 130,000 crore now.

5.2 Conclusion

Since the FMCG sector is expected to grow several folds in the coming years, advertising in this sector will prove to be fruitful for any company.

Sales are the lifeblood of any business. Without sales there would be no business. Therefore it is very important that if a business wants to succeed, it should have good sales. Advertising helps in increasing the sales of any product. Since testimonial advertising influences the people to a great extent and leaves an everlasting impression in the minds of the customer, it can prove to be a powerful tool for advertising.

It is important to study the consumer behaviour and their choices especially in FMCG industry because there are several brands as options for the customer. Since the financial risk is very low in this segment the consumers do not mind switching from one brand to the other. Hence it is very important for the marketer to know the ways of marketing and advertising its products properly.

Since, advertising forms such an important aspect of marketing, its study and understanding is very important.

Testimonial advertising have also helped in contributing to the improvements of the advertising strategies to a great extent.