Description
Post liberalization Indian market has evolved a lot, providing opportunities galore to companies and posing unique challenges. With a 300 million plus strong middle class population (more than population of France Italy and U.K. put together) India is one lucrative market wherein every marketer is vying for lion‟s share.
Int. J. Manag. Bus. Res., 2 (3), 253- 269, Summer 2012
© IAU
Interactive Communication Channels and Their Appropriateness
for the FMCG Business
*
A. Munir Dad
The School of Business and Management, University of Gloucestershire, Cheltenham, United Kingdom
ABSTRACT: Purpose: The aim and objective of this report is to identify the benefits of interactive
communication channels and to advice the FMCG business on how these new methods are better than the
conventional methods.
Design/ Methodology/Approach: In this research article facts about advertisement and its effectiveness were
collected from different surveys conducted by various agencies. Mainly secondary data is used for this research.
The present conceptual paper also demonstrates the previous literature and findings.
Findings: For FMCG business, Interactive communication channels are far better than traditional methods and
they create brand awareness and brand differentiation among other FMCG brands. Although traditional methods
have their own advantages but their effectiveness could not be measured, while it is possible in case of modern
methods of advertisements. Moreover, people are becoming more accustomed to modern methods due to
advancements of technologies.
Research implications/limitations: This research will provide guidelines to managers and policy makers of
FMCGs Corporations on effective use of all types of communication channels to increase their sales. This
research has various limitations. It is only conducted on secondary data. To fill this gap future research can be
conducted on primary basis. Only few formats of communication were discussed in this paper. More advanced
formats (e.g. Enhanced Text) could be explored in future research by specifying any region or circumstances.
Originality/value: Considering the previous literature on advertisement and communication channels, this
research study provides the conceptual comparative analysis of traditional channels of communication and
Modern tools of communication for selling of any product particularly FMCGs products. This study depicts the
usefulness of modern technological tools in today's world in both retail and FMCGs businesses.
Keywords: Fast Moving Consumer Goods (FMCG), Communication/Advertisement channels, Interactive
communication channels, Traditional methods of communication, Comparative analysis between new and old
channels of communication
INTRODUCTION
Communication is very important element of
the business as Fill (2005) argued that in
business effective communication is the guarantee
of success; however, there are many different
channels of communication for example TV,
Radio, Newspaper, internet, SMS, etc (Danaher
and Rossiter, 2011). In the modern world
Technology has been developed and this
development of the technology has invented new
methods of communication which have
dramatically changed the consumer behaviour as
well as all the business structure. Many
businesses have already started using new
methods of communication, but FMCG industry
*Corresponding Author, Email: [email protected]
A. Munir Dad
254
is still not using new methods of technology as
IAB (2008) argued that in UK FMCG business
had only 2.5% share in the online advertising
market. However, it is using traditional methods
very frequently. Whereas Fill (2006) argued that
today these new methods are essential for
success of every business as internet has
decreased the market share of the traditional
channels like newspaper and magazine. Today
people are spending more time on internet and
online activities; similarly online shopping trend
has also been increased rapidly whereas on the
other hand traditional channels are not that
effective to fulfil all the requirements (Speck and
Elliot, 1997). Therefore, FMCG business should
also start using these new communication
channels. Communication channels are used for
the persuading the customers. And with the
effective communication sales could be
enhanced or new product could be launched in
the market successfully. As Durden (2010) tells
the story about the Munch Bunch which is a fruit
flavoured yogurt and it was losing its sales from
UK’s market and it came on number 4th
between 2006 and 2008 ;however, company took
its position back only within one year by
effective communication strategy. Moreover,
Durden (2010) tells that company started a
communication strategy on TV program in
which company targeted mums and kids and told
them about the benefits of fruits and calcium for
kids and then presented Munch Bunch that it has
got all the ingredients by which your kids could
have good health. Furthermore, through effective
communication strategy company increased its
sale by 21.7% and profit by 74%.
Companies also use communication
strategies for improving their brand image or for
brand repositioning as it is discussed by
European Association of Communications
Agencies that how successfully Coca-Cola
protected its image as people started thinking
about it is very conservative brand and it is not
appealing to youngsters (Silver Winner, 2004).
Coca-Cola used TV, Radio and Print media in
different regions of the world in which they
showed that after drinking Coca-Cola, any
boring moment could be converted into a joyful
moment. This campaign really worked and brand
got more response rate and increase in sales by
57 million units more .There are many
communication channels which marketers use
for promoting their products and according to
Danaher and Rossiter (2011) today marketing
managers have to face diverse choice of media
however they (Danaher and Rossiter, 2011)
discussed many communication channels, and
compared the new channels (Internet, blogs and
txt messages etc) with the traditional
communication channels (television, door to
door marketing and direct postal mails, etc).
Literature Review
FMCG and Communication
Along with many other definitions of Fast
Moving Consumer Goods, Menke (2007) argued
that, Fast Moving Consumer Goods are those
goods which have very low prices and are
manufactured at Low cost as well; however, they
are produced in high volume and it is aimed to
achieve high profit through economies of scale.
Furthermore, according to Cox (2003) FMCG
can also be called Consumer Packaged Goods.
According to many researchers FMCG
includes those products which are low
involvement products and consumers don’t take
much time on decision making process before
purchasing them likewise, Bulmer (1998)
defined the range of FMCG products from
cosmetics to households. However Francis
(2006) argued that development in FMCG
product is just a development in already
developed products so marketers do not need to
invest high budget on research therefore they
have low cost and in result marketers are able to
market them (FMCG products) at low prices.
Kotler and Keller (2009), likewise, argued
that FMCG’s product range can be classified in
to tangible and non tangible goods/products and
these are low involvement products that is why
people don’t put much effort before purchasing
them and these products are often being
purchased by the consumers very frequently
without spending time on decision making
process. In supporting this idea Kotler and
Keller (2009) argued that Fast Moving
Consumer Good can also be classified as
convenience goods and these convenience goods
are further divided into three categories i.e. :
(1)Impulse Goods, (2)Staples Goods And
(3)Emergency Goods.
If consumer behaviour is discussed regarding
purchase related to FMCG product then it is
clear that FMCG products have got less degree
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
255
of involvement similarly, Moffett et al (2002)
argued that in FMCG industry there are too
many products which are substitute or
alternative to each other and competition is too
high and product differentiation is very low.
Therefore consumers usually don’t make
decisions on the basis of brand differentiation
but they purchase habitually. Kotler and Keller
(2009) argued that in FMCG industry consumer
usually do not make purchase on the basis of
brand differentiation of a product but they do
purchase on the basis of differentiation between
the stores’ brands. Kotler and Keller (2009)
further argued that purchase is not being made
because of brand loyalty but on the basis of
consumers’ habit. Likewise Fill (2005)
supported this concept and argued that because
of consumers’ low involvement, while
purchasing FMCG products, proposed risk is
also very low.
According to Duncan and Moriarty (1998)
communication is called as a human activity
through which relationships are built and they
called communication a core activity but not
only in the field of marketing. Furthermore, Fill
(2005) argued that marketing communication is
way or a medium through which an organization
engage with its customers. Likewise, Chantrey
(2000) argued communication channels are the
different ways or means through which
companies can communicate and persuade
customers likewise, Mohr and Nevin (1990)
argues that in marketing communication
channels are used for the transmission of
persuasive information from brand owners to the
customers.
Communication channels are used for the
persuading the customers. And with the effective
communication sales could be enhanced or new
product could be launched in the market
successfully. As Durden (2010) tells the story
about the Munch Bunch which is a fruit
flavoured yogurt and it was losing its sales from
UK’s market and it came on number 4th
between 2006 and 2008 however company took
its position back only within one year by
effective communication strategy. Moreover
Durden (2010) tells that company started a
communication strategy on TV program in
which company targeted mums and kids and told
them about the benefits of fruits and calcium for
kids and then presented Munch Bunch that it has
got all the ingredients by which your kids could
have good health. Furthermore, through effective
communication strategy company increased its
sale by 21.7% and profit by 74%.
Companies also use communication
strategies for improving their brand image or for
brand repositioning as it is discussed by
European Association of Communications
Agencies that how successfully Coca-Cola
protected its image as people started thinking
about it is very conservative brand and it is not
appealing to youngsters (Silver Winner, 2004).
Coca-Cola used TV, Radio and Print media in
different regions of the world in which they
showed that, after drinking coca-cola, any boring
moment could be converted into a joyful
moment. This campaign really worked and brand
got more response rate and increase in sales by
57 million units more. There are many
communication channels which marketers use
for promoting their products and according to
Danaher and Rossiter (2011) today marketing
managers have to face diverse choice of media
however they (Danaher and Rossiter, 2011)
discussed many communication channels, and
compared the new channels (Internet, blogs and
txt messages etc) with the traditional
communication channels (television, door to
door marketing and direct postal mails etc).
As products in FMCG industry are being
purchased habitually and consumers do not take
much time on making purchase decision
therefore, Fill (2006) argued that marketing
communication plays very important role in
creating brand differentiation especially when
there is no difference between the core products.
Furthermore, Fill (2006) quoted the example of
mineral water Perrier and Highland Spring that
these two brands are different but core product
(Mineral Water) is same, so consumer perceives
the same benefits from both brands but with the
help of effective marketing communication
strategy consumers’ brand loyalty and emotional
attachment can be gain. According to Fill (2005)
brand is being kept within evoked set of brands
and evoked set of brand mean the whole range of
brand which is being under considered by
consumers while making purchase decision.
Moreover, Fill (2005) stated that the
promotional messages should be shorter for
FMCG products because these products have got
low user involvement that is why consumers are
A. Munir Dad
256
not interested in getting much information;
therefore, message should be emotional and
shorter than those products which have high
involvement.
Traditional Communication Channels
According to Bezjian-Avery (1998) the
usage of old communication channels has been
decreased because of emergence of new
electronic media channels. However there are
many traditional communication channels which
were being used by marketers and some of them
are still being used successfully.
Limitations of the given figure 1 channels
have been discussed below in the context of
FMCG Industry.
Limitations of Traditional Communication
Channels
According to Pfeiffer and Zinnbauer (2010)
advertising has seen the greatest lost in the
history from last few years however, they argued
that the new communication channels are going
to have high growth rate in future. According to
Menke (2007) traditional communication
channels played very effective role whereas,
now in this interactive era they are not able to
fulfil all the needs and requirements of the
customers and marketers.
