CHAPTER - I

INTRODUCTION

S. No. CONTENTS
1 Introduction

1.1 ResearchBackground

1.2 FMCG

1.3.1 CountryProfile:India

1.3.2 IndianFMCGMarketOverview

1.3.4 SelectedFMCGbrandsincontextofthisResearch

1.3.5 RationaleofselectingFMCGsector

1.4 MarketingStrategies
1.5 Promotion
1.6 Brand

1.6.1 BrandStretch

1.7 Organizationo

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 Chapter1

Introduction

Thechapteroutlinestheresearchbackground,therationalefortheresearch,fast
movingconsumergoodsmarketcontext,IndianFMCGMarketoverview,basics of
Marketing strategies, Promotion, brand, brand Stretch and organization of
thesis.

1.1ResearchBackground

“Research is like motorway lights; it can’t tell you where to go but it can
reduce the riskin howyouget there”.“Research isformalized curiosity,itis
poking and prying with a purpose”- Zora Neale Hurston. This research is very
muchanoutcomeofmycuriosityaboutmarketingdynamics,aboutwhycertain
brandstretchesexcelandothersjustfailtocopeup?Isitnecessaryforamarketer
tobuildacompletenewsupportforanewproductlaunchorcanhe/sheleverage
thecurrentsuccessandrideonitandmanysuchrelatedquestions.Fordecades,
researchers have been involved in studying Brands and finding answers to the
question of "why some Brands achieve higher performance than other?”The
overwhelminginterestofacademicresearchersinthisquestionresultedinarich but
fragmented research that presents some paradigms that claim to be the answer
to the question.

Different factors contribute to the fragmentation and richness of the marketing

literature on this issue. Hofer and Schendel (1985) highlight this complexity by
pointingoutthelargenumberofvariablesthatcanhaveapotentialinfluenceon
Brand's performance.

Aaker(1991)isofthe viewthatestablishingandmanaging brandshouldnotbe taken

to be the core operating target for most industries but should also be seen as a
source of competitiveness. In other words, value is added to a brand when the
brand is able to compete successfully with other brands.

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In today’s cut throat brand war environment where the customer has got
remarkable options for choosing brands, it is a very demanding mission for a
marketertodrawnewandholdontotheoldcustomer-base.Toachievethisgoal
themarketerusesvarioustypesofmarketingstrategiestoplacetheirofferingin
thementalframeworkofthecustomerandsetuptheirpositivebrandreputation in the
market.

Marketing strategies is a process or model to allow a company or organization

tofocuslimitedresourcesonthebestopportunities,toincreasesalesandthereby
achieve a sustainable competitive advantage, Kazoo Associates. The marketer
should discover what the consumers desire to buy and are ready to pay up to
what extent. This can be done through effective research by studying the
Markets, trends, consumer preferences, tastes, likes, dislikes and also past data
like the success factor so related brands, studying the competitors, being aware
ofsalesnumbersofsimilarandrelatedproducts,marketshares,emptyspacesin
Market and many other factors. After understanding the Market, the marketer
willbeabletobuildabetterproductandsubsequentlyabetterbrandbyeffective
positioning.Whatpossiblyintheworldwouldbebetterthanbearingfruitsofan
already sown tree rather that planting a new one altogether, in other words why
not use your existing, already established brand instead of establishing a new
one. This is when Brand stretch comes into picture, marketers are preferring
Brandextensionsovernewlaunchesasnotonlyitsavesthemalotofcost,time,
effortandotherresourcesbutalsoithelpsthemtocaptureahighermarketshare:
“ABrandStretchhasfivetimesmorelikelihoodofsuccesscomparedtoallnew
launches”: Neilson featured insights,2013.

Extending brands have become increasingly important in the last decade of

consumerism as new product launches have gone up substantially. Moreover, a
weak economic environment and inflationary pressures are forcing CEOs and
marketers to come up with innovative ways and means to search for profitable
growth.ANielsensurveyacrossasampleofIndiaInc.hasfoundthatmarketers
havetodayrealizedthathavingfewerbutlargerbrandsmakesalotmore

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business sense. This shift is visible as many companies have caught the brand
stretching bug, seeing it as a cheaper and less risky way compared to creating
new brands. It also suggests that stronger parent Brands Beget stronger spin –
offs and also that stretches are more successful in highly fragmented categories
insteadofbroaderones.ItevenstatesthatstrongerparentBrandsBegetstronger spin –
offs.

But Market history has also seen many successful Names failing terribly in lieu
of chasing this convenient, leveraging option: like: Dabur’s Real Milk shakes,
Rasna’scarbonatedfruitjuicesorDoveFacialcleanser,Dovefacialmoisturizer,
Dove hair serum , to name a few. So what is it that makes an extension click or
fade?Inthisstudy,aneffortismadetodiscoverthevariousaspectsthattheeffect the
success or failure of Extensions in the marketplace and also to try to device a
standard Model for marketers so they can venture out to brand extensions
successfully.

Conclusively speaking Brand stretching can prove to be the most efficient and
effectivewaytolaunchnewproductandservicesbyandestablishedbrand,only
whendonevigilantly.Thusthestudyaimsatidentifyingthosefactorswhichwill
affectthesuccessofextensionsandtofurthermakethestudymorefocused,the study
would delve into promotion aspect primarily.

FMCG
FMCG industry synonymously also known as CPG (Consumer packaged
goods) industry largely deals with production, distribution and marketing of
consumerpackagedgoods.TheFastMovingConsumerGoods(FMCG)isthose
products which are regularly consumed by the consumers at a frequent interval
like: shampoos, crème, washing powder, tooth paste, etc. Key activities of
FMCG sector are selling, marketing, financing, purchasing, etc. The sector is
also engaged in operations, supply chain, production and general management.
Broadlyspeakingconsumerproductsaredividedintofourcategoriesonthebasis of
various purchasing behavior of the consumers, namely:

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 1. Convenienceproducts
2. Shoppingproducts
3. Specialtyproducts
4. Unsoughtproducts.
Convenience product: The products or services which are purchased very
frequently, instantaneouslyand withouta lot ofcomparison orbuyingeffortfor
eg:laundrydetergents, fastfood, sugar and magazines.Theyaregenerallylow-
priced and distributed extensively to make them available whenever needed by
consumers.
Shoppingproducts:Theproductsorserviceswhichtheconsumercompareson
various aspects such as price, quality, style etc and then selects thus spending
moretimeandeffortcomeunderthistype,foreg:furniture,usedcars,clothing,
, airline services etc. This category needs more sale support and limited outlets
also suffice.
Specialty products: Consumer products with unique characteristics or Brand
recognition fall under this category where in the consumer make special effort
forexample:specificcars,professionalandhigh-pricesphotographicequipment,
designer clothes etc. A perfect example for these types of consumer products is
Ferrari.
Unsought products: products about which the consumer does not know or in
general doesn’t think of buying. Such products are purchased mostly due to
dangerorthefearofdangerandlackofdesire.Thetypicalexamplesofunsought
goodsare funeral services, encyclopedias, fire extinguishers and reference
books.
FMCGfallsunderthefirstcategoryofconsumerproductsthatistheconvenience
productandasthenatureofthecategorysuggests:itneedsextensive marketing
support , supply network and support.

