CHAPTER 1 INTRODUCTION

1.1 FAST MOVING CONSUMER GOODS

Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate bars. Subsets of FMCGs are Fast Moving Consumer Electronics which include innovative electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems and Laptops. These are replaced more frequently than other electronic products. White goods in FMCG refer to household electronic items such as Refrigerators, T.Vs, Music Systems, etc.

1.1.1 The FMCG Industry

The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams,
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toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment in the food-processing industry. Automatic investment approval (including foreign technology agreements within specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing sector. FMCG industry, alternatively called as CPG (Consumer packaged goods) industry primarily deals with the production, distribution and marketing of consumer packaged goods. These are products that have a quick turnover, and relatively low cost. Consumers generally put less thought into the purchase of FMCG than they do for other products. Though the absolute profit made on FMCG products is relatively small, they generally sell in large numbers and so the cumulative profit on such products can be large. Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc. The industry also engaged in operations, supply chain, production and general management. FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is estimated to grow 60% by 2010.

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FMCG Industry Economy

FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is estimated to grow 60% by 2010. FMCG industry is regarded as the largest sector in New Zealand which accounts for 5% of Gross Domestic Product (GDP).

Growth Prospects
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. FMCG sector is also likely to benefit from growing demand in the market. 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.

It is expected that the rural income will rise in 2007, boosting purchasing power in the countryside. 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.

At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated
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that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas.

Common FMCG products

Some common FMCG product categories include food and dairy products, glassware, paper products, pharmaceuticals, consumer electronics, packaged food products, plastic goods, printing and stationery, household products, photography, drinks etc. and some of the examples of FMCG products are coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and cigarettes, watches, soaps etc.

Market potentiality of FMCG industry

Some of the merits of FMCG industry, which made this industry as a potential one, are low operational cost, strong distribution networks, presence of renowned FMCG companies. Population growth is another factor which is responsible behind the success of this industry.

Leading FMCG companies

Some of the well known FMCG companies are Sara Lee, Nestl, Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi and Mars etc.

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Categories of FMCG Industry

Attributes
House hold Care

Type of Products
Cleaners, Repellents,

Company Name
HUL, Nirma, ITC, Mosquito Dabur.

Soaps, Detergents, Household P&G,

Personal Care

Oral Care, Skin Care, Hair P&G, HUL, ITC, Fem Care, Care, Soaps, Toiletries, Lakme, Deodorants, Emami, Palmolive. Marico, Dabur, Himalya, Colgate-

Cosmetics,

Female Hygiene Products. Food and Beverages FOOD:

Staples/Cereals, Coca-Cola, Pepsi Co, Dabur, Khaitan,

Bakery products, Ice Cream, Glaxosmithkline, Chocolate, Braded sugar, United Breweries.

Branded Flour. BEVERAGES: Health

beverage, Soft Drinks, Tea, Coffee, Packaged water,

Liquor, Juice

(Table 1.1)

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Product Characteristics
Products belonging to the FMCG segment generally have the following characteristics: They are used at least once a month They are used directly by the end-consumer They are non-durable They are sold in packaged form They are branded Industry Segments The main segments of the FMCG sector are: Personal Care: oral care; hair care; skin care; personal wash (soaps); cosmetics and toiletries; deodorants; perfumes; paper products (tissues, diapers, sanitary); shoe care. Household Care: fabric wash (laundry soaps and synthetic detergents); household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellants, metal polish and furniture polish). Branded and Packaged Food and Beverages: health beverages; soft drinks; staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream; tea; coffee; processed fruits, vegetables and meat; dairy products; bottled water; branded flour; branded rice; branded sugar; juices etc. Spirits and Tobacco: An exact product-wise sales break up for each of the items is difficult.

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1.1.2 The top 10 companies in FMCG sector

S. NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Companies 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

The companies mentioned in Table 1.2, are the leaders in their respective sectors. The personal care category has the largest number of brands, i.e., 21, inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are 11 HUL brands in the 21, aggregating Rs. 3,799 crore or 54% of the personal care category. Cigarettes account for 17% of the top 100 FMCG sales, and just below the personal care category. ITC alone accounts for 60% volume market share and 70% by value of all filter cigarettes in India. The foods category in FMCG is gaining popularity with a swing of launches by HUL, ITC, Godrej, and others. This category has 18 major brands, aggregating Rs. 4,637 crore. Nestle and Amul slug it out in the powders segment. The food category has also seen innovations like softies in ice creams, chapattis by HUL, ready to eat rice by HUL and pizzas by both GCMMF and Godrej Pillsbury. This category seems to have faster development than the stagnating personal care category. Amul, India's largest foods company has a good presence in the food category with its ice-creams, curd, milk, butter, cheese, and so on. Britannia also ranks in the top 100 FMCG brands, dominates the biscuits category and has launched a series of products at various prices.