Speck and Elliot (1997) argued that people
do not really like to watch advertisements
especially during any interesting program and
that really cause irritation for the target
consumers and they argued that most of the
people just turn off the pages of the newspaper
where there are advertisements and on TV
switching ratio of channels is so high. Likewise,
Menke (2007) specifically talking about FMCG
industry argued that it is not easy for the
companies to get the information about target
people who watch the advertisement and who
just switch the channels.
Furthermore, Springer (2007) divided the old
and new communication channels in to the
category of Push and Pull media and He
categorised traditional channels in to push media
and argued that they were usually less focused
and were used for mass communication
furthermore they have less response rate as
compare to new channels (pull media). Menke
(2007) also argued that traditional channels are
one-sided and usually push strategy is needed.
Moffett et al (2002) argued that selling is not
important but consumer need base marketing has
got more importance. Therefore, Menke (2007)
concluded that these traditional communication
channels only focus for increasing sale instead of
fulfilling customers’ needs.
Figure 1: Traditional communication channels
Radio
Television
Postal Mail
Newspaper
Door to Door Selling
Traditional Methods
Of Communication
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
257
New Methods of Technology and Their
Appropriateness for the FMCG Business
Internet and Online Business
According to Cerf (1997) cited in Doren et al.
(2000) internet was developed by US Defence
Advanced Research Projects Agency after the
second world war in 1960s’ and the main
purpose was to communicate on continuous
bases within the Army units.
Doren et al. (2000) argued that internet was
not being used publically for a long time because
of its highly sensitive purpose of development.
However, Frost and Strauss (1998) discussed
that the social and technological developments
especially the creation of World Wide Web
(WWW), browsers and other applications
created a huge interest for the usage of internet
in both public and private sectors. Similarly,
Hoffman and Novak (1996) said that the Web is
working as a latest channel of communication
and it has all potentials to perform the marketing
functions.
Moreover, according to Stewart and Zhao
(2000) surely the internet commerce is growing
very rapidly and it is changing the pattern and
methods of business in many different ways
whereas, it has larger market share in Business
to Business rather than business to consumer.
Furthermore, in general, the internet usage is
increasing every year by people individually and
a research shows that it is known that 55.2%
people in UK use home computers just because
of internet (Key Note UK Internet Market,
2009).
Chaffey (2010) discussed that online
shopping is growing very rapidly however
tourism is the biggest online industry. Figure 2
shows that in year 2008 in UK the usage of
internet
(E-commerce perspective) for tourism was
highest and it was 63% whereas, internet
banking was following with 49% ;however,
usage ratio of internet for selling goods or
services was lowest and it was 19% (Key Note
UK Internet Market, 2009).
Moreover, Chaffey (2010) argued that
people yet does not prefer to purchase grocery
online however, most of the industries are
coming online because of its cost effectiveness.
While concluding this part it can be argued
that with the rapid development in internet
industry marketers have found many new
interactive methods of communication with the
consumers which are highly time and cost
effective. According to Menke (2007) the main
reason of rapid growth in online expenditures is
the huge development of broadband and
consumers’ great response and interest towards
its usage.
According to Edelman (2007) this digital
development is changing all the media and its
forms by creating the difference between old and
new methods. Cauberghe and Pelsmacker (2011)
discussed this convergence and argued that new
digital technology made the users able to interact
with the TV through using remote control.
Chaffey et al (2009) said that these new
interactive methods made two way
communications possible and these methods
could be used by companies for having
interaction with their consumers, for example
Nestle, a FMCG company, is using their website
for having communication with their users and
through this process company is able to have
more access over information about consumers
and their needs.
In addition, Fill (2005), as mentioned above,
argued that FMCG products are purchased on
habitual basis and it has very low user
involvement but on the other side, Chaffey et al
(2009) argued that these new interactive
methods of communication can create
customised interaction between consumer and
company, so these new interactive methods
could be very useful for FMCG business.
Danaher and Rossiter (2011) purported that
internet technology and email are playing very
important role in our daily lives and they have
become necessary part of our lives. Furthermore,
this technological development has created wide
range of new communication channels and
marketing managers have got too many choices
for communication with their consumers
(Danaher and Rossiter, 2011).
Springer (2007) said that pull strategy is
being used for these new interactive methods of
communication rather than push strategy.
However, Meffert (2000) argued that there are
some methods of interactive communication
which are form of push strategy e.g. Banners,
Pop-up windows and E-mails are forms of push
strategy communication. As mentioned above,
with the internet and technological development,
now marketers have got new communication
A. Munir Dad
258
channels to communicate with their consumers.
These new interactive communication channels
are far better than conventional channels and
they can fulfil the needs of both businesses and
consumers’ social and technological requirements
(Chaffey et al, 2009). These new
communication channels, their backgrounds and
how they can be used appropriately by FMCG
industry are discussed below briefly and are
represented in figure 3 at the end of this paper.
Figure 2: The usage of Internet in UK in 2008
Source: Key Note UK Internet Market (2009)
Figure 3: Modern Methods of Communication
63%
49%
37%
19%
Using Services Related to
travel and
Accommodation
Internet Banking Downloading Software Selling Goods or Services
Purpose for Using the Internet
(% of adult users), 2008, in E-Commerce Sector
Email
Blogs Social Networks
Banner Ads
Games Advertising
Search Engine
Marketing
SMS And Marketing Digital Radio
ITV Advertisement
Viral Marketing
Modern Methods
Of
Communication
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
259
Social Networks: Chaffey et al (2009) stated
that social network sites are also called
community sites and they are the best source of
interaction between consumer to consumer
(c2c). The typical communication methods on
social networks include posting comments,
sending messages, chatting with online friends,
sharing videos and tagging and rating specific
contents (Chaffey et al, 2009).
According to Vogt and Knapman (2008)
famous social network sites include Facebook,
Orkut, Beebo, Linked In and MySpace;
furthermore, these social networks are divided
into two categories which are Open and Closed
networks. Vogt and Knapman (2008) described
that Open Networks are those in which any one
can connect with any one e.g. Facebook, Orkut
and MySpace. Webb and Burgoyne (2009)
stated that according to the research by TNS
USA Study in year 2007 people are asked about
where they would prefer to spend their 15
minutes if they are free then in the response 17%
of the people liked to do activities on their social
networks, and this choice was rated highest
among other options.
The given figure 4 shows that consumers’
interest for social network sites is increasing day
by day and the users are growing very rapidly
and people are spending more and more of their
free time on social media, as consumers are
going online so marketers also need to go online.
Moreover, social networks are changing the
consumers’ behaviour and today the way
consumer perceives brand image is different
than yesterday. Many big brands are using social
networks to keep themselves in touch with their
consumers and through these SNS (Social
Network Sites) companies also get to know the
consumers’ needs and new market trends.
According to ANA Magazine (2010) McDonald
also started using social networks and this will
create more brand loyalty among its fans.
Banner Ads: According to Pashupati and Lee
(2003) banner ad is one of the most effective and
prominent among other forms of internet
advertising. Vurro (2010) described that banner
ads create attraction for the internet users to
click on them and this click leads them to the
further details of the product or service.
Furthermore, Pashupati and Lee (2003) argued
that sometimes manufacturers, for banner
advertisement, are being charged as per click
made by user and sometimes they are charged
for fix duration of time. Furthermore, Vurro
(2010) stated that according to 70% of internet
users, banner ads are considered as effective
source of advertisement however, Vurro (2010)
argued that the effectiveness of banner ad
depends on its programming. This idea is
supported by Chaffey (2010) and he argued that
static banners are less effective than flashing
banners and users click ratio is higher for
flashing banners rather than static banners.
According to Wysocka and Hand (2007)
large banner ads are more effective than smaller
and they have more potential to have click on
them however, Schumann and Thorson (2007)
argued that banners are not effective only when
they are being clicked but even without being
clicked they create brand awareness and positive
attitude of users towards the brand. According to
Key Note Internet Advertising (2009) banner
advertisement is one of the largest segments of
the display advertising market and in year 2008
4.9 billion U.S dollars were generated through
banner advertisement which was 21% of total
revenue generated from all formats of internet
advertising in US. As products, their benefits,
features and functions can be demonstrated
through online banners so that banner
advertisement can work as an effective
advertisement channel for FMCG industry.
E-mail: O’Brien and J ones (1995) argued that
customer loyalty can be gained by having
regular and good relationship with them.
Therefore, Merisavo and Raulas (2004) stated
that brand loyalty increases surely by e-mail
marketing because it makes possible for
marketers to keep in touch with their customers
at very low cost.
Reichheld and Schefter (2000) discussed
that marketers should use e-mail as a tool for
marketing and communication and they should
retain customers on internet rather than just
attracting them. Merisavo and Raulas (2004)
argued that though e-mail marketing has a power
to maintain the brand loyalty but this tool was
being ignored by marketers for a so long time
before the notice of Reichheld and Schefter in
year 2000. Neuborne (2008) argued that day by
day marketers are increasing investment into
e-mail marketing, furthermore, Neuborne, 2008
A. Munir Dad
260
stated that according to Direct Marketing
Association (DMA) 600 million U.S dollars
were spent on e-mail marketing in year 2008
however, it will be more than 1.1 billion U.S
dollars by 2012. On the other hand Danaher and
Rossiter (2011) argued that e-mail is the main
reason for the decreasing share of direct postal
mails.
According to Davis (2002) there are several
characteristics of e-mail which make it attractive
to marketers for communication. Those
characteristics are:
? E-mail can be created, sent and received in a
very short period of time
? Through e-mail cost per message is very
low up to 0.01$
? It is considered as a ‘quick response’ tool
because normally people response back
within 48 hours.
? It has got ‘high response’ rate
? And it can be fully personalized according
to one’s need and want.
Usually receiver make decision, on the basis
of header and senders address of the e-mail, that
whether to delete it or to read it therefore Fill
(2005) argued that this part of the e-mail should
be well considered before sending it. According
to Menke (2007) the basic purpose of e-mail
marketing in business is to create an interaction
between the company and consumer so in
FMCG business it is very essential to be careful
about who is going to receive the e-mail because
if it is sent to any irrelevant person then it would
be ignored and company will just bear a cost.
Blogs: Schumann and Thorson (2007) defined
that blogs are the short form of the web blog
which are also called internet diaries and they
are written by internet users and it contains
videos, posts and audios etc. As now it is
confirmed to the marketers that consumers are
the greater source of influencing to each other
and on internet it is being done through blogs
and other social media like Facebook and
MySpace etc (Padmanabhan, 2008).