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FMCGgoodscanbefurtherdividedintothree categories:
 Staplegoods:Thosegoodsthatareboughtregularlysuchasbread,milk, sugar,
rice, etc
 Impulsegoods:Thosegoodsthatneednoadvancepurchaseplanningand are
bought out of stimuli like: candy, snacks, newspapers, etc.
 Emergency goods: These goods are essential consumables that are
generally purchased quickly in case of emergency such as candles,
lighters, umbrellas, batteries, flashlights.
In context of Market, FMCG goods are divided into below given
categories as shown in the graph:

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TheFMCG sector has scaled up from US$ 31.6 billion in2011 to US$52.75
billion in 2017-2018. The sector is further anticipated to grow at a Compound
Annual Growth Rate (CAGR) of 27.86 per cent to reach US$ 103.7 billion by
2020. The sector is projected to grow 11-12 per cent in 2019.

CommonFMCGproducts
Foodanddairyproducts,glassware,paperproducts,pharmaceuticals,consumer
electronics, packaged food products, plastic goods, printing and stationery,
household products, photography, drinks etc. are examples of common FMCG
product categories and coffee, tea, dry cells, greeting cards, gifts, detergents,
tobacco and cigarettes, watches, soaps ,shampoos etc are examples of common
FMCG products.

LeadingFMCGcompanies

Nestle, Jhonson & Jhonson, Procter & Gamble, Pepsi,Unilever, AB InBev,

Coca Cola,JBS, Phillip Morris andL'Oreal are the TOP 10 companies
internationally in FMCG sector. InIndian Market , the popular FMCG
companies are as follows: HUL, Marico, Patanjali, P& G, ITC, Parle Agro,
Dabur, Nestle, ReckittBenckiser, Britania , etc.

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 CountryProfile:India

Indiaistheworld'slargestdemocracyand,accordingtoBBC,itisemerging as a
rising economic powerhouse , India has become known as an important
regionalpower.Butatthesametimeitisalsofacinghuge,social,economicand
environmental problems.
India has been home to a number of the world's most ancient surviving
civilizations,theIndiansubcontinent-fromthemountainousAfghanfrontierto the
jungles of Burma and the coral reefs of the Indian Ocean –Indiais both
enormous and diverse in terms of people, language and cultural traditions.

Republicof India
Capital:NewDelhi
 Population1.3billion
 Area3.1millionsqkm(1.2millionsqmiles),excludingKashmir
 MajorlanguagesHindi,Englishandmorethan20otherofficiallanguages
 MajorreligionsHinduism,Islam,Christianity,Sikhism,Buddhism
 Lifeexpectancy67years(men),70years(women)
 CurrencyRupee

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 IndiaasalucrativeinvestmentDestination:

Incomes have augmented at a fast pace in India and will continue so given the
country’sstrongeconomicdevelopmentprospects.Percapitaincomeisexpected
togrow ata CAGR of 4.94per cent during 2010-19F.

 India'sGDPpercapitaatCurrentpricesisexpectedtoincreaseformUS$
1,481.56 in 2012 to US$ 3,273.85 in 2023.

 AnimportantConsequenceofrisingincomesisgrowingappetitefor premium
products, primarily in the urban segment.

 Astheproportionof'workingagepopulation'intotalpopulation increases,
per capita income and GDP are expected to surge.

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Source:IMFWorldEconomicOutlookDatabaseApril2018

POLICYANDREGULATORYFRAMEWORK

UnionBudget

The standard deduction of Rs 40,000 (US$ 618) on account of transport

allowance and reimbursement of various medical expenses will amplify the
disposable income with common public. The imposing of customs duty on
importofFMCGproductssuchasshavingandafter-shavelotions,fruitand

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vegetable juices, edible oils of vegetable origin will lead to a rise in domestic
sector.

GST

GST reforms have positively changed the picture of FMCG sector. Major
productiongiantsofcommercialgoodssectorarerestructuringtheirsupplychain
mechanisms, warehousing arrangements and Information technology
infrastructureinlinewiththeGSTscheduleinordertoensuresmoothandhassle free
interstate movement of products. PepsiCo, HUL, Dabur, Marico, are few such
companies which have realigned their systems as per GST.

The Modern retail stores have witnessed a price drop onFMCGitemsupto3-8

percent as an after effect of GST implementation, Goods like detergents, soaps,
shampoos, quick foods, biscuits, snacks etc are the ones to enjoy price slump.
TheGSTisabouttoimproviselogisticsintheFMCGsectorintoacontemporary
andcompetentmodelasallmajorcorporationsarerestructuringtheiroperations into
larger warehousing and supply chains.

An estimated drop of 25-30 percent is expected in the warehousing cost of

FMCGcompaniesinlightofthenewGSTRegimeanditsimplementation.The
sizesofthewarehouseswillincreaseandthenumberswilldecreasedramatically
from45-50to25-30,resultingincostreduction.ManyoftheFMCGitemshave
benefitted drastically as their tax slabs have tumbled down to 18 percent which
were 23-24 per cent earlier; Hair oil, soap, tooth paste are few such products.

FSB:FoodSafetyBill

FSBwoulddecreasepricesoffoodgrainsinfavorofBelowPovertyLine(BPL)
households, enabling them to spend income on other goods and services,
counting FMCG products. This is anticipated to elicit higher consumption
expenditure, predominantly in rural India, which is an imperative market for
manyFMCGcompanies.Therehasbeenanincreasingtrendnoticedabout

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inclination of rural publics towards FMCG items which will further get a boost
with this bill.

FDI:ForeignDirectInvestment

The government approved 100 percent FDI in Cash and carry segment and in
singlebrandretail,also51percentFDIinmulti-brandretailin2006,whichwill further
enhance the emerging organized retail market in the country.

Source:DIPPandmediaarticles

100 per cent FDI is permissible in food processing and single-brand retail and
up to 51 per cent in the category of multi-brand retail.This will boost
employment and logistics, and also give high visibility for FMCG brands in
organized retail markets, increasing consumer spending and encourage more
product launches. As seen in the graph the sector observered vigorous FDI
inflowsofUS$13.99billionfortheperiodofApril2000toSeptember2018.

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Food processing, being the largest recipient; its share amounting to 63.13 per
cent.Investmentintents,relatedtoFMCGsector,arisingfrompaperpulp,sugar,
fermentation, food processing, vegetable oils and vanaspathi, soaps, cosmetics
and toiletries industries, worth Rs 198.88 billion (US$ 2.76 billion) were
implemented between January–November 2018.

SelfEmploymentandTalentUtilization(SETU)
GovernmenthasstartedSelfEmploymentandTalentUtilization(SETU)scheme
toencourageyoungentrepreneurs.US$163.73millionhavebeeninvestedunder this
scheme. SETU Scheme Source: SBI

Relaxationoflicenserules
Industrial license is not necessary for almost all food and agro-processing
industries, excluding certain products such as beer, potable alcohol and wines,
canesugarandhydrogenatedanimalfatsandoilsaswellasitemsheldinreserve for
exclusive produce in the small-scale sector only.

