Fast Moving Consumer Markets India

8/6/2019 Fast Moving Consumer Markets India

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What is FMCG ?

Also known as Consumer Packaged Goods (CPG)

Products with quick turnover &relativelylow cost

Less thinking by consumers

Absolute profit made on FMCG products is relatively small

but they sell in large quantity & earn large profits.

Durable Products; E.g. Soaps, Cosmetics, teeth cleaning

products, shaving products etc.

Non-Durable Products; E.g. Glassware's, bulbs, batteries,

plastic goods etc.


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One of the fastest growing sector in early 1980s till 1990s

After 1990s,

o FMCG started losing their sheen due to introduction of other product typeso Totallack of imagination on the part of FMCG companies.

By 2000, volumes & margins either shrank or stagnated

During 2006, Consumers willingness to upgrade to better, value added

products helped FMCG.

According to a McKinsey Global Institute (MGI) study titled 'Bird of Gold':The Rise ofIndia's Consumer Market, the total consumption in India is likely

to quadruple making India the fifth largest consumer market by 2025. Urban

India will account for nearly 68 per cent of consumption growth while rural

consumption will grow by 32 per cent by 2025.

India ranks first in theN

ielsen Global Consumer Confidence survey releasedin May 2010. India is one of the fastest growing markets in the world and the

current consumer belief that recession would soon be a thing of the past has

filled Indians with confidence, said Piyush Mathur, Managing Director,

South Asia, The Nielsen Co. With 127 index points, India ranked number one

in the recent round of the survey, followed by Indonesia (116) and Norway

(115).


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FMCG is the fourth largest sector in the Indian economy

with a total market size of Rs.60,000cr.

FMCG sector generates 5% of total factory employment in

the country and is creating employment for three million

people.

FMCG Industry in India is expected to grow at an annual12% to become a Rs.4,00,000 cr. Industry by 2020


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FMCG companies are Nestle, Unilever, Proctor & Gamble.

Their products are in varieties of soft drinks, chocolate bars

etc.

Few FMCG brands are Coca-Cola, Kleenex, Pepsi etc.

FMCG industry is

o Innovative

o Full of Rich Experience

o Worldwide reach

o Frequently travelling opportunities


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The products often cater to 3 very distinct but usually wanted foraspects- necessity, comfort, luxury. They meet demands of the

entire cross section of population . Price and income elasticity of

demand varies across products and consumers.

Individuals items are of small value although all FMCG products

put together account for a significant part of the consumers

budget.

The consumer spends little time on the purchase decision. He

seldom everlooks at the specifications. Brand loyalities or

recommendations of reliable retailer/dealer drive purchasedecisions.

Limited Inventory of these products are kept by consumer and

prefers to purchase them frequently as when required.


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1. Large Domestic Market:-

2. Large Consumer Goods Spender:-

3. Low Penetration & Low per Capita consumption :-

4. Changing Lifestyles:-

5. Retailing New growth area

6. Demand & Supply Gap


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1. Materials Availability:-

2. Leveraging The Cost Advantage:-

e.g. P & G outsourced Vicks Vaporub toAustralia, Japan etc. from Hyderabad


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Geographic

Demographic

Social and Economic

Behavioral


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Household Care

e.g. laundry soaps, mosquito repellents, dish cleaners etc.

Food & beverages

e.g. soft drinks, bakery products, tea, coffee, vegetables etc.

Personal Care

e.g. oral care, hair care, skin care, cosmetics, deodorants,

perfumes etc.


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Zone region- nearest zone will be targeted first

Villages and town- helps to analyze marketing strategy

Density

Climate


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Age- children or adult

Gender-male or female


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Income group- high, medium orlow

Social and Economic- Education (illiterate, literate , highly

literate), social class


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Occasions ( Diwali, Deshehra, Eid)

Brand loyalty (rural area people are morebrand loyal)


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1. Britannia India Ltd. (BIL)

2. DaburIndia Ltd.

3. Indian Tobacco Corporation Ltd. (ITCL)

4. Marico

5. Nirma Ltd.


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1. CadburyIndia Ltd. (CIL)

2. Cargill

3. Coca-Cola

4. Colgate Palmolive India

5. H.J. Heinz Co.

6. Hindustan Lever Ltd. (HLL)

7. Nestle India Ltd.

8. Procter & Gamble


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Differs from product to product

examples:

1. Mc Donald's Youth

2. Vim bar - Housewives3. Pepsodent Kids

4. Kellogg's Previously kids now adults too

5. Sugar free Age group of35 and more


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Direct on-screen marketing (e.g. Harpic)

Power brand strategy

(Include those brand that have maximum pulling power andgrowth e.g. lifebuoy soap)

Power brand extension (e.g. lifebuoy talcum powder)

Exit from non power brand

Using India as a brand


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Small size packet strategy

Pricing strategy

1. Mark up

2. Go- deterring (e.g. bingo chips)3. Competitor based

4. Product bundling

Same value, size increase

Same value, size decrease (e.g. society tea)


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Huge investment on advertisement

Frequent broadcast

Specially during peak hours

During live matches During popular TV shows

Target TV channels ( M TV, V TV)

Through banners, posters, trial packs, events, hoardings,radio etc.

Based on Market Research


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As a reminder

To inform about our product

To show the success of brand

To attract the customers To hamper the unsecured mind of consumer (e.g.

saffola,dettol)

To arise the need purposely

To attach consumer emotionally with product

To show facts and figures of products


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Surf excel for washing machine

Vim bar gel

Gillette razor

Bingo chips Happy dent chewing gum

Bourn vita, Horlicks

Pepsodent, Colgate

Pepsi, sprite, coca-cola


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Attractive packs

Vibrant colors

Pack will show the important feature of product

Protective packaging( bru coffee)

Size wise packing (Navratna oil and Colgate) According to segmentation of Market

Packaging should be enhanced time by time

Affordable packs ( coca cola 200 ml).


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According to the need of consumer

To avoid the loss of product diversification

To balance the profit through product line

To avoid penetration by competitor ( perk glucose)


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IndustrialMarketing FMCG

Relationship driven Product Driven

Maximize value of relationship Maximize value of transaction

Small focused target market Large target market

Multi-step Buying process,

longer sales cycle

Single-step Buying process,

shorter sales cycle

Rational buying decision based

on business value

Emotional buying decision based

on status, desire or price


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Case-Study

HLL-Juggernaut-

The DilemmaOf Growth

(FMCG Markets India)

Fast Moving Consumer Markets India

Documents

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