In a strategic move to boost its market presence and streamline operations, Godrej Consumer Products (GCPL) has significantly increased its advertising expenditure, surpassing Rs 1,000 crore for the fiscal year 2024. This marks a substantial 47% rise from the previous year’s spend of Rs 687.34 crore. The investment highlights GCPL’s commitment to enhancing brand visibility and driving growth, while concurrently optimizing its product lineup.
For the financial year ending March 2024, GCPL’s advertising and publicity budget soared to Rs 1,011 crore, positioning the company as one of the top advertisers in India. This substantial investment represents a notable shift from the company’s historical advertising spend of ₹350-400 crore a few years ago. The increased budget underscores GCPL’s strategic focus on amplifying its brand presence across various domestic markets.
Sudhir Sitapati, Managing Director and CEO of GCPL, emphasized the importance of this investment: “In line with our strategy of category development, we have made significant investments in advertising. We were the fifth largest advertiser in India in 2023, up from number 17 in 2021. We are also increasing our investments in distribution.”
GCPL’s decision to ramp up its advertising expenditure aligns with its broader strategy to foster category development and improve market penetration. The company is channeling resources into brands, automation, and SKU rationalization, reflecting a strong emphasis on operational simplification and efficiency. This approach aims to enhance brand visibility while streamlining product offerings to focus on high-performing items.
In addition to advertising, GCPL is prioritizing investments in distribution to bolster its market reach and operational capabilities. By concentrating on a more focused product portfolio and improving distribution channels, the company aims to drive double-digit volume growth and consolidate its market position.
As part of its strategy, GCPL has undertaken a rationalization process that has led to a 30% reduction in its stock-keeping units (SKUs). This strategic move is designed to optimize the company’s product lineup, focusing resources on high-performing products and eliminating underperforming ones. The SKU rationalization process is part of a broader effort to enhance operational efficiency and resource optimization.
Sitapati explained, “From multiple agencies, we moved to a single agency, which is our in-house agency, the LightBox. From multiple executions, we are moving to a single execution, shooting differently in the same location with different models for different countries.”
On a consolidated basis, including international markets such as Indonesia, Africa, and the US, GCPL’s total expenditure on advertising and publicity reached Rs 1,336.12 crore. This global investment highlights GCPL’s commitment to strengthening its brand presence across various regions and aligning its advertising strategies with market demands.
GCPL’s substantial increase in advertising spend and focus on SKU rationalization are indicative of its strategic efforts to adapt to evolving market dynamics and consumer preferences. By investing heavily in advertising and streamlining its product portfolio, GCPL aims to enhance its market position, drive growth, and deliver greater value to its stakeholders.
The company’s approach reflects a well-rounded strategy that balances aggressive marketing with operational efficiency, positioning GCPL for continued success in an increasingly competitive landscape. As the fiscal year progresses, the impact of these investments will likely become more evident in the company’s market performance and overall brand equity.
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