13.2IndianFMCGMarketOverview
FMCGstandsonthe4thpedestalamongstsectorsintheIndianeconomy.India's
householdandpersonalcareistheleadingsegment,accordingfor50percentof
theoverallmarket.healthcare(31percent)andfoodandbeverages(19percent) comes
next in terms of market share. Growing awareness, easier access and
changinglifestyleshavebeenthekeygrowthdriversforthesector.Thenumber
ofonlineusersinIndiaislikelytocross850millionby2025.InApril2018,Mr.
AcharyaBalkrishna,CEOofPatanjaliannouncedthatthecompanyisgenerating
Rs.10-15crore(US$14,916.47–23,274.70million)throughitsonlinebusiness.
RetailmarketinIndiaisaestimatedtoreachUS$1.1trillionby2020fromUS$ 840
billion in 2017, with modern trade expected to grow at 20 per cent -25 per
centperannum,whichislikelytoboostrevenuesofFMCGcompanies.In2018, e-
commerce segment contribution is projected to be around 1.3 per cent of the
overall branded packaged.

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Source:IndianBrandEquityFoundation,2018

AchievementsbygovernmentinFMCG

Followingaretheaccomplishmentsofthegovernmentinthepastfouryears (2014-
2018):

 Number of mega food parks ready amplified from 2 between 2008-14 to

13 between 2014-18.

 Preservationandprocessingcapacityimprovedfrom308,000during 2008-
14 to 1.41 million during 2014-18.

 Thequantityoffoodlabsaugmentedfrom31during2008-14to42during
2014-18.

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Source:EconomicTimes

UrbanMarketAccountsForMajorPortionOf Revenues
Urban segment accounts for a revenue share of around 55 per cent, the largest
contributor to the overall revenue breed by the FMCG sector in India. Rural
segment is rising at a fast pace and accounts for a revenue share of 45 per cent
in the overall revenues of FMCG sector in India. 50 percent of the total rural
spending is on FMCG products. In the past years, the rate of growth of rural
Indian market is higher than that of urban India. In 2018-19, revenues from the
rural sector are further expected to raise up to 15-16 per cent and probably then
willcrossthemarketspacecoverageofurbanmarkets.Requirementsforquality
products have risen up in rural areas of India, on the grounds of improved
distribution channels of manufacturing and FMCG companies.FMCG urban
sector is anticipated to have a stable revenue growth at 8 per cent in FY19.

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Source:BCG,KPMG-indiaretailing.com,DeloitteReport,WinninginIndia’sRetailSector,
CRISIL, State Bank of India, CRISIL report.

RuralSegment on The Rise

In FY18 rural India shares 45 per cent of the total Indian FMCG market. Rural
income amounts to around US$ 572 billion currently and is expected to reach
US$1.8trillionbyFY21.India’sruralpercapitadisposableincomeisestimated to
increase at a CAGR of 4.4 per cent to US$ 631 by 2020. With the rising
income levels, there is the sharp trend upwards of increase in expenditure, in
ruralareas.TheFastMovingConsumerGoods(FMCG)sectorinruralandsemi-
urban India is estimated to cross US$ 220 billion by 2025. The revenue of
FMCG’s rural sector is projected to grow to 15- 16 per cent in FY19 from
probable 10 per cent in FY18.

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Note:F-Forecast,2018*-DatarelatestothefinancialyearFY18
Source:ACNielsen,DaburReports,GodrejGroup,McKinseyGlobalInstitute,CRISIL

CatalystsforFMCG growthinIndia:

ShifttoorganizedMarkets:-Organizedsectorgrowthisexpectedtogrowasthe share
of unorganized market in the FMCG sector fall with increased level of brand
consciousness. Growth in modern retail will augment the growth of organized
FMCG sector.Post GST and demonetization, modern trade share grew to 10 per
cent of the overall FMCG revenue, as of August 2018.

Increasedpenetration: Lowpenetrationlevelsofbrandedproductsincategories like

instant foods indicating a scope for volume growth  Investment in this
sectorattractsinvestorsastheFMCGproductshavedemandthroughouttheyear.

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GrowingOnlineUsersBoostupOnlineFMCGSales
India’s growing internet infiltration, intensifying digital ripeness along with
developing infrastructure has helped enhance online transactions. The online
FMCGmarketisforecastedtoreachUS$45billionin2020fromUS$20billion in
2017, backed by increase in online users from 90 million in 2017 to 200
millionin2020E.By2020,about40percentofFMCGexpenditureisestimated to be
digitally effected.

Note:EisEstimatedSource:GoogleandBCGreport

Easyaccess:AvailabilityofFMCGgoodshasbecomewaymoreconvenientas
internet and various channels of sales has made the ease of access of desired
producttocustomersmoreaccessibleatrequiredtimeandplace.Onlinegrocery
stores and online retail stores like Grofers, Flipkart, Amazon making the goods
more eagerly available .

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Increased penetration: Rural expenditure has increased, led by amalgamation
of rising incomes and elevated aspiration levels, there is an augmented demand
forbranded productsin ruralIndiathusIndiahasahugeuntappedruralmarket.

KeyMergersandAcquisitionsintheFMCGSector

1.3.3SelectedFMCGbrandsincontextofthisResearch

1.Parachute:Marico
Marico Limited is one of India's foremost FMCG companies operating in the
beauty and wellness space. Currently operating in 25 countries across budding
markets of Asia and Africa, Marico has fostered many brands in the categories
ofhaircare,skincare,edibleoils,healthfoods,malegrooming,andfabriccare.
Marico's India business markets hold brands such as Parachute, Parachute
Advansed,Saffola,Hair&Care,Nihar,NiharNaturals,Livon,SetWet,Mediker
andReviveamongothersthataddvaluetothelifeof1inevery3Indians.The

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International business contain unique brands such as Parachute, HairCode,
Fiancée, Civil, Hercules, Black Chic, Isoplus, Code 10, Ingwe, X-Men and
ThuanPhatthatarecustomizedlocallytofulfillthelifestylerequirementsofour
international consumers. Charting an annual turnover of INR 63 billion
(Financial Year 2017 - 2018) across our assortment. A market leader in its
categoryandoneofouroldestbrands,ParachuteCoconutOiltodaystandsfor purity
and quality. Over the years, the brand has seen a lot of advancements in
packaging, sizing and tamper-proofing. Parachute enjoys massive loyalty in
urban,semi-urbanandruralmarket.ParachuteAdvancedBodyLotionhasbeen
skillfully developed with a advance formulation having 100% natural
moisturizers Parachute Advanced Body Lotion is currently available in the
followingvariants:ParachuteAdvancedSoftTouch,ParachuteAdvancedDeep
Nourish, Parachute Advanced Refresh (2012),Parachute Advanced Butter
Smooth Parachute Summer Refresh Lotion Spray.

Safola, /Marico: Saffola, another Marico family brand is a health care brand
whichhasarangeofeverydayhealthyFoodsandServices.Saffolaearlierhada
rangeofhealthyheartoilsonlythenitstretcheditswingsinthecategoryofoats. Saffola
Masala Oats are flavored along with real vegetables and masalas.

