Notes on Indian equities, sectors and economy

How high can adspends go? Check Colgate!

Posted by fairval on March 12, 2014

This chart was a bit of an eye opener. According to this Nirmal Bang report, in FY14, Colgate will spend as much as 19% of revenues on A&P spends.  This is the highest in more than a decade.This is also the highest A&P spend as a % of sales in any FMCG category.

Colgate has consistently outspent the number 2 – HUL – in % of sales spent on A&P. So here we have a case of where the leader has a market share 3x that of the challenger, and yet spends more in even % to sales terms, let alone absolute amounts. Wow! Clearly, the challenger has no chance in such a scenario.

This year’s spike may have been driven by P&G’s launch of Oral B in mid’13, and the rapid gains GSK’s Sensodyne has made.



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