Advertising Media Efficiency of FMCG Firms in India: An Empirical Investigation Using Data Envelopment Analysis

The present study aims to evaluate the advertising spending efficiency of 17 FMCG firms for the time period of seven years from 2006 to 2012. The Data Envelopment Analysis (DEA) technique is used to evaluate the efficiencies in terms of Overall Technical Efficiency (OTE), Pure Technical Efficiency (PTE) and Scale Efficiency (SE) for each firm in different years. The analysis reveals that on an average, almost 6% of the companies in terms of OTE and 22% firms in terms of PTE efficiently utilize their advertising expenditure. The analysis also reveals that the analyzed companies, on an average, need to reduce their inputs by almost 50% while maintaining their current levels of outputs in order to become efficient.