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In the household care category (like mosquito repellents), Godrej and Reckitt are two players. Good knight from Godrej, is worth above Rs 217 crore, followed by Reckitt's Mortein at Rs 149 crore. In the shampoo category, HUL's Clinic and Sunsilk make it to the top 100, although P&G's Head and Shoulders and Pantene are also trying hard to be positioned on top. Clinic is nearly double the size of Sunsilk. Dabur is among the top five FMCG companies in India and is an herbal specialist. With a turnover of Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur has brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. Asian Paints is enjoying a formidable presence in the Indian sub-continent, Southeast Asia, Far East, Middle East, South Pacific, Caribbean, Africa and Europe. Asian Paints is India's largest paint company, with a turnover of Rs.22.6 billion (around USD 513 million). Forbes Global magazine, USA, ranked Asian Paints among the 200 Best Small Companies in the World Cadbury India is the market leader in the chocolate confectionery market with a 70% market share and is ranked number two in the total food drinks market. Its popular brands include Cadbury's Dairy Milk, 5 Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380 Million) Marico is a leading Indian group in consumer products and services in the Global Beauty and Wellness space. Outlook There is a huge growth potential for all the FMCG companies as the per capita consumption of almost all products in the country is amongst the lowest in the world. Again the demand or prospect could be increased further if these companies can change the consumer's mindset and offer new generation products. Earlier, Indian consumers were using non-branded apparel, but today, clothes of different brands are available and the same consumers are willing to pay more for branded quality clothes. It's the quality, promotion and innovation of products, which can drive many sectors.

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1.1.3 SWOT Analysis of FMCG Sector Strengths:

1. Low operational costs 2. Presence of established distribution networks in both urban and rural areas 3. Presence of well-known brands in FMCG sector

Weaknesses:
1. Lower scope of investing in technology and achieving economies of scale, especially in small sectors 2. Low exports levels 3. "Me-too" products, which illegally mimic the labels of the established brands. These products narrow the scope of FMCG products in rural and semi-urban market.

Opportunities:
1. Untapped rural market 2. Rising income levels i.e. increase in purchasing power of consumers 3. Large domestic market- a population of over one billion. 4. Export potential 5. High consumer goods spending

Threats:
1. Removal of import restrictions resulting in replacing of domestic brands 2. Slowdown in rural demand 3. Tax and regulatory structure

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1.1.4 Indian Competitiveness and Comparison with the World Markets

The following factors make India a competitive player in FMCG sector: Availability of raw materials Because of the diverse agro-climatic conditions in India, there is a large raw material base suitable for food processing industries. India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest producer of rice, wheat and fruits &vegetables. India also produces caustic soda and soda ash, which are required for the production of soaps and detergents. The availability of these raw materials gives India the location advantage.

Labor cost comparison

(Figure 1.1)

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Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest in the world, after China & Indonesia. Low labor costs give the advantage of low cost of production. Many MNC's have established their plants in India to outsource for domestic and export markets. Presence across value chain Indian companies have their presence across the value chain of FMCG sector, right from the supply of raw materials to packaged goods in the food-processing sector. This brings India a more cost competitive advantage. For example, Amul supplies milk as well as dairy products like cheese, butter, etc.

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1.1.5 Distinguishing features of Indian FMCG Business

FMCG companies sell their products directly to consumers. Major features that distinguish this sector from the others include the following: 1. Design and Manufacturing Low Capital Intensity - Most product categories in FMCG require relatively minor investment in plant and machinery and other fixed assets. Also, the business has low working capital intensity as bulk of sales from manufacturing take place on a cash basis. Technology - Basic technology for manufacturing is easily available. Also, technology for most products has been fairly stable. Modifications and improvements rarely change the basic process. Third-party Manufacturing - Manufacturing of products by third party vendors is quite common. Benefits associated with third party manufacturing include (1) flexibility in production and inventory planning; (2) flexibility in controlling labor costs; and (3) logistics - sometimes its essential to get certain products manufactured near the market. 2. Marketing and Distribution Marketing function is indispensible in case of FMCG companies. Major features of the marketing function include the following: High Initial Launch Cost - New products require a large front-ended investment in product development, market research, test marketing and launch. Creating awareness and develop franchise for a new brand requires enormous initial expenditure on launch advertisements, free samples and product promotions. Launch costs are as high as 50100% of revenue in the first year. For established brands, advertisement expenditure varies from 5 - 12% depending on the categories.

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Limited Mass Media Options - The challenge associated with the launch and/or brandbuilding initiatives is that few number of mass media options. TV reaches 67% of urban consumers and 35% of rural consumers. Alternatives like wall paintings, theatres, video vehicles, special packaging and consumer promotions become an expensive but required activity associated with a successful FMCG. Huge Distribution Network - India is home to six million retail outlets, including 2 million in 5,160 towns and four million in 627,000 villages. Super markets virtually do not exist in India. This makes logistics particularly for new players extremely difficult. It also makes new product launches difficult since retailers are reluctant to allocate resources and time to slow moving products. Critical factors for success are the ability to build, develop, and maintain a robust distribution network. 3. Competition Significant Presence of Unorganized Sector - Factors that enable small, unorganized players with local presence to flourish include the following: Basic technology for most products is fairly simple and easily available. The small-scale sector in India enjoys exemption/ lower rates of excise duty, sales tax etc. This makes them more price competitive vis--vis the organized sector. A highly scattered market and poor transport infrastructure limits the ability of MNCs and national players to reach out to remote rural areas and small towns. Low brand awareness enables local players to market their spurious look-alike brands. Lower overheads due to limited geography, family management, focused product lines and minimal expenditure on marketing.

