industry fmcg

8/3/2019 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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Advertisement

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Competition at its Worst !!

Aamir Khan Coke AD.f

Chota Coke


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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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