Short Messaging Service and Marketing:
Short Messaging Service (SMS) generally called
‘texting’ is another form of e-mail but it creates
communication between mobile phones rather
than personal computers (Chaffey et al, 2009).
Cheng et al (2009) argued that it is too fast
communication service and it delivers with in a
very short time. Cheng et al (2009) mentioned
some of the benefits of SMS marketing and they
are:
? High speed text message delivery
? Interactivity
? More customer reach (Mass
communication)
? And response rate for SMS is five times
more than direct postal mail.
Dickinger et al. (2004) argued that SMS
marketing is very much cost effective and the
only cost which company has to bear is the cost
of purchasing phone numbers which normally
goes up to 30 U.S dollars for 1000 phone
numbers however this cost seems very minor
after the SMS reaches to its exact target
customer. Furthermore, Menke (2007) argued
that mobile phone technology is developing very
rapidly and because of this great increase in the
number of mobile users marketers have got more
opportunity to use this channel effectively for
the communication. According to Fill (2005)
FMCG industry can get benefits from this SMS
service as it is same as e-mail and likewise sales
promotion and brand awareness can be created
by using mobile marketing. Furthermore, mobile
coupons for price discount can be sent through
SMS for generating sales promotion (Carter,
2004).
Search Engine Marketing: According to
Chaffey et al (2009) Search Engine Marketing
(SEM) is another form of new methods of
communication in which companies do
advertisement of their products or brands on the
search engines. Moreover, Churchill (2005)
argued that search engines are working as a
source of good fortune for the marketers and
through advertisements on search engines
marketers are enhancing their Return on
Investment (ROI).
Search Engine Marketing is also known as
Keyword Search Advertising. According to Wu
et al. (2011) search engine marketing starts
working when consumers write the keyword in
search engine and in the search result they find
clients’ advertisement which often shown on the
top or side of the page. Furthermore, client is
being charged only when user clicks on that
shown advertisement however, sometimes it
becomes the disadvantage of search engine
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
261
marketing because consumer might click on the
keyword without being understanding the web
page (Wu et al., 2011).
According to Churchill (2005) there are
certain advantages of search engine marketing
which are: It is more costs effective as compare
to other advertising methods, Marketers can
analyze and measure the result of the campaign
so that the accountability is high for advertising
campaigns on search engines, Through
traditional methods marketers were not able to
quantify the actual ROI of the specific campaign
however it is possible through SEM so that
measurability of search engine marketing is
higher, Lastly, as data can be analysed through
previous records so that predictability is high on
search engine marketing.
According to Chaffey (2010) search engines
show all other terms which are related to that
specific search keyword e.g. if consumer search
about any fruit juice then search engine might
also show the benefits of that fruit juice.
Moreover, FMCG products are low involvement
products so that they need to be linked with high
involvement products (Kotler and Keller, 2009)
so in short FMCG business can get more
benefits through search engine marketing.
Another advantage of search engine marketing is
its cost effectiveness which could also be the
reason of using SEM by FMCGs business. In
short, all the FMCG companies should under
consider the use of SEM as a part of their
integrated marketing communication otherwise
it would be difficult to compete with other
brands which are using search engine marketing.
Viral Marketing: According to Key Note UK
Internet Market (2009) viral marketing is the
process of using the current social networks for
the promotion of a product or a brand based on
the concept that user will further spread the
information around the other users. Viral
marketing might contain television ads, cartoon
characters, video clips, humorous images, poems
or songs and any type of messages (including
news and information) which create interest for
the users and they pass that content to other
users within their networks (Chaffey et al, 2009).
According to Gibbon and Hawkes (2006) the
simple, effective and best viral marketing creates
positive response and it let the users to
experience or interacts with the brand.
Moreover, Chaffey (2010) argued that viral
marketing is very much effective for creating
brand awareness.
Charlesworth (2009) argued that for
successful viral marketing company must
consider this given below criteria:
? The message which is going to be sent must
be interesting and creates interest for
consumers such that they forward it further.
In short message must have worth to be
forwarded.
? User friendly techniques must be used for
sending the message such that users can
forward the message easily and frequently
e.g. there should be a button like ‘‘forward
to friends’’.
? And in last, message should be sent on
where it could be seen easily by the target
group.
As viral marketing helps in enhancing brand
awareness and it is also being done with very
low cost, FMCGs business should start taking
benefit through this communication channel
however they should be providing honest and
appealing content to make the campaign
successful.
Games Advertising: This is the new platform
for the marketers to promote their brands. In
addition, according to Internet Advertising
Bureau (2010) this is the very growing medium
and all the major brands are observing it as a
marketing channel however, coca-cola and
Procter and Gamble are already using it. It is
becoming one of the most effective
communication channels and Internet
Advertising Bureau (2010) tells that only in UK
20.1 million people are playing games on
internet on regular basis and on average they are
spending more than 7 hours in a day on online
games.
Marketers of FMCG business should not
ignore this channel of communication as people
are spending more and more time on online
games similarly its market share is also
increasing rapidly. Furthermore, people keep in
mind about the brands they have seen in games
and this channel is as effective as even President
Obama used this channel for his election
promotion campaign (Internet Advertising
Bureau, 2010).
A. Munir Dad
262
ITV Advertisements: Interactive Television is
the further technological development in the
traditional televisions. In short, Gawlinski
(2003) argued that the television sets which have
got internet access are called interactive
televisions (ITV). Furthermore, Tsaih et al.
(2005) stated that through interactive televisions
companies are broadcasting audiovisual
messages and users can communicate as they
have got opportunity to make search on ITV and
they can search more information according to
their needs and can go for shopping online.
According to Gawlinski (2003) there are
different types of interactive televisions
includes: Electronic Programme Guides, Tele
text Style Service, Walled Gardens, Internet on
Television, Enhanced Television, Video on
Demand, near video on Demand and Personal
Video Recorders
According to Menke (2007) as it costs very
low to promote the brand through interactive
television advertisements as compare to
advertising on traditional TV thus it leads to
higher return on investment (ROI) and it creates
brand awareness however price is charged on the
number of views by users and sometimes it leads
to wastage of money that is why it sometimes
does not attract FMCGs business.
If FMCG companies start using ITV for the
communication then they can increase their
brand awareness though they can create brand
awareness among new generation more
efficiently because it is new technology and
normally young people only seems using ITVs.
Digital Radio: According to Menke (2007)
Digital Radio is also called Digital Audio
Broadcasting (DAB) and J efkins (2000) stated
that this is the latest technology and further
development in traditional radio through which
multi audio services are being provided to the
listeners.
According to Mortensen (2008) more than
60% of UK’s people are listening digital radio
for hours in a day but they are also using some
new platforms for listening it which includes
internet and mobile phones and digital TV or
ITV moreover, digital radio has chances to have
much more market share in the future. Similarly,
Barber (2007) determined that sales of digital
radio will increase and in year 2012 and more
than 60% of households will have subscription
for digital radio.
For FMCG industry digital radio can
become very effective communication channel
as it is very cost effective, then its market share
growing very rapidly and on the other hand
social and technological trend is changing as
well and people are moving from traditional
radio to digital radio therefore, as consumers are
moving to this channels marketers also need to
move there.
Figure 4: Consumers’ interest for social network sites
Source: You've got a friend: Measuring the value of brand friending on social networks
17% 17%
14%
10%
9%
8%
7%
1%
Social
Networking
Talk on Cell Watch Tv Surf the
internet
Play console
video games
IM Listen to
MP3 player
Listen to the
Radio
Users 15 minutes Free time preferred activity by TNS USA Study, 2007
%
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
263
Advantages of New Methods of Technology
According to Chaffey et al (2009) the main
purpose of the advertising is to create awareness
and to generate the direct response by consumers
(as shown in figure 5) whereas, Menke (2007)
argued that the traditional methods of
communication are not as effective as new
interactive methods are.
New interactive methods of communications
are much more effective than traditional methods
however Chaffey et al. (2009), in figure 5,
highlighted these major benefits of new methods
which includes (1) Online advertisement
generates the direct response by consumers as
soon as they click on the displayed advertisements
and it makes the direct interaction possible
between the consumers and marketers.
(2) Online advertisements are much more
effective for increasing brand awareness.
(3) Advertisement through new interactive
methods of communication is much more
effective than traditional methods as firstly it is
cost effective and secondly it saves time. While
using traditional methods, marketers were
required to start working weeks or months
before its actual launching date furthermore it
was difficult to bring changes in the campaign
once it was being launched, however, now while
using new methods, marketers do not need much
time for all above processes. (4) Through new
methods of communication accountability is
possible as marketers are now able to measure
the ad effectiveness in terms of number of
people seen that ad or in term of number of
people liked or disliked that ad.
Furthermore, charlesworths (2009) argued
that another benefit of online advertisement is
that it makes the interaction possible between
consumer to consumer (C2C) or between current
customers and potential customers therefore it
effective for generating positive word of mouth
and creates brand loyalty among consumers.
Moreover, it is very easy to reach the target
market through online advertisements
(Charlesworth, 2009).
Some other benefits of advertising through
new technological media are discussed by
Trehan and Trehan (2007) which are: (1) New
methods are comparatively cost effective and
maximum marketers can afford the advertising
campaigns using new methods. (2) Messages can
be sent in a detail form and it could be re-
reachable and consumers can visit the ad at any
time when they are free. Moreover consumers
can make contact with the advertisers at any
time on the electronic address available on the
web site.(3)Another opportunity for the
advertising through the internet medium is that
the market share for internet market is increasing
day by day and on the other hand people are
spending more and more time on internet.
Disadvantages of New Methods of Technology
Marketers are having more opportunities
through online advertisements as internet market
is growing very rapidly but on the other hand
consumers are having more and more influencing
power and they can also become the cause of
damaging the brand image or they can create
negative word of mouth very easily especially
through social networks and web blogs (Menke,
2007).
However, there are some other possible
threats and disadvantages which are discussed
by some of the e-business researchers. As
Trehan and Trehan (2007) determined some
threats for using interactive methods for
advertisements which are (1) Internet advertising
market has just started growing now whereas
traditional channels are still occupying on most
of the market share. (2) While advertising
through new technological methods only those
people can be targeted who are using internet
otherwise these new methods are not useful for
offline consumers. (3) Getting users’ e-mail
addresses is also a hectic job and companies
have to pay cost for getting them though it costs
very low but on the other side after bearing this
cost people do not welcome the spam, junk or
uninvited people.