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1.2 THE STUDY

The project deals with the awareness of the brand of the two FMCG companies. The project involves the comparative analysis of the two FMCG companies that is Hindustan Unilever and Procter and Gamble. Project will also involve the analysis of the variety of the products available in the market. Presence of both the companies will be ascertained by the product portfolio that they have. Another aspect that will be covered in the project is the consumption pattern of the customers. Which companys product are used maximum by the consumers, this will show their brand awareness and preference. For the purpose of comparison various categories of products is selected. The basis of selection is that these categories of products are provided by both the companies. It will help in the proper analysis of both the companies. The categories selected are as follows: Laundry Skin care Hair care Oral care

1.2.1 Objectives of the project

To examine the awareness of brand among the customers. To ascertain the variety of products offered by the two FMCG Companies. To determine the consumption patterns of the two FMCG companies.

1.2.2 Limitations of the project

Detailed research cannot be conducted due to time constraint. The scope of the study is limited to Chandigarh. For collecting data commutation cost will be incurred. Frequent changes in the market trend and consumer preferences Respondents may not provide full and accurate information during survey.

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1.3 COMPANIES PROFILE 1.3.1 Hindustan Unilever Limited

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. They endow the company with a scale of combined volumes of about 4 million tones and sales of nearly Rs.13718 crores. HUL is also one of the country's largest exporters; it has been recognized as a Golden Super Star Trading House by the Government of India. The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to "add vitality to life." HUL meets every day needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds 52.10% of the equity. The rest of the shareholding is distributed among 360,675 individual shareholders and financial institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's are household names across the country and span many categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured over 37 factories across India. The operations involve over 2,000 suppliers and associates. HUL's distribution network comprises of about 2,500 redistribution stockiest, covering 6.3 million retail outlets reaching the entire urban population, and about 250 million rural consumers.

HUL has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Unilever Research Centre (HURC) was set up in 1958, and now has facilities in Mumbai and Bangalore. HURC and the Global Technology Centers in India have over 200 highly qualified scientists and technologists, many with post-doctoral experience acquired in the U.S and Europe. HUL believes that an organizations worth is also in the service it renders to the community. HUL is focusing on health & hygiene education, women empowerment, and water management. It is also involved in education and rehabilitation of special or underprivileged
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children, care for the destitute and HIV-positive, and rural development. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures, most recent being the village built by HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused devastation in South India. In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Business world, one of Indias leading business magazines. The rating was based on a compilation of the magazines annual survey of Indias Most Reputed Companies over the past 25 years. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. It has over 35 brands. Sixteen of HULs brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2008). According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands List. Its a company that has consistently had the largest number of brands in the Top 50 and in the Top 10 (with 4 brands). Hindustan Unilever's distribution covers over 1 million retails outlets across India directly and its products are available in over 6.3 million outlets in India, i.e., nearly 80% of the retail outlets in India. It has 39 factories in the country. Two out of three Indians use the companys products and HUL products have the largest consumer reach being available in over 80 per cent of consumer homes across India.

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1.3.2 Product Portfolio

Home and Personal Care Personal Wash Lux Lifebuoy Liril Hamam Breeze Dove Pears Rexona Laundry Surf Excel Rin Wheel Hair Care Sunsilk Clinic Plus Skin Care Fair & Lovely Ponds Vaseline Aviance Oral Care Pepsodent Close Up Deodorants Axe Rexona Color Cosmetics Lakme Ayurvedic Personal and Health Care Ayush

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Food Tea Brooke Bond Lipton Coffee Brooke Bond Bru Foods Kissan Annapurna Knoor Ice Cream Kwality Walls

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1.3.3 BCG Matrix for Hindustan Unilever Limited

(Figure 1.2) Stars, the first column in the matrix suggests that it is a High Growth Industry and likewise it has a High Market Share. In this category following appears from the HUL brand: Ponds Fair & Lovely Lux Cash Cow is the second column which states that there is High Market Share and Low growth Industry. In this category following appears: Pepsodent Surf Excel. It is a low growth industry because detergent market is a saturated market.

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Dog is the third column which states that it has a Low Market Share and it is Low Growth Industry. Following appears in this category Aviance Wheel Question Mark is the fourth column, which states that it has a Low Market Share and a High Growth Industry. Following appears in this category: Close Up Rin

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1.3.4 SWOT Analysis of Hindustan Unilever Limited

Strengths:
Strong company image Strong brand portfolio Success of the slogan Quantity & variety Effective & attractive packaging High quality man power Solid base of the company Innovative aspects Corporate behavior Health & personal care products Help people getting more out of life

Weaknesses:
High prices of products Substitutes products Policy of spending for the social responsibility Lack of control in the market Dual leadership Decrease in revenues Reduced spending for research & development

Opportunities:
Changing life style of people New markets Increase the volume of production
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Focus on R&D Low income consumers Help in improving people diet & daily lives

Threats:
Competitors(P&G,) Political effects Legislative effect Environmental effect Economic crises Obstacle faced Change in life style of people Chance for price war Increase in production & labor cost.

