5 Strategies of FMCG Companies to Cheat Customer 3Y NITIN BHAT ndian FMCG companies love to Cheat customers (by the way they calll this a strategy) and Indi Customers are happy being Cheated knowingly or unknowingly. The biggest problem in India is th we don't have strong Consumer Protection Act against FMCG sector like Westen Countries. Le ind out the strategies of FMCG companies to fool the customer. 1. Packing Remains Same but Qty is Reduced: Have u ever wondered why the prices of sor JTC FMCG goods are unchanged for years...| still remember, the standard packing of well kno smalll chips packet is 10 Rs from quite long... With 8% average food inflation, Are these compani doing favor to customers by not increasing the pricing...| realized the strategy behind the sar cently from following 2 incidents a) Recently i bought a very famous OTC pain relief Balm... am using this FMCG product from me years and only difference i noticed over years is that packing changed from cylindrical glass unit tc dlastic one, Fair enough but this time i noticed that there is Cylindrical Plastic unit is not complet lled but there is a one more oval shaped small chamber inside cylindrical unit. There is a vacut detween ovel chamber & cylindrical unit in bottom half so from customer perspective, he is unc mpression that he is getting higher quantity becoz of big external unit but actually he is getting vi ess quantity,(b) A standard medium size packing of very famous chips brand cost 20 Rs and over the ye customer is happily buying the same... Only catch is earlier customer used to get 100 ams & now he getting more vacuum air @ & very less quantity i.2. 61 gms. Very Smart Strategy, infact now restaurants are also adopting same technique..they serve m course meal in serving bow! with very very thick base so customer feel quantity from look of it bu realty, u just get foot to mouth quantity. What a great way to make fool of customers... This is one the way but their are another more smarter ways which require changing consumer behavior ove period of time. 2. Smaller Unit Cost Less and Bigger Unit Cost More: 10 years back, majority of custom preferred sachet shampoo packs over boitied units... Sounds good becoz still remembered i appl simple logic at that time... 5 mi shampoo sachet used to cost 2.5 Rs and 100 mi bottle of sa brand used to cost 40 Rs therefore if | buy 20 units of sachet, it used to cost 50 Rs but bottle cost Rs So pure economics suggest that buying a bottle unit is wise decision:) & it also goes by law ‘economics that the bigger units should cost less than smaller units Now the situation has reversed, Firstly during those days people used to prefer soap for washing he but now they have graduated to Shampoo rather graduated to Shampoo by FM companies. Secondly shampoo sachets are now off the shell and U cud not find it in any urban semi-urban areas . Sachets are now available either in small kirana shops or in Rural areas but not least, today a sachet of same brand with 5 ml packing cost 3.5 Rs (| bought it from 1 store rural market, out of sheer nostalgia) & 100 mi bottle cost approx 90 Rs so again going by logic if it 20 shampoo sachets, it will cost 70 Rs but now botlle is costing approx 90 Rs...Law of econom ‘does not fit here as bioger unit is costina more then smaller unit....Secondly FMCG companies +forming cartel by not selling sachets in many Geography Pockets so that customer does not have other option but to buy only bottled units. 3. Phasing out Smaller Packing and Only Pushing Bigger Unit: Typical e.g. is Health Drink The smallest & standard packing available these days is 500 gms, which cost approx 150 R Customer is being graduated trom smaller unit to bigger unit by FMCG Companies... Second e.g of Cola drinks, today for home use the minimum unit available is of either 500 ml becoz now a days one buy a wooden carat of 24 Glass Bottles (It was 300 ml packing 15 years back and now its 200 200 ml Glass Bottles are sold only at small fime cafe’s or tea shops for single consumption customer has graduated from 300 mito 500 mi. 4. Artificially Jacking Up price and Then Offer Heavy Discounts Selectively: There is nechanism in India to fix price of products. Examples in this category are Rice and Vegetable O vary famous FMCG Rice brand is permanently being sold as Buy 1 & Get 1 Free at few stores bi other stores, itis available without this offer so any customer buying from 2nd category of stores deing cheated to extent of 50% of cost..ts not the case that ‘1st category stores are not making mo aut imagine margins of 2nd category, where it is available without offer....5 Ka packing of same br with MRP of approx 550 Rs is available at 350 Rs after adjusting discount offered by Relailar thar yo where on product it is mentioned that there is a discount on this unit...Is it customers fault that hi suying from 2nd category of stores rather 1st category which is offering heavy discount & by arbit: ixing the price, the brand is openly cheating the customer. It is very famous strategy of FM companies to cheat customers.5. Creating Impression of being Premium: This category is honored by Tea and Soaps. | sai variants of Tea Brand in a Row...Each variant was better in packing compared to previous one ¢ costlier by 30 Rs...Over a period of time i tried all 4 but unfortunately could not find any differen Now difference between various variants is also not mentioned clearly except that higher version | long leaves, which means basic version is sub-standard... Similarly in soaps u will find 3-4 varia without any defined additional benefits..'s similar to going to a mid segment restaurant & u will 410 variants of Paneer in Main Course...| tied all variants in all restaurants but cud not find m difference except minor modification...Basic stuf |.e.95% ingredients remain the same. We have seen that despite being in 21st century and living in a technologically connected world, are still far behind in consumer activism specially against FMCG Companies...\We don't have any which standardize weights of various products or maintain transparency with customer on varit aspects of product availability in market. Though we agree that objective is not to squeeze FM! companies profit but at the same maintaining transparency in terms of standardization of weights Chips packet will be available only in standard packing’s of 50 gm, 100 gm & 200 gm so that : price vatiation, customer will come to know immediately & if customer wishes to move to lower | then he is free to do so rather price remain constant and weight varies, which means custome mislead intentionally. | agree Indian Customers are price sensitive but at the same time, they are va seekers. Hope FMCG Companies are listening In anormal scenario, we don't pay too much attention on nitty gritty but it is very imp to know all the practices & our rights, which can help usin taking informed decisions while shopping