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Will deceptive marketing practices prove costly to businesses?

The role of marketing packaged foods in the context of  new regulations on claims and advertisement

Marketing and claims of food products

Introduction - Role of marketing in business 

Marketing is pivotal to the success of a product or service and it also helps in appropriate positioning of a brand in the market.  In the last decade, traditional marketing channels were disrupted with the advent of digital avenues as more consumers are congregated on the internet. While there is definitely a change observed in the tools used for reaching the target segments, the core activities in this space has largely remained constant like promotions, campaigns and advertisements etc., as the underlying phenomenon of all these efforts is always a conversion (to sale) which is measured as return on marketing investment (ROMI)

Brand positioning in the CPG segment

In the consumer packaged goods segment, marketers adapt numerous strategies to remain top in the neck and neck competition. Sometimes they get overboard in formulating persuasion techniques for making the consumer spend on the product. Besides advertisements, the key pulling strategies include prominently displaying offers, discounts and claims. The end goal of all these efforts is to create a brand recall and entice the consumer to purchase the product. On the downside, lack of authenticity in the claims would affect the consumer loyalty. In the past, there are quite a few court rulings which have come in the favour of aggravated consumers

Food authority and its role in regulating advertisements 

Considering the enormous scope, currently in India there responsibility of regulating claims would fall in the hands of multiple departments. Besides, The Advertising Standards Council of India (ASCI) the content on food products is regulated by food authority (FSSAI). However, in an attempt to bring more transparency in the economic relations between consumer and brand owners, the Indian food regulator has introduced detailed advertisement rules by unbundling the food packing regulations. The industry was given 6 months of transition time to comply with these regulations, the front runners in the market has already utilized this period to tweak the current processes in alignment with these rules. Having worked with industry in this area, we attempt to provide the workable framework for mitigating the risk of non-compliance in this blog 

5 steps process for an effective advertisement campaign

a. Identify the channels of communication: This is very critical step in the entire process considering the huge definition that the law has prescribed for advertisement and claims. Typically any communication of product to the consumer would come under the purview of these regulations. For instance, companies at large should consider the following as prospective channels i.e. product (label/ wrapper), promotion (Advertisement, classifieds, handouts, menu cards etc.,), medium (social media, websites, mobile applications, radio & TV promos) 

b. Classification of Ad words: Based on the nature of the information in the above described channels, the organizations should place the triggering words in the respective categories mentioned in the regulations. For instance, “no added sugar” “no preservatives” “low in fat” shall be placed in no addition claim, non addition of additives and nutrition claims respectively. The categories prescribed in the regulations are illustrated below 

c. Review and align with respective definitions: Now that, you have the triggering words placed in the respective compartments in the regulations, it is time for review and check the alignment of rule position with your claims. For example, (1) “low fat” is valid only if the fat is in the product is not more than 3g per 100 g (solids) or 1.5g for 100ml (liquids).  (2) Claims regarding the non-addition of sugars to a food may also be made, where sugars are naturally present in the food, and in such case the following indication shall also appear on the label i.e. CONTAINS NATURALLY OCCURRING SUGARS

d. Updating the current process: Since within an organization finished goods are a result of inter-related actions between various departments, it is very pivotal to work in synergy with each other.  For instance, marketing working in silo can result in compliance risk to the business and similar working style of regulatory affairs team would hinder the creative product promotions. Hence, it is important to work in collaboration for achieving the business objectives. The key to successful organizations is to have an agile methodology in tweaking the processes, this is very much required when there is a volatile regulatory environment
e. Developing an IT database: The database for objectionable words (or triggers for non-compliance) are to be documented and shall be made accessible for both marketing and NPD departments. This would help business in two ways, one building cross functional capacity and secondly mitigate slippages with an effective decision making process.

In conclusion, business understanding the importance of these regulations would make effective changes in reaching out to consumers. Considering the potential need for the industry to comply, the food regulator should conduct sensitization programs to SME businesses and consumers as well for bringing a positive change

(All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site)

Issue 38

Image Courtesy: https://postermywall.com


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