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1.3.5 Procter and Gamble

Procter & Gamble Co. (P&G) is an American company based in Cincinnati, Ohio that manufactures a wide range of consumer goods. In India Proctor & Gamble have two subsidiaries: P&G Hygiene and Health Care Ltd. and P&G Home Products Ltd. P&G Hygiene and Health Care Limited are one of India's fastest growing Fast Moving Consumer Goods Companies with a turnover of more than Rs. 500 crores. It has in its portfolio famous brands like Vicks & Whisper. P&G Home Products Limited deals in Fabric Care segment and Hair Care segment. It has in its kitty global brands such as Ariel and Tide in the Fabric Care segment, and Head & Shoulders, Pantene, and Rejoice in the Hair Care segment. Procter & Gamble's relationship with India started in 1951 when Vicks Product Inc. India, a branch of Vicks Product Inc. In 1964, a public limited company, Richardson Hindustan Limited (RHL) was formed which obtained an Industrial License to undertake manufacture of Menthol and de mentholised peppermint oil and VICKS range of products such as Vicks Vapo Rub, Vicks Cough Drops and Vicks Inhaler. In May 1967, RHL introduced Clearasil, then America's number one pimple cream in Indian market. In 1979, RHL launches Vicks Action 500 and in 1984 it set up an Ayurvedic Research Laboratory to address the common ailments of the people such as cough and cold. In October 1985, RHL became an affiliate of The Procter & Gamble Company, USA and its name was changed to Procter & Gamble India. In 1989, Procter & Gamble India launched Whisper - the breakthrough technology sanitary napkin. In 1991, P&G India launched Ariel detergent. In 1992, The Procter & Gamble Company, US increased its stake in Procter & Gamble India to 51% and then to 65%. In 1993, Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products and started marketing Old Spice Brand of products. In 1999 Procter & Gamble India Limited changed the name of the Company to Procter & Gamble Hygiene and Health Care Limited. P&G Home Products Limited was incorporated as 100% subsidiary of The Procter & Gamble Company, USA in 1993 and it launched launches Ariel Super Soaker. In the same year Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products. In 1995, Procter & Gamble Home Products entered the Hair care Category with the launch of Pantene Pro-V

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shampoo. In 1997 Procter & Gamble Home Products launches Head & Shoulders shampoo. In 2000, Procter & Gamble Home Products introduced Tide Detergent Powder - the largest selling detergent in the world. In 2003, Procter & Gamble Home Products Limited launched Pampers world's number one selling diaper brand. Today, Proctor & Gamble is the second largest FMCG Company in India after Hindustan Lever Limited.

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1.3.6 Product Portfolio

Fabric Care Procter and Gamble has two of its world- leading detergents-Tide and Ariel, in India to cater to the main concerns of the Indian households, namely, outstanding whiteness and stain-removal. Ariel Front-O-Mat Ariel 2 Fragrances Tide Detergent Tide Bar Hair Care P&Gs Beauty Business is over US$ 10 Billion in global sales, making it one of the worlds largest beauty companies. The P&G beauty business sells more than 50 different beauty brands including Pantene, Olay, SK-II, Max Factor, Cover Girl, Joy, Hugo Boss, Herbal Essences and Clairol Nice n Easy. In India, P&Gs beauty care business comprises of Pantene, the worlds largest selling shampoo, Head and Shoulders the worlds No. 1 Antidandruff shampoo. Procter & Gamble is committed to making every day in the lives of its customers better through the superior quality of its products and services. Pantene Pro-V Head and Shoulders Rejoice Baby Care Pampers

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1.3.7 BCG Matrix for Procter and Gamble

(Figure1.3) Stars, the first column in the matrix suggests that it is a High Growth Industry and likewise it has a High Market Share. In this category following appears: Olay Cash Cow is the second column which states that there is High Market Share and Low growth Industry. In this category following appears: Ariel Tide Dog is the third column in the matrix, it suggests that there is Low Market Share and Low Growth Industry, there is not any product which comes in this category from P&G brand basket.

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Question Mark is the fourth column of the BCG matrix, it suggests that there is Low Market Share and High Growth Industry, following appears: Rejoice Shampoo appears, the Shampoo industry has a lot of growth potential but Rejoice has a low market share.

1.3.8 SWOT Analysis of Procter and Gamble Strengths:

Leading Market Position Diversified and innovative product portfolio Strong finances in the past

Weakness:
Quality control problem Decreased Revenues in their Northeast Asian Market

Opportunities:
Developing Markets Demographic trends across the world

Threats:
Competitors Rising cost of energy prices Economic Slowdown in the US and Euro zone New Regulations

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CHAPTER 2 RESEARCH METHODOLOGY

2.1 RESEARCH DESIGN

Research design for the project is Descriptive research design. A descriptive research design is the one which is description of the state of affairs as it exists at present. It includes survey and fact finding enquiries of different kinds. The researcher has no control over the variables. In it detailed study of the awareness of brand among customers will be done. The information will be collected with the help of an unbiased, non disguised and structured questionnaire.

