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HUL ITC Amp Godrej Supply Chain Management Comparision
HUL ITC Amp Godrej Supply Chain Management Comparision
ITM Chennai
FMCG Sector
FMCG are products that have a quick shelf turnover, at relatively low cost and don't require a lot of thought, time and financial investment to purchase Fast Moving Customer Goods is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year FMCG is characterized by strong presence of MNC and well established distribution network. The intense competition between the organised and unorganised segments operating at low operational cost.
Market Analysis
Size ( Past , Present and Future) Growth ( Expected Trends ) Profitability Risks / Threats Distribution Channels
Market Analysis
Growth
Risk
Profit
(cont.)
Fast moving consumer goods has gained importance with retailing gaining prominence. Over the last one decade the market is growing at the rate of 18.7 %. Total market size in excess of US$ 13.1 billion Availability of key raw materials, cheaper labour costs and presence of highly effective supply chain system gives competitive advantage.
Growth Prospects
The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. The FMCG sector will witness more than 50 per cent growth in rural and semi-urban India by 2010. Penetration level as well as per capita consumption in most product categories is low indicating the untapped market potential , hence the market potential of growth is very high. Burgeoning Indian population, presents an opportunity to makers of branded products to convert consumers to branded products. With the retail gaining momentum, the FMCG prospective growth can be realized with increase in sales volumes.
Growth Prospects
There is an increase in the disposable incomes and altered lifestyle which is being fueled by the increase in the per capita income. The increase the population will increase the demands many fold.
Pushing (Up)
FMCG sector depends upon bulk sales only. High the volume of the sales , higher is the profit.
Balancing (Up/Down)
Small packaging typically known as Sachet - Is a two edged sword. Helps in trapping the bottom segment of the Customer Pyramid . But it decreases the profit margin per unit sale. In the long run increases the volume of sales. Thus must be used very wisely.
Threats / Risks
Due to cut throat competition there is severe pressure on margin for the manufacturers of FMCG products. The rural and semi urban population is growing but the problem faced by the FMCG manufacturers is the logistics. Some problems associated with rural markets is acute dependence on the vagaries of the monsoon, seasonal consumption linked to harvests, festivals and special occasions, poor roads and power problem.
Threats / Risks
Once the product fails its not easy to revive it back. When the company launches a new product its competitor will also launch the new product in the same line, within the short span. Hopping from one product to another is too high , due to very large pool of products. Customer Loyalty is big issue. Tolerance level in the customer satisfaction is quite low , due to easy availability of other options.
Distribution channel
Existing distribution channels
Can be described by how direct they are to the customer in other words how many channels it take the goods to reach customer.
E- Shakti (HUL)
Enhancing livelihoods 75000 poor women have benefited with an additional income of Rs.18.75 crore through a livelihood enhancement programme established by a unique corporateNGO partnership
Distribution at the Supermarkets HUL has set up a full-scale sales organisation, for this channel to serve modern retailing outlets. Product tests and in-store sampling is provided to consumers.
Harnessing Information Technology An IT-powered system has been implemented to supply stocks to redistribution stockists. The objective is to make the product available at the right place and right time in the most cost effective manner. For this, stockists have been connected through an Internet-based network, called RS Net, for online interaction. RS Net is part of Project Leap, HUL's end-to-end supply chain.
Conclusion
Hindustan Unilever, which once pioneered distribution in India, is today reinventing distribution - creating new channels, and redefining the way current channels are serviced. In the process it is converging product availability, with brand communication and brand experience.
ITC Limited Imperial tobacco Ltd. Turnover of US $ 4.75 billion Registered office in Kolkata Employs over 20,000 people More than 60 locations across India Listed on Forbes 2000 Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports Packaged Foods & Confectionery, Branded Apparel and Greeting Cards.
F e-choupal rural two-way A fulfillment capability R M Cigarette Trade Marketing capability E R Expanded FMCG distribution capability S
Brande d Foods Lifestyl e retailin g Educatio n Stationer y Matches & Agarbat tis Personal Care Product s
M A R K E T S
31
Godrej
Key Businesses
33
Benefits
Sales orders generated on same day slashing delays. Convenient Data Flow Portal framework - cutting edge concept Daily visibility of Retailing information. Lower carrying cost to distributors. Reduced Product Stagnation. Better Decision Making about forecasting.
ITC E-Choupal HUL E-Shakti Godrej Major distributors are of B & C Class