Industry FMCG
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Transcript of Industry FMCG
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Envision.Accomplish.Excel
FMCG : Industry Understanding
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FMCG
It is an acronym for Fast Moving Consumer Goods which is defined as fast selling,
low unit value consumer products normally in universal demand
What is
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Indian FMCG
With a market size ofUS$ 25 billion (2007-08 retail sales),
constitutes 2.15 per cent of India's gross domestic product
(GDP).
The industry is poised to grow by 10 to 12 percent
annually.
Industry growth drivers:
Emergence of organized retail business
Increasing disposable income
Growing young population
Urbanization
Snapshot
Source: IBEF: Fast Moving Consumer Goods (FMCG): Feb2011, FMCG Market Overview April 2010
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Rural India
Rural India accounts for close to one-third of the total consumption pie.
The penetration of companies into rural north India increased from 9.5 per cent in2000 to 46 per cent in 2008.
FMCG companies are devising exclusive rural marketing strategies to tap the rural
consumer base : HUL - Project Shakti, ITC e-choupal
FMCG
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PlayersFMCG
Companies Sales
Hindustan Unilever Ltd.
Indian Tobacco Company Ltd.
Amul (GCMMF)
Hindustan Unilever Ltd.
ITC (Indian Tobacco Company)
Nestl India
GCMMF (AMUL)
Dabur India
Asian Paints (India)
Cadbury India
Britannia Industries
Procter & Gamble Hygiene and Health Care
Marico Industries
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Operating Practices
Mass market led and not niche
Marketing is very significant
Extensive distribution networks and logistics
Price point conscious: Low Unit Pack, Flexible packs, Grammage adjustments
Active promotions
Variety of Choice: Variants or SKUs
Competition led
FMCG
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Radeuss positioning in FMCG
New Product Development partner who takes care of entire cycle from
Concept to Commercialization
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New Product DevelopmentFMCG
How is New Product Launch perceived ?
Heavy cost
Areas of Focus:
High advertisement
Free samples, promotions
Develop excellent retail presence
Maintain low investment in fixed assetsContract manufacturing (Product as well as Packaging)
Dynamic adaptation to market response to gain
acceptability
On average, launching a new SKU costs betw
Rs 8 crore and Rs 10 crore. "It could go up t
in some cases. This includes the cost of res
promotions and marketing budgets," says S
General Manager, Marketing, Dabur.
The contribution of innovation to a company
ranges between 0.1 to 10 percentin the first
year, and is in the range of 0.1 to 20 per cen
second year," says Banoja Acharya, Vice Pre
BASES India at the market research firm, The
Company.
"Who cares about how much money a c
spent on technology or research? Eve
consumer must like what is being offered. I
need - at the price he can afford," conclude
Karan, Partner, Baring Private Equity.
Source: Critical operating rules in Indian FMCG sector in FMCGMarket Overview April 2010, Business Today,June 2011, Eat,pray, love innovations
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OfferingsRadeus
Product Development Process Radeus Services
Positioning and PricingDetermining the Market, Brand Building Plan
Research
ProductProduct Formulation
-
PackagingGraphics and Structure Designing, SKUs
Designing +
Engineering + Mold
Development( For rigid structure packaging )
PromotionTVCs, On shelf promotion, other marketing
communications like Brand endorsements, placements,
etc.
-
DistributionDetermining the channels: modern trade, kirana stores,
online, etc.
-
Performance ReviewConsumer acceptance, design optimization
Research + Engineering
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Competition: FMCG OfferingsRadeus
Product Development
Process
Radeus TATA Elxsi Desmania Lumium Ax
Positioning and Pricing
Determining the Market, BrandBuilding Plan
Research Research, Brand
Strategy
Design Research Research, Brand
Strategy
ProductProduct Formulation
- Product shapes - Sub- Product
shapes
PackagingGraphics and Structure Designing,
SKUs
Designing +
Engineering +
Mold Development( For rigid structure
packaging )
Graphics and
Structure Designing
+
Engineering +
Vendor
Development
Graphics and
Structure
Designing
Graphics and
Structure Designing
+
Engineering
Desi
Engin
Mold De( For rigi
pack
PromotionTVCs, On shelf promotion, etc.
- - Print and Digital
Communication
-
DistributionDetermining the channels: modern
trade, kirana stores, etc.
- Retail Designing Retail Designing Retail Designing
Performance ReviewConsumer acceptance, design
optimization
Research + Engineering Engineering - Engineering Engin
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THANKYOU
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