2.2 SAMPLE DESIGN

A sample design is a definite plan for obtaining a sample from a given population. It refers to the techniques or procedures the researcher would adopt in selecting items for the sample. Sample design chosen for the purpose of the study is simple random sampling.

2.3 SAMPLE SIZE

The target sample for this study is 200 respondents in various areas of Delhi that was done independently and they are further divided into 100 males and 100 females that lies in age group of 20-40 including business class, service class, students and house wives.

2.4 SAMPLE AREA

The sampling unit may be a Geographical one such as state, District etc. The geographical sampling unit under study has covered the area of Delhi. The various locations where survey was conducted include Rajouri Garden, Raja Garden, Reliance fresh, Traditional Shops, Supermarket.
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2.5 DATA COLLECTION

Data will be collected through both by primary and secondary sources. Primary Data: Primary data will be collected through, a structured, unbiased and non disguised questionnaire, being filled in by those customers who are coming out of the different retail outlets. Personal survey will also help in collection of data. Secondary data: Secondary data will be collected through website of the company, journals and magazines. Reports published by the various research organizations.

2.6 DATA ANALYSIS

After collecting the data, data analysis was done in which use of graph, charts and tables and many other statistical tools were taken to do the analysis of the present situation.

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CHAPTER 3 ANALYSIS AND DESCRIPTION

Table 3.1 shows the data that has been taken from the customers to know the preference for place of shopping for purchasing consumer goods. Preference for place of purchasing Consumer Goods. Attributes Supermarket Mall Traditional Shop E-Shopping Total Female 29 15 53 3 100 Male 30 24 39 7 100 (Table 3.1) Percentage 29.5% 19.5% 46% 5% 100%

Preference for place of Purchasing Consumer Goods

60 50 40 30 20 10 0 Supermarket Mall Traditional Shop E-shopping 29 30 15 3 7 24 53 39 Female Male

(Figure 3.1)
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Respondents were given the following options and were asked to choose out of the following which is the most preferred place for shopping of household consumables. The results obtained were divided in two categories that are male and female. The most preferred place for shopping in case of females is traditional shop. And in case of males again they preferred to shop from traditional shop. Almost 46% respondents favored that they would go to traditional shop for the shopping because of the ease of going there, as these shops are near to ones home. After this second is supermarket people like to go there and shop. The least preferred option was the Eshopping as people do not find it convenient, moreover on net they are not able to see the products, so they prefer it least.

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Table 3.2 depicts the purchasing pattern of the consumers for purchasing household consumables Purchasing Patterns of the Consumers. Attributes Weekly Fortnightly Monthly Total Female 10 27 63 100 Male 5 20 75 100 (Table 3.2) Percentage 7.5% 23.5% 69% 100%

Purchasing Patterns of the Consumers

80 70 60 50 40 30 20 10 0 75 63

27 10 5

Female 20 Male

Weekly

Fortnightly

Monthly

(Figure 3.2) Respondents were asked about their purchase behavior. They were asked how frequently they go for the purchase of household consumables. Again for this question responses were divided according to the female and male category. Both female and male respondents would like to go for shopping on the monthly basis. When contacted they replied that this helps in maintaining the balances all the month. They purchase for the whole month in advance and consume products accordingly. They also replied that it is convenient to follow this pattern as need of going again and again to the shop is eliminated. After monthly second came the fortnightly and the last one is weekly.

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Table 3.3 shows the expenditure of income on purchase of various product categories. It shows that major income of the consumers is spent on which category. Expenditure of income on purchase of various product categories. Attributes Laundry Skin Care Hair Care Oral care Total Responses 63 49 54 34 200 (Table 3.3) Percentage 31.5% 24.5% 27% 17% 100%

Expenditure of Income on Purchase of Various Product Categories

Laundry Skin Care Hair Care Oral care

Oral care 17%

Laundry 31%

Hair Care 27% Skin Care 25%

(Figure 3.3)

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Here we asked the respondents about their expenditure on the various categories. Options given to them were skin care, oral care, hair care and laundry. These are the very basic items that are required by the households. Respondents replied in the following manner they said that major part of their income is spent on laundry i.e. 31% after this came the hair care, 27% and skin care 25%. There is not much difference between skin care and hair care. Last was the oral care with 17%. So, the consumers spent most on laundry and least on oral care. An awareness regarding the oral care segment needs to be generated, so that this sector can also grow like the other sectors.

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Table 3.4 shows the Brand Recall of the products offered by Hindustan Unilever Limited. Customers are required to name any 5 products offered by Hindustan Unilever Limited. Brand Recall. Attributes Surf Excel Sunsilk Pepsodent Maximum Responses 110 70 50 (Table 3.4)

Brand Recall
110 70 50 Series1

120 100 80 60 40 20 0

Surf excel

Sunsilk

Pepsodent

(Figure 3.4) Here we asked from the respondents to name 5 brands offered by the HUL, these are the top 3 brands that consumers remember. Top of the list is Surf Excel; this can be attributed to the fact that HUL does a wonderful and innovative advertising for Surf Excel. After this second came Sunsilk Shampoo from HUL and third came Pepsodent. We can see that HUL has a diverse product portfolio and consumers remember different products from the HUL. This data indicated that the Brand Recall power of HUL is very huge.

