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ASSIGNMENT ON CHANGING TRENDS IN FMCG INDUSTRY IN INDIA pdf
Post: #1

ASSIGNMENT ON CHANGING TRENDS IN FMCG INDUSTRY IN INDIA


.pdf  CHANGING TRENDS.pdf (Size: 231.2 KB / Downloads: 39)

Introduction to FMCG Industry

FMCG Concept and Definition:

The term FMCG (fast moving consumer goods), although popular and frequently
used does not have a standard definition and is generally used in India to refer to products
of everyday use. Conceptually, however, the term refers to relatively fast moving items
that are used directly by the consumer. Thus, a significant gap exists between the general
use and the conceptual meaning of the term FMCG.
Further, difficulties crop up when attempts to devise a definition for FMCG. The
problem arises because the concept has a retail orientation and distinguishes between
consumer products on the basis of how quickly they move at the retailer’s shelves. The
moot question therefore, is what industry turnaround threshold should be for the item to
qualify as an FMCG. Should the turnaround happen daily, weekly, or monthly?
One of the factors on which the turnaround depends is the purchase cycle.
However, the purchase cycle for the same product tend to vary across population
segments.

ABOUT THE INDUSTRY IN INDIA

FMCG in India has a strong and competitive MNC presence across the entire value chain.
It has been predicted that the FMCG market will reach to US$ 33.4 billion in 2015 from
US $ billion 11.6 in 2003. The middle class and the rural segments of the Indian
population are the most promising market for FMCG, and give brand makers the
opportunity to convert them to branded products. Most of the product categories like
jams, toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as
well as low penetration level, but the potential for growth is huge.
The Indian Economy is surging ahead by leaps and bounds, keeping pace with rapid
urbanization, increased literacy levels, and rising per capita income.
The big firms are growing bigger and small-time companies are catching up as well.
According to the study conducted by AC Nielsen, 62 of the top 100 brands are owned by
MNCs, and the balance by Indian companies.

Household Care

Personal Wash:-


The market size of personal wash is estimated to be around Rs. 8,300 Cr. The
personal wash can be segregated into three segments: Premium, Economy
and Popular. The penetration level of soaps is ~92 per cent. It is available in 5
million retail stores, out of which, 75 per cent are in the rural areas. HUL is the
leader with market share of ~53 per cent; Godrej occupies second position
with market share of ~10 per cent.

Detergents:-

The size of the detergent market is estimated to be Rs. 12,000 Cr. Household
care segment is characterized by high degree of competition and high level of
penetration. In washing powder HUL is the leader with ~38 per cent of
mar-ket share. Other major players are Nirma, Henkel and Proctor & Gamble.

Demographic

With the presence of 12.2% of the world population in the villages of India, the Indian
rural FMCG market is something no one can overlook. Increased focus on farm sector
will boost rural incomes, hence providing better growth prospects to the FMCG
companies. Better infrastructure facilities will improve their supply chain.
Because of the low per capita consumption for almost all the products in the country,
FMCG companies have immense possibilities for growth. And if the companies are able
to change the mindset of the consumers, i.e. if they are able to take the consumers to
branded products and offer new generation products, they would be able to generate
higher growth in the near future.
However, the demand in urban areas would be the key growth driver over the long term.
Also, increase in the urban population, along with increase in income levels and the
availability of new categories, would help the urban areas maintain their position in terms
of consumption.

Procter & Gamble Hygiene & Health Care Limited (P&G)

Procter & Gamble was founded in 1837 by William Procter, a British citizen who
immigrated to the United States. The company first sold candles. Procter & Gamble Co.
(P&G, NYSE: PG ) is a Fortune 500 American multinational corporation headquartered
in Downtown Cincinnati, Ohio that manufactures a wide range of consumer goods. As of
mid 2010, P&G is the 6th most profitable corporation in the world, and the 5th largest
corporation in the United States by market capitalization, surpassed only by Apple,
Exxon Mobil, Microsoft, and Wal-Mart. It is 6th in Fortune's Most Admired Companies
2010 list P&G is credited with many business innovations including brand management
and the soap opera.
According to the Nielsen Company, in 2007 P&G spent more on U.S. advertising than
any other company; the $2.62 billion spent by P&G is almost twice as much as that spent
by General Motors, the next company on the Nielsen list. P&G was named 2008
Advertiser of the Year by Cannes International Advertising Festival. Proctor & Gamble
is a leading member of the U.S. Global Leadership Coalition, a Washington D.C.-based
coalition of over 400 major companies and NGOs that advocates for a larger International
Affairs Budget, which funds American diplomatic and development efforts abroad.
 

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