3 - fmcg marketing

7/28/2019 3 - Fmcg Marketing

1/61


2/61

FMCG Refers To Consumer Non DurableGoods required For Daily And Frequent Use.

FMCG is an acronym for Fast MovingConsumer Goods, which refer to things thatwe buy from local supermarkets on dailybasis, the things that have high turnover andare relatively cheaper

Also known as Consumer Packaged Goods(CPG)


3/61

Flavored MilkJuices Squashes Custard Coffee Tea Health drinks Milk Powder Cigarettes Mineral Water


4/61

Cereals Biscuits & Bakery Cookies Wafers Confectionery Dairy Products Butter Cheese Aerated Drinks


5/61

FMCG products are sold quickly at relatively low cost Absolute profit made on FMCG products is relatively

small but they sell in large quantity & earn largeprofits.

FMCG products have high turnover and are relatively

cheaper. The goods that comprise this category are ones that

need to be replaced frequently or are consumedfrequently, compared to those that are usable forextended periods of time.

FMCG goods represent a market that will alwayshave consumers

FMCG market is highly competitive due to highmarket saturation and low consumer switching costs.


6/61

Business limited to the upper segment of thesociety

Low purchasing power

Focus on Urban areas only Companies like HLL never bothered to enter

Indian rural market


7/61

Focus on rural markets Launch of Nirma changed the scenario Focus on the lower strata of the society

making detergents very affordable Cavinkare sachet marketing started in 1983

which was also a lesson for the MNCs Companies like HLL woke up to the new

market realities


8/61

Higher number of domestic choices Both urban and rural as targets

Value for money and value added offers

Affluent customers who always had the moneystarted splurging

More number of players viz HLL, Marico,Henkel, Colgate, etc

Sales boom was observed for first 4 yrs andthen it stabilized


9/61

Growth rate of FMCG was torpid High penetration categories like toilet soaps

& detergent bars were badly affected

Crisis in agricultural sector & industrialslowdown forced consumers to cut down onspending

Buyers moved from high end to low end

products Most marketers offered smaller versions of

products


10/61

FMCG cos. got a new lease of life 2005onwards

Products of almost all categories witnessed aboost in sales

Key reasons Increase in per capita income Organized retail boom Increased rural penetration

New range of affordable products wereintroduced


11/61

Target Market differs from product to productExamples:

1. Mc Donald's Youth

2. Vim bar - Housewives

3. Pepsodent Kids

4. Kellogg's Kids & adults

5. Sugar free Age group of 35 and more


12/61

Competitive Strategy consists of move of companies inorder to attract customers, withstand competitivepressures and strengthen an organizations marketposition.

The main objective of Competitive Strategy is to generatea competitive advantage, increase the loyalty of customers

and to beat competitors. In FMCG sector, the competitive strategies varies from

company to company

Three main competitive strategies are: Overall low cost leadership strategy Excellent distribution strategy Focused differentiation strategy


13/61

Advertising -Huge investment made onadvertising assisted with frequent broadcastspecially during peak hours, during livematches during popular TV shows

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

Occupying the best of the slots in print media


14/61


15/61

A product line extension is the use of anestablished products brand name for a new itemin the same product category according to theneed of consumer

Why product line extension is done? To make the product more affordable to the

various market segments To balance the profit through product line To avoid penetration by competitor Eg: Coca-Cola, Diet Coke, Vanilla Coke

Surf, Surf Excel, Surf Excel Blue
http://en.wikipedia.org/wiki/Coca-Colahttp://en.wikipedia.org/wiki/Diet_Cokehttp://en.wikipedia.org/wiki/Vanilla_Cokehttp://en.wikipedia.org/wiki/Coca-Colahttp://en.wikipedia.org/wiki/Diet_Cokehttp://en.wikipedia.org/wiki/Vanilla_Cokehttp://en.wikipedia.org/wiki/Vanilla_Cokehttp://en.wikipedia.org/wiki/Diet_Cokehttp://en.wikipedia.org/wiki/Coca-Colahttp://en.wikipedia.org/wiki/Coca-Colahttp://en.wikipedia.org/wiki/Coca-Cola


16/61

Brand extension or brand stretching is amarketing strategy in which a firm marketinga product with a well-developed image usesthe same brand name in a different product

category It gives credence value to the brand Eg: Dabur Toothpaste, Dabur Hair Oil, Dabur

Shampoo

Poor choices for brand extension may diluteand deteriorate the core brand and damagethe brand equity
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Brand_namehttp://en.wikipedia.org/wiki/Brand_namehttp://en.wikipedia.org/wiki/Brand_namehttp://en.wikipedia.org/wiki/Marketing


17/61

If the products are differentiated in theircharacteristics and this difference isperceivable, there are chances of brand loyaltybeing formed based on satisfaction with

greater performance or fit of product withneeds. In this case, loyalty is driven by functional or

symbolic benefits.

