NEW DELHI FMCG firms are tightening their purse strings by controlling
advertising spends and other marketing expenses to maintain their margins as high raw material prices continue to pose serious challenge, according to analysts. Going forward, they said companies are likely to be cautious on their advertising expenses if they have to remain profitable despite the high input cost. “Most of the FMCG companies are focusing on volume growth without hurting their operating margins. While they are resorting to price hikes, they also have to reduce their operating cost, including their adspend, staff cost and other expenses to maintain their margins,“ India Infoline Research Analyst Vanmala Nagwekar said. As per a report by Standard Chartered Equity Research on Indian consumer sector, the FMCG segment maintained margins at 15.8% in the last fiscal despite rising raw material costs by controlling adspends and cutting operating costs during the period.
advertising spends and other marketing expenses to maintain their margins as high raw material prices continue to pose serious challenge, according to analysts. Going forward, they said companies are likely to be cautious on their advertising expenses if they have to remain profitable despite the high input cost. “Most of the FMCG companies are focusing on volume growth without hurting their operating margins. While they are resorting to price hikes, they also have to reduce their operating cost, including their adspend, staff cost and other expenses to maintain their margins,“ India Infoline Research Analyst Vanmala Nagwekar said. As per a report by Standard Chartered Equity Research on Indian consumer sector, the FMCG segment maintained margins at 15.8% in the last fiscal despite rising raw material costs by controlling adspends and cutting operating costs during the period.
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