The importance of social media on the FMCG market in Bangladesh

Marketing communication between companies and customers has changed considerably in the 21st century. This was due to the development of new technologies and expanding access to the internet in global terms. Also, the needs, preferences, and expectations of consumers have changed. They do not want to be passive actors any more whose activities were limited only to following the activities of producers and making purchasing decisions. They demonstrate strong intentions to conduct a dialog with producers as well as their readiness to express opinions and co-create products, services, and the strategy of the enterprise [Zajc, 2013; Bednarz, 2017; Ziemba et al., 2019].

With the development of the new technologies, companies work on implementation of different marketing communication models including social media marketing to achieve coherent and effective marketing message. It is necessary for them to coordinate multiple messages, various tools, and communication channels and merge them well into a consistent marketing communications mix with the intention of sending the target market a clear message about themselves and their offer [Gabrielli and Balboni, 2010, p. 277; Pluta-Olearnik, 2018, pp. 125–127]. New customer-centric communication models like many-to-many in which buyers and sellers participate in active ways offer new perspectives in the companies’ marketing communication system.

Marketing communication has a special significance for the producers of mass-produced, frequently purchased and consumed, or fast-moving consumer goods (FMCG) [Dwivedi and McDonald, 2018, p. 1388]. Their profound experience gained from the communication with consumers on the developed markets can be used to establish communication processes while entering new markets particularly emerging ones. Commonly FMCG producers concentrate on selling simple products that meet basic consumers’ requirements there [McKinsey, 2015]. However, the FMCG sector grows quickly because of the growing population and the rising middle class in the emerging countries. Worldwide, the consumer packaged goods market in 2014 was $8tn and may grow to $14tn by 2025 [McKinsey, 2015].

The FMCG sector has an important impact on the Bangladesh economy [Shih, 2016]. Bangladesh has generated a great economic development over the last years and has become an unexpected successful country in Asia. This country once belonged to the poorest countries category and was characterized by poverty and famine [Basu, 2018]. Due to the positive economic growth and the opportunities for companies to get the benefit of this development, various entities have already started their expansion on the Bangladesh market.

Continuous economic growth in Bangladesh has a positive effect on local residents, which is reflected in the increase of their income and higher purchasing power. Based on conclusions that Mukherjee and Das [2016a] drew from the empirical research, it can be said that the traditional offline advertising in mass media is still effective to obtain information about the FMCG. However, the importance of online marketing platforms has grown considerably due to progressive widespread access to the internet [Haddad, 2016; Adhikari, 2018]. The internet is nowadays the second best choice preferred media for the respondents [Mukherjee and Das, 2016a]. Social media is perceived as a new reliable channel of communication with consumers [Foux, 2006, p. 38; Atsmon et al., 2012]. Therefore, it seems to be essential for FMCG producers present on the Bangladeshi market to get familiar with the buying behaviors of the consumers, the most commonly used channels of communication as well as achievable social media to build long-term profitable relationships that create value.

As there is only few numbers of publications describing social media in Bangladesh, this article attempts to fill this gap and focuses on the importance of the internet and social media used for marketing communication in Bangladesh. The key aim of this paper is twofold: first, to identify the general use of the internet and examples of main social media used by residents of Bangladesh and second, to discover their potential in building marketing communication between FMCG manufacturers and consumers on this market.

In view of the growing importance of online communication channels, four research questions were posed:

What are the main areas of activity of Bangladeshi residents on the internet?

The research method used in the paper is a quantitative survey on the sample of 100 consumers aged 18–55 years. The sample was drawn randomly from the population and represents the equal distribution according to age and gender as the percentage of the population. The sample was based on the census 2011. The research was conducted in September 2019 in Dhaka, the capital of Bangladesh. The results of the survey are analyzed according to age and gender and presented.

The paper consists of seven parts. At first, the theoretical background and literature review concerning marketing communication, including social media marketing are presented. Then the economy of Bangladesh as well as FMCG market are described. Using economic and socio-demographic data, the high potential of the development of the Bangladesh economy was underlined. Following this, the research method, main results are proposed. The paper ends with summary and conclusions.