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Table 3.5 shows the Brand Recall of the products offered by Procter & Gamble. Customers are required to name any 5 products offered by Procter & Gamble. Brand Recall. Attributes Pantene Ariel Head & shoulders Maximum Responses 98 52 77 (Table 3.5)

Brand Recall
100 80 60 40 20 0 Pantene Ariel Head & Shoulders

Series1

(Figure 3.5) Here we asked from the respondents to name 5 brands offered by Procter and Gamble. Here maximum people remembered the Pantene Shampoo, this fact is attributed to Brand endorser that P&G is using currently i.e. Katrina Kaif. This shows the effectiveness of the advertisement. After this next is the detergent Ariel, it is also used hugely by the consumers. Another product that came in top 3 is the shampoo i.e. Head and Shoulders.

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Table 3.6 shows the various parameters about the product that affect the buying decisions of the customers. Parameters that affect buying decisions. Attributes Quality Price Easy Availability Total Responses 65 86 49 200 (Table 3.6) Percentage 32.5% 43% 24.5% 100%

Parameters that affect Buying Decisions

Quality Price Easy Availability

49, 25%

65, 32%

86, 43%

(Figure 3.6)

Respondents were given an option to choose from the following attributes the most influencing factor that affects their buying decisions. The attributes were quality, price and easy availability. 43% of the respondents gave their vote to the price factor followed by quality which is 32% and the last is easy availability which is 25%. The respondents replies show that price is the most influencing factor that affects a persons buying decision. What product consumer will purchase depends upon its price. After this came the quality, the products in FMCG category is available very easily and they have a lot of
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substitutes also. So consumer has a lot of choice in this category so they should focus on quality aspect this will help in customer retention also.

Table 3.7 shows data regarding the top 3 FMCG companies in India. Customers were asked to name the FMCG companies that they know. Top 3 FMCG companies. Name of the Companies HUL P&G ITC Total Responses 93 65 42 200 (Table 3.7) Percentage 46.5% 32.5% 21% 100%

Top 3 FMCG Companies

HUL P&G ITC

21% 46% 33%

(Figure 3.7) Respondents were asked to give the name of FMCG companies in India. These three names came in the picture most of the respondents remembered HUL, i.e. 46% so this shows that HUL is number one in Brand Recall after HUL came Procter and Gamble almost 33% remembered this brand and the remaining 21% gave the name of ITC. This clearly shows that there is direct comparison between HUL and Procter and Gamble. This also suggests that these two companies are the most preferred ones. And most of the consumers remember them. This shows that both the companies have a huge Brand Recall.
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Table 3.8 shows the Preference of shampoos by the consumers. They were asked to choose the shampoo out of the following that they currently use. Preference for the use of Shampoo. Name of the Shampoo Sunsilk Head and Shoulder Pantene Clinic Plus Total Responses 40 56 73 31 200 (Table 3.8) Percentage 20% 28% 36.5% 15.5% 100%

Preference for the use of Shampoo

Sunsilk Head and Shoulders Pantene Clinic Plus

16%

20% 28%

36%

(Figure 3.8)

Here we asked the respondents about the hair care segment, and we focused on the shampoo that they would like to use out of the following options. Options are designed on a predetermined basis that includes the product form both HUL and Procter and Gamble. Sunsilk and Clinic Plus are the products offered by HUL and Head and shoulders and Pantene are the products offered by Procter and Gamble. Here we can see that maximum respondents replied in the favor of Pantene which is 36% after this next is the Head and Shoulders which is 28%, both these products are offered by Procter and Gamble. So we can see that in this category Procter and
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Gamble is the winner. Sunsilk from HUL got 20% votes and Clinic Plus from same brand got 16% votes. Table 3.9 shows the usage of the detergent powder by the consumers. The options given were from both the companies that are HUL and P & G. Usage of Detergent by the Consumer. Name of the Detergent Surf Excel Ariel Tide Rin Wheel Total Responses 72 45 20 34 29 200 (Table 3.9) Percentage 36% 22.5% 10% 17% 14.5% 100%

Usage of Detergent by the Consumer

80 70 60 50 40 30 20 10 0 72 45 34 20 29 Series1

Surf Excel

Ariel

Tide

Rin

Wheel

(Figure 3.9) Another category to study in our project was the Laundry section. This is the most important part of the household consumables. Here also for getting a direct comparison between HUL and Procter and Gamble we have included the products from both the companies. Surf Excel, Wheel and Rin are from HUL and Ariel and Tide are from Procter and Gamble group. Maximum votes came in favor of Surf excel i.e. 36% after this came Ariel with 22.5% so here we can say that Surf Excel and Ariel are positioned against each other.

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And in the middle income level Rin has gained more votes i.e. 17% as compared to Tide i.e.10%. But here we have to see that Wheel a product of HUL has got 14.5% share, which is also a significant number. So we came to the conclusion that HUL is the winner in the Laundry Category.

