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“Studying the Availability, Visibility of the Products of Reckitt Benckiser (India) Limited and its Competitor Products in KB Stores in Delhi”
Submitted to: Punjab Technical University, Jalandhar In partial fulfillment of the requirements for the degree of Masters in Business Administration Batch (2008-2010)
Submitted By: Bhanu Pratap Rao MBA- 2nd sem. RIMT- SCHOOL OF MANAGEMENT STUDIES
Mandi Gobindgarh, Punjab
It is not possible to prepare a project report without the assistance and encouragement of other people. This one is certainly no exception. Completing a task is never the effort of a single person. It is often the result of invaluable contribution of number of individuals in an indirect manner. I would like to give my deep sincere regard to those who helped me in the successful completion of the project and preparation of the report. I would like to owe debt of gratitude to Mr. Martand Singh (Zonal Sales Manager) and Mr. Abhishek Singh (Marketing Trade Manager) for giving me the opportunity to gain exposure in the organization. I would like to express my sincere thanks to sMr. Sanjay Mahajan (TSI) and Mr. Aman Agarwal (Distributor), who imparted help support & experience even at the cost of busy schedule. Without this help it was not possible to complete this project. I would also thank all DBSRs & KSRs agent for their invaluable support.
Thanking you: Bhanu Pratap Rao
There is a strong MNC presence in the Indian FMCG market. The Fast Moving Consumer Goods (FMCG) sector is the fourth largest sector in the economy with a total market size in excess of Rs 60,000 crore. This industry essentially comprises Consumer Non Durable (CND) products and caters to the everyday need of the population. The project will study the availability, visibility of the products of Reckitt Benkiser (India) Ltd and its competitor products in KB Stores in Delhi. The Project Duration is of near about 45 days viz. from 22nd June to 7th Aug. The project will also study the order and supply system and how to increase the sale in KB Stores. Many of the KB Stores have been visited to consider all the aspects. A detailed study will be done by collecting and analyzing the primary and secondary data.
Table of Contents
Tittle Page Acknowledgement Executive Summary Introduction-FMCG Sector
1 2 3 5
Company Overview and History Brief Profile of the Business Introduction to the Project Review of Literature Research Methodology Analysis and Discussions Findings and Evaluation Conclusion Limitations Bibliography Summary Annexure Suggestions Recommendations 5
7 9 26 32 34 36 44 45 46 47 48 50 53 54
Introduction - FMCG Sector
The Fast Moving Consumer Goods (FMCG) sector is the fourth largest sector in the economy with a total market size in excess of Rs 60,000 crore. This industry essentially comprises Consumer Non Durable (CND) products and caters to the everyday need of the population. Fast Moving Consumer Goods (FMCG), are products that are sold quickly at relatively low cost. Though the absolute profit made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be large. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, teeth cleaning products, shaving products and detergents, as well as other nondurables such as glassware, light bulbs, batteries, paper products and plastic goods.FMCG may also include pharmaceuticals, consumer electronics, packaged food products and drinks, although these are often categorized separately.
India is one of the world’s largest producer for a number of FMCG products but its FMCG exports are languishing at around Rs 1,000 crore only. There is significant potential for increasing exports but there are certain factors inhibiting this. Small-scale sector reservations limit ability to invest in technology and quality upgradation to achieve economies of scale. Moreover, lower volume of higher value added products reduce scope for export to developing countries.
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
Main segments of FMCG sector are: • • • • Health and Personal Care Fabric Care Home Care Food and Beverages
• • • Large untapped rural market Export potential Increasing disposable income with result in faster growth revenue
• • Competition from the unbranded players in rural market Bargaining power of consumers
• • •
Lack of innovative approach in distribution channel Rising material, advertisement and distribution cost "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.