Marketing communication plays a fundamental role in operation of consumers and all institutional entities including business ones. It is a bilateral process, in which both sender (company) and recipient (current and future buyers) of a communication message can provide feedback and influence mutual decisions. They communicate to transfer, gather, and exchange information to and from the market [Gabrielli and Balboni, 2010; Danaher and Rossiter, 2011; Hollensen, 2014]. Marketing communication allows entrepreneurs to get familiar with consumers’ needs and preferences and address with a compact message about existing and new products/services offerings, their characteristics and properties, pricing policy, distribution channels and all undertaken promotional activities to them.

The concept of integrated marketing communication emerged as an important topic in the early 1990s [Schultz et al., 1993] as an evolution of traditional mass-media advertising because of the emergence of new technologies on the market. It was noticed that to achieve effective marketing communication, it is necessary to coordinate various tools and communication channels in such a way that the message sent by a company is coherent [Pluta-Olearnik, 2018, pp. 125–127]. The term “integration” should be understood as the implementation of horizontal coordination mechanisms [Schultz et al., 1993] where multiple messages and many communications activities are merged into a consistent marketing communications mix in order to send the target market a clear message about a company and its market offer [Gabrielli and Balboni, 2010, p. 277]. This concept of synergy in marketing communications refers to the coordination of messages for delivering more impact [Danaher and Rossiter, 2011, p. 9]. In general, it can be said that it is the result of aligning activities, procedures, messages, and goals in order to communicate with consistency [Gabrielli and Balboni, 2010, p. 277]. Porcu et al. [2017, p. 694] claim that integrated marketing communication model “allows for the possibility of continuous dialogue by conveying consistent and transparent messages via all media to foster long-term profitable relationships that create value.”

Numerous communication models are presented in the literature. Among them Hoffman and Novak [1996] presented three communication schemes using internet tools. The first one is a one-to-many communication process, where the company transmits content to consumers through a medium. There is no interaction between actors in this traditional model of the communication. The second model is called interpersonal and computer-mediated communication. This model incorporates a feedback view of interactivity. Communication can take place through various direct and indirect channels, media and devices. In the era of digitalization and the development of the internet as well as new technologies a third model for hypermedia in computer-mediated environments was introduced. It is a many-to-many communication model in which buyers and sellers participate in active way, e.g. on websites or social networks [Klepek and Starzyczna, 2018; Bartosik-Purgat, 2019].

Danaher and Rossiter [2011, pp. 6–7] argue that traditional communication channels (television, radio, newspapers, telemarketing, and door-to-door sales) are expected to decline. There is a wide and diverse choice of other media channels called new media, which can be used to address marketing communication to customers: the internet channel's banner ads, websites, e-mail and blogs, mobile phone communications SMS, MMS, cell phone TV, digital television, e-books, computer games, DVDs, and social media [Bartosik-Purgat, 2019, p. 79].

Felix et al. [2016, p. 123] describe that companies can perceive social media marketing in a broad and narrow sense: as an opportunity to build relationships with stakeholders, as well as another communications channel through which they can push information to customers. In the narrow approach social media marketing is defined as “the use of social media platforms and networking sites to inform, create image, promote, increase the awareness of an enterprise's brand, products, services as well as create user interactivity on platforms by stimulating users to post or share content” [Felix et al., 2016, p. 119]. It is “a group of internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user generated content” [Kaplan and Haenlein, 2010, p. 61]. Social media platforms include social networking tools (e.g. Facebook, Messenger, Twitter), professional networking sites (e.g. LinkedIn), media sharing sites (moblogs containing digital audio, images, movies, or photographs e.g. YouTube, Instagram), commerce communities (e.g. Amazon), consumer-to-consumer e-mail, consumer product or service ratings websites and forums, word-of-mouth internet discussion boards and forums including blogs [Mangold and Faulds, 2009, p. 358; Valos et al., 2016, p. 21]. Constantly evolving, social media plays a significant role in marketing communication between companies and consumers by adding “the ability for interactive and participative communication like: sharing, commenting, responding, syndicating and interacting with content and connecting with others” [Baptista et al., 2017, p. 325]. Entrepreneurs should understand their functional traits that can be presented by seven functional blocks of social media: identity, conversations, sharing, presence, relationships, reputation, and groups [Kietzmann et al., 2011, p. 243]. Among the aforementioned features, reputation being a matter of trust seems to be extremely important. Driven by word-of-mouth social media is considered to be trustworthy because the message spreads from user to user which proves the credibility of the message [Faux, 2006, p. 38; Banerjee and Ashwini Kumar, 2013, p. 62].

