Culture of Consumerism in FMCG segment, India

Keywords: Consumerism, FMCG

Consumer is one that buys goods for consumption and not for resale or commercial purpose
(or) Consumer is an individual who pays some amount of money for the thing required to
consume goods and services. Consumer plays a vital role in the economic system of the nation.

Consumerism:

In general, it is a scenario of increasing consumption of goods and services. Consumerism is

described as the tendency of people to identify strongly with products and services they
consume. This makes the manufacturers to produce the product, how consumer wants so that
the consumption of the product increase.

FMCG:

Fast-Moving Consumer Goods (FMCG) are the products which are sold quickly and of low
cost. FMCG is the fourth largest sector in Indian economy. This industry is divided into the
demographics of rural and urban. The urban market contributes 60% of the consumption
revenue of the FMCG market in India and the semi urban and the rural segment contribute 40%
of the overall revenue of FMCG sector.

For example: packaged food, beverages, cosmetics, comes under FMCG products.

Introduction

EVOLUTION OF FMCG SECTOR:

Indian market consists of 2 types based upon locale, they are Urban and rural. Urban market is
the platform for those marketers with the knowledge of consumers tastes and to make profits
sustainably. These days rural market too shows high growth with the potentiality of profits for
marketers.

India has always been a country with a huge population, be it the 1950's or the twenty first
century. In that sense, the FMCG market potential has always been very big. There too, the
consumers had limited choices. However, Nirma's entry changed the whole Indian FMCG
scene. It sold detergent at Rs.3.50/Kg, whereas HUL surf was priced at Rs.15/Kg. So, Nirma
started a strategy of selling in less quantities and less price which attracted the rural areas.
MNC's like HUL, which were sitting pretty till then, woke up to new market realities and
noticed the latent rural potential of India. The government's relaxation of norms also
encouraged these companies to go out for economies of scale in order to make FMCG products
more affordable. Post liberalisation not only saw higher number of domestic choices, but also
imported products. The lowering of the trade barriers encouraged MNC's to come and invest
Secondly, upgrade existing consumers to value added premium products and increase usage of
existing product ranges. So, you could see all companies be it HLL, Godrej Consumer, Marico,
Henkel, Reckitt Benckiser and Colgate, trying to outdo each other in getting to the rural
consumer first. Each of them has seen a significant expansion in the retail reach in mid-sized
towns and villages. Some who could not do it on their own, have piggy backed on other FMCG
major's distribution network.

As there is high infrastructure development in rural areas, people are shifting from urban to
rural areas for peaceful living. Urban people who are living in rural areas making the rural
marketers to sell the products of urban utilization. Rural marketers improved their way of
operating business by better service logistics, improving their product penetration using e-
platforms too.

The demand for FMCG products depends upon the how strong consumer motive is to buy those
products. Consumer motive relates to the wide spectrum of wants and needs. Consumer
motivation is an internal state that drives people to identify and buy products or services that
fulfill conscious and unconscious needs or desires. This fulfillment of needs can then motivate
them to make repeat purchase of the same product. When we observe the recent trends in
FMCG sector more concentration is given to food products and personal care products.

CONSUMER ATTITUDE:
Consumer attitude towards a product is learned, either directly through self - experience with
the consumption of a product or its service, or indirectly through receiving external information
about the product or its service. The second is that attitude is an antecedent to behavior.
Therefore, it becomes essential to know about the way information is received and the way it
is processed, and the nature of the messages obtained. Attitudes refer to what a person
feels/believes about something. Attitudes may be reflected in how an individual act based on
his/her beliefs. Once formed, attitudes are very difficult to change.
Change in consumer behaviour:

Consumer behaviour can be defined as the decision-making process and physical

activity involved in acquiring, evaluating and physical activity involved in acquiring,
evaluating and disposing of goods and services Consumers’ buying behaviour is evolving faster
than ever before, with buyers not only expecting seamless services, but also a real experience.
Today’s consumer is active on social media, and is tech-savvy, information-rich and time-
starved. The resulting level of disruption driven by such consumers is unprecedented.

Increased consumer awareness and preferences due to unlimited information has brought
substantial changes in consumer buying behavior. Past couple of years, customers have been
loaded with preferences not in terms of product or brands but also in terms of point of purchase.
It has caused major disruptions in market it is important for a brand to understand the transition
in the past and present buying behavior and demand and strategize accordingly.