Dove,HUL:
DoveisabrandofHindustanUnileverinIndia,ithasitsexistencein80countries across
the world, with a range of superior products from bar, lotions, body washes,
face careandcreams.It isone of thetopsoap bar brandinUK,USand Canada, it is
also the fastest growing brand in hair care sector, in India. HUL is having its
hold from past eighty years in India, Ninety percent of Indian households use
HUL products in some or the other way.

Ithasoverthirtyfivebrandsintwentydifferentproductcategorieslike:assoaps,
detergents,shampoos,skincare,toothpastes,deodorants,cosmetics,tea,coffee,
packaged foods, ice cream, and water purifiers, the Company is a part of the
everydaylifeofmillionsofconsumersacrossIndia.Itsportfolioincludesleading

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householdbrandssuchasLux,Lifebuoy,SurfExcel,Rin,Wheel,Fair&Lovely,
Pond’s,Vaseline,Lakmé,Dove,ClinicPlus,Sunsilk,Pepsodent,Closeup,Axe,
BrookeBond,Bru,Knorr,Kissan,KwalityWall’sandPureit.TheCompanyhas about
18,000 employees and has a sales of INR 34619 crores (financial year 2017-
18).HULisasubsidiaryofUnilever,oneoftheworld’sleadingsuppliers
ofFood,HomeCare,PersonalCareandRefreshmentproductswithsalesinover
190countriesandanannualsalesturnoverof€53.7billionin2017.Unileverhas over
67% shareholding in HUL.

- MAGGI Cup-a-licious Soups are the range of single serve soups in

Instant Format. Each flavour of MAGGI Cup-a-licious Soups, while
retaining the classic taste, has a contemporary
twist that makes it truly unique. MAGGI Cup-a-licious Soups are
available in the following 6 unique flavours:
- TomatoMargherita
- WinterVegetableswithGinger
- VegetablewithChilliPepper
- GreenPeawithCoriander
- DalShorbawithRoastedGarlic
- CreamofCornwithPepper

Daburgulabaricrème

Dabur India Ltd is one of India’s leading FMCG Companies with Revenues of
overRs7,680Crore&MarketCapitalisationofoverRs48,800Crore.Building on a
legacy of quality and experience of over 133 years, Dabur is today India’s
MostTrustedNameandtheWorld’sLargestAyurvedicandNaturalHealthCare
Company.

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Bournvita

Bournvita is our core product and we wanted to leverage its competitive

advantageinthebiscuitsegment,informedChellaPandyan,AssociateDirector,
Marketing, Biscuits India and Kids Fuel AP, Mondelez India. Mondelez India
on Tuesday launched its second biscuit brand Cadbury Bournvita Biscuits in
India. Bournvita is our core product and we wanted to leverage its competitive
advantageinthebiscuitsegment,informedChellaPandyan,AssociateDirector,
Marketing,BiscuitsIndiaandKidsFuelAP,MondelezIndia.BournvitaBiscuits is
the company's second brand in the biscuits category after Oreo, which was
launched five years back, in 2011.

Santoor

WiproConsumerCarebusinessincludessoaps,toiletries,personalcareproducts, baby
care products, wellness products, electrical wire devices, domestic and
commercial lighting and modular office furniture. We have a strong brand
presence with significant market share in identified segments. In addition, we
have a strong presence in the personal care and skin care products market in
South-East Asia and Middle-East.

Wipro Consumer Care organic growth has been led by growth in toilet soaps,
domestic and institutional lighting and office furniture. It has gained Global
footprint with acquisition of Unza, Yardleyand LD Waxsons. The key brands
include – Santoor (a Toilet soap brand with extensions in talcum powder,
Handwash,Facewash,BodyLotion,BabySoapandShampoo),Chandrikasoap,
Glucovita Glucose powder, Northwest Switches, Enchanteur (a female toiletry
brand), Romano (a male toiletry brand), Bio Essence (a skincare brand) and
Yardley (a luxury toiletry brand).

Lifeboy

Unilever,LifebuoystartedwithWilliamLever'sgoaltostopcholerainVictorian
England.Overthepast century,we’reevolved intotheworld's#1sellinggerms
protectionsoapandaworldwideleaderbringingbetterhealthandhygieneto

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billions.keepgermsatbaywiththis'on-the-go'packofLifebuoyHandSanitizer
-Total10variant.ItisenrichedwithMoisturizersandVitaminEthatleaveyour hands
99.99%* germ free. Lifebuoy Sanitizer is in gel form and it leaves your
handsfeelingsoft,freshandsmooth.ThisLifebuoyHandSanitizerisconvenient to
carry and can be placed on your pocket, bag or purse for convenience.

Patanjali:

Patanjali Ayurved Limited produces quality Herbomineral preparations. To

monitor quality, the Divya Yog Mandir Trust and Patanjali Yog Peeth grow
many endangered herbs on its farmland. The principles of Good Manufacturing
Practices(GMP)arerigorouslyfollowedintheplantand Companypridesitself on
being environment friendly. Patanjali Cashew cookies are made from cow's
milkbutterand100%wholewheatatta.Ithaszeropercentmaidaand Trans-fat which
makes it healthy and nutritious.

Veet
Veet, formerly called Neet and Immac, is a Canadian brand of chemical
depilatoryinternationallysoldproductsmanufacturedby
ReckittBenckiserCompany. Hair removal creams, mousses and gels, and
waxes are produced under this brand. It has previously created similar products
under the names Neet and Immac.

These were certain brands selected to do the study and understand the stretch
market better. All of them are leading and most known brands to most of the
Indian users of FMCG products. Their study would definitely help us to get a
clear reflection of the Market trends and would also help us to understand the
stretch architecture thoroughly.

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13.4RationaleofselectingFMCGsector

Favorable demographics and rise in income level to boost FMCG market. It is

expected to grow manifolds on the given fronts.

FMCGmarketinIndiaisexpectedtogrowataCAGRof27.86percentandis expected to
reach US$ 103.70 billion by 2020 from US$ 52.75 billion in FY18.

Final consumption expenditure is expected to reach nearly US$ 3.6 trillion by 2020
from US$ 1.82 trillion in 2017.

Final consumption expenditure is set to increase at a CAGR of 25.44 per cent from
2017-2021.

RiseinruralconsumptiontodrivetheFMCGmarket

InFY18,Ruralconsumptionroseby9.7percent.

The rural FMCGmarketinIndiais expectedtogrow toUS$220.00 billionby2025 from

US$ 23.63 billion in FY18.

RevenuesofFMCGsectorreachedRs3.4lakhcrore(US$52.8billion)inFY18and are
estimated to reach US$ 103.7 billion in 2020F. The sector is projected to grow 11-
12 per cent in 2019.

Income.It is forecasted togrowat12-13per centbetween September-December 2018.