Benefits of Industry
• • • Low operational costs Presence of established distribution networks in both urban and rural areas Presence of well-known brands in FMCG sector
Reckitt Benckiser is a global force in household, health and personal care, delivering ever better solution of consumers. The company has the sales of over 6 billion pounds consistently going ahead of the industry due to its leading brands, its operation in over 60 countries and sales in 180, and its highly motivated multinational management. Reckitt Benckiser Group Plc. (Reckitt Benckiser) is principally engaged in the manufacturing and marketing of household, cleaning, health and personal care products. The company manufactures products related to several categories which include dishwashing, fabric care, surface care, health, home care and personal care products and food. The company operates through 60 operating companies across 180 countries. The company has 13 directly held subsidiaries which include Propack, Reckitt Benckiser (Australia) Pty Limited, Reckitt Benckiser (Brazil) Limited, Reckitt Benckiser (Canada) Inc. Reckitt Benckiser Deutschland GmbH, Reckitt Benckiser Health care (UK) Limited, Reckitt Benckiser Inc., Reckitt Benckiser (India) Limited,
Reckitt Benckiser Italia and Reckitt Benckiser (UK) Limited. The company is headquartered in the UK. The company reported revenues of (British Pounds) GBP 6,563.00 million during the fiscal year ended 2008, an increase of 24.56% over 2007. The operating profit of the company was GBP 1,505.00 million during the fiscal year 2008, an increase of 22.06% over 2007. The net profit of the company was GBP 1,120.00 million during the fiscal year 2008, an increase of 19.40% over 2007. In 2008, the BBC broadcast an investigaton into the methods Reckitt Benckiser used to maintain the market share of the Gaviscon powerbrand. The company held Platinum status in 2005, 2006, 2007, and 2008 in the Business.
Reckitt & Colman Colman's was founded in 1814 when Jeremiah Colman began milling flour and mustard in Norwich, England. Reckitt & Sons started in 1840 when Isaac Reckitt rented a starch mill in Hull, England. He diversified into other household products and in due course passed on his business to his four sons. Reckitt & Sons was first listed on the London Stock Exchange in 1888. In 1938 Reckitt & Sons merged with J&J Colman to become Reckitt & Colman Ltd. Reckitt & Colman sold the Colman's food business in 1995 but still has some food brands. Benckiser Johann A. Benckiser founded a business in Germany in 1823. Its main products were industrial chemicals. Benckiser went public in 1997. Merger and subsequent developments
The company was formed by a merger between Britain's Reckitt & Colman and the Dutch company Benckiser NV in December of 1999. Bart Becht became CEO of this new company and has been credited for its transformation, focusing on core brands and improving efficiency in the supply chain . The new management team’s strategy of “innovation marketing”. – a combination of increased marketing spend and product innovation, focusing on consumer needs – has been linked to the company’s ongoing success. For example, in 2008, the company’s “rapid succession of well publicised new product variants” were credited for helping them “to capture shoppers' imagination” Business Week has also noted that “40% of Reckitt Benckiser's $10.5 billion in 2007 revenues came from products launched within the previous three years.” In October 2005, Reckitt Benckiser agreed to purchase the over-the-counter drugs manufacturing business of Boots Group, Boots Healthcare International, for £1.926 billion. The three main brands acquired were Nurofen in analgesics; Strepsils sore throat lozenges; and Clearasil antiacne treatments. In January 2008, the Company acquired Adams Respiratory Therapeutics Inc., a pharmaceutical company, for $2.3bn: one of the major brands acquired with this purchase was Mucinex.
Brief Profile of the Business
Reckitt & BenckiserPlc, UK, promote Reckitt & Benckiser of India Ltd (Reckitt & Benckiser). The company has business interests in household products, personal care and pharmaceuticals. Key brands include Dettol, Cherry Blossom, Harpic, Robin liquid blue and Mortein. Around 40% of the company´s sales come from its flagship product Dettol. Dettol`s market share hovers around 85% and its product portfolio comprises toilet soaps, anti germ liquids and talcum powder. The remaining divisions, namely fabric care, shoe care and floor care contribute approximately 15% to the total turnover. Within the household products and the personal care segments, Reckitt & Benckiser is mainly into insecticides, lavatory care, surface care, shoe care and air fresheners. Insecticides contribute over 50% to Reckitt & Benckiser’s household business and 26% to its total sales. The company has a strong brand Mortein in the insect repellent market with a total market share of 45% (coil
12% and mats 33%). In the relatively small lavatory care market (Rs320m), Reckitt & Benckiser’s Harpic enjoys a 79.6% market share. Its brand Cherry enjoys a 79% market share in the Indian shoe care industry. The Indian air freshener market is estimated at Rs120m with Balsara Hygiene’s Odonil leading the market with an 80% share. Reckitt & Benckiser has positioned its Haze brand at the premium end of the market. Regarding the wash-segment, Reckitt & Benckiser is currently present only in the post-wash segment with its flagship brand Robin Blue, which is in existence since 1984. Robin Blue powder market share is around 20%. The company has entered into a joint venture, operational from March 1998, with pharmaceutical major Nicholas Piramal; a company having a strong distribution reach with chemists. The UK parent and Nicholas Piramal hold 40% stake each while the balance is with Reckitt & Benckiser. The joint venture, Reckitt Piramal, is the largest over the counter (OTC) pharmaceutical company in the country. The JV, besides improving sales of its flagship product Dettol, which currently contributes to over 80% of the JV´s sales, would also help in pushing other products like Dispirin and Gelora.
