MxMIndia

Tag: FMCG

  • The slowdown may be a dampner, but there's some reason for cheer as 2011 comes to an end. All our yearerenders linked here.

    The MxMIndia LookBacks for 2011

     

    LookBack 2011 coordinated by Ritu Midha

     

    By Ritu Midha

    The year 2011 has been full of ups and downs for the global economy. While it started on an optimistic note, the projections have been revised downwards several times since.

     

    LOOKBACK 2011
    The Year in News Media (Ranjona Banerji)
    Middle India on overdrive (Nielsen report)
    Top TV & Print Spenders
    The Year for GECs
    The Year for News TV
    What creative & media agencies won
    People Movements
    The winnings
    Filmwallahs dominate endorsements
    11 Noteworthy Happenings (Tuhina Anand)

    India was no exception – though it was largely due to the global slowdown – the government’s foot-dragger approach to many a policy, and high inflation rate did not help the matters any.

     

    The slowdown has led to tightened purse strings, however as per a Nielsen report, ‘Global Online Consumer Confidence, Concerns and Spending Intentions – 3rd Quarter, 2011’:  consumer sentiment in India is the most optimistic in the world, for the seventh quarter in a row. (Data Source: Nielsen global consumer online confidence survey, Q3, 2011)

     

     

    Click here to download the report from Nielsen website

     

    As for the economy, in January, World Bank predicted that in the year 2012, India would grow at a pace of 8.7 per cent (and the oft-compared economy, China would grow at a slower pace of 8.4 per cent).

     

    There is too much water under the bridge since then, and current fiscal is now expected to show growth figures of around 7%, as per Fitch, the credit rating agency.

     

    However, hope is back for 2012, with credit rating agencies reaffirming India’s ratings in the fag end of 2011.

     

    Moody’s, in a recently released report, reaffirmed India’s sovereign rating at BAA3. Though it has added that growth downturn is likely to persist for two more quarters.

     

    As per data released by Fitch in December 2011, the economy is likely to grow by 7.5 per cent in 2012-13. Though, in the current fiscal it is likely to be around 7 per cent.

     

    Interestingly, the government’s forecast is 7.5 per cent growth in the current fiscal. In its mid-year review released in mid-December, the government revised the growth projection to 7.5 per cent from 9 per cent forecasted in the pre-Budget survey.

     

    Another good news coming at the end of the year is easing out of food inflation. The index stood at 1.81 per cent in the period up to December10, 2011, while in the previous week it was at 4.35 per cent. The reason behind the improved numbers is the fall in the prices of cereals and vegetables.

     

    Inflation, till now, has led to a sharp increase in raw material prices, hurting the FMCG companies. As a result, leading FMCG companies like Hindustan Unilever, Procter & Gamble, Reckitt Benckiser, Godrej Consumer Products, Marico and Dabur were compelled to increase their product prices.

     

    However, according to a report by FICCI, the Indian FMCG market is now expected to grow at rate of 10 per cent (current estimates: Rs 2,600 crore) over the next 10 years and reach a size of Rs 4,13,000 crore by 2015, which would further increase to Rs 6,65,000 crore by 2020. It is good news for media fraternity, as FMCG is their main stay.

     

    In this back drop, let us check growth expectations of the media industry. In the beginning of the year, KPMG had predicted that the industry size would grow to Rs 341 billion – an approximate growth of 16 per cent.

     

     

    Meanwhile, as per PricewaterhouseCoopers estimates, the entertainment and media (E&M) industry in 2010 stood at Rs 646 billion as compared to Rs 580.8 billion in 2009.  This was lower than the projected growth rate of 15.1 per cent for last year. The reason for lower growth rate was the decline witnessed in the film segment. The other two key industry segments: television (15.4 per cent growth as compared to 15.6 per cent projected) and print (10.7 per cent as compared to 8.5 per cent projected), showed good growth. As per the estimates, the E&M industry size would have been Rs 735 billion for 2011, but this does not look achievable now.