Because social media has already become the integral part of the workplace and home life of people around the world, therefore, to succeed, companies must develop strategies for online communication channels and convince consumers to search for information in an active way. It is so because only “consumer motivation (desire), ability, and opportunity to process a communication determine the intensity and direction of that processing and the resulting outcomes that occur” [Batra and Keller, 2016, p. 130]. Uddin et al. [2017, p. 1] underline that “social media has turned into the most affordable catalyst for brand communication through engaging customers in innovative ways and making them true stakeholders in the value-creation process.” As noted by Ashley and Tuten [2015, pp. 16–17], social media is used as a branding channel to increase brand awareness and brand liking, promote customer engagement and loyalty, inspire consumer word-of-mouth communication about the brand, and potentially drive traffic to brand locations on- and offline.

Bangladesh is an Asian country located on the fertile delta area in South Asia. Currently Bangladesh is the eighth largest population country in the world with over 164.9 million people. It is estimated to have around 171.8 million people by 2022. The reasons for this massive growth are high birth rates and declining death rates combined with increasing life expectancy.

Bangladesh is also one of the most densely populated countries. The capital of Bangladesh, Dhaka, is the twentieth largest metropolitan city. The urbanization is an important aspect of Bangladesh: about 17.6 million live in Dhaka. The next bigger city is Chittagong with only 4.5 million inhabitants, followed by Khulna and Rajshahi with around 1 million inhabitants. One third of the total population of Bangladesh lives in the cities; the other two-thirds live in rural areas [Etzold and Mallick, 2015].

According to the German statistical department, an increase of 7% per year on the real GDP is forecasted until 2022 [Statista Report, 2017]. World Economic Forum estimates that in 2019 10-year average annual GDP growth is 5.9% [World Economic Forum, 2019]. As presented in Figure 1, GDP per capita increases constantly and in 2019 it reached 1,905 USD. Further growth is expected—GDP per capita in 2024 is estimated at 2,846.76 USD [CEIC, 2020; Statista, 2020]. The Bangladesh GDP per capita PPP was 3879.2 USD in 2018.

Figure 1

As presented in Figure 2, only 18.2% of the population in Bangladesh uses the internet. Mobile-broadband subscriptions per 100 people increased rapidly from 2014–2015 (0.4) to 2017–2018 (17.8) while growth dynamics of fixed-broadband internet subscription per 100 people is small (0.6 and 3.8, respectively) [World Economic Forum, 2019]. This aforementioned data is consistent with Uddin et al. [2017, p. 3] and data obtained from the Bangladesh Telecommunication Regulatory Commission that “the total number of internet subscribers in Bangladesh has reached 36.64 million at the end of October 2013.” Majority of them (35.11 million) use the internet through mobile phones, while the rest (1.53 million) use broadband internet. Nevertheless, the internet community uses social media regularly. Digital skills among population 1–7 (best) is 3.5 in 2019 [World Economic Forum, 2019].

Figure 2

It is also worth adding that in Bangladesh the majority of men are professionally active whereas the majority of women stays at home as housewives and takes care of the family. Global Gender Gap Index (gender parity) examines gender inequality between men and women in four key areas: health, education, economy, and politics (measured between 0 and 1) and for Bangladesh in 2020 it is 0.726 [World Economic Forum, 2020].

To recapitulate, according to World Bank, the economy of Bangladesh shows a robust growth and a macroeconomic stability. The GDP development of Bangladesh has benefited from the recovery in exports and the robust domestic demand [World Bank, 2018].

In Bangladesh, overall private spending has increased in recent years. In 2008, it amounted to 69,310.433 million USD and a decade later, in 2019, it increased to 210,595.436 million USD [CEIC, 2020]. Figure 3 shows the development of consumer spending of Bangladesh residents based on data provided by the Bangladesh Bureau of Statistics.