According to Anbarasan & Kumar (2014), research was conducted to ascertain the vital
affecting variables by employing factor analysis and it was found that retailers influence played
an important role. According to Singh & Dar (2014), customers fondness for FMCG goods is
one of the most important factors thriving in rural marketing which is defined by four A’s
(awareness, affordability, adoptability, and availability).

The following are the factors influencing the consumers on buying the FMCG products

 Advertisement strategy:
Celebrity advertisements, promotional schemes and broadcasting is
aiding the communication between customer and supplier to involve and connect with
their brands. Due to the poor advertisement, people are unaware of the new FMCG
products and it becomes essential to encourage every probable action to boost the
product.
 Brand influence:
This is an important factor since established brands act as high entry
barriers to new products but if brand loyalty is strong, consumers will tend to pay a
high price for the product and are reluctant to switch to competitive products even
dependability, product characteristics, as well as social and economic aspects, have a
major influence on purchasing attitude.
 Product related trends
The consumption pattern of customer is either concentrated on
need or want. Besides taking into consideration the effect of the goods on their well-
being, the customers are also aware of its impact on the surroundings, there by
concentrating on the environment-friendly and sustainable goods and their packaging
issue. Thus, with the increase in the importance of green products, the interest has risen
to analyze the factors that can influence consumers green purchasing behavior.
 Liberalization of the economy:
The consequences of Liberalization economy are unaccountable. It has
led to the entry of worldwide brands in rural markets without any restrictions.
Previously companies invested their advertising efforts towards the customers of the
urban marketplace, but nowadays with the markets becoming rigid in the urban area,
most of the companies concentrate towards the rapidly developing rural sector.

 Visual merchandising:
Visual merchandising is described as everything that creates a
positive image of a business and results in interest, desire on the part of the customer.
It ranges from window displays including forum display and floor merchandising along
with promotion signage. The retailers today are using the merchandising tool to
differentiate themselves from other competitors and to be prominent in the market and
attract the customers.
 Cultural orientation:
Certain factors like consumer’s mood, product category and
demographic characteristics have a considerable impact on customers’ intended
purchase decisions including individualist culture.
 Income and demographic profile:
India`s growing population has been rising household income
levels. This has been an account of steady GDP growth in the country. The rise in the
income levels is a trend not restricted to metros but has spread across tier 2 and 3 cities
as well. With growing incomes, people`s interest to spend is now expanding into these
smaller cities, which are turning into new power centers of demand.
 Access to the internet and use of smartphone:
The usage of internet and smartphones has witnessed a dramatic
growth in the spending of the consumer. Smartphones have been rapidly transformed
from being just handheld telecommunication devices to be a window to the world. It
also become a new retail store front.
Conclusion:
FMCG by its contribution to GDP has become one of the key factors of the India
economy. The study was to know the influence of various factors on purchase of FMCG
products among the rural, semi urban consumer And this study has clearly shown that
rural consumers also gave more and more importance to Quality of FMCG products
they purchase, rather than the influence of media and other advertisements or
promotions by celebrities etc. These companies have good chances and opportunities
as there is increase in consumer income, lifestyle and economic growth and this
industry has huge competition and that can be Overcome by increasing awareness of
their respective brands and products. And by the above given facts and figures it clearly
shows that the FMCG segment in India has a Bright future.
The research concludes that the perception of a rural consumer is as equal as the
perception of an urban consumer. They can realize the need of the product, extensive
awareness of the product, and suitable information sources of the product. They derive
characteristics through their experience of the product and make careful study on the
negative effect and quality of product. They also approach the product of FMCG and
make suitable purchase decision. They can collect information of the product through
Television advertisements. Consumer prefers the product, making the purchasing
decision and expressing the satisfaction level. The consumers have the tendencies brand
shift if not satisfied with the utilization of the product as well as availability in the
market. In the post –purchase satisfaction in consumers of predominant brand image
and quality of the product is important. The royalty of consumer purpose is very high,
so their strength and their expectation are also maximized. The democratic background
of the rural consumer plays a vital role in determining the behavioral aspect as well as
the royalty of brand.