30 January 2017

9 Types of digital marketing : Which is right for you?

Digital marketing is an umbrella term for the marketing of products or services using digital technologies, mainly on the Internet, but also including mobile phones, display advertising, and any other digital medium.

The 9 different types of digital marketing: Which is right for you?

  • Search Engine Optimization (SEO)
  • Pay Per Click Advertising (PPC)
  • Public Relations (PR)
  • Social Media Marketing.
  • Content Marketing.
  • Affiliate Marketing.
  • Viral Marketing.
  • Influence Marketing.
  • Online/Website Marketing

Search Engine Optimization (SEO)


         SEO is one of the first and still strongest types of digital marketing you’ll come across. 94% of all the clicks in search results go to organic listings – not PPC. The methods have changed over the years; but the aim is still generally the same. Get you higher up in the list when your customers do Google searches.

Pay Per Click Advertising (PPC)


         When people refer to pay per click advertising, they are likely talking about the ‘sponsored’ links you often see in Google searches; however they may also be referring to ads in other search engines too, like Yahoo or Bing.
They’re one of the only types of digital marketing that is completely short term – when you stop paying, the ad ceases to exist.
They are links to your website that you pay to get ranked above or alongside the ‘organic’ listings shown in a search. SEO is about ranking highly long term in the organic listings – PPC is usually about simply paying a search engine directly to be up there. 

Public Relations (PR)

       Public relations cannot be overlooked – and although it’s not strictly just a type of digital marketing, I had to include it because it can have a huge impact on your digital marketing results.
Of all the types of digital marketing; PR is most likely to result in the most exposure quickly (apart from maybe viral marketing – but more on that later.)

Social Media Marketing


            Social media marketing is a great way to get exposure and connect with your customers. Talking with your customers directly is a great way to get them to know, like and trust you – which is ultimately the best way to make a sale, and maybe even a brand advocate.
If you’re considering all the different types of digital marketing – this is likely the one that will help you grow your relationship with your customers fastest.

Content Marketing


                 Content marketing. You are my hero. Content marketing is the ultimate type of digital marketing – because it includes all the best stuff, working in harmony.

It mixes great content on your website, SEO, PR and Social Media Marketing in tandem.

Using all the methods together can make your business a serious success.

Because it’s a combination of lot’s of the other types of digital marketing – it’s definitely my favourite.

Affiliate Marketing


                Affiliate marketing is where you site back and relax – and let someone else do the marketing for you. The only catch is, if they bring in a sale – you share the profits.

The great thing is, unlike the other types of digital marketing – there’s no cost upfront.
Viral Marketing

                        Viral marketing is amazing – if you can get some content of yours to go viral, it could turn your business into an overnight success.
To make your next marketing campaign can take a combination of a number of the other types of digital marketing – such as content marketing, PR and social media marketing – but it can also lead to some amazing results for your business.
Check out the dollar shave club
 – they went from nothing to 12,000 orders in two days with this video:

    LINK of this videos & many more https://youtu.be/ZUG9qYTJMsI

Influence Marketing

          Influence marketing is relatively new – but it’s a very exciting type of digital marketing.
It’s vastly different from the other types of digital marketing, but can be equally as effective.

Digital/Online/Website Marketing

                  Digital, online, website marketing – these are all the same things. And they cover any of the above. It’s an ‘umbrella’ term. So I would make sure you figure out which of the services you really want in the above list before going to an agency that does this, so you know exactly which types of digital marketing you should ask for.


Summary of the 9 types of digital marketing

Here’s a quick summary of the main goals of each of the 9 different types of digital marketing, in case you’re still not sure which is right for you:

SEO: Increase traffic from search engines
PPC:  Increase traffic from search engines
PR: Increase exposure for a business
Social Media Marketing: Build customer relationships
Content Marketing: Increase traffic from search engines, exposure, sales & leads
Affiliate Marketing: Increase sales & leads
Viral Marketing: Increase exposure – short term
Influence Marketing: Increase exposure – targetted
Online/Website Marketing: Coverall term; could include any of the above methods/goals

                    I hope you found this guide useful, and hopefully, you’re now armed with lots of questions for your digital marketer! You might even now know more than your digital marketer about all the different types of digital marketing.