Reckitt Benckiser Plc and Lancaster Square Holdings SL, have made a voluntary offer to the equity shareholders of Reckitt Benckiser India Ltd to acquire 41,91,339 equity shares of Rs 10 each, representing 12.73 per cent of the paid up equity share capital of Reckitt Benckiser India, at Rs 250 per share, payable in cash. The specified date is August 16, 2002. The date of the opening of the offer is September 2, 2002. The date of the closing of the offer is October 1, 2002.
In aggregate, Reckitt Benckiser Plc and Lancaster Square at present hold 28,721,849 fully paid up equity shares of Rs 10 each, representing 87.27 per cent of the paid up equity share capital of Reckitt Benckiser India. After the open offer the company plans to delist its shares.
Reckitt Benckiser Plc has received approval from the Foreign Investment Promotion Board (FIPB) for infusion of funds of Rs 403.19 crore for the open offer of its subsidiary, Reckitt Benckiser (India) Ltd. The parent has made an open offer to acquire the public shareholding of Reckitt Benckiser (India) at Rs 250 per share. The company is making serious efforts to improve penetration of the specialised toilet cleaner and to upgrade the habits of Indian consumer. For this purpose, Reckitt & Benckiser has recently tied up with sanitaryware major EID Parry’s premium brand Parryware for a co-branding initiative in Delhi. The company has recently relaunched Cherry Blossom Shine in a handy and compact case. The company also launched the Mortein Xtra Power range of mosquito coils and mats. It extended the range of offerings of the Dettol brand further by recently introducing Dettol Extra Care soap and Dettol talcum powder. As part of its strategy, Reckitt & Benckiser has decided to pull out of its food products business. Its factory at Chetla, which manufactures the Robinson brand of barley, is proposed to be sold as a going concern. Negotiations in this regard are currently underway. The merged overseas parent, christened Reckitt Benckiser Plc, which holds 51 per cent of the company`s equity stake, was firming up its strategy to garner a higher share of the market for dish wash, home care, fabric care and health care products. Reckitt & Benckiser would draw up its strategy some time later in line with the parent company`s strategy. A decision on change in the name of Reckitt & Benckiser would also be taken after the legal formalities are completed in the UK. The merged parent is also working on a global e-commerce initiative strategy. Initially, however, this strategy will more likely to focus on B2B rather than B2C transactions. Reckitt’s Indian operations would, for the time being, continue to be channeled through the existing distributors` network.
The company will relaunch several products with new packaging, introducing new delivery systems and offering better value to the customers. The pest control business will come under greater focus as Reckitt & Benckiser sees a lot of potential in this segment in the future. Products are also to be introduced under umbrella brands Mortein, Lizol and Dettol.
Strength of Organization and Culture
The Reckitt Benckiser culture lies at the heart of our success. Led by a strong management team, who are heavily incentivised to achieve performance, our people are entrepreneurial and take it upon themselves to own and create initiatives and deliver great execution. They are driven and dynamic, and want to make their mark. We enjoy constructive conflict with each other and our partners, and like to take calculated risks to gain advantage in some of the most competitive markets in the world. We keep the organisation slim, streamlined and unbureaucratic. In this way we can have fast decision-making, be spontaneous and respond rapidly to changing consumer needs and market conditions. Our commitment to performance is total, whether it is financial results or impacting upon climate change and helping those more vulnerable in society. To tackle the total carbon footprint of our products, from cradle-to-grave, in 2008 we progressed our Carbon 20 initiative and developed detailed plans and measurements for working with consumers to achieve our commitment to reduce our total carbon footprint by 20% by 2020. This year we also delivered on the last part of our commitment to save 150,000 lives through working with Save the Children across the world. We are now working with them on a new programme, which will see our commitment have even more impact in the future.
Reckitt Benckiser passionately delivers better solutions in household cleaning and health & personal care to customers and consumers, wherever they may be, for the ultimate purpose of creating shareholder value.