Table 3.10 shows the toothpaste that is being used by the consumers. Brand of Toothpaste used by the Consumers. Name of the Toothpaste Close Up Pepsodent Oral B Any other Total Responses 25 83 36 56 200 (Table 3.10) Percentage 12.5% 41.5% 18% 28% 100%

Brand of Toothpaste used by the Consumers

100 50 0 Close Up 25 Pepsodent Oral B 25 83 36 56

Any Other

Series1

(Figure 3.10)
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Another category of our study was the Oral Care Segment. Here also we have included the products from both the companies in the options. Pepsodent from the HUL group got the maximum votes i.e. 41.5% followed by any other category in this respondents replied Dabur Lal Toothpaste, Meswak Toothpaste. This show that today people prefers the herbal products also. Close Up got 12.5% votes and Oral B from Procter and Gamble got 18% votes. So here also HUL has the advantage, but Procter and Gamble needs to launch more products in the Oral Care segment. Table 3.11 shows the data relating to the skincare product that is being used by the consumers. . Skin Care Brand used by the Consumers Name of the Product Fair & Lovely Ponds Olay Vaseline Total Responses 48 79 53 20 200 (Table 3.11) Percentage 24% 39.5% 26.5% 10% 100%

Skin Care Brand used by the Consumers

90 80 70 60 50 40 30 20 10 0 79

48

53

Series1 20

Fair & Lovely

Ponds

Olay

Vaseline

(Figure 3.11)

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Skin Care category is another part of our study. Here we have tried to analyze the usage pattern of the consumers in the skin care. It is the highly innovative market; new products keep on coming every day. Again options include products from both the companies HUL and Procter and Gamble. Ponds offered by HUL got the maximum votes i.e. 39.5% after this came Olay offered by Procter and Gamble which got 26.5% votes. So the competition here is intense. Procter and Gamble has introduced Anti-ageing formula in India with Olay Total Effects and people are satisfied with the results.

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CHAPTER 4 SUMMARY, CONCLUSION AND RECOMMENDATIONS

The study was on the Comparative analysis of two FMCG giants focusing upon the brand awareness of the consumers. Under the project a comparative study was done by taking the two leading FMCG companies working in India. The two companies are Hindustan Unilever Limited and Procter & Gamble. Both these companies are in competition with each other. Both the companys focus is on their advertising. The companies have a wide portfolio of products. Consumer goods are those goods that are used widely by the consumers in their day to day life. So a major task is to make these products available to the consumers. Hindustan Unilever Limited is the number one company in India in FMCG category. It has a presence in laundry, skin care, hair care and oral care. Same goes for Procter & Gamble it also present in all the above categories. The study was focused on these three categories, what product portfolio both the companies have. The study moves around the comparison of both the companies, regarding their brand awareness. Project also involves the consumption patterns of the consumers, the type of products they are using, what products they would like to use in future, to determine their satisfaction levels. Project also involves the study of the perception of the consumers towards both the companies.

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After successful completion of the study, we have come up with the following findings:

Unilever may be losing the battle to Procter and Gamble around the world, but when it comes to India it will take P&G a valiant effort to move ahead in the market dominated by Hindustan Unilever Limited (a subsidiary of Unilever). The rivalry between the two has been going on worldwide and is heated up in India too. Hindustan Unilever Limited is Indias largest FMCG with an array of household brands. Their products have become an integral part of the country used by everyone in every strata of the society. The strength of Hindustan Unilever limited lies in its distribution network covering 6.3 million outlets, an unmatchable portfolio of brands, innovation and research and development capabilities of the parent company. In the hair care segment, two of Hindustan Unilever Limited biggest brands, Sunsilk and Clinic Plus are pitted against Procter and Gambles Pantene Pro-V and Head & Shoulders. From the study we came to know that today most of the people prefer Pantene Pro-V and Head & Shoulders, both these brands are from Procter and Gamble, share of Hindustan Unilever Limited has reduced. This is due to the fact that brand endorsers used by P&G are able to connect well with the consumers and it is reflected by the consumers responses. In the fabric care or laundry sector also this competition is very strong. HULs low priced brand, Wheel, still holds a major share of 14.5% which is greater than Tide and Rin. Major competition is between Surf Excel and Ariel. Ariel has come strong in competition to HUL because P&G have focused on certain niches and are pushing growth aggressively in premium categories. HUL has migrated its flagship brand Rin Supreme bar to the premium brand Surf Excel bar to strengthen its presence in the Rs. 5000 crore Indian fabric wash category. Hindustan Unilevers Ponds have specifically remained a top segment brand and to compete with it. P&G has launched its popular range of Olay Total into the market. And

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in our survey, this fact has been proved right again almost 40% of the respondents replied in favor of Ponds but it is followed by P&Gs Olay which is approximately 27%. In the oral care segment Hindustan Unilever Limiteds Pepsodent is the clear winner, Pepsodent has a very huge brand recall, people have started using Pepsodent. Another major finding is that a lot of people now use Dabur Lal Toothpaste, and Meswak Toothpaste which are out of the brand basket of both Procter and Gamble and Hindustan Unilever limited. The most influencing factor that affects the buying decision of the consumers is still the price, followed by quality and then easy availability. People still consider price as the most important factor, during the price war between the two companies Tide emerged as a leader because of its low price. Another finding is that most of the consumers still want to go to traditional shop for purchasing household consumables. E- Shopping is the least preferred by the consumers. After analyzing the purchase pattern of the consumers we find that 69% of the respondents said that they would like to shop for household consumables on a monthly basis. As they find it convenient to shop in this manner.