     

    In December, both Zenith Optimedia and group M indicated a sluggish growth for 2012 globally.

     

     

    As per Zenith Optimedia, global ad spending in major media will grow to $486 billion (4.7 per cent growth). It had earlier predicted a 5.3 per cent growth in 2012. However, Asia Pacific (excluding Japan) is expected to grow by an average 10.4 per cent a year and 33 per cent of the global growth is expected to come from the four Bric markets (Brazil, Russia, India, China).

     

    Group M, meanwhile expects a 6.4 per cent increase in global ad spending in 2012, As for 2011, it expected to show a 5 per cent increase in ad spends over 2010, to $490 billion.

     

    As for India, the experts believe that growth rate in 2011 would be in single digits, while Zenith Optimedia prediction of around 11% growth might hold true of 2012.

     

    Look out for the second part of our yearenders tomorrow

  • Claims by FMCG, educational institutions and health centres also on CCC radar

    ASCI’s Consumer Complaints Council upholds complaints against 17 out of 25 ads

    By A Correspondent

     

    During July and August 2011, the Consumer Complaints Council (CCC) of ASCI upheld complaints made against 17 advertisements from various sectors like Education, Health, FMCG and Restricted products. During the same timeframe, the CCC did not uphold complaints against 8 such advertisements.

     

    In a complaint received against the advertisement of Maruti Suzuki – Estilo Magic, the advertisement mentions the mileage of i10 (1.1) Era as “16 kmpl”, which is incorrect.  i10 (1.1) Era ARIA certified mileage is 19.8 kmpl. The CCC concluded that the data stated in the advertisement about the mileage of the competitor did not tally with the ARIA Certification and is false.

     

    There was a complaint relating to the advertisement of “Bata India – Think Weinbrenner, Think Outdoors.” As per the complaint, Bata had carried out a print campaign for Weinbrenner, wherein the copy read, “SMS Bata <space> <your e-mail id> to 58888 to win exclusive gifts”. Acting on the line, the complainant sent SMSes twice, but was never offered or sent any gifts. The CCC concluded that the statement, “SMS BATA…to win exclusive gifts”, was misleading as the advertisement did not state clearly all material conditions to enable the consumer to obtain a true and fair view of his prospects in such activities.

     

    A complaint was received against advertising communication of Hindustan Unilever – Pureit Water Purifier. As per the complaint, the commercials make a claim of “Pureit 1 Crore safety challenge”.  The CCC considered the technical proof provided by the advertiser and the complainant and concluded that whilst Pureit “meets USA’s EPA stringent germ-kill criteria”, it is not the only one to do so.  The claim, “It’s been 2 years and till date no purifier in India has been able to meet Pureit’s Safety challenge”, is misleading as this challenge was only against products launched prior to December 2009. Thus, the communication created a false impression that Pureit is the best water purifier.  This complaint was also upheld.

     

    In the education sector, there was a whole set of advertisement that received complaints. For T.I.M.E. – CAT’ 11/12, the claim “Largest student base: 1,30,000+ students trained for CAT’09 & CAT’10” was  rejected as the claim was not validated  by any third party nor the advertiser  had compared any data of other service providers in the same category. Also, the claim, “Best faculty team in Delhi – NCR”, was not supported by any comparative data. Another claim, “Best Results: 50%+ of students in the IIMs are from T.I.M.E.”, was neither validated nor supported with any independent data, and the claim was based on 2009 and 2010 data as mentioned in the advertisement. The CCC concluded that pending the validation of the data by independent auditors, the claims are misleading and hence upheld the complaint.