Integrated Marketing Communication Tools in Rural Market

As earlier said, there are around 6, 38, 667 villages populated by 720 million people i.e., 72% of India lives in villages which makes it a market which cannot be ignored by marketers. Customers in villages are willing to pay for the right services as they have their own sets of aspirations. When it comes to rural market, the rules are different, especially in diverse one like India. Here, the rural environment is different than urban. Therefore communication to potential customers in a proper and effective manner is a major challenge for corporate marketers.

An urban communications approach might not hold well in these rural markets and thus there is a need to have a different Integrated Marketing Communications (IMC) approach for the rural markets in India.

IMC Tools



Advertising has four characteristics: it is persuasive in nature; it is non-personal; it is paid for by an identified sponsor, and it is disseminated through mass channels of communication. Advertising messages may promote the adoption of goods, services, persons, or ideas. Because the sales message is disseminated through the mass media-as opposed to personal selling-it is viewed as a much cheaper way of reaching consumers. However, its non-personal nature means it lacks the ability to tailor the sales message to the message recipient and, more importantly, actually get the sale. Therefore, advertising effects are best measured in terms of increasing awareness and changing attitudes and opinions, not creating sales. Advertising's contribution to sales is difficult to isolate because many factors influence sales. The contribution advertising makes to sales are best viewed over the long run. The exception to this thinking is within the internet arena. While banner ads, pop-ups and interstitials should still be viewed as a brand promoting and not necessarily sales drivers, technology provides the ability to track how many of a website's visitors click the banner, investigate a product, request more information, and ultimately make a purchase.
Through the use of symbols and images advertising can help differentiate products and services that are otherwise similar. Advertising also helps create and maintain brand equity. Brand equity is an intangible asset that results from a favourable image, impressions of differentiation, or consumer attachment to the company, brand, or trademark. This equity translates into greater sales volume, and/or higher margins, thus greater competitive advantage. Brand equity is established and maintained through advertising that focuses on image, product attributes, service, or other features of the company and its products or services.
Cost is the greatest disadvantage of advertising. The average cost for a 30-second spot on network television increased fivefold between 1980 and 2005. Plus, the average cost of producing a 30-second ad for network television is quite expensive. It is not uncommon for a national advertiser to spend in the millions of dollars for one 30-second commercial to be produced. Add more millions on top of that if celebrity talent is utilized.
Credibility and clutter are other disadvantages. Consumers have become increasingly sceptical about advertising messages and tend to resent advertisers' attempt to persuade. Advertising is everywhere, from network television to daily newspapers, to roadside billboards, to golf course signs, to stickers on fruit in grocery stores. Clutter encourages consumers to ignore many advertising messages. New media are emerging, such as DVRs (digital video recorders) which allow consumers to record programs and then skip commercials, and satellite radio which provides a majority of its channels advertising free.

Public Relations (PR)


Public relations is defined as a management function which identifies, establishes, and maintains mutually beneficial relationships between an organization and the public upon which its success or failure depends. Whereas advertising is a one-way communication from sender (the marketer) to the receiver (the consumer or the retail trade), public relations considers multiple audiences (consumers, employees, suppliers, vendors, etc.) and uses two-way communication to monitor feedback and adjust both its message and the organization's actions for maximum benefit. A primary tool used by public relations practitioners is publicity. Publicity capitalizes on the news value of a product, service, idea, person or event so that the information can be disseminated through the news media. This third party "endorsement" by the news media provides a vital boost to the marketing communication message: credibility. Articles in the media are perceived as being more objective than advertisements, and their messages are more likely to be absorbed and believed. For example, after the CBS newsmagazine, 60 Minutes reported in the early 1990s that drinking moderate amounts of red wine could prevent heart attacks by lowering cholesterol, red wine sales in the United States increased 50 percent. Another benefit publicity offers is that it is free, not considering the great amount of effort it can require to get out-bound publicity noticed and picked up by media sources.
Public relations' role in the promotional mix is becoming more important because of what Philip Kotler describes as an "overcommunicated society." Consumers develop "communication-avoidance routines" where they are likely to tune out commercial messages. As advertising loses some of its cost-effectivenesses, marketers are turning to news coverage, events, and community programs to help disseminate their product and company messages. Some consumers may also base their purchase decisions on the image of the company, for example, how environmentally responsible the company is. In this regard, public relations plays an important role in presenting, through news reports, sponsorships, "advertorials" (a form of advertising that instead of selling a product or service promotes the company's views regarding current issues), and other forms of communication, what the company stands for.