Figure 3

On an average, consumers in Bangladesh spend 55% on food and drink, 45% on things such as housing, clothing and footwear, energy, transport, water, education, health, personal care and financial services [Datatopics World Bank, 2010].

In general, the increasing FMCG market is driven by the growing population and the rising middle class. Nevertheless, the demographic differences determine the choice of products and services. It is worth mentioning that while entering foreign emerging markets, FMCG producers mostly decide to sell only simple products that meet basic consumers’ requirements. However, per capita income levels of many large cities in developing countries are comparable to those of large North American and European ones. This means that they have a demand and sales potential, which is increasingly similar [McKinsey, 2015]. This seems to be true especially as Shih [2016, p. 4] points out that “consumers are now actively seeking FMCG brands that align their motivations and needs. The increase in income level and disposal of incomes lead the Asian consumers to pursue better quality, premium, and higher price products.”

This is the case of Bangladesh where two elements have a decisive impact on the FMCG market: constantly growing urban population (in 2017 there were 58.75 million of inhabitants that is 35.70% of the population) and the growing middle-class income (according to the Bangladesh Development Studies, 20% of the total population in Bangladesh belongs to the middle-class income category). In 2025, 25% of the residents may belong to the middle-class income category thanks to greater access to education, finance, information technology services, and private sector employment [Khan, 2019].

The FMCG market is characterized by the high or bulk short-term demand on goods. Due to the usual low level of prices and the short-life cycle of products, the consumers’ involvement in the purchasing process is low. Besides, the competition is strong, and the range of substitute products is big [Holzmüller and Schuh, 2005]. Furthermore, consumers tend to care more about the background and back-stories of the products. As a consequence, FMCG manufacturers build brands based on real-customer stories and social responsibility. This emphasizes the overall potential of social media on the FMCG market in Bangladesh in communicating with the customers and building relationship with them [Mukherjee and Das, 2016b].

To identify the usage of the internet and examples of social media as well as to discover their potential in Bangladesh from the point of view of FMCG manufacturers, a quantitative survey on the sample of 100 consumers was conducted on September 2019 in the capital Dhaka. The capital city Dhaka was selected to carry out empirical study due to the fact that it is a main urban area, which has the highest level of internet use in the entire country. Respondents were between 18 and 55 years old. The sample reflected age and gender statistics of the capital Dhaka according to the nationwide population marginal distribution of the Bangladesh Bureau of Statistics. The sample was drawn randomly from the population and represents the equal distribution according to age and gender as the percentage of the population. The sample was based on the census 2011. A face-to-face interview method was applied with the support of the company Kantar. The interviewees were usually interviewed at home.

The questionnaire consisted of seven questions about internet use in general, the use of social media, the importance of social media platforms for receiving information about products, as well as their impact on purchasing decisions.

To assess the importance of social media and the degree of influence of respondents on purchasing decisions, a five-point Likert scale was used in all questions, where: 1—very important/very strong; 2—important/strong; 3—neither important/strong nor not important/not strong; 4—rather not important/not strong; 5—not important at all/not strong at all. Statistical significance level was α = 0.05. Moreover, the one-way analysis of variance (one-way ANOVA) was used to compare means of the samples.

The distribution of males and females is balanced within the sample (50 respondents, respectively). Most of the participants are between 26 and 35 years old (46%), followed by the group aged 18–25 (27%). 19% of the sample is between 36 and 45 years old, and the lowest share is generated by a group of participants aged 46–55 (8%).

Seventy seven percent of the respondents of this questioning were married, 23% are singles. As presented in Table 1, most male respondents are full-time or self-employed (86%). More than 60% of them are in the age segments 36–45 and 46–55 (63.2% and 62.5%, respectively). Most female respondents are housewives (82%) and the majority is in the age group 26–35 (56.5%).

Because of the fact that the sample size is limited, the results cannot be generalized. However, they point to the changes taking place in Bangladesh and the preferences of local consumers.

Majority of respondents (76%) have a regular access to internet facilities. Almost 60% of respondents use the internet 2 h or more every day. As it can be seen in Figure 4, participants most often use the internet to create social networks (76%), read news (49%), and use instant messengers (29%). It is important that most consumers of Bangladesh regularly use social media. This gives great opportunities to build and maintain a thoughtful marketing communication strategy. Moreover, respondents also use the internet for chat rooms (18%), shopping (17%), gaming (15%), web browsing (13%), and getting access to music (12%).