     

    Career  Launcher (I)  Ltd in one advertisement mentioned that,”4300+ IIM calls in CAT”10″, “CL scores: 4/8 100 % in CAT’10, FMS’10 & 11 Toppers, JMET’10 Topper”. These claims were not backed and substantiated with data/ evidence.  The CCC concluded that pending the validation of the data by independent auditors, the claims mentioned in the advertisement and cited in the complaint are misleading. The complaint was upheld

     

    The advertisement of Team Satyam claimed that “75+ Students and counting, in National Law Schools”, “95% of call getters from Lucknow are Clat Possible students”,  “5/5 NLU-Delhi call getters from Lucknow are Clat Possible students”, “3 NLSIU, 5 NALSAR, 7 NUJS, 8NLU-D  Students to National Law Schools”,  “40+ Students to National Law Schools”. The CCC concluded that pending the validation of the data by independent auditors, the claims mentioned in the advertisement and cited in the complaint, are misleading.  The advertisement contravened Chapter I.4 of the Code.  The complaint was UPHELD.

    A TVC of Greenply Industries Ltd. Greenlam Laminates showed “an old man going through the Catholic sacrament of baptism, and thereafter his funeral which shows a coffin made with Greenlam Laminates. The TVC is extremely offensive and mocks the Roman Catholic faith, by unnecessarily using sacraments to promote its product.  The CCC concluded that the TVC appeared to trivialize conversion and thus is likely to hurt religious sentiments. This complaint was upheld.

     

    Hindustan Unilever Ltd’s Dove Damage Therapy TVC claimed that Dove is the most recommended shampoo by Indian women”, is qualified by a super stating “Based on a study conducted amongst 400 women”.  It was stated that a base size of 400 is far too small to be used to support this claim and it also did not clarify the parameters for which the Dove shampoo is recommended. Also, the supers in the said advertisement are blurred and illegible. The print advertisement, TVC, and the hoardings contravened Chapter I.4 of the Code and the claims are misleading, hence the complaint was upheld.

     

    Procter & Gamble Home Products  Ltd’s -  New  Ariel  Oxyblu – Deep Clean Technology ad showed the removal of three difficult stains, namely ink, oil and tea by use of Ariel Oxyblu, whereas the claim support data mentioned in the super is for ink stains alone. The super reads “Creative visualization.  Based on technical test by independent laboratory (Prema Labs, 2011) tested on ink stain in three different layers of polyster fabric v/s ordinary powder.  It is clear from the same that the claims about removal of oil and tea stains are completely unsubstantiated. The CCC concluded that the claim read in conjunction with the visual depiction is misleading by implication.

     

    Pernod Ricard India Pvt Ltd, in its  TVC of Royal  Stag  – Mega  Cricket showed the visuals of the cricketer Harbhajan Singh on his first day in a ball bearing factory. He is shown saying, “Have I made it large?” As per the complaint, the TVC begins with the repeated use of the word “large”, which is normally referred to as a measure of liquor and by associating it with Royal Stag, which is a liquor brand, the TVC is an overt insinuation aimed at conjuring up the image of a liquor brand and therefore an indirect and surrogate advertisement for liquor. Despite having approvals from CBFC for using the slogan, the CCC concluded that the TVC uses the brand name and logo of a liquor product. The advertisement contravened Chapter III.6 (c) (d) of the ASCI Code. Also, as the TVC violated the Rule 7(2) (viii) (A) of The Cable Television Network Rules 1994, the TVC is in breach of the law and contravened Chapter III.4 of the ASCI Code.  The complaint was upheld.

     

    As per McDowell’s No.1 Platinum Soda advertisement which begins with the visuals of a Sikh boy resembling cricketer Harbhajan Singh shown sitting on a large ball and saying, “Have I made it large”.  Then they show the arrival of his father and upbraiding him for making a large ball instead of ball bearings. This is followed by cricketer Mahendra Singh Dhoni’s dialogue, which goes on to say, “Zindagi mein kuchh karna hai to large chhodo. Kuchh alag karo, yaar. McDowell’s No.1 Platinum Soda. No.1 Spirit of Leadership”.  The TVC is a clever ploy of capitalizing on the image of a liquor brand sought to be created in the TVC of “Royal Stag – Mega Cricket”, and then extrapolating it with another liquor brand “McDowell”.   The use of the word “Spirit” in its tag line further enhances the image of the liquor brand and therefore the TVC is an indirect and surrogate advertisement for liquor. The complaint was upheld.

