Low Growth in Indian FMCG Goods

Aperio FMCG ConsultingIndian FMCG goods see low growth despite massive spend on advertising - is price cutting the right strategy?

In an article from the Economic Times (India) it was reported that despite high spend on advertising FMCG brands such as HUL, Dabur, Colgate Palmolive and others, saw low volume growth in the last quarter of 2012. And this is despite huge spends on advertising and promoting new products. And this trend was expected to continue in the first quarter of 2013.

It is clear that pressure on the consumer’s wallet has increased which contributed to a slowdown in consumer spending, especially in discretionary items, as well as increased competitive intensity.

Aperio FMCG - India sees low FMCG growthAs some brands have done, a short-term fix is to cut prices especially in premium categories, however is this the right strategy?

Also do companies in high-clutter categories continue to increase their spend to get customers to choose their brand over their peers? How do they get the balance right?

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