Functional benefits would be specifictangible features of the product (Eg: TidePlus)

Symbolic benefits would be intangibles suchas brand personality (Eg: Reebok, Nike)


18/61

The shampoo sachets, soaps, toothpastesare available in even the smallest villages.

It's a direct result of rising aspirations,fuelled by television commercials.

The consumer demands the product fromthe local shopkeeper, who then buys theproducts from the nearest feeder markets.

Hence, if distribution is ensured to theFeeder Markets in towns or villages with

populations of 10-15,000, the first step hasbeen taken towards reaching your targetcustomer.


19/61

If price is the only differentiating factor,then products become a commodity

If the price differentiation in the market isperceivable, Price-led loyalty might exist in

the market. Price-led loyalty is practiced by FMCGbrands apparel brands which come out withfrequent sales promotions

Low pricing may lead to the customer

perception that quality of the product islow.

Lower prices should create a sense of value


20/61

Introduction of packs with smaller sizes Eg:Introduction of 25 gm of Amul Butter alongwith standard sizes of 100 gm & 500 gm

Sachets of some shampoos like ChikShampoo in rural India


21/61


22/61

4 scenarios can take place during recessionperiod

1. Brand equity (High): Reduction in Brandinvestments: High loss potential

2. Brand Equity (High): No reduction increasein brand investments: Recession isopportunity

3. Brand equity (Low): Reduction in Brand

investments: Survival game4. Brand equity (Low): No reduction in Brand

investments: Double or Nothing


23/61

Focus on healthSugar free chyavanprash, multi grain biscuits,

probiotic ice creams, smart snacks (lays with 40%less saturated fats)

Micro segmentationAge- Junior Horlicks

Gender- Womens Horlicks, Male fairness creams

Lower value SKUs or sachetization


24/61

Jet age consumer products All types of flakes Pastas, noodles, soups, pizzas, burgers Energy drinks

Chopped veggies, ready to eat parathas, etcDifferent varieties of bread

Under penetrated growth categories Skin/fairness creams Anti ageing solutions

Deodorants, perfumes, body wash, shampoos,conditioners, etc

Cosmetics


25/61

Evolved forms of products Dish wash (powder bar to liquid)

Shaving (creams to foams/gels)

Mosquito repellents (coils to aerosols) Toilet cleaners (acids to Toilet Sanitizers)


26/61


27/61

Dabur India Limited is the Fourth largest FMCGCompany in India with interests in Health Care,Personal Care and Food products.

Dabur has a Turnover of more than Rs. 1600 crorewith powerful brands like Dabur Amla,DaburChyawanprash, Vatika, Hajmola & Real.

2 major strategic business units (SBU) ConsumerCare Division (CCD) and Consumer Health Division(CHD)

3 Subsidiary Group companies Dabur Foods, Dabur Nepal and Dabur

International


28/61


29/61


30/61


31/61


32/61


33/61


34/61


35/61


36/61


37/61

Dabur is cautiously optimistic about its prospectsin 2011-12

They believe that, if the Indian economy continuesto grow by over 6.5 per cent, demand for FMCGproducts is bound to increase.

However, a bulk of this demand growth will befrom smaller towns and rural centers.

This also points to the fact that growth will largely

be volume driven. The major concern for 2011-12 is to do withprices of inputs.


38/61


39/61


40/61

Hindustan Unilever Ltd is Indias largestFMCG sector company with all type ofhousehold products available with it.

It has Home & Personal Care products in its

kitty. According to Brand Equity, HUL has largest no

of brands in most trusted brands list. 16 of HULs brands featured in AC-Nielson

Brand Equity list of 100 most trusted brandsin 2008 in an annual survey.


41/61


42/61


43/61

After stagnating between 1999 and 2004, thecompany is back on the growth track. In thepast five years, till 2010 HULs net sales &profits have witnessed substantial growth


44/61


45/61

Hindustan Unilever Ltds (HUL) beveragebrands have been amalgamated under twoumbrella brands Brooke Bond and Liptonand in the fabric wash category, the company

has retained only Rin, Surf and Wheel. HUL has withdrawn brands such as Sunlight,

501& Dalda

Some brand extensions like Clinic All Clearanti-dandruff shampoo to hair oil categoryhad been successful


46/61

SoapsLux, Pears, Lifebuoy ShampoosSunsilk, Clinic Plus, Dove

DetergentsSurf, Wheel

Talcum PowderPonds

TeaTajmahal, Bru, Lipton, Red Label

Fairness & Skin CreamFair & Lovely, Lakme,Ponds Fairness Cream, Ponds Age Miracle


47/61

The Company has been launching newproducts and brand extensions, withinvestments being made towards brand-building and increasing its market share.

