In a move that could lead to the realisation of actual market share positions of players in the fast-moving consumer goods (FMCG) sector, retail audit major ORG-MARG is planning to take into account promotions/ freebies as part of the audits.
ORG-MARG has already commissioned a pilot study. According to industry sources this has been a long standing demand of industry players, who felt that the actual market share position was not being reflected, what with promotions becoming a regular feature now. The impact of the new development is expected to be immense, as with the proposed change, a player offering a one-for-one free promotion on a product could actually witness doubling of its market share.
According to the statistics, in 2001, there were as many as 2,050 promotional schemes of all kinds in the Rs 80,000-crore FMCG industry. The categories, which witnessed the maximum number of promotions are, toilet soaps, toothpastes and biscuits, in that order. In 2000, the number stood at 1,954 schemes. During this year, the categories, which used this route to a great extent to market products included, toilet-soaps, tea and toothpastes.
The industry has been voicing its concern on promotions not being accounted for by ORG-MARG while determining market shares — an indicator to growth among competing brands in a category. However, ORG-MARG had commissioned a separate database on promotions, called Promo Database, in addition to the regular database. Now, it plans to merge the two into one comprehensive database, which will account for the promotional schemes in the marketplace.
According to industry analysts, the new development will bring out the factual picture in terms of market shares and will act as a true indicator for marketers to formulate future strategies.
Source: Financial Express