FMCG Firms Must Not Curb Marketing Spends During Slowdown, Says Vinita Bali
A slowdown is exactly the time when FMCG firms have to do more to spur demand and consumption, says Vinita Bali, former managing director of Britannia Industries. (Photo: BloombergQuint)

FMCG Firms Must Not Curb Marketing Spends During Slowdown, Says Vinita Bali

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Makers of fast-moving consumer goods must spare advertising and marketing costs during their cost-cutting exercises in periods of receding growth, according to industry veteran Vinita Bali.

“Companies have to shift from their lazy marketing and really activate their brand propositions,” Bali told BloombergQuint in an interaction on Wednesday. “This is the time when companies have to make trade-offs between volume growth, margin and investments.”

The former managing director of Britannia Industries Ltd. said such companies usually tend to reduce their marketing spends during recession, citing studies. “That (recession) is exactly the time when you have to do more to spur demand and consumption.”

The liquidity crunch faced by non-banking lenders last year has spilled over to India’s consumption economy. Growth in the country’s FMCG sector declined for the second straight quarter in the quarter ended June, heading towards a slowdown, according to Nielsen India. Also, a sharp pullback in spending by consumers in rural markets has impacted FMCG companies.

Volumes at Hindustan Unilever Ltd., India’s largest FMCG firm, fell to a seven-quarter low in April-June period, impacted by declining rural growth.

Also read: Q1 Results: Britannia’s Profit Misses Estimates Amid Consumption Slowdown

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