Further Reid and Bojanic (2009) argued that
sometimes there is more than one advertisement
banner or display shown on the web page which
seem very awful to the consumers and it
decreases the effectiveness of all the ads
however on the other hand there are many
software available in the market which consumer
use to block all type of online advertisements.
Moreover, Chaffey et al (2009) stated that online
medium of communication seems invalid for
advertisement when the cost per click goes high
but the consumers response rate is still low.
FMCG business should critically evaluate all the
factors and circumstances before using the new
A. Munir Dad
264
methods of technology however current market
trends do also matter highly and companies
should also have PEST (Political, Economic,
Social and Technological) analysis in detail.
Difference between Traditional and New Methods
of Communication
New methods of communication are no
doubt different from old methods of
communication (TV, radio, newspaper, door to
door selling etc). According to Danaher and
Rossiter (2011) these differences between
conventional and new methods of communication
are on the basis of ease in usage, trustworthiness,
reliability and perceived value given by
consumers. Moreover, Springer (2007) divided
the traditional and interactive methods of
communication with respect to the strategies
required. Furthermore, there are two type of
media pull media and push
media; all the conventional methods are under
push media however, new methods come under
pull media (Springer, 2007).
In addition, Chaffey et al (2009) determined
that new methods are high intensity methods
however traditional methods are low intensity
methods. In traditional channels marketers always
start communication with the consumers however,
in new methods of technology consumer starts
making contacts and he is seeking and searching
the information (pull media).
Figure 5 shows the difference between new
and conventional methods of communication,
there is two way response in interactive methods
of communication for example there can be two
ways communication through e-mail marketing
and banner ads by replying the mail and clicking
on the banner ads respectively.
Figure 5: Benefits of interactive communication channels
Source: Internet marketing: strategy, implementation and practice By Chaffey et al. (2009)
COMPANY CUSTOMER
PUSH
Direct Response
Traditional TV, Print, Radio
Media and Direct Postal Mail
COMPANY CUSTOMER
PULL/PUSH
INTELLIGENC
TWO WAYS Feedback
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
265
Figure 6: Advertising expenditure by all major segments
Source: Highlights fromthe World Digital Media Trends 2010 report
Future of Internet Advertising
J ames (2011) briefly highlighted the global
digital media trends and stated that the total
global advertising expenditure is expected to
increase up to 1.69 trillion U.S Dollars in year
2014 and it is forecasted that global advertising
expenditures would achieve 4% CAGR
(Compound Annual Growth Rate).
Furthermore, J ames (2011) argued that in
U.S, which is the largest advertising market in
the world, offline advertising market will have
lost in its share up to 86% in year 2013.
However, online advertising expenditure will go
up to 40.3 billion U.S Dollars which will be the
16% of the market share.
The given graph (figure 6) discriminates the
advertising expenditure by its all major segments.
This graph clearly indicates that internet
advertising market is growing rapidly and
continuously even in year 2009 when the
advertising market was in lost and all the major
advertising segments were bearing lost including
TV but internet was still growing with 4.3%
growth rate.
If the graph (Figure 6) is analysed in detail
then it becomes very clear that all the offline
advertising are shrinking however, Television is
still in good health and it will definitely play its
role even in future and according J ames (2011) it
would have 7.6% growth rate. Whereas, interactive
Channels are rapidly growing as it can be
seen in the figure 1 that advertising through
interactive video game is on the top even in year
2009, when there was recession on the peak, it
had market growth rate of 16.2%. Furthermore,
these two mediums (internet and video games)
will be leading for advertising market in future.
FMCG industry should observe these
interactive methods because at the moment they
are most favourite advertising channels and this
forecast indicates that they will remain favourite
-100
0
100
200
300
400
500
600
Percentage Change in Global Advertising Expenditures
by segments (2005-2014)
Internet
Television
Video Games
Consumer Magazines
Newspapers
Radio
Out of Home
Directories
Trade Magazines
Total
A. Munir Dad
266
in the future because of the benefits which are
associated with their usage for example their
cost effectiveness and time effectiveness.
However, on the other hand population on the
online market is increasing and consumers are
also spending more time as compare to past
whereas these interactive communication
channels are effective for creating brand
awareness (Chaffey et al, 2009).Furthermore,
J ames (2011) divided the advertising
expenditures by different online advertisement
formats shown in figure 1. In addition, Magna (a
forecaster) cited in J ames (2011) determined that
the spending on search advertising will increase
up to 53.3 billion U.S dollars in year 2015
however it was calculated $20bn in year 2010
whereas it was calculated $12.5bn in 2010 in
single U.S online advertising market and it is
forecasted $21.3bn in year 2015.
Practical Implementations
FMCG Marketers should not use any single
channel whereas they should use multi channels
for advertising campaign such that the campaign
could be more effective and the advertising
message reaches to the maximum target
audience. However the most important is to first
find which medium is most used by the target
audiences. As FMCG products are low
involvement products so marketers should use
online banner ads such that online ads do not
create irritation for consumers. FMCG
manufacturers should not stop using some of
effective traditional channels as Young (2010)
argued that advertisement through TV and
Newspaper is still effective and they have
market share of 29% and 28% respectively.
FMCG marketers should make synergy of
traditional and new channels of communication
as described by Gurau (2008), as marketers were
suggesting multi channel campaigns or IMC, and
now according to above research it is being
suggested to FMCG marketers to combine multi
interactive channels with multi traditional
channels and should make a synergy. Research
indicates that pop-up advertising is not liked by
the users and it creates disturbance for
consumers so that FMCG marketers should not
use it however, if they really want to use it then
they should be very careful while using it.
FMCG manufacturers who want to target kids
should use video games for advertising as IAB
(2010) argued that in UK 20.1 million people
played games on internet in year 2010. So kids
market can be captured through games
advertising more efficiently .FMCG marketers
should be careful in online customer relationship
management (CRM). FMCG manufacturers
should adopt new interactive methods of
communication for those products which are for
youngsters and people of middle age because
research indicates that most of the online users
are young and middle age people. However
retired people prefer old channels as TV and
Newspapers.
Danaher and Rossiter (2011) argued that
mobile advertising is even worse than e-mail
however Internet Advertising Bureau (2010a)
tells that mobile advertising expenditures
increased up to 83 Million pounds whereas it
was 37.6 million in 2009. This shows the great
growth rate and worth of mobile advertising so
FMCG manufacturers should use this channel
because it is more effective for reaching the
target audience. FMCG marketer should start
using search engines for advertising as research
indicates that search marketing is one of the
most growing channels at the moment and most
of the FMCG businesses are not using this
channel yet. Marketers should use social
networks, like Facebook and Twitter, for
increasing brand awareness because today there
are millions of people who are using these
networks and company can target more people in
less cost. These social networks are effective in
viral marketing and can create positive word of
mouth.
However marketers should be careful in
using these networks because control factor is
very low on social networks and they can also
generate a negative word of mouth as well which
can damage the brand’s image. Use of SMS and
internet is higher among youngsters (Danaher
and Rossiter, 2011). So it is suggested if the
FMCG manufacturers want to target youngster
then the advertising message should be delivered
via e-mail and SMS. After building a company’s
website FMCG manufacturers should not expect
that customer will start visiting them because
they have built it now but FMCG manufacturers
should create reasons making their visit
guarantee. Moreover, FMCG manufacturers
should always think about creativity and
innovation for their online campaigns.
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
267
CONCLUSION
As research indicates that the characteristics
of FMCG products are low involvement
products with low product differentiation and
consumers do not take much time in decision
making process because FMCG products are
being purchased on consumers’ habitual buying
behaviour, therefore, marketers need to create
high brand awareness in order to include that
specific brand into consumer’s evoked set of
brands. Based on this marketers should not
ignore the effectiveness, strengths and power of
the new methods of communication.
Furthermore, the discussed benefits of new
methods of communication are more than the
traditional methods and FMCG manufacturers
can create brand awareness and product
differentiation effectively by using these new
interactive methods. In addition, traditional
methods of communication are becoming out
dated and are not able to fulfil all the
requirements of today’s consumers’ and
marketers’ needs.
Though the traditional methods still have
some advantages as they are reliable and
credible but on the other hand they need push
strategy and create one side communication,
moreover, they are not measureable as marketers
cannot evaluate how effective the campaign was
and what exactly changes it need in future.
However, most of the new methods of
communication need pull strategy rather than
push and they can also be evaluated and
measured for their effectiveness and accuracy,
furthermore, new methods of communication are
much interactive and they enable communication
from both marketers’ and consumers’ side.
Though FMCG manufacturers yet have not
realized the benefits and effectiveness of new
methods of communication, that is why they still
do not prefer to use these methods otherwise
these online methods of communication are able
to generate more customised messages, and by
using these interactive methods marketers could
focus their target markets and could save their
extra cost which they pay in mass
communication. Another reason for FMCG
manufacturers that they must start using these
interactive methods, for communication, is high
growth rate in the internet population from last
few years and on the other side people are
spending more and more time on social networks
and in internet surfing, so that marketers should
go where consumer goes. Furthermore, internet
advertising usually does not create irritation for
users because users watch the online ads while
they are doing other activities without have any
interruption.
Limitations and Future Research
Though this research provides a detailed
critical evaluation of the Interactive
communication channels and the way these
channels could be useful for FMCG businesses
but still there are some new formats of
interactive communication which are not
discussed in this research but those formats are
being used by businesses very frequently (e.g.
Enhanced Text). Those formats should be
analysed in the context of FMCG businesses. In
this research Website format is not being
analysed which is one of the major source of
interactive communication channel therefore
future research should focus on that format as
well. Technology is developing very rapidly and
it has changed the process of consumer
cognition, now 3D virtual worlds (e.g.
Secondlife and There.com) are being used by
many companies for the advertising purpose.
Many big brands (e.g. Toyota, Reebok etc) have
already started their representation in these
immersive virtual worlds. So this new and
immersive communication channel should be
explored and focused in future research not only
in the context of FMCG Business but for other
businesses. Because corporate world has just
started considering virtual worlds beneficial for
their businesses and a huge gap is there in the
literature which need to be filled in marketing
perspective. Marketers and academics could
explore these virtual worlds not only in
advertising perspective but in many other fields
of marketing for instance branding, virtual
reality retail stores’ environment, consumer
psychology and many more.