Sales Promotions (SP)


Sales promotions are direct inducements that offer extra incentives to enhance or accelerate the product's movement from producer to consumer. Sales promotions may be directed at the consumer or the trade. Consumer promotions such as coupons, sampling, premiums, sweepstakes, price packs (packs that offer greater quantity or lower cost than normal), low-cost financing deals, and rebates are purchase incentives in that they induce product trial and encourage repurchase. Consumer promotions may also include incentives to visit a retail establishment or request additional information. Trade promotions include slotting allowances ("buying" shelf space in retail stores), allowances for featuring the brand in retail advertising, display and merchandising allowances, buying allowances (volume discounts and other volume-oriented incentives), bill back allowances (pay-for-performance incentives), incentives to salespeople, and other tactics to encourage retailers to carry the item and to push the brand.
Two perspectives may be found among marketers regarding sales promotion. First, sales promotion is supplemental to advertising in that it binds the role of advertising in personal selling. This view regards sales promotion as a minor player in the marketing communication program. A second view regards sales promotion and advertising as distinct functions with objectives and strategies very different from each other. Sales promotion in this sense is equal to or even more important than advertising. Some companies allocate as much as 75 percent of their advertising/promotion dollars to sales promotion and just 25 percent to advertising. Finding the right balance is often a difficult task. The main purpose of sales promotion is to spur action. Advertising sets up the deal by developing a brand reputation and building market value. Sales promotion helps close the deal by providing incentives that build market volume.
Sales promotions can motivate customers to select a particular brand, especially when brands appear to be equal, and they can produce more immediate and measurable results than advertising. However, too heavy a reliance on sales promotions results in "deal-prone" consumers with little brand loyalty and too much price sensitivity. Sales promotions can also force competitors to offer similar inducements, with sales and profits suffering for everyone.

Personal Selling (PS)

Personal selling includes all person-to-person contact with customers with the purpose of introducing the product to the customer, convincing him or her of the product's value, and closing the sale. The role of personal selling varies from organization to organization, depending on the nature and size of the company, the industry, and the products or services it is marketing. Many marketing executives realize that both sales and non-sales employees act as salespeople for their organization in one way or another. One study that perhaps supports this contention found that marketing executives predicted greater emphasis being placed on sales management and personal selling in their organization than on any other promotional mix element. These organizations have launched training sessions that show employees how they act as salespeople for the organization and how they can improve their interpersonal skills with clients, customers, and prospects. Employee reward programs now reward employees for their efforts in this regard.
Personal selling is the most effective way to make a sale because of the interpersonal communication between the salesperson and the prospect. Messages can be tailored to particular situations, immediate feedback can be processed, and message strategies can be changed to accommodate the feedback. However, personal selling is the most expensive way to make a sale, with the average cost per sales call ranging from $235 to $332 and the average number of sales calls needed to close a deal being between three and six personal calls.
Sales and marketing management classifies salesperson's into one of three groups: creative selling, order taking, and missionary sales reps. Creative selling jobs require the most skills and preparation. They are the "point person" for the sales function. The prospect for customers, analyze situations, determine how their company can satisfy wants and needs of prospects, and, most importantly, get an order. Order takers take over after the initial order is received. They handle repeat purchases (straight re-buys) and modified re-buys. Missionary sales reps service accounts by introducing new products, promotions, and other programs. Orders are taken by order takers or by distributors.

Direct Marketing (DM)


