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New TAM ADEX Analysis

Huge spend increases in 2002 still do not recover FMCGs

(A pre-budget analysis by the TAM S-Group using data from AC Nielsen Retail Audit & TAM ADEX)

(28 February 2003 1:00 pm)

Data for 2002 from AC Nielsen Retail Audit shows that there are certain sectors that are clearly in the doldrums. The table below suggests that consumers consumed more of food items like Biscuits and Edible Oil.

Table 1:

  %Change (2002 over 2001)
Value
Volume
Ad Spends
Biscuits
+10.3
+11.6
+71%
Refined Oil
+25.0
+12.0
+7%
Packaged Tea
-9.4
-9.2
+35%
Source AC Nielsen Retail Audit TAM ADEX*

In contrast, FMCG categories like Soaps, Detergents and Washing Powders came in for a sharp decline as shown in Table2. A spate of problems including promotions, price-offs, freebies and buy-one-get-one-free offers are being blamed for the degrowths in Soaps and Detergents. But the trend is extremely worrying! These are the categories that put in sackfull of Rupees every year in the TV industry. If they are not getting results after increasing their budgets, the way they have last year, what does the future hold? Will these categories continue to pour monies in or will they choose the dreaded 'BTL' (Below-The-Line) routes?

Table 2:

  %Change (2002 over 2001)
Value
Volume
Ad Spends
Washing Powders/liquids
-2.8
-5.4
+65%
Detergent Cakes/bars
-0.6
-2.9
+116%
Toilet Soaps
-6.0
-11.0
+7%
Source AC Nielsen Retail Audit TAM ADEX*


If we move to a different industry - Pharma, which contributes around 800 million rupees to the TV & Print media, the results are just as appalling! It again brings us to the grim reality that increases in ad spends don't necessarily guarantee increase in category sales as shown in Table3.

Table 3:

  %Change (2002 over 2001)
Value
Volume
Ad Spends
Antiseptic cream
- 4.0
-9.0
+14%
Antiseptic Liquids
-1.3
-5.7
+14%
Analgesics/cold tablets
-8.5
-16.0
+13%
Source AC Nielsen Retail Audit TAM ADEX*

 

So what's the future hold? Will the budget change anything? Will consumers start consuming more of FMCGs? Will companies stop using mass media and turn to BTL activities? The S-Group will continue to bring you more papers on the same. Watch this space for more!


Atul Phadnis, director, S-Group, TAM Media Research


Sources used : AC Nielsen Retail Audit & TAM TV+Press ADEX

 
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