TheUnionBudget2019-20initiativestoincreaseconsumerspendingamongmiddle
classareexpectedtoboostconsumerconfidenceandimprovedemandgenerationfor

brandedconsumerproducts

FMCG sector to gain support for growth from Inland Waterways Authority of India
(IWAI) multi-modal transportation project of freight village at Varanasi which will
bringtogetherretailers,warehouseoperatorsandlogisticsserviceproviders,
investmentworthRs1.7billion(US$25.35million)

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Note:F–Forecast,*-FY18Source:Dabur,ACNielsen,Euromonitor International, ICICI
securities, Nielsen India

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GrowthopportunitiesintheIndianFMCG industry

As evident from the above data and figures FMCG is a very lucrative,
progressive and encouraging sector of Indian economy and government is also
taking many measures to accelerated growth in this sector. Hence it is
worthwhiletogoaheadanddosomeresearchinthissectorasitwillbenefit

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manyandwillcontributeasacatalystinthisevergrowingsectoroffastmoving
consumer goods.

Marketingstrategies

Marketingstrategyformulationistheproceduretodescribemajormarketingobjectives
offirm.Thisfacilitatesformulatorstodevelopaguide.Theyscrutinizethemarketand with
relevant information, strategy makers determine what marketing approaches will be
effective to approach clients and attract them to look for business services. Marketing
strategy development often takes place within teams. The use of teams within
organizations charged with new product development has proven to be a
significantresourceforthedevelopmentofstrategicoutcomes(BharadwajandMenon
2004).Teamsofferorganizationsthewaytoaccomplishlearningandcreativity,aswell as
knowledge distribution throughout the organization.

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 Figure1.1Marketing Strategy

Marketing strategy, therefore, has three interdependent parts: segmenting

markets into groups that can be served, ways of developing advantageous
relations with those customers, and strategies to handle competitors.
Segmentation and positioning Customers are people, so differ considerably.
Companies know that they cannot satisfy all consumers in a given market – at
least,notallconsumersinthesameway.Therearetoomanykindsofconsumer with
too many kinds of need, and some companies are in a better position than
others to serve some groups of customers better. Consequently, companies use
market segmentation to divide the total market. They then choose market
segments and design strategies for profitably serving chosen segments. This
process involves market segmentation, targeting and positioning.

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From the complexity of humans, it follows that there are many ways in which
markets segment, and finding a new way of segmenting markets or a new
segment can be the breakthrough that creates a market success. Simple criteria,
likeage,genderandsocialclass,dolittletoinformmarketers,sinceevenamong
middle-class teenage boys there is a huge variety in interest: sporty football
fanatics, video junkies, punk musicians, etc. Only multi criteria approaches
reveal segments such as GUPPYs (gay urban professionals), high-spending
groups who start and nurture many new trends in music, fashion and
entertainment and whose presence in a community is a measure of its creative
potential. Market targeting involves evaluating each market segment’s
attractiveness and selecting one or more segments to enter.

Anorganizationevaluatesitsstrengthsrelativetothecompetitionandconsiders
howmanysegmentsit canserveeffectively.Finally,marketpositioninggivesa
productaclear,distinctiveanddesirableplace intheminds oftargetconsumers
comparedwithcompetingproducts.Aproduct’spositionistheplacetheproduct
occupiesinconsumers’minds.Ifaproductisperceivedtobeexactlylikeanother
product on the market, consumers would have no reason to buy it. Market
positioning can be the key to success, such as a toy shop being marketed as the
EarlyLearningCentre.Clearly,suchanofferinghastobemorethanjustaname. To
appeal to parents and their children, the store concentrates on educational toys
and books, avoiding heavily merchandised (Barbie or Disney products) or
electrical toys. The company can position a product on only one important
differentiating factor or on several. However, positioning on too many factors
can result in consumer confusion or disbelief. Once the company has chosen a
desired position, it must take steps to deliver and communicate that position to
target consumers.

Market segmentation— dividing a market into distinct groups of buyers with

differentneeds,characteristicsorbehavior,whomightrequireseparateproducts or
marketing mixes. Market segment—A group of consumers who respond in a
similar way to a given set of marketing stimuli.

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Market targeting— the process of evaluating each market segment’s
attractivenessandselectingoneormoresegmentstoenter.Marketpositioning—
arrangingforaproducttooccupyaclear,distinctiveanddesirableplacerelative to
competing products in the minds of target consumers. Formulating competitive
positioning for a product and a detailed marketing mix.

Product’s position—The way the product is defined by consumers on

important attributes – the place the product occupies in consumers’ minds
relative to competing products.

Consumermarketsegmentation:

Keyelementsofmarketingsegmentation:

⚫ Segmentation. Your existing and potential customers fall into particular

groups or segments, characterized by their 'needs'. ...

⚫ Targetingandpositioning.Youshouldaimtoselltothemarketsegments that
will be most profitable for your business. ...

⚫ Promotionaltactics....

⚫ Monitoringandevaluation....

⚫ Marketingplan.

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The following are the four broad categories in which Segmentation can be
done.

Figure1.2 MarketSegmentation

1.4.3MarketingStrategyProcess:

Marketing Strategy is a procedure of arranging, creating and actualizing moves

to get an aggressive edge in your picked specialty. This procedure is important
to plot and rearrange an immediate guide of the organization's destinations and
how to accomplish them. An organization needing to secure a sure share of the
business sector, ought to guarantee they plainly recognize their central goal,
study the business circumstance, characterize particular targets and create,
executeandassessanarrangementtoensuretheycangivetheirclientstheitems they
require, when they require them.

MarketingStrategyProcess

 UnderstandCustomer

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  AnalyzeCustomer
 AnalyzeCompetition
 ResearchDistribution
 DefineMarketingMix
 FinancialAnalysis
 Review&Revise

Therearemanystrategieswhichcanbeused,TheMarketersarecategorizedin many
categories like: Market leaders, Market challengers, Market followers, Market
Niches. Then there are many generic Strategies that can be followed by them
like: Porters Generic strategies, BCG Matrix, Cost leadership strategies,
focused strategies, differentiation strategies, Focus strategy and so on.

Promotion

Promotion means the communication techniques aimed at informing,

influencingandpersuadingcustomerstobuyoruseaparticularbrandofproduct.
Itinvolves communicationabout product orservice.Itis oneof the elementsof
marketing mix. Promotion can be used for many types of purposes like:

 Increasedsales
 Attractnewcustomers
 Encouragecustomerloyalty
 CreateAwareness
 Toinform
 Toremindpotentialcustomers
 Tochangeattitudes
 Tocreateanimage
 Topositionaproduct
 Toencouragebrandswitching
 Toreassurenewcustomers
 Tosupportdistributionchannels.

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TheMainaimofPromotionistoensurethatcustomersareawareoftheexistence
andpositioningofproducts.Itisalsousedtopersuadecustomersthattheproduct
isbetterthancompetingproductsandtoremindcustomersaboutwhattheymay want
to buy.

The Specific Mix of Promotional methods that a business uses to pursue its
marketing objectives and the main elements/tools are:

 Advertising
 SalesPromotion
 Personalselling
 Publicrelations
 DirectMarketing
 DigitalPromotions

Thecompositionofpromotionalmixdependsonvariousparameters:
Stageintheproduct'slife cycle E.g.Advertising&PRareoftenimportantat
launch stage

Natureoftheproduct What information do customers require

before they buy?

Competition What are rivals doing? what promotional

methods are traditionally effective in a
market?

MarketingBudget Howmuchcanthefirmafford?