Our Core Values
Performance unleashed What is our company like? In short, we’re like our brands - strong, fast-acting and highly effective. Join us here and you’ll find plenty of drive and energy, and a direct and open style. It’s a place you’ll be given the freedom to make your mark very early in your career. We thrive on constant innovation and tangible results. And there’s another thing that makes us truly distinctive: at Reckitt Benckiser you’ll find a real passion to outperform. From the very first day you join us we make sure you have a real job. Right from the start, you’ll be expected to take ownership for the role you’ve chosen and supported in it. Expect to be rewarded for success. Expect too, the freedom to enjoy a dynamic, international career in a business that values achievement and commitment, not rules and process.
Four key values drive our business:Achievement Achievement makes us who we are. We don’t just aim high, we aim to achieve beyond expectation - to outperform. And we develop and support our people to outperform so we can all achieve results wherever we focus, be it products, profits or CSR. Entrepreneurship We encourage bold thinking and commercial drive. We allow daring ideas to thrive and value the passion that people bring in turning ideas into great execution.
Teamwork We pull together to succeed. As individuals we are competitive high-achievers, but we bring our strengths together when needed to work as one united by common principles and attitudes, not rules and processes, to drive success. Commitment For us, ‘the buck stops here’. We take personal responsibility for our areas of accountability and take the initiative in doing what’s needed. We aren’t slaves to process or spoon-fed. Our people are given the latitude to do what they think is right within a framework for success. Leaders at all levels select people against this attitude and develop it further to ensure the sustainability of the business.
Our clear and consistent strategy is to drive above industry growth and returns through: • A disproportionate focus on driving our Powerbrands, global leaders in categories with high growth potential, and completing their international roll-out. • • High levels of media and marketing investment, and continuous innovation. Transforming net revenue growth into even better profit and strong cash flow.
Disproportionate focus on our 17 Powerbrands Powerbrands are Reckitt Benckiser’s globally leading brands in high growth categories, and of the 17 Powerbrands, 15 are either Number 1 or 2 globally. We have further strengthened our leadership positions for our Powerbrands in 2008.
This year we further strengthened and refined our Powerbrands to 17, and we are transitioning other brands with the same footprint into them. As an example, in the US we are transitioning Electrasol and Jet Dry into the Finish brand, and in Europe, transitioning Calgonit into Finish. This delivers both benefits for the consumer, through better and faster access to our innovation pipeline, and increased effectiveness and efficiency for us, through common advertising and packaging. Our newly acquired Mucinex brand, the US’ leading cough and decongestion remedy, made it to the Powerbrand list straightaway. This brand came with the acquisition of the Adams business and has already delivered results over and above our challenging expectations. Powerbrands accounted for 62% of Reckitt Benckiser’s 2008 net revenues. This is up from 61% in 2007. Continuing to invest behind our brands Our growth has been achieved by ensuring that consumers know about our products and the reasons to buy them. This year we again increased our marketing and advertising investment behind our brands and reaped the reward. In harder market conditions, we think it is more important, not less, to invest in keeping our brands at the forefront of consumers’ minds. Media deflation has enabled us to get more value, but despite lower costs, we have increased our media investment by 14% at constant exchange compared to the previous year. We remain amongst the highest investors in media in the industry, with 12.4% of net revenue ploughed back into advertising our brands. Innovation – driving above average growth Investment and product innovation are the key driving factors behind the Powerbrands’ and RB’s growth. Consumers today are making their purchasing decisions with even greater scrutiny. Our innovation has been crucial in giving consumers even more reason to buy our products. Turning our growth into cash
We turn our growth into attractive profits and cash flow through margin expansion and cash conversion. We drive our margins by focusing on higher margin categories and products. We then build on this by having a never-ceasing cost optimization programme, which in all market conditions relentlessly looks at taking cost out without taking anything away from consumers and, where possible, making the products even better. At a time when consumers are looking harder for value for money, we are able to give them 10% more Vanish for the same price by reducing 70% of the plastic in the packaging. We moved from a round tub to a resealable pouch. This also helped improve Reckitt Benckiser’s environmental impact, which has remained an important focus even in more challenging times. Through our cost optimisation programme, we have managed to minimise the price increases we passed on to consumers to partially offset the rise in commodity costs. With this activity, and benefiting from the faster growth on our higher margin RB Pharmaceutical and consumer health care businesses, we have driven adjusted operating margins up by 80bps and delivered very strong cash flow. This has strengthened the financial position of the Company and allowed the return of funds to shareholders. We have increased the full year dividend by 45% and funded a £300m share buy back programme.
