Some big enterprises like HUL, Britannia, Dabur, Godrej Consumer and Colgate-Palmolive have contended that they will continue spending on marketing to ensure a higher brand which helps in recalling among consumers.
The most leading and Fast Moving Consumer Goods (FMCG) companies like Hindustan Unilever, Godrej Consumer, Britannia, Colgate-Palmolive India and Dabur India have any such plan on cutting back on ad spending because such inflationary pressure has even impacted volume growth.
Such searing inflation and the rising input costs have made the compulsion on FMCG companies to hike prices and reduce the pack size. This move has also impacted very well in the volumes of FMCG enterprises in Q1 of FY23. Nevertheless the ruinous effect on the volumes, i.e., the FMCG companies have not cut down on ad spending. In fact, most FMCG enterprises not only have asserted that they will not only continue spending on ads but also on marketing to ensure that they get higher brand recall among consumers. The FMCG giant The Hindustan Unilever increased its ad spending from 30% to Rs 1334 against Rs 1029 in the corresponding quarter during the previous fiscal.
While speaking to analysts, told that during the Q1 FY23 earnings call, Ritesh Tiwari, HUL CFO & Executive Director, Finance and IT told that the FMCG major will ensure that its brands will get proper and enough support to maintain a higher share of voice even ahead of its market share.
Sudhir Sitapati, the CEO & of Godrej Consumer Products Limited (GCPL) & MD said that the company’s ad spending increased despite its gross margins, which he feels is unconventional. He also said that they are going to do it sensibly as there is no point in just generally increasing the media as there are a lot of other things to go with; quality of communication, they have to see the return on media investment is, etc. He also thinks that they should show some commitment to their business regardless of gross margin and cost pressure. They feel that they will be continuing to invest. They have already seen green shoots and as they saw the return on investment of this media that plays up, it will become bigger and bigger as time goes on.
Sitapati also told that the ad spending will increase on QoQ by 150 bps which is a significant jump. It is relevant to note that GCPLadvertisement expenses jumped by 37% to Rs 201.39 crore in Q1 FY23 from Rs 147.19 crore in Q1 FY22. He also stated that A&P would try to be almost in the range of 17% to 18% and not more than that.
Follow and connect with us on Facebook, LinkedIn & Twitter
Hmm it looks like your site ate my first comment (it was extremely long) so I guess I’ll just sum it up what I had written and say, I’m thoroughly enjoying your blog. I too am an aspiring blog writer but I’m still new to everything. Do you have any tips for rookie blog writers? I’d really appreciate it.