     

    One of the Ford Figo advertisements stated that the “Ford Figo leaves its competition far behind”, and has made comparison of Figo Advantage with Hyundai i10 in terms of space and maintenance. The facts used in the advertisement were based on Ford’s internal Benchmarking study, and had no independent support. The advertisement was deemed as misleading the consumers by the CCC which concluded that the claims made in the advertisement were not substantiated on the basis of an independent survey.

     

    General Motors India Pvt. Ltd.’s TVC of Chevrolet Beat Diesel adopted the tagline of “India’s most fuel efficient car”, and have, with a view to mislead the consumers, tried to justify the same by relying upon a stray comment in an article published in ‘Autocar India’ of August 2011 issue, whereby the magazine by its own non-standard method tried to give a general sense to consumers of city driving fuel efficiency of the ‘Beat Diesel’.  The Beat Diesel advertisement uses the tagline which is same as that used by “Indica eV2” in their advertisement of being “India’s most fuel efficient car”.  This fuel efficiency claim is backed by ARAI who have certified ‘Indica eV2″. Apart from plagiarism, the advertisement is disparaging the ‘Indica eV2’. The CCC concluded that the claim was not backed by the data of ARAI. This part of the complaint was upheld.

     

    Titan’s Fast Track Watches advertisement showed a young woman taking off her innerwear (bra) from underneath her T-shirt and holding it out as if to discard it.  The advertisement is promoting a new offer of 20% off on watches. The advertisement is offensive to women, damaging young minds, and totally unrelated to the subject of the advertisement.   The CCC concluded that the depiction of the young woman is likely, in the light of generally prevailing standards of decency and propriety, to cause grave or widespread offence and hence the complaint was upheld.

     

    During these two months, the CCC also received complaints against Samsung ACs, Royal Hygiene Care Pvt Ltd’s She Comfort, Hindustan Unilever’s Pureit Marvella eWater Purifier, IMS  Learning  Resources  Pvt  Ltd, Hardcastle Restaurant’s McDonald’s, L’Oreal India’s Garneir Fructis, Hindustan Unilver’s Clinic All Clear and Tata Indicom amongst others as these advertisements did not contravene ASCI’s codes or guidelines.

     

     

  • FMCG, consumer durables prices rise on rupee volatility

    As the $ rises, pay more for FMCGs & white goods

    By A Correspondent

     

    The falling rupee is raising the heckles for consumers already grappling with rising food prices. Over the last few weeks several fast moving consumer goods companies and white goods makers have increased prices, citing the depreciating rupee. And, those left behind are also bracing for a hike.

     

    If you haven’t noticed it yet, telecom handset makers such as BlackBerry and HTC have already jacked up prices by around 5%. According to retailers, Nokia has also raised the prices by the same amount, but the company declined to comment. Godrej, LG Electronics and Whirlpool have increased prices by around 8%. Samsung is planning to raise smartphone prices by 3-5%, but when it comes to white goods, the Korean giants have already opted for a 2-5% increase for refrigerators, washing machines and microwave ovens. Godrej Consumer Products, Dabur, Panasonic will follow suit, company executives said.

     

    While demand is not rising significantly, most companies say they can no longer absorb the lower margins on account of higher commodity prices. Although metal prices have declined internationally in recent weeks, the falling rupee has eroded the gains. Since the beginning of August, when the rupee was a little short of the 45-mark against the dollar, the Indian currency fell to a low of 52.73, a decline of nearly 18%. On Monday, the rupee closed 51.42, but even this is 15% lower than the level seen four months ago.

     

    Source: The Economic Times

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