Reckitt Benckiser has five core categories:Surface Care (Profile of Category)
Disinfectant cleaners both clean and disinfect surfaces, killing 99.9% of germs. All purpose cleaners are ideal for many household surfaces, particularly in the bathroom and kitchen. Lavatory cleaners offer specialised cleaning and disinfecting for the toilet bowl and cistern. Specialty cleaners are designed for specific tasks – from cleaning ovens to removing limescale. Finally, Polishes & Waxes clean and shine hard surfaces such as furniture and floors. Key Brands • •
Lysol Dettol Easy of Bang Harpic
Fabric Care (Profile of Category)
This category consists of five product groups used for cleaning and treating all fabrics. It covers products used before, during or after the main laundry wash cycle. Fabric Treatment products
remove stains from clothes, carpets and upholstery. Garment Care products are specially formulated for washing delicate fabrics. Water Softeners protect the machine and laundry against the build-up of limescale and other deposits. Fabric Softeners are used for softening and freshening fabrics and ironing aids help make ironing more convenient. Laundry Detergents clean fabrics in washing machines. Key Brands • • Calgon Vanish
Health and Personal Care (Profile of Category)
Products that relieve common personal or health problems. Antiseptics protect against infection and deliver germ kill. Analgesics, Cold/Flu/Sore Throat and Gastro-Intestinals are generally over the counter medications for common ailments like pain, fever, cold, flu, sore throat or heartburn. Suboxone is the Company’s prescription drug against opioid dependence. Veet, our Depilatory product, removes hair leaving beautiful smooth skin. Our skin care range consists of products like Clearasil to fight spots and break-outs for visibly clearer skin and products like E45 for dry skin. Denture Care consists of both denture fixatives and cleaners. Key Brands • Veet
• • •
Dettol Clearsil Strepsils
Home Care (Profile of Category)
Consists of three categories. Air Care products remove odours and add fragrance to the air to create an ambience. Various formats include: autosprays, electrical plug-ins, aerosols, gels and candles. Pest Control products offer solutions to domestic infestation. The category includes insecticide and rodenticide products – in formats such as coils, mats, baits, traps, vapourisers and sprays – to prevent infestation and to kill pests. Shoe Care cleans and protects shoes. Key Brands • • Airwick Mortein
Major Players Hindustan Lever Limited (HLL)
HLL is India's renowned and largest Fast Moving Consumer Goods (FMCG) Company. It is a leader in Home & Personal Care Products, Food & Beverages having widespread marketing & distribution network all over India. HLL covers 1 million retail outlets and 50000 villages with 7000 redistribution stockists. The distribution network of HLL is spread all over India. Its primary sale is to the redistribution stockists and the secondary sale is carried out by the stockists to various wholesale and retail outlets. With this backdrop in the FMCG market, HLL planned to e-integrate the entire distribution network and aspired for a software that takes care of various phenomenal issues of the stockists. Challenge: Over 7000 Redistribution Stockists (RS) of HLL are responsible for reaching the nook and corner of the consumer market and make the HLL products available wherever required. The Redistribution Stockists (RS) of HLL obtain stock from the C&F agents and store it in their gowdown and distribute the stocks through their sales network. These were the areas of concern:
Manipulation of schemes offered by HLL - HLL offers secondary schemes for the retailers to promote sales. The chances of manipulating these schemes were high and no effective approach was prevalent to keep track of whether the schemes reach the retailers or not.
Normally, the dealers of HLL deal with numerous products and are engaged in frequent sale and distribution activity. Hence, they hardly had any time to keep track of the stock movement. This led to piling up of non-moving stock.
As the principal company is unaware of the stock level, it periodically sends the stocks to the distributor. This led to dumping the non-moving stocks. The distributor had no powerful means to control this, as he himself does not know the stock level.
The billing and reporting were time-consuming process for the RS. The report formats changed very frequently and the distributors had difficulty in providing the reports in required formats.
RS was barely able to keep track of the salesperson performance.
Solution: HLL has chosen Wings to e-integrate its entire distribution network using Wings SCM exclusive software designed for Distributors & Stockists. Wings SCM provided innovative solutions to surmount the difficulties in the earlier system.
Wings SCM handles schemes efficiently. It has controlled manipulation of schemes to a great extent. Whenever the schemes are declared by HLL they are defined in Wings. Hence, each time a sales invoice is raised automatically the scheme benefits are included in the bill. This ensures that the retailer gets what is intended for him.
The inventory module of Wings efficiently handles stock movement and helps the RS to keep track of the stock movement and stock balance at any point of time. The effective reorder management resulted in maintaining sufficient stock at all times.