MarketingStrategy Otherelementsofthemix

Targetmarket Appropriatewaystoreachthetargetmarket

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Advertising
Advertising is a paid form of communication on different Media platforms like
TV, radio, newspapers, Magazines, online, cinema, billboards, etc, by an
identifiedsponsor,withacontrolledmessage.Ithaswidecoveragebutit’soften
tooexpensive.Themessagehereisimpersonalbutcanberepeatedmanytimes.
It’sonewaycommunicationonlyandlacksflexibility.Itcanbeusedeffectively to
build brand loyalty but has a limited ability to close sales. Thus we can say that
its an effective yet expensive way to build a brand.

SalesPromotion
Sales promotion is a tool used to instigate immediate purchase by giving short
term incentives; it is aimed at consumers or other intermediaries or sales force.
It has many tools like:

o Coupons
o Moneyoffs
o Freegifts
o Competitions/luckydraws
o Pointofsaledisplays
o freesamples
o Demonstrations
o Buyonegetonefree
o Merchandising
o loyaltypointts
o tradeinoffers,etc.

Itisaneffectivetoolintheshortrunandencouragestostimulateinstantbuying but
does not has any long term impact. On the contrary some times consumer
erceive the brand is not selling much and thus coming up with sales promotion
offers so one has to be balanced enough as a marketer while using this tool of
promotion mix.

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Personalselling
Personalsellingispromotingofgoodsandservicesonpersontopersonbasis.It
involves two way communications, meeting with potential customers to close
sale. It can be done by telephone, meetings, and retail outlets and by knocking
doors.Highlypricedproducts,lowvolumeandhighlytechnicalproductsrelyon
personal selling.

So in a nutshell we can say that personal selling may be useful in many cases
and in fact necessary in products that are very technical or need personal
attention in selling but other than that it might contribute in creating a negative
imageorirritabilityinprospectsregardingourproductorservice.Onehastobe very
conscious on choosing this tool of promotion and should wisely limit the use
when necessary.

Publicrelations
Public relations involve the activities that create a goodwill and positive image
amongst the various publics of the business. It aims to have favorable image of
ourbrand,tomanageandbuildreputationofbusinessanditsproducts,to

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communicateeffectivelywithcustomersandalldirectandindirectstakeholders.
Anotherimportantfunctioniscrisismanagement.Whenduetoanylegaldispute
oranyotherreasonsthefirmsreputationisatstake,itcankilltheentirebusiness
andatsuchtimeitisthetaskofPRtohandlethesituationonthereputationfront
andkeepbuildingandformapositiveimageofthebrand.Therearemanytools or ways
of doing public relations like:

Figure1.3 PRtools
DirectMarketing
Direct Marketing is sending promotional material directed through mail,
telephones or other directs mediums to individual, households or business. It
helpsbusinesstogenerateaspecificresponsefromtargetedgroupsofcustomers and
allows business to focus on several marketing objectives like :

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 - increasingsalestoexistingcustomers
- buildingcustomerloyalty
- reestablishinglapsedcustomerrelationship
- generatingnewbusiness

It has got many advantages and disadvantages as a tool of

promotion ,they are as follows:

DigitalPromotions
With the advent of internet and its accessibility on our smart phones, the whole
worldofmarketingisslowlychangingitspicture.Thearchitectureofpromotion
ismovingtowardsaparadigmshiftinitstruecomposition.Therearemanyways
digital marketing can be done, they are as follows:

- SEM(searchengineMarketing):itgenerallycoversbothPayperclick(PPC) and
SEO that is search engine optimization. It brings traffic to your website

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 using keywords/key phrases. It can be used for paid or unpaid means and
helps the website ranking higher on the search engine. The following types
of paid listings are most common: Paid Placement Paid Inclusion Shopping
Search Video Search Ads Local Search Ads Product Listing Ads.

- SEObringsinorganictraffictoyourwebsiteInvolvesKeyword/KeyPhrase
Research SEO can also be performed on images as well as text It is crucial
forgeneratingmorebusinessfromorganicsearchesSEOshouldbepracticed as
an on-going strategy BEWARE! SEO is not a quick fix.

- PAY-PER-CLICK, Location is the key – this rule applies to more than real
estate Instead of Google setting prices, the market effectively sets Google
Ads prices at what advertisers are willing to pay Insurance is always one of
the most expensive keywords to purchase pay-per-click advertisements.52
percent of people shopping online prefer to click on paid advertisements at
thetopofGoogle’ssearchengineresultspages.IfyourPPCadisamongthe top
three PPC ad slots on the first search engine results page on Google,
you’vegotaboutaoneinsixchanceofanInternetuserclickingonyourpage.

- SOCIAL MEDIA MARKETING There is a social media network for every

type of business More and more businesses are investing in social media
Social media helps to reach new groups of prospective customers. The
biggest platforms are Facebook, Twitter and Instagram Social media
marketing can be used for long-term or short-term campaigns.

- CONTENT MARKETING Content marketing is the practice of providing

valuable, interesting or helpful content which builds brand presence,
authorityandconsumertrust.Contentmarketingcoversthefollowingfacets:
Articles and blogs

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- VideosandwebinarsFreeGuidesandeBooksPodcastsInfographicsStatistic and
industry reports Newsletter.

- EMAIL MARKETING There are over 3.7 billion email users in the world
currently. The top 3 uses of email marketing are newsletters, promotional
content and welcome series emails. Surprisingly, 72% of consumers prefer
to receive promotional content through email, compared to 17% who prefer
socialmediaOver50%ofallmarketingcampaignsareemail.Verylow-cost way
of reaching thousands of customers with very minimal efforts.

- INFLUENCER/AFFILIATE MARKETING Influencer marketing is

becoming increasingly popular, and for good reason. 70% of millennial
consumers are influenced by the recommendations of their peers in buying
decisions, ⅓ of Twitter audiences follow and engage with social media
celebrities andinfluencers.IntheUK alone brandsspend£1.3 billion ayear on
affiliate marketing 15% of all of the digital marketing industry’s revenue
isgeneratedbyaffiliatemarketingIntheUK,affiliatemarketingcontributes 1%
to the country’s total GDP. This is more than the agricultural industry.

- VIRAL MARKETING Viral marketing is a method of creating buzzwords

or marketing pieces that are memorable and attention-grabbing in our
modern, always-connected world. Viral marketing can be related to any of
thefollowingpractices:InfluencermarketingOnlinePRanalyticsOnlinePR
outreach Online PR strategy Real-time marketing Reputation management.
Thereisacommonmisconceptionthatviralmarketingdependsontheability to
reliably create something popular. When in fact, a successful viral
marketing campaign rests more on understanding how to connect with
specific demographics by presenting them with valuable content that they
engage with.

- OTT (over the top) platforms:With competition from Netflix, Amazon

prime, Hot star and a host of new video streaming providers, the television

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 industry has undergone seismic changes over the last five years. There are
lots of options for those that want to advertise on television without paying
expensive ad slot costs. TV ads are intrusive, capable of interrupting
whatever else a viewer might be doing to watch and listen to your pitch. No
other advertising medium combines sight and sound and has such a grand
impact Good TV ads are more than walking, talking messages. You
determine how you want your audience to react.