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doc_644443411.pdf
Post liberalization Indian market has evolved a lot, providing opportunities galore to companies and posing unique challenges. With a 300 million plus strong middle class population (more than population of France Italy and U.K. put together) India is one lucrative market wherein every marketer is vying for lion‟s share.
Int. J. Manag. Bus. Res., 2 (3), 253- 269, Summer 2012
© IAU
Interactive Communication Channels and Their Appropriateness
for the FMCG Business
*
A. Munir Dad
The School of Business and Management, University of Gloucestershire, Cheltenham, United Kingdom
ABSTRACT: Purpose: The aim and objective of this report is to identify the benefits of interactive
communication channels and to advice the FMCG business on how these new methods are better than the
conventional methods.
Design/ Methodology/Approach: In this research article facts about advertisement and its effectiveness were
collected from different surveys conducted by various agencies. Mainly secondary data is used for this research.
The present conceptual paper also demonstrates the previous literature and findings.
Findings: For FMCG business, Interactive communication channels are far better than traditional methods and
they create brand awareness and brand differentiation among other FMCG brands. Although traditional methods
have their own advantages but their effectiveness could not be measured, while it is possible in case of modern
methods of advertisements. Moreover, people are becoming more accustomed to modern methods due to
advancements of technologies.
Research implications/limitations: This research will provide guidelines to managers and policy makers of
FMCGs Corporations on effective use of all types of communication channels to increase their sales. This
research has various limitations. It is only conducted on secondary data. To fill this gap future research can be
conducted on primary basis. Only few formats of communication were discussed in this paper. More advanced
formats (e.g. Enhanced Text) could be explored in future research by specifying any region or circumstances.
Originality/value: Considering the previous literature on advertisement and communication channels, this
research study provides the conceptual comparative analysis of traditional channels of communication and
Modern tools of communication for selling of any product particularly FMCGs products. This study depicts the
usefulness of modern technological tools in today's world in both retail and FMCGs businesses.
Keywords: Fast Moving Consumer Goods (FMCG), Communication/Advertisement channels, Interactive
communication channels, Traditional methods of communication, Comparative analysis between new and old
channels of communication
INTRODUCTION
Communication is very important element of
the business as Fill (2005) argued that in
business effective communication is the guarantee
of success; however, there are many different
channels of communication for example TV,
Radio, Newspaper, internet, SMS, etc (Danaher
and Rossiter, 2011). In the modern world
Technology has been developed and this
development of the technology has invented new
methods of communication which have
dramatically changed the consumer behaviour as
well as all the business structure. Many
businesses have already started using new
methods of communication, but FMCG industry
*Corresponding Author, Email: [email protected]
A. Munir Dad
254
is still not using new methods of technology as
IAB (2008) argued that in UK FMCG business
had only 2.5% share in the online advertising
market. However, it is using traditional methods
very frequently. Whereas Fill (2006) argued that
today these new methods are essential for
success of every business as internet has
decreased the market share of the traditional
channels like newspaper and magazine. Today
people are spending more time on internet and
online activities; similarly online shopping trend
has also been increased rapidly whereas on the
other hand traditional channels are not that
effective to fulfil all the requirements (Speck and
Elliot, 1997). Therefore, FMCG business should
also start using these new communication
channels. Communication channels are used for
the persuading the customers. And with the
effective communication sales could be
enhanced or new product could be launched in
the market successfully. As Durden (2010) tells
the story about the Munch Bunch which is a fruit
flavoured yogurt and it was losing its sales from
UK’s market and it came on number 4th
between 2006 and 2008 ;however, company took
its position back only within one year by
effective communication strategy. Moreover,
Durden (2010) tells that company started a
communication strategy on TV program in
which company targeted mums and kids and told
them about the benefits of fruits and calcium for
kids and then presented Munch Bunch that it has
got all the ingredients by which your kids could
have good health. Furthermore, through effective
communication strategy company increased its
sale by 21.7% and profit by 74%.
Companies also use communication
strategies for improving their brand image or for
brand repositioning as it is discussed by
European Association of Communications
Agencies that how successfully Coca-Cola
protected its image as people started thinking
about it is very conservative brand and it is not
appealing to youngsters (Silver Winner, 2004).
Coca-Cola used TV, Radio and Print media in
different regions of the world in which they
showed that after drinking Coca-Cola, any
boring moment could be converted into a joyful
moment. This campaign really worked and brand
got more response rate and increase in sales by
57 million units more .There are many
communication channels which marketers use
for promoting their products and according to
Danaher and Rossiter (2011) today marketing
managers have to face diverse choice of media
however they (Danaher and Rossiter, 2011)
discussed many communication channels, and
compared the new channels (Internet, blogs and
txt messages etc) with the traditional
communication channels (television, door to
door marketing and direct postal mails, etc).
Literature Review
FMCG and Communication
Along with many other definitions of Fast
Moving Consumer Goods, Menke (2007) argued
that, Fast Moving Consumer Goods are those
goods which have very low prices and are
manufactured at Low cost as well; however, they
are produced in high volume and it is aimed to
achieve high profit through economies of scale.
Furthermore, according to Cox (2003) FMCG
can also be called Consumer Packaged Goods.
According to many researchers FMCG
includes those products which are low
involvement products and consumers don’t take
much time on decision making process before
purchasing them likewise, Bulmer (1998)
defined the range of FMCG products from
cosmetics to households. However Francis
(2006) argued that development in FMCG
product is just a development in already
developed products so marketers do not need to
invest high budget on research therefore they
have low cost and in result marketers are able to
market them (FMCG products) at low prices.
Kotler and Keller (2009), likewise, argued
that FMCG’s product range can be classified in
to tangible and non tangible goods/products and
these are low involvement products that is why
people don’t put much effort before purchasing
them and these products are often being
purchased by the consumers very frequently
without spending time on decision making
process. In supporting this idea Kotler and
Keller (2009) argued that Fast Moving
Consumer Good can also be classified as
convenience goods and these convenience goods
are further divided into three categories i.e. :
(1)Impulse Goods, (2)Staples Goods And
(3)Emergency Goods.
If consumer behaviour is discussed regarding
purchase related to FMCG product then it is
clear that FMCG products have got less degree
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
255
of involvement similarly, Moffett et al (2002)
argued that in FMCG industry there are too
many products which are substitute or
alternative to each other and competition is too
high and product differentiation is very low.
Therefore consumers usually don’t make
decisions on the basis of brand differentiation
but they purchase habitually. Kotler and Keller
(2009) argued that in FMCG industry consumer
usually do not make purchase on the basis of
brand differentiation of a product but they do
purchase on the basis of differentiation between
the stores’ brands. Kotler and Keller (2009)
further argued that purchase is not being made
because of brand loyalty but on the basis of
consumers’ habit. Likewise Fill (2005)
supported this concept and argued that because
of consumers’ low involvement, while
purchasing FMCG products, proposed risk is
also very low.
According to Duncan and Moriarty (1998)
communication is called as a human activity
through which relationships are built and they
called communication a core activity but not
only in the field of marketing. Furthermore, Fill
(2005) argued that marketing communication is
way or a medium through which an organization
engage with its customers. Likewise, Chantrey
(2000) argued communication channels are the
different ways or means through which
companies can communicate and persuade
customers likewise, Mohr and Nevin (1990)
argues that in marketing communication
channels are used for the transmission of
persuasive information from brand owners to the
customers.
Communication channels are used for the
persuading the customers. And with the effective
communication sales could be enhanced or new
product could be launched in the market
successfully. As Durden (2010) tells the story
about the Munch Bunch which is a fruit
flavoured yogurt and it was losing its sales from
UK’s market and it came on number 4th
between 2006 and 2008 however company took
its position back only within one year by
effective communication strategy. Moreover
Durden (2010) tells that company started a
communication strategy on TV program in
which company targeted mums and kids and told
them about the benefits of fruits and calcium for
kids and then presented Munch Bunch that it has
got all the ingredients by which your kids could
have good health. Furthermore, through effective
communication strategy company increased its
sale by 21.7% and profit by 74%.
Companies also use communication
strategies for improving their brand image or for
brand repositioning as it is discussed by
European Association of Communications
Agencies that how successfully Coca-Cola
protected its image as people started thinking
about it is very conservative brand and it is not
appealing to youngsters (Silver Winner, 2004).
Coca-Cola used TV, Radio and Print media in
different regions of the world in which they
showed that, after drinking coca-cola, any boring
moment could be converted into a joyful
moment. This campaign really worked and brand
got more response rate and increase in sales by
57 million units more. There are many
communication channels which marketers use
for promoting their products and according to
Danaher and Rossiter (2011) today marketing
managers have to face diverse choice of media
however they (Danaher and Rossiter, 2011)
discussed many communication channels, and
compared the new channels (Internet, blogs and
txt messages etc) with the traditional
communication channels (television, door to
door marketing and direct postal mails etc).
As products in FMCG industry are being
purchased habitually and consumers do not take
much time on making purchase decision
therefore, Fill (2006) argued that marketing
communication plays very important role in
creating brand differentiation especially when
there is no difference between the core products.
Furthermore, Fill (2006) quoted the example of
mineral water Perrier and Highland Spring that
these two brands are different but core product
(Mineral Water) is same, so consumer perceives
the same benefits from both brands but with the
help of effective marketing communication
strategy consumers’ brand loyalty and emotional
attachment can be gain. According to Fill (2005)
brand is being kept within evoked set of brands
and evoked set of brand mean the whole range of
brand which is being under considered by
consumers while making purchase decision.
Moreover, Fill (2005) stated that the
promotional messages should be shorter for
FMCG products because these products have got
low user involvement that is why consumers are
A. Munir Dad
256
not interested in getting much information;
therefore, message should be emotional and
shorter than those products which have high
involvement.
Traditional Communication Channels
According to Bezjian-Avery (1998) the
usage of old communication channels has been
decreased because of emergence of new
electronic media channels. However there are
many traditional communication channels which
were being used by marketers and some of them
are still being used successfully.
Limitations of the given figure 1 channels
have been discussed below in the context of
FMCG Industry.
Limitations of Traditional Communication
Channels
According to Pfeiffer and Zinnbauer (2010)
advertising has seen the greatest lost in the
history from last few years however, they argued
that the new communication channels are going
to have high growth rate in future. According to
Menke (2007) traditional communication
channels played very effective role whereas,
now in this interactive era they are not able to
fulfil all the needs and requirements of the
customers and marketers.