Wings designed flat file reports exclusively for HLL. These reports display the purchase, sales and stock balance of the stockist. These files are updated in the HLL website. This enables the principle company to keep abreast of the current market demands and the stock to be sent to the distributor.
Reports as you want - The Report Writer utility enables the stockist to design and get the report in whichever format they want it. Once the data is available Wings can represent it in the desired format.
Load Charts - Once the distributor generates the sales invoices of a particular day, Wings automatically generates the load chart based on it. This chart displays the load i.e. the quantity of each item to be loaded in the van, for each beat.
Collections - Wings has various collection modes. The stockist can enter salesman-wise, beat-wise, date-wise, profit center-wise, product-wise and party wise collections details.
Compatibility with other software - Wings supports export and import of data. This feature is helpful when a distributor is dealing with various principal companies and is using different software for each principle company. The distributor can either import the data from other software to Wings or export the data in Wings to other software to get the consolidated reports.
3-Dimensional Reports - Wings helps to filter the reports by period, product and customer. This enables the stockist to analyze the sales data in various aspects.
DOS Printing - Wings supports DOS printing. This makes printing faster.
Johnson & Johnson
Caring for the world, one person at a time... inspires and unites the people of Johnson & Johnson. We embrace research and science - bringing innovative ideas, products and services to advance the health and well-being of people. Employees of the Johnson & Johnson Family of Companies work with partners in health care to touch the lives of over a billion people every day, throughout the world. Our Family of Companies comprises:
The world’s premier consumer health company
• • •
The world’s largest and most diverse medical devices and diagnostics company The world’s fourth-largest biologics company And the world’s seventh-largest pharmaceuticals company
We have more than 250 operating companies in 57 countries employing 117,000 people. Our worldwide headquarters is in New Brunswick, New Jersey, USA. To learn more about our companies, explore the map.
Our Credo Values The values that guide our decision making are spelled out in Our Credo. Put simply, Our Credo challenges us to put the needs and well-being of the people we serve first.
Our Management Approach Johnson & Johnson is a company of enduring strength. We credit our strength and endurance to a consistent approach to managing our business, and to the character of our people.
Our Views & Positions As a global corporation, what we believe and what we do has an impact on the challenges and opportunities facing health care and business today.
Corporate Governance Our Credo values guide the actions of people throughout the Johnson & Johnson Family of Companies. These values extend to our accounting and financial reporting responsibilities.
Company Structure See how our Family of Companies is organized. Our People & Diversity People and values are our greatest assets and diversity is a central part of the cultures across the Johnson & Johnson Family of Companies.
Our History Johnson & Johnson was founded more than 120 years ago. Since then, we’ve brought the world new ideas and products that have transformed human health and well-being.
Dabur India Limited
Dabur India Ltd (Dabur India), a part of the Dabur Group, was incorporated in 1975 for manufacturing and marketing FMCG, ayurvedic and pharmaceutical products. The pharmaceutical division of the company was demerged in 2003. In Apr 2006, three entities, Balsara Hygeine Products Ltd, Balsara Home Products Ltd and Besta Cosmetics Ltd were merged with Dabur India. Dabur India operates with four divisions namely, consumer care, consumer healthcare, foods and international business division. The consumer care caters to six FMCG segments of hair care, oral care, health supplements, digestives, home care and skin and baby care. Some of its major brands include, Vatika, Meswak, Hajmola, Babool and Odomos among others. Consumer healthcare deals in ayurvedic products under the brands Honitus, Nature Care and Shankpushpi among others. Dabur India operates its food business through Dabur Foods Ltd that offers juices, nectars, drinks and food additives under the brand names Real, Active and Coolers among others. Dabur India operates nine production facilities organised around three main factories at Baddi, HP; Pantnagar, Uttarakhand and Nepal; and six support factories at UP, Jammu, Rajasthan, MP,
WB and Dadra and Nagar Haveli. In FY07, consumer care accounted for approximately 88% of the company’s revenue. In May 2007, Dabur India incorporated H&B Stores Ltd, a wholly owned subsidiary, for foraying into the retail business.
Godrej Industries Limited (GIL)
At Godrej Industries Limited (GIL), we believe that people are our principal asset. They are the ones who create everything that's valuable to the company. All they need is the platform to do so. We also believe in taking our people along as we forge ahead. Quality is a way of life at Godrej. If you are looking for challenges early in your career, if you want to be someone making important decisions, if you enjoy professional challenges, if you are interested in moving across functions and businesses — then welcome to Godrej Industries Limited.