Direct marketing, the oldest form of marketing, is the process of communicating directly with target customers to encourage response by telephone, mail, electronic means, or personal visit. Users of direct marketing include retailers, wholesalers, manufacturers, and service providers, and they use a variety of methods including direct mail, telemarketing, direct-response advertising, online computer shopping services, cable shopping networks, and infomercials. Traditionally not viewed as an element in the promotional mix, direct marketing represents one of the most profound changes in marketing and promotion in the last 25 years. Aspects of direct marketing, which includes direct response advertising and direct mail advertising as well as the various research and support activities necessary for their implementation, have been adopted by virtually all companies engaged in marketing products, services, ideas, or persons.
Direct marketing has become an important part of many marketing communication programs for three reasons. First, the number of two-income households has increased dramatically. About six in every ten women in the United States work outside the home. This has reduced the number of time families has for shopping trips. Secondly, more shoppers than ever before rely on credit cards for payment of goods and services. These cashless transactions make products easier and faster to purchase. Finally, technological advances in telecommunications and computers allow consumers to make purchases from their homes via telephone, television, or computer with ease and safety. These three factors have dramatically altered the purchasing habits of American consumers and made direct marketing a growing field worldwide.
Direct marketing allows a company to target more precisely a segment of customers and prospects with a sales message tailored to their specific needs and characteristics. Unlike advertising and public relations, whose connections to actual sales are tenuous or nebulous at best, direct marketing offers accountability by providing tangible results. The economics of direct marketing have also improved over the years as more information is gathered about customers and prospects. By identifying those consumers they can serve more effectively and profitably, companies may be more efficient in their marketing efforts. Whereas network television in the past offered opportunities to reach huge groups of consumers at a low cost per thousand, direct marketing can reach individual consumers and develop a relationship with each of them.
Research indicates that brands with strong brand equity are more successful in direct marketing efforts than little-known brands. Direct marketing, then, works best when another marketing communication such as traditional media advertising supports the direct marketing effort.
Direct marketing has its drawbacks also. Just as consumers built resistance to the persuasive nature of advertising, so have they with direct marketing efforts. Direct marketers have responded by being fewer sales oriented and more relationship oriented. Also, just as consumers grew weary of advertising clutter, so have they with the direct marketing efforts. Consumers are bombarded with mail, infomercials, and telemarketing pitches daily. Some direct marketers have responded by regarding privacy as a customer service benefit. Direct marketers must also overcome consumer mistrust of direct marketing efforts due to incidents of illegal behaviour by companies and individuals using direct marketing. The U.S. Postal Service, the Federal Trade Commission, and other federal and state agencies may prosecute criminal acts. The industry then risks legislation regulating the behaviour of direct marketers if it is not successful in self-regulation. The Direct Marketing Association, the leading trade organization for direct marketing, works with companies and government agencies to initiate self-regulation. In March of 2003, the National Do Not Call Registry went into effect whereby consumers added their names to a list that telemarketers had to eliminate from their outbound call database.

Sponsorship's (Event Marketing)

Sponsorship's, or event marketing, combine advertising and sales promotions with public relations. Sponsorship's increase awareness of a company or product, build loyalty with a specific target audience, help differentiate a product from its competitors, provide merchandising opportunities, demonstrate a commitment to a community or ethnic group, or impact the bottom line. Like advertising, sponsorship's are initiated to build long-term associations. Organizations sometimes compare sponsorship's with advertising by using gross impressions or cost-per-thousand measurements. However, the value of sponsorship's can be very difficult to measure. Companies considering sponsorships should consider the short-term public relations value of sponsorships and the long-term goals of the organization. Sports sponsorship's make up about two-thirds of all sponsorship's.

Social Media Marketing


The concept of social media marketing basically refers to the process of promoting business or websites through social media channels. It is a powerful marketing medium that is defining the way people are communicating. It is one of the significantly low-cost promotional methods that provide businesses large numbers of links and a huge amount of traffic. Companies manage to get massive attention and that really works in favour of the business. Social media marketing is a potent method applied by progressive companies for selling their products/services or for just publishing content for advertisement revenue.
Social media is an extremely useful tool using which companies can get their information, product descriptions, promotions all ingrained in the chain of networking world. Considering the newness of this marketing method, organizations are coming up with innovative ways to develop their marketing plans. New platforms are being created to approach potential clients. A large number of business organizations are allocating budget for online business development using social media marketing. It is a booming sector which is going to redefine the way marketing strategies are being formed and promoted.

Internet Marketing


Internet marketing also referred to as i-marketing, web-marketing, online-marketing or e-Marketing, is the marketing of products or services over the Internet. The Internet has brought media to a global audience. The interactive nature of Internet marketing in terms of providing instant responses and eliciting responses are the unique qualities of the medium. Internet marketing is sometimes considered to be broad in scope because it not only refers to marketing on the Internet but also includes marketing done via e-mail and wireless media. Management of digital customer data and electronic customer relationship management (ECRM) systems are also often grouped together under internet marketing.
Internet marketing ties together creative and technical aspects of the Internet, including: design, development, advertising, and sales.
Internet marketing also refers to the placement of media along many different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, e-mail marketing, and Web 2.0 strategies.