- MOBILE ADVERTISING In the United States 90% of all mobile time is

spent in apps It’s predicted that an estimated 2.87 billion people around the
world will own a smart phone by 2020 App store optimization works in a
similar way as SEO as the aim is to increase the visibility of your product
Mobile search engine activity is readily replacing that of computers

Brand

Kotleretal(2005p.549)definedabrandas“aname,term,sign,symbol,design or a
combination of these that identifies the makers or seller of the product or
services”.Thisdefinitionisbasedontheuseofabrandname,symbolsandsigns
todistinguish a productfrom its competitor. Prasad anddev(2000) notedthata
brand can also be said to include all tangible and intangible attributes that the
business stands for. According to Keller (2003 p.3).The brand has to be viewed
as an identifier where the logo, slogan, names forms a particular image and
awareness for the consumer.

The brand has to be viewed as an experience provider where the logo, slogan,
names, event and contacts by consumer provides consumers affective, sensory,
lifestyle and create relation with the brand. Kotler and Armstrong (2004) also
see brand to be beyond an identifier. It represents consumer’s sensitivity and
emotional attachment to the product. According to Feldwick, (2002), a brand is
a distinguishable symbol of origin and an assurance of performance.

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Conclusively, a brand can be said to be a symbol of all facts associated
with a product and service. A brand commonly includes a logo, a name
and any other visible elements suchassymbols andimages. Italso
consists ofothersetsofe xpe c t a t i on related toa productorservice which
normally arise in people’s mind.

Toaconsumer,brandmeansandsignifies:

 Sourceofproduct
 Delegatingresponsibilitytothemanufacturerofproduct
 Lowerrisk
 Lesssearch cost
 Qualitysymbol
 Dealorpactwiththeproductmanufacturer
 Symbolicdevice

Brandssimplifyconsumerspurchasedecision.Overaperiodoftime,consumers
discover the brands which satisfy their need. If the consumers recognize a
particularbrandandhaveknowledgeaboutit,theymakequickpurchasedecision
andsavelotoftime.Also,theysavesearchcostsforproduct.Consumersremain
committed and loyal to a brand as long as they believe and have an implicit
understanding that the brand will continue meeting their expectations and
perform in the desired manner consistently. As long as the consumers get
benefitsandsatisfactionfromconsumptionoftheproduct,theywillmorelikely
continue to buy that brand. Brands also play a crucial role in signifying certain
product features to consumers.

Toaseller,brandmeansandsignifies:

 Basisofcompetitiveadvantage
 Wayofbestowingproductswithuniqueassociations
 Wayofidentificationtoeasyhandling
 Wayoflegalprotectionofproducts’uniquetraits/features

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  Signofqualitytosatisfiedcustomer
 Meansoffinancialreturns

A brand, in short, can be defined as a seller’s promise to provide consistently a

unique set of characteristics, advantages, and services to the buyers/consumers.
It is a name, term, sign, symbol or a combination of all these planned to
differentiate the goods/services of one seller or group of sellers from those of
competitors.Some examples of well known brands are Mc Donald’s’,
Mercedes-Benz, Sony, Coca Cola, Kingfisher, etc

BrandEquity

Aaker(1991) statedthatbrand equitycanbe referredtoas“asetof brand

assets and liabilities linked to a brand, its name and symbol that addto or
subtract from thevalue provided by a product or service to a firm and/or to
that firm’s customers”.

Brandloyalty
Aaker (1991) defined Brand loyalty as “the attachment that a customer has to a
brand”. It can also be seen as consumer’s preference to purchase a particular
brandinaproductclassandthiscouldbeasa resultoftheconsumer awareness about
that particular brand.

Brandimage
Brandimageisreferredtoasconsumerperceptionsaboutthebrandorhowthey view
it. According to Keller (1993), brand image is also seen as “a symbolic
construct created within the minds of people and consist of all the information
and expectations associated with a product or service”

BrandAwareness
Keller (2003) stated that Brand awareness can be referred to as the ability of a
consumer to distinguish a brand under various conditions. Keller (2003) also
notedthatbrandawarenessisbuiltandincreasedbyfamiliaritywiththebrand

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as a result of repeated vulnerability which eventually leads to consumers
experience with the brand. Consumer’s experience of a particular brand could
either be by hearing, seeing, or thinking about it and this will help the brand to
stick in their memory

BrandManagement

Brand management begins with having a thorough knowledge of the term

“brand”. It includes developing a promise, making that promise and
maintainingit.Itmeansdefiningthebrand,positioningthebrand,anddelivering the
brand. Brand management is nothing but an art of creating and sustaining the
brand. Branding makes customers committed to your business. A strong
branddifferentiatesyourproductsfromthecompetitors.Itgivesaqualityimage to
your business.

Brand management includes managing the tangible and intangible

characteristics of brand. In case of product brands, the tangibles include the
product itself, price, packaging, etc. While in case of service brands, the
tangiblesincludethecustomers’experience.Theintangiblesincludeemotional
connections with the product / service.

Brandingisassemblingofvariousmarketingmixmediumintoawholesoasto
giveyouanidentity.Itisnothingbutcapturingyourcustomersmindwithyour brand
name. It gives an image of an experienced, huge and reliable business.

It is all about capturing the niche market for your product / service and about
creating a confidence in the current and prospective customers’ minds that you
are the unique solution to their problem.

Theaimofbrandingistoconveybrandmessagevividly,createcustomerloyalty,
persuadethebuyerfortheproduct,andestablishanemotionalconnectivitywith
thecustomers. Brandingforms customerperceptionsabouttheproduct.Itshould

44
raisecustomerexpectationsabouttheproduct.Theprimaryaimofbrandingis
tocreatedifferentiation.

Strong brands reduce customers’ perceived monetary, social and safety risks in
buying goods/services. The customers can better imagine the intangible goods
with the help of brand name. Strong brand organizations have a high market
share.Thebrandshouldbegivengoodsupportsothatitcansustainitselfinlong run. It
is essential to manage all brands and build brand equity over a period of time.
Here comes importance and usefulness of brand management. Brand
management helps in building a corporate image. A brand manager has to
overseeoverallbrandperformance.Asuccessfulbrandcanonlybecreatedifthe brand
management system is competent.

Brand personality is the way a brand speaks and behaves. It means assigning
human personality traits/characteristics to a brand so as to achieve
differentiation. These characteristics signify brand behavior through both
individuals representing the brand (i.e. it’s employees) as well as through
advertising,packaging, etc.Whenbrandimageorbrandidentityisexpressedin
termsofhumantraits,itiscalledbrandpersonality.Forinstance-Allen
Solleybrandspeaksthepersonalityandmakestheindividualwhowearsitstand
apartfromthecrowd.Infosysrepresentsuniqueness,value,andintellectualism.

Brand personality is nothing but personification of brand. A brand is expressed

either as a personality who embodies these personality traits (For instance -
Shahrukh Khan and Airtel, John Abraham and Castrol) or distinct personality
traits(Forinstance-Doveashonest,feministandoptimist;Hewlett Packardbrand
represents accomplishment, competency and influence). Brand personality is
the result of all the consumer’s experiences with the brand. It is unique and
long lasting.