HUL is also streamlining its various businessoperations, in line with the One Unileverphilosophy adopted by the Unilever groupworldwide.

Introduction of premium products andaddition of new consumers via marketexpansion will be HULs growth drivers


48/61

Being an MNC operating in India, HUL is moreconservative in its strategies than its Indiancounterparts.

Prolonged inflation may lead to margin

contraction, in case HUL is not able to passon this burden to consumers.

The companys large size also poses aproblem, since it does not give HUL the agilityto address the competition it faces fromnational and regional players.


49/61

Strengths: Strong brand portfolio, price, quantity & variety.

Innovative Aspects.

Presence of Established distribution networks in

both urban and rural areas. A large no. of distributers

16 million outlets over the world.

700 million customer base.

Strong R&D of the company Highly skilled human resource.


50/61


51/61

Threats Tax and regulatory structure.

Fake brands which are cheaper

Entry of ITC in FMCG sector.

Increasing cost of raw material.


52/61

Distribution strategy (Strong distribution network) Distribution network(direct selling co. HULN; products

marketed by AYUSH) Brand extension strategy (pears, lux, lifebuoy) Line extension strategy (surf, surf excel, surf excel +)

Promotional strategy-ads,(Rs700-800 cr) Segmentation strategy Premium brands (ponds age miracle) Affordable & value for money brands Sachetization of shampoos Community services programs like SHAKTI for rural

women & LIFEBUOY SWASTHA CHETNA which is arural health program

ITC Business Portfolio


53/61

ITC Business Portfolio

FMCG

,

Paper &Packaging

otels AgriBusiness

InformationTechnology

Cigarettes Personal CareFoods Lifestyle Retailing

Education & Stationery Matches Incense Sticks

Branded Packaged Foods


54/61

54


6 chosen categories:

Staples

Aashirvaad Atta, Salt, Spices

Biscuits

Sunfeast

Salty Snacks

Potato chips, : Bingo!

Confectionery

Candyman, mint-o

Noodles: Launched SunfeastYippee Noodles in Sept 10 in Karnataka andTamil Nadu markets

Ready to Eat

Kitchens of India (Ready to Eat, Conserves & Chutneys and Frozen Foods),

Aashirvaad (Instant Mixes & Cooking Pastes), Sunfeast Pasta



55/61

55


Aashirvaad Atta:

Current market leader amongst national branded players; leverages the e-

choupal network for cost-quality optimisation and region specific offerings

Sunfeast Biscuits:

Differentiated & innovative products; continues to build consumer

franchise; distributed & outsourced supply chain being ramped up

Targeted cost management actions shore up margins

Number of innovative products in the pipeline leveraging the capabilities

of the ITC R&D Centre

Safety Matches


56/61

56

Safety Matches

Current industry consumer spend estimated at Rs. 1250 crores p.a. for 24

billion match boxes

Fragmented supply base arising from policy of reservation for small scale

industry

Mass market moving from 0.50 p price point to Re 1.00.

ITC markets its brands with value added products across each price

point

Support SMEs with complementary marketing strengths

AIMIndias largest selling Safety Matches brand

Successful acquisition of WIMCO Ltd. by Russell Credit

Key brands: Homelites, Ship, Cheetah Fight etc.

Incense sticks (Agarbattis)


57/61

57

Incense sticks (Agarbattis)

Current industry consumer spend estimated at over Rs. 900 crores p.a.

ITC markets its brands with value added products across each price

point

Mangaldeep : second largest national brand in the country

Support cottage sector with complementary marketing strengths

Provides livelihood opportunities to more than 8000 under privileged

women

Personal Care Products


58/61

58

Personal Care Products

Current market size estimated at over Rs. 29000 crores (growing at 12% p.a.)

ITC presence established in Body Wash (Soaps, shower gels), Hair Care (Shampoos,conditioner).

Product portfolio enlarged with the launch of Fairness creamVivel Active Fair

Portfolio approach straddling all consumer segments with 4 umbrella brands

Essenza Di Wills (Prestige)

Fiama Di Wills (Premium)

Vivel Di Wills and Vivel (Mid)

Products well received in the market, gaining customer acceptance

Supported by investments in brands celebrity endorsements

Investments being made in Research & Development and strategic tax incentivised

manufacturing sites

ITCs Cigarettes Business


59/61

59

ITC s Cigarettes Business

Market leadership Powerful brands across segments

Leadership in all segments - geographic & price

Extensive FMCG distribution network

Direct servicing of 1,00,000 markets & 2 million retail outlets World-class state-of-the-art technology and products

Investment - Rs.10 billion in six years

Exciting long term growth potential


60/61


61/61

3 - fmcg marketing

Documents