Mobile Marketing


Mobile Marketing involves communicating with the consumer via cellular (or mobile) device, either to send a simple marketing message, to introduce them to a new audience participation-based campaign or to allow them to visit a mobile website.
Mobile connectivity not only enables people to connect to the Internet via a cellular telephone, PDA or other gadget, but also consolidates the different communication channels in a simple, yet effective medium.
Cheaper than traditional means for both the consumer and the marketer - and easy enough for almost any age group to understand and engage with - Mobile Marketing really is a streamlined version of traditional e-Marketing.



Puppetry is the indigenous theatre of India. From time immemorial it has been the most popular form and well-appreciated form of entertainment available to the village people. It is an inexpensive activity. The manipulator uses the puppets as a medium to express and communicate ideas, values and social messages.
Life Insurance Corporation of India used puppets to educate rural masses about Life Insurance; enlisting the help of the literacy house in Luck now. These plays were shown to the audience in villages in UP, Bihar, & MP. The number of inquiries at local Life Insurance Companies during the period immediately following the performance was compared with normal frequency and found to be considerably higher. The field staff of the corporation also reported a definite impact on the business.

Folk Theatre


Folk theatres are mainly short and rhythmic in form. The simple tunes help in informing and educating the people in informal and interesting manner. It has been used as an effective medium for social protest against injustice, Folk theatres are mainly short and rhythmic in form. The simple tunes help in informing and educating the people in informal and interesting manner. It has been used as an effective medium for social protest against injustice, exploitation and oppression.
The government has used this media for popularizing an improved variety of seeds, agricultural implements, fertilizer etc. Punjab Agricultural University produced Two Audio Cassettes.
Balliye Kanak Biye – Wheat Cultivation.
Khiran Kepah Narme – Cotton Cultivation.
Both were well received by farmers.
BBLIL used Magician quite effectively for the launch of Kadak Chhap Tea in Etawah.
“Direct Contact” is a face-to-face relationship with people individually and with groups such as the Panchayats and other village groups. Such contact helps in arousing the villager’s interest in their own problem and motivating them towards self-development.
Demonstration may be
  • Method demonstration
  • Result demonstration
  • Simple Demonstration
  • Composite Demonstration
In result demonstration, the help of audiovisual media can add value. Asian Paints launched Utsav range by painting Mukhiya’s house or Post office to demonstrate that paint does not peel off.

Wall Paintings

Wall Paintings are an effective and economical medium for advertising in rural areas. They are silent, unlike traditional theatre.A speech or film comes to an end, but wall painting stays as long as the weather allows it to.
Retailer normally welcomes paintings of their shops, walls, and name boards. Since it makes the shop look cleaner and better. Their shops look alluring and stand out among other outlets. Besides rural households, shopkeepers and panchayats do not except any payment, for their wall to be painted with product messages. To get one’s wall painted with the product messages is seemed as a status symbol. The greatest advantage of the medium is the power of the picture completed with its local touch. The images used have a strong emotional association with the surrounding, a feat impossible for even a moving visual medium like television, which must use a general image to cater to the greatest number of viewers.



2015 was a big year for e-commerce. Going down in history as the year that online shopping truly came into its own with growth outpacing that of in-store shopping, 2015 saw a huge $600 billion being spent on FMCG products online. With explosive growth predicted for the sector in 2016, it is estimated that the value of FMCG e-commerce will double in the next two years.

1. Tablets and Mobile shopping will desktop purchases, putting the focus on app optimisation and website performance
As identified over Black Friday weekend, mobile shopping is set to take centre stage in 2016. More than a third of all sales were placed from a mobile phone or tablet over the festive period, indicating that mobile is becoming the consumer’s preferred way of shopping. Optimisation of the mobile platform, therefore, is of the highest priority for retailers and suppliers; 69% admit that they are working to make their mobile apps and websites more responsive and more intuitive for users. Such is the strength of mobile commerce coming into 2016, that many e-tailers are considering adopting an app-only model for their online sales.
“Omnichannel shoppers spend 71% more on average than single-channel consumers.”
– Bluefin, “Why omnichannel retail is no longer an option“
Retails and FMCG brands should ensure that their mobile presence is not only functional but also aligned with the rest of their branding, be it online or in store. Done right, mobile commerce can be a powerful addition to any FMCG company’s portfolio, endlessly useful in this age of omnichannel commerce. And not only that, but it has also been shown that omnichannel consumers are more likely to spend more when making a purchase.