On the basis of the above findings these can be some recommendations for both the companies, i.e. Hindustan Unilever Limited and Procter and Gamble

Hindustan Unilever Limited and Procter and Gamble should launch new products and should expand their distribution network. Hindustan Unilever Limited will have to consistently widen its portfolio with new benefits, variants and formats to cater to affluent people who have the propensity to spend. Both the companies should conduct more surveys in order to know about the customer satisfaction in the rural areas.

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Both the companies can provide incentive in hair care segment like buy one get one free offer with shampoo, price cuts and massive advertising. As per the survey that has been conducted for the study we have found out that people still wants to go to traditional shop for the purchase of household durables, so the company should offer attractive offers to the retailers to capture the greatest shelf space. Detergent market is saturated, and both the companies have products in premium range and middle income range moreover, they are indulged in price war since 2004, now they have to launch new products like cloths conditioners, cloth whiteners, starching products etc all these sectors are untapped, they can focus on these sectors. But prices of these products should be reasonable as small companies like Revive; Ujala etc already exist and are good competition. In oral care HUL presence is very significant with Pepsodent, but they are incurring lots of losses with Close Up. They have introduced various flavors but it had not worked as they have thought, they even had the advantage of first mover because it was with Close Up that Gel toothpastes are introduced in Oral Care segment. They should focus on a niche market and then position their product. In the oral care Procter and Gamble has Oral B, it is positioned as a very premium brand and also and medicated product. So there is a need to change the positioning to reap greater benefits. More needs to be spent on the advertising of the product and on the below the line advertising.
In the Skin Care segment both the companies are giving competition to each other. After Procter and Gamble introduced Olay in India with their anti-ageing formula Hindustan Unilever limited came up with anti-ageing formula with Ponds. Both are giving neck-to-neck competition to each other. Another brand of HUL is Vaseline, which has a range of lotions, but it has to be appreciated with effective advertisement. They can create awareness through door to door operation. They can offer discounts and free gifts also.

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REFERENCE

References from Print Materials

1. Malhotra Naresh.K. [2004], Marketing Research: An applied orientation, Pearson Education. 2. The Marketing Magazine of IIFT Kolkata 3. Philip Kotler (2007) Marketing Management

References from Electronic Media

1. www.hul.co.in 2. http://www.pg-india.com/hp/index.htm 3. www.ibef.org 4. http://ibef.org/artdisplay.aspx?cat_id=447&art_id=7933&refer=i1011 5. http://www.economywatch.com/world-industries/fmcg.html 6. www.ibef.org/pdf files [Accessed on 29 November, 2009] 7. http://www.chillibreeze.com/articles_various/fmcg-in-india.asp 8. http://www.naukrihub.com/india/fmcg/overview/ 9. http://www.coolavenues.com/know/mktg/amritanshu_2.php3

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ANNEXURE

Questionnaire
I am PGDM student conducting a market survey on brand awareness of FMCG companies for household consumables. You are kindly requested to respond to the following questions. The information provided by you will be kept confidential and will be used for academic purpose only. Name: . Occupation.. Gender: Male Female

1. Where do you like to go for shopping of household consumables? a) Super market b) Mall c) Traditional Shop d) E-shopping 2. How frequently do you purchase the household consumables?

a) Weekly

b) Fortnightly

c) Monthly

3. What is your annual income?

a) Below Rs. 100000 p.a. c) Rs. 250000-500000 p.a.

b) Rs. 100000-200000 p.a. d) Above Rs. 500000 p.a.

4. Major part of your income is spent on which of the following products?

a) Laundry

b) Hair care

c) Skin Care

d)Oral Care

5. Do you know about the products offered by Hindustan Unilever? Name any five

..
6. Do you know about the products offered by Procter and Gamble? Name any five

...
7. Are you brand conscious?

a) Yes

b) No

8. Which parameter affects your buying decision?

a) Quality

b) Price

c) Easy Availability

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9. Name any two FMCG companies producing household consumables? .. 10. Which brand do you prefer out of the following? a) Sunsilk b) Head & Shoulders 11. Which detergent you use out of the following? a) Surf Excel b) Ariel c) Tide 12. Which toothpaste do you use out of the following? a) Close up b) Pepsodent c) Oral B

c) Pantene

d) Clinic Plus

d) Rin

e) Wheel

d) Any other

13. Which of the following skincare products you have used out of the following? a) Fair & Lovely b) Ponds c) Olay d) Vaseline 14. Are you satisfied with the product availability at your nearest shop or retail outlet? a) Very Satisfied b) Satisfied c) Dissatisfied 15. Any other suggestions?

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