Brand personality must be differentiated from brand image, in sense that,

while brand image denote the tangible (physical and functional) benefits and
attributesofabrand,brandpersonalityindicatesemotionalassociationsofthe

45
brand.Ifbrandimageiscomprehensivebrandaccordingtoconsumers’opinion,
brand personality is that aspect of comprehensive brand which generates it’s
emotional character and associations in consumers’ mind.

BrandStretch

Brand extension or brand stretching is a marketing strategy in which a firm

marketing a product with a well-developed proposition uses the same brand
name in a different product category. It is based on the philosophy that a brand
is not bounded to one product, but has value that can transcend into different
product categories.

30% of revenue of top 23 FMCG most trusted brands come from Brand Stretch
A Brand Stretch has five times more likelihood of success compared to all new
launches Brand Stretch helps leverage equity, spend efficiency and have faster
consumer adoption

DifferentiatingaLineExtensionfromaBrandExtensionAproductchangingthe size,
flavor or pack type would be described as a line extension and not a brand
stretch, and are outside the scope of study. A noodle brand introducing new
flavorsorasoftdrinkcompanylaunchingitsbeverageinacaninsteadofabottle, are
other examples of line extensions. Brand Extension on the other hand, is when
a brand breaks new ground and courageously extends outside its core category.

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BRANDSTRETCH≠LINEEXTENSIONSBRANDSTRETCH= BRAND
EXTENSIONS

UnderstandingBrandStretchtypesNielsenreviewedthevariouskindsofbrand
extensions that marketers typically resort to and has broadly identified three
types. Type A is where there is a change in product format but its core function
remains the same. A company manufacturing bar soaps extending to liquid
sanitizerwouldbeagoodexampleofthistypeofbrandstretch.TypeBiswhen a
product shiftstoan adjacent category butis stillwithintheambitof thelarger
category. An example would be when a Corn flakes brand introduces Oats. A
TypeCbrandstretchis whenthereisacompleteshifttoadifferentcategory.A
company extending from a category of Spirits and Beer to a service oriented
industry of Airlines would fall under this

Brand Extension is the use of an established brand name in new product

categories. This new category to which the brand is extended can be related or
unrelatedtotheexistingproductcategories.Arenowned/successfulbrandhelps an
organization to launch products in new categories more easily. For instance,
Nike’sbrandcoreproductisshoes. But itisnowextendedtosunglasses,soccer balls,
basketballs, and golf equipments. An existing brand that gives rise to a
brandextensionisreferredtoasparentbrand.Ifthecustomersofthenew

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business have values and aspirations synchronizing/matching those of the core
business,andifthesevaluesandaspirationsareembodiedinthebrand,itislikely to be
accepted by customers in the new business.

Extending abrandoutsideits core product categorycan be beneficial ina sense

that it helps evaluating product category opportunities, identifies resource
requirements, lowers risk, and measures brand’s relevance and appeal.

Brandextensionmaybesuccessfulorunsuccessful.

Instanceswherebrandextensionhasbeenasuccessare-

i. Wipro which was originally into computers has extended into shampoo,
powder, and soap.
ii. Mars is no longer a famous bar only, but an ice-cream, chocolate drink
and a slab of chocolate.

Instanceswherebrandextensionhasbeenafailureare-

i. In case of new Coke, Coca Cola has forgotten what the core brand was
meanttostandfor.Itthoughtthattastewastheonlyfactorthatconsumer
caredabout.Itwaswrong.Thetimeandmoneyspentonresearchonnew Coca
Cola could not evaluate the deep emotional attachment to the original
Coca- Cola.
ii. RasnaLtd.-IsamongthefamoussoftdrinkcompaniesinIndia.Butwhen
ittriedtomoveawayfromitsniche,ithasn’thadmuchsuccess.Whenit
experimented with fizzy fruit drink “Oranjolt”, the brand bombed even
before it could take off. Oranjolt was a fruit drink in which carbonates
were used as preservative. It didn’t work out because it was out of
synchronizationwithretailpractices.Oranjoltneedtoberefrigeratedand
italsofacedqualityproblems.Ithasashelflifeofthree-fourweeks,while other
soft- drinks assured life of five months.

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AdvantagesofBrandExtension
BrandExtensionhasfollowingadvantages:
Itmakesacceptanceofnewproducteasy.

- Itincreasesbrandimage.
- Theriskperceivedbythecustomersreduces.
- The likelihood of gaining distribution and trial increases. An
established brand name increases consumer interest and
willingnesstotrynewproducthavingtheestablishedbrandname.
- Theefficiencyofpromotionalexpenditureincreases.Advertising,
sellingandpromotionalcostsarereduced.Thereareeconomiesof
scaleasadvertisingforcorebrandanditsextensionreinforceseach
other.
- Costofdevelopingnewbrandissaved.
- Consumerscannowseekforavariety.
- Therearepackagingandlabelingefficiencies.
- Theexpenseofintroductoryandfollowupmarketingprogramsis
reduced.

Therearefeedbackbenefitstotheparentbrandandtheorganization.

- Theimageofparentbrandisenhanced.
- Itrevivesthebrand.
- Itallowssubsequentextension.
- Brandmeaningisclarified.
- Itincreasesmarketcoverageasitbringsnewcustomersintobrand
franchise.
- Customersassociateoriginal/corebrandtonewproduct,hence they
also have quality associations.

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DisadvantagesofBrandExtension

- Brand extension in unrelated markets may lead to loss of reliability if a

brand name is extended too far. An organization must research the
product categories in which the established brand name will work.
- Thereisariskthatthenewproductmaygenerateimplicationsthat
damagetheimageofthecore/originalbrand.
- There are chances of less awareness and trial because the management
may not provide enough investment for the introduction of new product
assuming that the spin-off effects from the original brand name will
compensate.
- Ifthebrandextensionshavenoadvantageovercompetitivebrandsinthe new
category, then it will fail.

OrganizationofThesis:

ThethesisbeginswiththeIntroductionofthetopicwhichisbroadlythendivided into
micro topics like India as a nation, FMCG as a sector, its growth dynamics
andrationaleforselectingitasasectorforresearch.Thenthischaptermovesto the
introduction of the concepts used in the Research like: marketing strategies,
Brand,Promotion,Brandstretch.Thethesisfurtherflowsintothesecondchapter
thatisthereviewofliteraturewhereinmanyliteratureshavebeenstudiedupon and a
ground base for the research has been created to investigate further.

This chapter is then followed by Objectives of the research and hypothesis

formedmentionedinthethirdchapterofthethesiswhichelaboratesthepurpose
behind the research and formulation of assumptive statements to be proven true
or otherwise. The next that is fourth chapter explains the research methodology
usedtojustifyourobjectivesandtestourhypothesis.Thenextchapterfifthstates the
various data analysis techniques used to analyze the data collected to
investigate further on our objectives.

The thesis then moves to its final few stages of chapter sixth on findings and
discussionwherethefindingsarediscussedaftertheapplicationofvariousdata

50
analysis techniques followed by chapter seventh based on suggestions and
implicationsandchaptereightdiscussingthelimitationsofthestudyandfurther scope
of research in the related arena of investigation. Thus this logical investigative
flow of analysis commensurate the complete thesis for the doctor of philosophy
dissertation.

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