Figure 4

Social networks dominate in every age group, but the highest usage is noticeable in the youngest age group (18–25 years). There are two major social platforms for Bangladeshi consumers, which are Facebook and YouTube (76%). Other social media platforms, such as Google+, Twitter, and even Instagram, are not important for respondents and receive values up to 15% (Figure 5).

Figure 5

The internet is frequently used to receive information about products: 76% of respondents said that the internet has a decisive influence on searching for product information. Even 70% of respondents indicate that the internet has a very large impact on information retrieval.

Analyzing the data presented in the Table 2, it can be stated that 83% of respondents perceive the internet as a very important channel for finding information about products (top 2 box). There are slight differences in the perception of the importance of social media, taking into account the gender and age of the respondents. Males emphasize greater importance of using social networking platforms to receive information about products than females (90% and 76%, respectively). Moreover, respondents aged 18–25 show the highest openness toward social media compared to other age groups (88.9%). The lowest interest is shown by respondents aged 36–45 (78.9%), which is still a high percentage.

The Table 3 shows the results of the one-way ANOVA considering the level of significance between males and females. The p value is 0.041, so there is a relationship between searching for product information and the importance of social media at the gender level.

Analyzing the significance level of age, the p level is 0.563 (Table 4). It means that the relationship tested is not significant, i.e. when searching for product information, social media is not relevant to age.

Another important aspect of this research is determining the role of social media in making purchasing decisions by consumers on the FMCG market. In this case, 73% of respondents say that social media plays an important role (Table 5). Similarly, to the previous question, males emphasize that social media influences very strongly and strongly the decision to purchase FMCG (top 2 box—80%).

These indications are higher compared to preferences of females (66%). Considering the age of respondents, it can be said that the youngest group of respondents aged 18–25 has the greatest impact of social media on purchasing decisions (88.9%). The lowest impact is perceived by respondents aged 46–55, however the result is substantial (50%).

Tables 6 and 7 show results of the one-way ANOVA after considering the impact of social media on respondents’ decisions to buy FMCG—significance levels for gender and age. Both results are higher than 0.05 (0.051 and 0.712, respectively), so based on the collected data, it can be said that there are no such relationships.

Summing up, it can be said that the importance of the internet and social media for searching information in Bangladesh are very high. In addition, they can influence purchasing decisions of the customers. It can therefore be concluded that there is a great potential to use social media as an important tool, and FMCG producers can develop those platforms for conveying marketing informations of their products effectively in the Bangladesh market. It is also worth highlighting that each platform mentioned by respondents requires a different approach to communication and advertising. It means that the companies should integrate different communication styles and tools in the area of social media marketing having in mind also that the traditional offline advertising in mass media is still effective in Bangladesh.

In today's business reality, the role of traditional media is gradually decreasing [Danaher and Rossiter, 2011, pp. 6–7]. Currently, the way of communication between enterprises and customers has changed along with universal access to the internet and related communication channels. This also happens on emerging markets such as Bangladesh. In Bangladesh, the internet access is still low and the speed is slow, but the government supports the spread of internet and takes various actions. They implement high-speed internet, reduce the price of internet bandwidth, and offer internet-enabled handheld devices at competitive prices [Uddin et al., 2017, p. 6]. Moreover, the social structure of the country is changing. This is favored by the mobility of rural residents to urban areas, the growing number of highly educated people, and the willingness of people to online shopping [Uddin et al., 2017, pp. 6–7]. In Bangladesh consumers are gradually changing their communication preferences. Mukherjee and Das [2016a] argue that audio visual media in Bangladesh is still the most preferred advertising media of respondents to get information about the FMCG, however the internet is a second-best choice of preferred media for the respondents. This statement was corroborated by Adhikari [2018] saying that there has been a shift from the offline marketing to the online marketing communication forms and the importance of online marketing platforms has grown. The results of the study also confirm the existence of a growing potential of internet facilities and social media that can be used for communication between FMCG manufacturers and customers. Haddad [2016] even considers social media as a decisive tool for marketing communication strategy because it offers a great opportunity to contact the customer. Uddin et al. [2017, p. 6] emphasize the high importance of social media in Bangladesh saying that: “if a company would like to have successful online presence today, social media marketing is crucial.” Atsmon et al. [2012] underline that emerging countries are often characterized by the high importance of the word-of-mouth advertising, and now social media is the new reliable way of communicating with consumers.