Speck and Elliot (1997) argued that people
do not really like to watch advertisements
especially during any interesting program and
that really cause irritation for the target
consumers and they argued that most of the
people just turn off the pages of the newspaper
where there are advertisements and on TV
switching ratio of channels is so high. Likewise,
Menke (2007) specifically talking about FMCG
industry argued that it is not easy for the
companies to get the information about target
people who watch the advertisement and who
just switch the channels.
Furthermore, Springer (2007) divided the old
and new communication channels in to the
category of Push and Pull media and He
categorised traditional channels in to push media
and argued that they were usually less focused
and were used for mass communication
furthermore they have less response rate as
compare to new channels (pull media). Menke
(2007) also argued that traditional channels are
one-sided and usually push strategy is needed.
Moffett et al (2002) argued that selling is not
important but consumer need base marketing has
got more importance. Therefore, Menke (2007)
concluded that these traditional communication
channels only focus for increasing sale instead of
fulfilling customers’ needs.
Figure 1: Traditional communication channels
Radio
Television
Postal Mail
Newspaper
Door to Door Selling
Traditional Methods
Of Communication
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
257
New Methods of Technology and Their
Appropriateness for the FMCG Business
Internet and Online Business
According to Cerf (1997) cited in Doren et al.
(2000) internet was developed by US Defence
Advanced Research Projects Agency after the
second world war in 1960s’ and the main
purpose was to communicate on continuous
bases within the Army units.
Doren et al. (2000) argued that internet was
not being used publically for a long time because
of its highly sensitive purpose of development.
However, Frost and Strauss (1998) discussed
that the social and technological developments
especially the creation of World Wide Web
(WWW), browsers and other applications
created a huge interest for the usage of internet
in both public and private sectors. Similarly,
Hoffman and Novak (1996) said that the Web is
working as a latest channel of communication
and it has all potentials to perform the marketing
functions.
Moreover, according to Stewart and Zhao
(2000) surely the internet commerce is growing
very rapidly and it is changing the pattern and
methods of business in many different ways
whereas, it has larger market share in Business
to Business rather than business to consumer.
Furthermore, in general, the internet usage is
increasing every year by people individually and
a research shows that it is known that 55.2%
people in UK use home computers just because
of internet (Key Note UK Internet Market,
2009).
Chaffey (2010) discussed that online
shopping is growing very rapidly however
tourism is the biggest online industry. Figure 2
shows that in year 2008 in UK the usage of
internet
(E-commerce perspective) for tourism was
highest and it was 63% whereas, internet
banking was following with 49% ;however,
usage ratio of internet for selling goods or
services was lowest and it was 19% (Key Note
UK Internet Market, 2009).
Moreover, Chaffey (2010) argued that
people yet does not prefer to purchase grocery
online however, most of the industries are
coming online because of its cost effectiveness.
While concluding this part it can be argued
that with the rapid development in internet
industry marketers have found many new
interactive methods of communication with the
consumers which are highly time and cost
effective. According to Menke (2007) the main
reason of rapid growth in online expenditures is
the huge development of broadband and
consumers’ great response and interest towards
its usage.
According to Edelman (2007) this digital
development is changing all the media and its
forms by creating the difference between old and
new methods. Cauberghe and Pelsmacker (2011)
discussed this convergence and argued that new
digital technology made the users able to interact
with the TV through using remote control.
Chaffey et al (2009) said that these new
interactive methods made two way
communications possible and these methods
could be used by companies for having
interaction with their consumers, for example
Nestle, a FMCG company, is using their website
for having communication with their users and
through this process company is able to have
more access over information about consumers
and their needs.
In addition, Fill (2005), as mentioned above,
argued that FMCG products are purchased on
habitual basis and it has very low user
involvement but on the other side, Chaffey et al
(2009) argued that these new interactive
methods of communication can create
customised interaction between consumer and
company, so these new interactive methods
could be very useful for FMCG business.
Danaher and Rossiter (2011) purported that
internet technology and email are playing very
important role in our daily lives and they have
become necessary part of our lives. Furthermore,
this technological development has created wide
range of new communication channels and
marketing managers have got too many choices
for communication with their consumers
(Danaher and Rossiter, 2011).
Springer (2007) said that pull strategy is
being used for these new interactive methods of
communication rather than push strategy.
However, Meffert (2000) argued that there are
some methods of interactive communication
which are form of push strategy e.g. Banners,
Pop-up windows and E-mails are forms of push
strategy communication. As mentioned above,
with the internet and technological development,
now marketers have got new communication
A. Munir Dad
258
channels to communicate with their consumers.
These new interactive communication channels
are far better than conventional channels and
they can fulfil the needs of both businesses and
consumers’ social and technological requirements
(Chaffey et al, 2009). These new
communication channels, their backgrounds and
how they can be used appropriately by FMCG
industry are discussed below briefly and are
represented in figure 3 at the end of this paper.
Figure 2: The usage of Internet in UK in 2008
Source: Key Note UK Internet Market (2009)
Figure 3: Modern Methods of Communication
63%
49%
37%
19%
Using Services Related to
travel and
Accommodation
Internet Banking Downloading Software Selling Goods or Services
Purpose for Using the Internet
(% of adult users), 2008, in E-Commerce Sector
Blogs Social Networks
Banner Ads
Games Advertising
Search Engine
Marketing
SMS And Marketing Digital Radio
ITV Advertisement
Viral Marketing
Modern Methods
Of
Communication
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
259
Social Networks: Chaffey et al (2009) stated
that social network sites are also called
community sites and they are the best source of
interaction between consumer to consumer
(c2c). The typical communication methods on
social networks include posting comments,
sending messages, chatting with online friends,
sharing videos and tagging and rating specific
contents (Chaffey et al, 2009).
According to Vogt and Knapman (2008)
famous social network sites include Facebook,
Orkut, Beebo, Linked In and MySpace;
furthermore, these social networks are divided
into two categories which are Open and Closed
networks. Vogt and Knapman (2008) described
that Open Networks are those in which any one
can connect with any one e.g. Facebook, Orkut
and MySpace. Webb and Burgoyne (2009)
stated that according to the research by TNS
USA Study in year 2007 people are asked about
where they would prefer to spend their 15
minutes if they are free then in the response 17%
of the people liked to do activities on their social
networks, and this choice was rated highest
among other options.
The given figure 4 shows that consumers’
interest for social network sites is increasing day
by day and the users are growing very rapidly
and people are spending more and more of their
free time on social media, as consumers are
going online so marketers also need to go online.
Moreover, social networks are changing the
consumers’ behaviour and today the way
consumer perceives brand image is different
than yesterday. Many big brands are using social
networks to keep themselves in touch with their
consumers and through these SNS (Social
Network Sites) companies also get to know the
consumers’ needs and new market trends.
According to ANA Magazine (2010) McDonald
also started using social networks and this will
create more brand loyalty among its fans.
Banner Ads: According to Pashupati and Lee
(2003) banner ad is one of the most effective and
prominent among other forms of internet
advertising. Vurro (2010) described that banner
ads create attraction for the internet users to
click on them and this click leads them to the
further details of the product or service.
Furthermore, Pashupati and Lee (2003) argued
that sometimes manufacturers, for banner
advertisement, are being charged as per click
made by user and sometimes they are charged
for fix duration of time. Furthermore, Vurro
(2010) stated that according to 70% of internet
users, banner ads are considered as effective
source of advertisement however, Vurro (2010)
argued that the effectiveness of banner ad
depends on its programming. This idea is
supported by Chaffey (2010) and he argued that
static banners are less effective than flashing
banners and users click ratio is higher for
flashing banners rather than static banners.
According to Wysocka and Hand (2007)
large banner ads are more effective than smaller
and they have more potential to have click on
them however, Schumann and Thorson (2007)
argued that banners are not effective only when
they are being clicked but even without being
clicked they create brand awareness and positive
attitude of users towards the brand. According to
Key Note Internet Advertising (2009) banner
advertisement is one of the largest segments of
the display advertising market and in year 2008
4.9 billion U.S dollars were generated through
banner advertisement which was 21% of total
revenue generated from all formats of internet
advertising in US. As products, their benefits,
features and functions can be demonstrated
through online banners so that banner
advertisement can work as an effective
advertisement channel for FMCG industry.
E-mail: O’Brien and J ones (1995) argued that
customer loyalty can be gained by having
regular and good relationship with them.
Therefore, Merisavo and Raulas (2004) stated
that brand loyalty increases surely by e-mail
marketing because it makes possible for
marketers to keep in touch with their customers
at very low cost.
Reichheld and Schefter (2000) discussed
that marketers should use e-mail as a tool for
marketing and communication and they should
retain customers on internet rather than just
attracting them. Merisavo and Raulas (2004)
argued that though e-mail marketing has a power
to maintain the brand loyalty but this tool was
being ignored by marketers for a so long time
before the notice of Reichheld and Schefter in
year 2000. Neuborne (2008) argued that day by
day marketers are increasing investment into
e-mail marketing, furthermore, Neuborne, 2008
A. Munir Dad
260
stated that according to Direct Marketing
Association (DMA) 600 million U.S dollars
were spent on e-mail marketing in year 2008
however, it will be more than 1.1 billion U.S
dollars by 2012. On the other hand Danaher and
Rossiter (2011) argued that e-mail is the main
reason for the decreasing share of direct postal
mails.
According to Davis (2002) there are several
characteristics of e-mail which make it attractive
to marketers for communication. Those
characteristics are:
? E-mail can be created, sent and received in a
very short period of time
? Through e-mail cost per message is very
low up to 0.01$
? It is considered as a ‘quick response’ tool
because normally people response back
within 48 hours.
? It has got ‘high response’ rate
? And it can be fully personalized according
to one’s need and want.
Usually receiver make decision, on the basis
of header and senders address of the e-mail, that
whether to delete it or to read it therefore Fill
(2005) argued that this part of the e-mail should
be well considered before sending it. According
to Menke (2007) the basic purpose of e-mail
marketing in business is to create an interaction
between the company and consumer so in
FMCG business it is very essential to be careful
about who is going to receive the e-mail because
if it is sent to any irrelevant person then it would
be ignored and company will just bear a cost.
Blogs: Schumann and Thorson (2007) defined
that blogs are the short form of the web blog
which are also called internet diaries and they
are written by internet users and it contains
videos, posts and audios etc. As now it is
confirmed to the marketers that consumers are
the greater source of influencing to each other
and on internet it is being done through blogs
and other social media like Facebook and
MySpace etc (Padmanabhan, 2008).