Working with Godrej Industries The wide variety of businesses that GIL is involved in provides present and potential employees plenty of opportunities to grow, as well as the cross-functional exposure to enrich and widen their horizons. A huge, and not always clearly visible, effort lies behind the success of any organisation. We at GIL believe in taking our people along as we forge ahead. Total employee involvement is embedded in the company's culture. Continuing with this tradition, we embarked on a 'total quality management' (TQM) journey in 1995. "Quality in everything we do" was the motto of this endeavour. This could only have been possible if each one of us did our bit in the quest for excellence. TQM awareness programmes, small group activities, Kaizens, and key business process improvements became the order of the day. Today, four years down the line, quality is a way of life at Godrej Industries. All our employees are part of an evolution born out of what we like to term 'shared values'. These are a set of 10 values developed after deliberations by the entire GIL team.
Openness is central to the way the company works. Our open appraisal system is a joint effort between the appraiser and the person being appraised. Performance on the job is not the sole criterion for evaluation; factors like customer orientation and subordinate development are given due importance. Training and development is a high-focus human resources initiative strongly supported at the corporate level. An employee is given ample opportunities to learn and grow. Tools like '360degrees feedback' facilitate overall individual development. Care and concern for fellow-employees is evident across the board in GIL. We take care of the quality of work delivered as well as the environment in which it is executed. Our lush green, spacious complex, which is a 'no tobacco zone', provides the right ambience to employees. Housing facilities, a school , a library and a recreation centre are just some of the highlights of the quality of life that we offer.
Leadership and management Most of the senior positions in Godrej Industries are held by people who joined the company as trainees. This speaks volumes about the company's commitment to ensuring the growth of its employees and about the opportunities it generates. Our management systems and structures are designed to encourage you to reach for the sky. As the group begins to look at a broader canvas and enters 'green field' areas, new opportunities are thrown up by the day. This in turn is making accelerated growth and promotion opportunities at all levels a reality. The compensation structure in GIL is comparable to the best in the industry. What is immeasurable is the work environment -- the responsibility, the challenge, the opportunities for horizontal and vertical mobility, and the freedom and flexibility in decisionmaking. All of these positives have created an environment that is warm, friendly and extremely conducive to professional and personal growth.
Introduction to the project
Reckitt Benckiser Group Plc. (Reckitt Benckiser) is principally engaged in the manufacturing and marketing of household, cleaning, health and personal care products. The company manufactures products related to several categories which include dishwashing, fabric care, surface care, health, home care and personal care products and food. There are so many manufacturing plant situated in India, which are owned by the same company. For example:• • •
Himachal Pradesh Jammu & Kashmir Uttarakhand Chennai etc.
Sometimes company gives the responsibility to manufacture the products to the other company, if they are able to fulfill the demand. There are four regional marketing offices in India, which are supposed to make the sale:1. New Delhi 2. Mumbai 3. Chennai 4. Kolkata
Hierarchy in Regional offices
There is a particular hierarchy in all the regional offices, which is responsible for all the sales. There are only four regional managers in India, who control all the aspects of regional offices. Company gives the responsibility of sale to the distributors and they make all the sale in their distributed areas.
There are two ways of selling the products;• • Traditional and, Modern Trade
In traditional way of marketing distributors appoints the DBSRs (Distributor Sales Representatives), give them a particular area. DBSRs take orders from the shops in traditional
way of marketing and then further distributors deliver the orders on the shops. Distributors get the monthly targets from the company. Company gives it once in a year.
Outlet Classification CLASS Per Month(Rs.)
Types of Outlets
• • • • G= Grocery GM=General Merchant CH= Chemist WS= Wholesaler
• • • • • •
SSS= Self-Service Store HW= Hardware PS= Petty Shop SH= Shoe Shop CS= Cosmetic KA= Key Account
Wholesalers and retailers get the points on the sales. On the basis of these points they get some extra benefits. In Modern Trade of marketing, distributors are allowed to sell the products in all the super markets, like- Big-baazar, Spencers, Vishal mega mart, More, Easy day. A KSR(key-account sales representative) is appointed for all the Big-baazar stores. They consider the availability and visibility of the product and according to the sale of all the products, it (product) gets the percentage on racks. Company has occupied the following percentage of all the categories:• • • • • • • Floor cleaner- 40% Toilet cleaner- 70% Hand wash- 65% Soap- 15% Mortein spray- 25% Coil and reffil- 15% Shaving cream- 10%
Veet- 10% There are no fix percentage of air wick, cherry and clearsil.