It means that FMCG manufacturers entering the market in Bangladesh, have to coordinate various communication tools and channels in such a way that the message about a company and its market offer is clear and coherent [Gabrielli and Balboni, 2010, p. 277; Pluta-Olearnik, 2018, pp. 125–127]. They should implement the concept of social media marketing integrated with traditional mass-media advertising. This double dialogue should allow them to build long-term profitable relationships that create value [Porcu et al., 2017, p. 694]. To do it properly, it is worth conducting further research to combine appropriately traditional message and social media. This would have both academic as well as empirical implications.

From the point of view of scientists and academics, it is interesting to observe changes in communication models in emerging countries. With the analysis of Bangladesh, in-depth research can be carried out to answer questions like when, why, and how more advanced models are implemented. They should be carried out together with an analysis of changes in consumers’ needs, expectations, and shopping behavior. Based on the development of the market and communication models, scientists can draw conclusions how to integrate various communication channels to achieve a consistent message [Gabrielli and Balboni, 2010; Danaher and Rossiter, 2011; Pluta-Olearnik, 2018]. This ongoing dialogue should be conducted in a consistent and transparent manner in all media to support long-term profitable relationships between companies and consumers [Porcu et al., 2017].

Even if the sample of the survey was small and the results cannot be generalized, it is possible to propose some recommendations for FMCG manufacturers already present in Bangladesh or planning to enter this market. Due to the positive economic growth of this country, companies perceive opportunities to benefit from this development. The growing middle class increases the number of internet users and strengthen the importance of digital media. Bangladesh residents have better access to internet facilities and regularly use social media. This gives great opportunities to build a tactful and feasible marketing communication strategy. Social media can be used to communicate with all customer groups, considering the division of consumers by age and sex. However, it should be underlined that males and the young age group (18–25 years) are the most accessible groups. FMCG manufacturers should focus on using particularly two main social media platforms, which are Facebook and YouTube. The results obtained are consistent with those of Uddin et al. [2017, p. 6]. Other social media platforms such as Google+, Twitter, and even Instagram are at present not important to respondents. Each platform requires a different approach to communication and advertising. Many short commercial spots and films are broadcast on YouTube, but the message conveyed is not up to the expectations of the recipients. On the other hand, on Facebook there are mostly personalized posts and videos that meet the preferences of the users. Nevertheless, social media has great potential as a communication tool because they have decisive impact on product information search and consumers’ purchasing decisions.

It is also worth mentioning that multiple FMCG manufacturers, via their communications, position themselves along with positive image of platforms [Dwivedi and McDonald, 2018, p. 1394]. In addition, when building a marketing message addressed to the residents of Bangladesh, it is worth focusing on the background and history of products, true customer stories, and social responsibility, and consumers expect this approach. It highlights the overall potential of social media on the FMCG market in Bangladesh in communicating with clients and building relationships with them [Mukherjee and Das, 2016b]. In this context, as a proposal for further research, it may be interesting to identify potential consumer interest in effective storytelling and content marketing.

It is worth adding that Bangladesh is a fast developing country in various areas. One of these areas is broadly understood business activity, including marketing. Companies present on the market in Bangladesh or planning to expand into this market should be aware of this great marketing potential that exists in the country. World Economic Forum measures extent of market dominance based on the response to the survey question “In your country, how do you characterize corporate activity?” [1 = dominated by a few business groups; 7 = spread among many firms]. In 2019 the value of this index for Bangladesh is 3 [World Economic Forum, 2019]. However, the results of the study indicate the existence of a high potential for rapid development. The reason is that consumers are open to new marketing communication channels and develop their knowledge about producers and their products there. Moreover, the profound experience the FMCG manufacturers gained from the developed markets can be used to establish communication processes while entering new markets, particularly emerging ones. This seems to be an important area for further empirical research.