Short Messaging Service and Marketing:
Short Messaging Service (SMS) generally called
‘texting’ is another form of e-mail but it creates
communication between mobile phones rather
than personal computers (Chaffey et al, 2009).
Cheng et al (2009) argued that it is too fast
communication service and it delivers with in a
very short time. Cheng et al (2009) mentioned
some of the benefits of SMS marketing and they
are:
? High speed text message delivery
? Interactivity
? More customer reach (Mass
communication)
? And response rate for SMS is five times
more than direct postal mail.
Dickinger et al. (2004) argued that SMS
marketing is very much cost effective and the
only cost which company has to bear is the cost
of purchasing phone numbers which normally
goes up to 30 U.S dollars for 1000 phone
numbers however this cost seems very minor
after the SMS reaches to its exact target
customer. Furthermore, Menke (2007) argued
that mobile phone technology is developing very
rapidly and because of this great increase in the
number of mobile users marketers have got more
opportunity to use this channel effectively for
the communication. According to Fill (2005)
FMCG industry can get benefits from this SMS
service as it is same as e-mail and likewise sales
promotion and brand awareness can be created
by using mobile marketing. Furthermore, mobile
coupons for price discount can be sent through
SMS for generating sales promotion (Carter,
2004).
Search Engine Marketing: According to
Chaffey et al (2009) Search Engine Marketing
(SEM) is another form of new methods of
communication in which companies do
advertisement of their products or brands on the
search engines. Moreover, Churchill (2005)
argued that search engines are working as a
source of good fortune for the marketers and
through advertisements on search engines
marketers are enhancing their Return on
Investment (ROI).
Search Engine Marketing is also known as
Keyword Search Advertising. According to Wu
et al. (2011) search engine marketing starts
working when consumers write the keyword in
search engine and in the search result they find
clients’ advertisement which often shown on the
top or side of the page. Furthermore, client is
being charged only when user clicks on that
shown advertisement however, sometimes it
becomes the disadvantage of search engine
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
261
marketing because consumer might click on the
keyword without being understanding the web
page (Wu et al., 2011).
According to Churchill (2005) there are
certain advantages of search engine marketing
which are: It is more costs effective as compare
to other advertising methods, Marketers can
analyze and measure the result of the campaign
so that the accountability is high for advertising
campaigns on search engines, Through
traditional methods marketers were not able to
quantify the actual ROI of the specific campaign
however it is possible through SEM so that
measurability of search engine marketing is
higher, Lastly, as data can be analysed through
previous records so that predictability is high on
search engine marketing.
According to Chaffey (2010) search engines
show all other terms which are related to that
specific search keyword e.g. if consumer search
about any fruit juice then search engine might
also show the benefits of that fruit juice.
Moreover, FMCG products are low involvement
products so that they need to be linked with high
involvement products (Kotler and Keller, 2009)
so in short FMCG business can get more
benefits through search engine marketing.
Another advantage of search engine marketing is
its cost effectiveness which could also be the
reason of using SEM by FMCGs business. In
short, all the FMCG companies should under
consider the use of SEM as a part of their
integrated marketing communication otherwise
it would be difficult to compete with other
brands which are using search engine marketing.
Viral Marketing: According to Key Note UK
Internet Market (2009) viral marketing is the
process of using the current social networks for
the promotion of a product or a brand based on
the concept that user will further spread the
information around the other users. Viral
marketing might contain television ads, cartoon
characters, video clips, humorous images, poems
or songs and any type of messages (including
news and information) which create interest for
the users and they pass that content to other
users within their networks (Chaffey et al, 2009).
According to Gibbon and Hawkes (2006) the
simple, effective and best viral marketing creates
positive response and it let the users to
experience or interacts with the brand.
Moreover, Chaffey (2010) argued that viral
marketing is very much effective for creating
brand awareness.
Charlesworth (2009) argued that for
successful viral marketing company must
consider this given below criteria:
? The message which is going to be sent must
be interesting and creates interest for
consumers such that they forward it further.
In short message must have worth to be
forwarded.
? User friendly techniques must be used for
sending the message such that users can
forward the message easily and frequently
e.g. there should be a button like ‘‘forward
to friends’’.
? And in last, message should be sent on
where it could be seen easily by the target
group.
As viral marketing helps in enhancing brand
awareness and it is also being done with very
low cost, FMCGs business should start taking
benefit through this communication channel
however they should be providing honest and
appealing content to make the campaign
successful.
Games Advertising: This is the new platform
for the marketers to promote their brands. In
addition, according to Internet Advertising
Bureau (2010) this is the very growing medium
and all the major brands are observing it as a
marketing channel however, coca-cola and
Procter and Gamble are already using it. It is
becoming one of the most effective
communication channels and Internet
Advertising Bureau (2010) tells that only in UK
20.1 million people are playing games on
internet on regular basis and on average they are
spending more than 7 hours in a day on online
games.
Marketers of FMCG business should not
ignore this channel of communication as people
are spending more and more time on online
games similarly its market share is also
increasing rapidly. Furthermore, people keep in
mind about the brands they have seen in games
and this channel is as effective as even President
Obama used this channel for his election
promotion campaign (Internet Advertising
Bureau, 2010).
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262
ITV Advertisements: Interactive Television is
the further technological development in the
traditional televisions. In short, Gawlinski
(2003) argued that the television sets which have
got internet access are called interactive
televisions (ITV). Furthermore, Tsaih et al.
(2005) stated that through interactive televisions
companies are broadcasting audiovisual
messages and users can communicate as they
have got opportunity to make search on ITV and
they can search more information according to
their needs and can go for shopping online.
According to Gawlinski (2003) there are
different types of interactive televisions
includes: Electronic Programme Guides, Tele
text Style Service, Walled Gardens, Internet on
Television, Enhanced Television, Video on
Demand, near video on Demand and Personal
Video Recorders
According to Menke (2007) as it costs very
low to promote the brand through interactive
television advertisements as compare to
advertising on traditional TV thus it leads to
higher return on investment (ROI) and it creates
brand awareness however price is charged on the
number of views by users and sometimes it leads
to wastage of money that is why it sometimes
does not attract FMCGs business.
If FMCG companies start using ITV for the
communication then they can increase their
brand awareness though they can create brand
awareness among new generation more
efficiently because it is new technology and
normally young people only seems using ITVs.
Digital Radio: According to Menke (2007)
Digital Radio is also called Digital Audio
Broadcasting (DAB) and J efkins (2000) stated
that this is the latest technology and further
development in traditional radio through which
multi audio services are being provided to the
listeners.
According to Mortensen (2008) more than
60% of UK’s people are listening digital radio
for hours in a day but they are also using some
new platforms for listening it which includes
internet and mobile phones and digital TV or
ITV moreover, digital radio has chances to have
much more market share in the future. Similarly,
Barber (2007) determined that sales of digital
radio will increase and in year 2012 and more
than 60% of households will have subscription
for digital radio.
For FMCG industry digital radio can
become very effective communication channel
as it is very cost effective, then its market share
growing very rapidly and on the other hand
social and technological trend is changing as
well and people are moving from traditional
radio to digital radio therefore, as consumers are
moving to this channels marketers also need to
move there.
Figure 4: Consumers’ interest for social network sites
Source: You've got a friend: Measuring the value of brand friending on social networks
17% 17%
14%
10%
9%
8%
7%
1%
Social
Networking
Talk on Cell Watch Tv Surf the
internet
Play console
video games
IM Listen to
MP3 player
Listen to the
Radio
Users 15 minutes Free time preferred activity by TNS USA Study, 2007
%
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
263
Advantages of New Methods of Technology
According to Chaffey et al (2009) the main
purpose of the advertising is to create awareness
and to generate the direct response by consumers
(as shown in figure 5) whereas, Menke (2007)
argued that the traditional methods of
communication are not as effective as new
interactive methods are.
New interactive methods of communications
are much more effective than traditional methods
however Chaffey et al. (2009), in figure 5,
highlighted these major benefits of new methods
which includes (1) Online advertisement
generates the direct response by consumers as
soon as they click on the displayed advertisements
and it makes the direct interaction possible
between the consumers and marketers.
(2) Online advertisements are much more
effective for increasing brand awareness.
(3) Advertisement through new interactive
methods of communication is much more
effective than traditional methods as firstly it is
cost effective and secondly it saves time. While
using traditional methods, marketers were
required to start working weeks or months
before its actual launching date furthermore it
was difficult to bring changes in the campaign
once it was being launched, however, now while
using new methods, marketers do not need much
time for all above processes. (4) Through new
methods of communication accountability is
possible as marketers are now able to measure
the ad effectiveness in terms of number of
people seen that ad or in term of number of
people liked or disliked that ad.
Furthermore, charlesworths (2009) argued
that another benefit of online advertisement is
that it makes the interaction possible between
consumer to consumer (C2C) or between current
customers and potential customers therefore it
effective for generating positive word of mouth
and creates brand loyalty among consumers.
Moreover, it is very easy to reach the target
market through online advertisements
(Charlesworth, 2009).
Some other benefits of advertising through
new technological media are discussed by
Trehan and Trehan (2007) which are: (1) New
methods are comparatively cost effective and
maximum marketers can afford the advertising
campaigns using new methods. (2) Messages can
be sent in a detail form and it could be re-
reachable and consumers can visit the ad at any
time when they are free. Moreover consumers
can make contact with the advertisers at any
time on the electronic address available on the
web site.(3)Another opportunity for the
advertising through the internet medium is that
the market share for internet market is increasing
day by day and on the other hand people are
spending more and more time on internet.
Disadvantages of New Methods of Technology
Marketers are having more opportunities
through online advertisements as internet market
is growing very rapidly but on the other hand
consumers are having more and more influencing
power and they can also become the cause of
damaging the brand image or they can create
negative word of mouth very easily especially
through social networks and web blogs (Menke,
2007).
However, there are some other possible
threats and disadvantages which are discussed
by some of the e-business researchers. As
Trehan and Trehan (2007) determined some
threats for using interactive methods for
advertisements which are (1) Internet advertising
market has just started growing now whereas
traditional channels are still occupying on most
of the market share. (2) While advertising
through new technological methods only those
people can be targeted who are using internet
otherwise these new methods are not useful for
offline consumers. (3) Getting users’ e-mail
addresses is also a hectic job and companies
have to pay cost for getting them though it costs
very low but on the other side after bearing this
cost people do not welcome the spam, junk or
uninvited people.