2. Product Content will become the differentiating factor for retailers and FMCG brands online
With shoppers slowly making the shift from bricks to clicks for their shopping and with mobile the predominant way to browse and buy, product content is now more important than ever. As consumers demand to know what is in their products, extended product information – full ingredient lists, nutritional values, usage instructions etc. – is needed to foster consumer trust and loyalty. As marketing teams turn their attention to addressing suspicions surrounding “Big Food” and big business, e-commerce will soon follow suit. Strong product content works hand-in-hand with optimised website performance to create a seamless online experience, particularly crucial in FMCG sales as retailers and brands must work to stand out in a crowded arena.
“Trust will be the new marketing currency.”
– Jesse Reif, Partner at Aha Marketing


3. The Consumer is King in 2016
“The future belongs to the retailers who engage them by providing value, thereby earning their trust.”
– Ventureburn, “7 e-commerce trends to watch out for in 2016“
E-commerce competition is fierce and consumers’ shopping habits are fickle. Even a slightly negative user experience – be it delays in delivery, problems paying or an unresponsive website – can mean lost revenue as consumers go elsewhere. This is especially true in the realm of online grocery and FMCG, as years of price wars and a similar core product selection means that user experience remains an important differentiating factor for retailers.
As seen by the previous two Cyber Mondays, many retailers’ websites are still not fully prepared for surges in online shopping activity, crashing during peak periods and frequently running low on stock. Ensuring that all websites and apps are fully functional, with intuitive navigation, quick loading times and a very secure payment process, will be key for consumer satisfaction in 2016.

4. In-store shopping will go digital as retailers connect shoppers’ phones to their basket
The development of mobile technology will not only benefit online sales, but its effects will carry over into the physical store, too. Supermarkets have already started introducing various in-store technologies in order to enhance the overall shopping experience. Tesco’s scan-as-you-shop service, for example, allows shoppers to scan their products as they add them to their basket in-store, saving time at checkout. With mobile-savvy millennials a key demographic for grocery retailers, we can expect to see a redoubling of efforts to connect with smartphone-carrying shoppers as they browse in the store.

5. Medium-sized retailers will be challenged on all sides when it comes to home delivery, as both global pure players and local stores look set to soar online
FMCG e-commerce in 2015 undoubtedly belonged to Amazon and its Pantry and Fresh services. Amazon Prime Pantry opened its services to UK consumers in November 2015, allowing members to get everyday household goods delivered to their home. Amazon Fresh, meanwhile, expanded its grocery home delivery services in the US, with plans to expand to the UK and Europe in 2016. This rapid geographic expansion has placed pressure on other grocery retailers to further develop their delivery models.
Up until now the most prevalent delivery model for groceries has been the pick-up model, yet consumers still show an overwhelming preference for home delivery. With the consumer as king and Amazon reigning supreme, we will see retailers testing the possibilities of home delivery throughout 2016. Independent retailers will expand their loyal customer base by building on their experience with local delivery to reach new customers, undercutting existing players with a less flexible infrastructure, while global companies will benefit from their proven delivery expertise. With the threat from global pure players on one side and the potential of smaller more nimble specialist retailers on the other, medium-sized retailers will need to be on top of their e-game in 2016.

6. Personalisation is the name of the game for FMCG companies, as they work to engage with consumers online

The personalisation of products and of content has been tipped as one of the most exciting opportunities in digital marketing in recent years. As the market becomes saturated with companies all offering similar products and services, tailoring the online experience to each user and their preferences is a new way to stand out. Coca-Cola was perhaps the first to really harness the power of product personalisation in 2013, with their “Share a Bottle with…” campaign. Other leading FMCG companies soon followed suit, however, with Mondelez recently profiting from their colour-in holiday packaging and making $2.5 billion from online Oreo sales in 2015. With these two examples leading the FMCG pack, 2016 could be the year that product personalisation truly takes off.




Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks,tioletries,processed foods and many other consumerable.In contrast, durables or major appliances such as kitchen appliances are generally replaced over a period of several years.
FMCG have a short shelf life either as a result of high consumer demand or because the product deteriorates rapidly. Some FMCGs, such as meat, fruits and vegetables, dairy products, and baked goods, are highly perishable. Other goods, such as alcohol, toiletries, pre-packaged foods, soft drinks, chocolate, candies, and cleaning products, have high turnover rates. The sales are sometimes influenced by some holidays and season.
Though the profit margin made on FMCG products is relatively small (more so for retailers than the producers/suppliers), they are generally sold in large quantities; thus, the cumulative profit on such products can be substantial. FMCG is a classic case of low margin and high volume business

Predicting Sales Of Fast-Moving Consumer Goods In India
  • Nielsen predicts that India’s FMCG industry will grow from $37 billion in 2013 to $49 billion in 2016.
  • Indian FMCG industry expected to grow 7% in 2014, 10% in 2015 and about 12% in 2016, taking the sales in 2016 to $49 billion.
  • Distribution growth, innovations around sachet offerings, employment rates and index of industrial production (IIP) are key influencers of FMCG sales in India.
India’s FMCG industry is massive. In 2013, 8.4 million outlets served 1.26 billion people and accounted for US$37 billion in sales.
The last three years have been challenging for India’s FMCG industry. Sales have been affected by a weak economy and high inflation. Consumer confidence which we found has a strong correlation with FMCG sales, has also dipped in this period. In more recent months, however, confidence is rebounding and the sector appears to be one with perceptible signs of a sustained recovery.

The FMCG Industry

To understand the declining FMCG growth trend and predict how the future looks like, we must first understand the sales environment. There are several forces at play that affect the FMCG industry in India.
Through multivariate regression modelling and custom forecasting, Nielsen arrived at drivers-based FMCG forecasts incorporating a range of influencing variables. This helps in understanding market dynamics, gain foresight into current and emerging trends and to plan better.
Nielsen used a three step approach to forecast FMCG sales value.
  1. Identify the drivers impacting sales through regression modelling
  2. Quantify the impact of each of the drivers
  3. Finally, forecast FMCG sales for the next three years using the identified drivers and their future value
All the above variables were modelled against FMCG sales to attain sales drivers. Using these drivers and their impact on FMCG, we were able to forecast sales for 2014 - 2016. 
Drivers Of FMCG Sales
Overall 8 factors have emerged which play a direct role in influencing FMCG sales. We have classified these drivers of sales into two categories: those that marketers can control and those they cannot. The good news is marketers can directly influence more than half of the drivers of sales.
Given the Indian FMCG consumer’s preference for traditional trade outlets and the challenge for marketers in actually reaching the consumer, it’s understandable that availability is the biggest driver of FMCG sales. This is followed by employment rates, which generates income, and then proliferation of sachets (low volume packs), which have a low outlay and are easy on the wallet. Sachet packs also play a strong role in recruiting new buyers and in inducing trials.
Using Sales Drivers To Explain Growth On Decline
FMCG growth has been slowing for some time now, sliding by 8.1% from 2010 to 2013. In a clear indication that sales drivers have played a part in this decline, a slowdown was seen in the rate of distribution expansion and the rate of sachet launches during the same period. Admittedly, weakening macroeconomic variables also contributed to the overall FMCG slowdown.
Here is a closer look at how some of the drivers affect FMCG sales:
Availability: The slowdown in distribution expansion has held up growth. The distribution expansion in 2013 has slowed down to 1.1% from a healthy 2.3% in 2010.
Awareness: While the extent of the impact is smaller, yet, the effect of lower television gross rating points (GRP) has affected sales.
Macro factors: Declining FMCG growth seems to be reflective of the Indian economy as a whole. The key macroeconomic indicators have weakened; GDP slowed from 7.9% in 2009 to 5.7% as of Nov. 12, 2013. The Index of Industrial Production (IIP) has also plunged from 5.8% in 2009 to 1.7% in November 2013. This has affected the economy and the consumers’ purchasing power.
Sachet (Low volume packs): New product launches through sachets have fuelled growth over the years. The growth in the number of low-volume packs hit 31.1% from 2009 to 2010. The rate then dropped to 10.5% from 2012 to 2013. This drop in sachet innovations has impacted FMCG growth.
The primary factors expected to drive a spurt in sales are a stronger GDP and rise in employment. An increase in the rate of availability through distribution expansion is also expected to support sales growth.
Nielsen expects the Indian FMCG sector to touch US$49 billion by 2016. The early signs of revival include a recovering GDP, a strengthening economy and higher consumer sentiment about their employment opportunities.