Further Reid and Bojanic (2009) argued that
sometimes there is more than one advertisement
banner or display shown on the web page which
seem very awful to the consumers and it
decreases the effectiveness of all the ads
however on the other hand there are many
software available in the market which consumer
use to block all type of online advertisements.
Moreover, Chaffey et al (2009) stated that online
medium of communication seems invalid for
advertisement when the cost per click goes high
but the consumers response rate is still low.
FMCG business should critically evaluate all the
factors and circumstances before using the new
A. Munir Dad
264
methods of technology however current market
trends do also matter highly and companies
should also have PEST (Political, Economic,
Social and Technological) analysis in detail.
Difference between Traditional and New Methods
of Communication
New methods of communication are no
doubt different from old methods of
communication (TV, radio, newspaper, door to
door selling etc). According to Danaher and
Rossiter (2011) these differences between
conventional and new methods of communication
are on the basis of ease in usage, trustworthiness,
reliability and perceived value given by
consumers. Moreover, Springer (2007) divided
the traditional and interactive methods of
communication with respect to the strategies
required. Furthermore, there are two type of
media pull media and push
media; all the conventional methods are under
push media however, new methods come under
pull media (Springer, 2007).
In addition, Chaffey et al (2009) determined
that new methods are high intensity methods
however traditional methods are low intensity
methods. In traditional channels marketers always
start communication with the consumers however,
in new methods of technology consumer starts
making contacts and he is seeking and searching
the information (pull media).
Figure 5 shows the difference between new
and conventional methods of communication,
there is two way response in interactive methods
of communication for example there can be two
ways communication through e-mail marketing
and banner ads by replying the mail and clicking
on the banner ads respectively.
Figure 5: Benefits of interactive communication channels
Source: Internet marketing: strategy, implementation and practice By Chaffey et al. (2009)
COMPANY CUSTOMER
PUSH
Direct Response
Traditional TV, Print, Radio
Media and Direct Postal Mail
COMPANY CUSTOMER
PULL/PUSH
INTELLIGENC
TWO WAYS Feedback
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
265
Figure 6: Advertising expenditure by all major segments
Source: Highlights fromthe World Digital Media Trends 2010 report
Future of Internet Advertising
J ames (2011) briefly highlighted the global
digital media trends and stated that the total
global advertising expenditure is expected to
increase up to 1.69 trillion U.S Dollars in year
2014 and it is forecasted that global advertising
expenditures would achieve 4% CAGR
(Compound Annual Growth Rate).
Furthermore, J ames (2011) argued that in
U.S, which is the largest advertising market in
the world, offline advertising market will have
lost in its share up to 86% in year 2013.
However, online advertising expenditure will go
up to 40.3 billion U.S Dollars which will be the
16% of the market share.
The given graph (figure 6) discriminates the
advertising expenditure by its all major segments.
This graph clearly indicates that internet
advertising market is growing rapidly and
continuously even in year 2009 when the
advertising market was in lost and all the major
advertising segments were bearing lost including
TV but internet was still growing with 4.3%
growth rate.
If the graph (Figure 6) is analysed in detail
then it becomes very clear that all the offline
advertising are shrinking however, Television is
still in good health and it will definitely play its
role even in future and according J ames (2011) it
would have 7.6% growth rate. Whereas, interactive
Channels are rapidly growing as it can be
seen in the figure 1 that advertising through
interactive video game is on the top even in year
2009, when there was recession on the peak, it
had market growth rate of 16.2%. Furthermore,
these two mediums (internet and video games)
will be leading for advertising market in future.
FMCG industry should observe these
interactive methods because at the moment they
are most favourite advertising channels and this
forecast indicates that they will remain favourite
-100
0
100
200
300
400
500
600
Percentage Change in Global Advertising Expenditures
by segments (2005-2014)
Internet
Television
Video Games
Consumer Magazines
Newspapers
Radio
Out of Home
Directories
Trade Magazines
Total
A. Munir Dad
266
in the future because of the benefits which are
associated with their usage for example their
cost effectiveness and time effectiveness.
However, on the other hand population on the
online market is increasing and consumers are
also spending more time as compare to past
whereas these interactive communication
channels are effective for creating brand
awareness (Chaffey et al, 2009).Furthermore,
J ames (2011) divided the advertising
expenditures by different online advertisement
formats shown in figure 1. In addition, Magna (a
forecaster) cited in J ames (2011) determined that
the spending on search advertising will increase
up to 53.3 billion U.S dollars in year 2015
however it was calculated $20bn in year 2010
whereas it was calculated $12.5bn in 2010 in
single U.S online advertising market and it is
forecasted $21.3bn in year 2015.
Practical Implementations
FMCG Marketers should not use any single
channel whereas they should use multi channels
for advertising campaign such that the campaign
could be more effective and the advertising
message reaches to the maximum target
audience. However the most important is to first
find which medium is most used by the target
audiences. As FMCG products are low
involvement products so marketers should use
online banner ads such that online ads do not
create irritation for consumers. FMCG
manufacturers should not stop using some of
effective traditional channels as Young (2010)
argued that advertisement through TV and
Newspaper is still effective and they have
market share of 29% and 28% respectively.
FMCG marketers should make synergy of
traditional and new channels of communication
as described by Gurau (2008), as marketers were
suggesting multi channel campaigns or IMC, and
now according to above research it is being
suggested to FMCG marketers to combine multi
interactive channels with multi traditional
channels and should make a synergy. Research
indicates that pop-up advertising is not liked by
the users and it creates disturbance for
consumers so that FMCG marketers should not
use it however, if they really want to use it then
they should be very careful while using it.
FMCG manufacturers who want to target kids
should use video games for advertising as IAB
(2010) argued that in UK 20.1 million people
played games on internet in year 2010. So kids
market can be captured through games
advertising more efficiently .FMCG marketers
should be careful in online customer relationship
management (CRM). FMCG manufacturers
should adopt new interactive methods of
communication for those products which are for
youngsters and people of middle age because
research indicates that most of the online users
are young and middle age people. However
retired people prefer old channels as TV and
Newspapers.
Danaher and Rossiter (2011) argued that
mobile advertising is even worse than e-mail
however Internet Advertising Bureau (2010a)
tells that mobile advertising expenditures
increased up to 83 Million pounds whereas it
was 37.6 million in 2009. This shows the great
growth rate and worth of mobile advertising so
FMCG manufacturers should use this channel
because it is more effective for reaching the
target audience. FMCG marketer should start
using search engines for advertising as research
indicates that search marketing is one of the
most growing channels at the moment and most
of the FMCG businesses are not using this
channel yet. Marketers should use social
networks, like Facebook and Twitter, for
increasing brand awareness because today there
are millions of people who are using these
networks and company can target more people in
less cost. These social networks are effective in
viral marketing and can create positive word of
mouth.
However marketers should be careful in
using these networks because control factor is
very low on social networks and they can also
generate a negative word of mouth as well which
can damage the brand’s image. Use of SMS and
internet is higher among youngsters (Danaher
and Rossiter, 2011). So it is suggested if the
FMCG manufacturers want to target youngster
then the advertising message should be delivered
via e-mail and SMS. After building a company’s
website FMCG manufacturers should not expect
that customer will start visiting them because
they have built it now but FMCG manufacturers
should create reasons making their visit
guarantee. Moreover, FMCG manufacturers
should always think about creativity and
innovation for their online campaigns.
Int. J. Manag. Bus. Res., 2 (3), 253-269, Summer 2012
267
CONCLUSION
As research indicates that the characteristics
of FMCG products are low involvement
products with low product differentiation and
consumers do not take much time in decision
making process because FMCG products are
being purchased on consumers’ habitual buying
behaviour, therefore, marketers need to create
high brand awareness in order to include that
specific brand into consumer’s evoked set of
brands. Based on this marketers should not
ignore the effectiveness, strengths and power of
the new methods of communication.
Furthermore, the discussed benefits of new
methods of communication are more than the
traditional methods and FMCG manufacturers
can create brand awareness and product
differentiation effectively by using these new
interactive methods. In addition, traditional
methods of communication are becoming out
dated and are not able to fulfil all the
requirements of today’s consumers’ and
marketers’ needs.
Though the traditional methods still have
some advantages as they are reliable and
credible but on the other hand they need push
strategy and create one side communication,
moreover, they are not measureable as marketers
cannot evaluate how effective the campaign was
and what exactly changes it need in future.
However, most of the new methods of
communication need pull strategy rather than
push and they can also be evaluated and
measured for their effectiveness and accuracy,
furthermore, new methods of communication are
much interactive and they enable communication
from both marketers’ and consumers’ side.
Though FMCG manufacturers yet have not
realized the benefits and effectiveness of new
methods of communication, that is why they still
do not prefer to use these methods otherwise
these online methods of communication are able
to generate more customised messages, and by
using these interactive methods marketers could
focus their target markets and could save their
extra cost which they pay in mass
communication. Another reason for FMCG
manufacturers that they must start using these
interactive methods, for communication, is high
growth rate in the internet population from last
few years and on the other side people are
spending more and more time on social networks
and in internet surfing, so that marketers should
go where consumer goes. Furthermore, internet
advertising usually does not create irritation for
users because users watch the online ads while
they are doing other activities without have any
interruption.
Limitations and Future Research
Though this research provides a detailed
critical evaluation of the Interactive
communication channels and the way these
channels could be useful for FMCG businesses
but still there are some new formats of
interactive communication which are not
discussed in this research but those formats are
being used by businesses very frequently (e.g.
Enhanced Text). Those formats should be
analysed in the context of FMCG businesses. In
this research Website format is not being
analysed which is one of the major source of
interactive communication channel therefore
future research should focus on that format as
well. Technology is developing very rapidly and
it has changed the process of consumer
cognition, now 3D virtual worlds (e.g.
Secondlife and There.com) are being used by
many companies for the advertising purpose.
Many big brands (e.g. Toyota, Reebok etc) have
already started their representation in these
immersive virtual worlds. So this new and
immersive communication channel should be
explored and focused in future research not only
in the context of FMCG Business but for other
businesses. Because corporate world has just
started considering virtual worlds beneficial for
their businesses and a huge gap is there in the
literature which need to be filled in marketing
perspective. Marketers and academics could
explore these virtual worlds not only in
advertising perspective but in many other fields
of marketing for instance branding, virtual
reality retail stores’ environment, consumer
psychology and many more.
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