In Big-baazar stores, they place the orders twice in a week according to the MBQ(minimum based quantity).
Information related to Project
In Delhi, there are near about 80 government stores, which are named as KB Stores (Kendriya Bhandar). These stores neither occurs in traditional nor in modern trade. Two years backs, there were centralize demand and order system in KB Stores but now it has converted into decentralize. Due to decentralize selling, sale has increased from Rs.5lakhs to Rs.20lakhs per month. A single distributor is handling all the KB Stores of Delhi and according to the demand of all the store, distributor deliver the order on the stores. During my summer training, I visited bear about 50 stores. When I used to in the stores, then I used to ask to the store incharges about any type of issues related to the company or distributor and further I used to provide it to the distributor and TSI of the company. I had to identified the problems occurred from the side of distributor, company officers.
Objective of the Project
All companies are having their own planning and business strategies but the company who is having the best, is the most successful company among its competitors. So the company can get success within its competitors by applying best and effective marketing strategies.
There are the following objectives of this project:1. To check the availability, visibility of the RB and its competitor products in KB Stores. 2. To know the impact of Retail visibility on customer’s ultimate purchase intension. 3. To find out problems faced by stores related to the RB products. 4. To study the position of the RB products in relation to the competitor products. 5. How to increase the sale in KB Stores.
Review of Literature
A literature review is a body of text that aims to review the critical points of current knowledge and or methodological approaches on a particular topic. Literature reviews are secondary sources, and as such, do not report any new or original experimental work. A good literature review is characterized by: a logical flow of ideas; current and relevant references with consistent, appropriate referencing style; proper use of terminology; and an unbiased and comprehensive view of the previous research on the topic. My project was related to government stores and company has started concentrating on these stores now but so many studies have been done on FMCG sector, mainly to increase the sale in rural areas. According to Serena Jian (senior company analyst), “Reckitt Benckiser is strong at marketing its brands to consumers.” And "Combined with good product innovation, that helps increase brand loyalty and drive up margins." 1. Basu Purba (2004), suggested that the lifestyle of rural consumers is changing. Rural Indian market and the marketing strategy have become the latest marketing buzzword for most of the FMCG majors. She added the strategies of different FMCG companies for capturing rural market like Titan’s Sonata watches, Coco Cola’s 200ml bottle, different strategies of HUL and Marico etc. She takes into consideration the study of National Council for Applied Economic Research (NCAER). According to the NCAER projections, the number of middle and high-income households in rural area is expected to grow from 140 million to 190 million by 2007. In urban
India, the same is expected to grow from 65 million to 79 million. Thus, the absolute size of rural India is expected to be double that of urban India.
2. Tognatta Pradeep (2003), suggested that, the economic growth in India's agricultural sector in last year was over 10%, compared with 8.5% in the industrial sector. This implies a huge market potentiality for the marketer to meet up increasing demand. Factors such as village psyche, strong distribution network and market awareness are few prerequisites for making a dent in the rural markets. The model is of the stolid Anglo-Dutch conglomerate Unilever Group, which has enjoyed a century-long presence in India through its subsidiary Hindustan Lever Ltd. It was Hindustan Lever that several years ago popularized the idea of selling its products in tiny packages. Its sachets of detergent and shampoo are in great demand in Indian villages. Britannia with its low priced Tiger brand biscuits has become some of the success story in rural marketing.
3. Aithal, K Rajesh (2004), suggested that rural markets are an important and growing market for most products and services including telecom. The characteristics of the market in terms of low and spread out population and limited purchasing power make it a difficult market to capture. The Bottom of the pyramid marketing strategies and the 4 A's model of Availability, Affordability, Acceptability and Awareness provide us with a means of developing appropriate strategies to tackle the marketing issues for marketing telecom services in rural areas. Successful cases like the Grameen Phone in Bangladesh and Smart Communications Inc in Philippines also provide us with some guidelines to tackling the issue. As per my concern of the research, it is a detail study of different FMCG products used by rural consumers. It will provide detail information about consumer preferences towards a good number of FMCG products which is too unique and different from those above researches.
Research methodology is a very organized and systematic way through which a particular case or problem can be solved efficiently. It is a step-by-step logical process, which involves: Defining a problem Laying the objectives of the research Sources of data Methods of data collection Tabulation of data Data analysis & processing
Conclusions & Recommendations
Sources of Data
Data refers to a collection of natural phenomena, descriptors, including the results of experience, observation or a set of premises. This may consist of nos., words or images particularly as measurements or observations of a set of variables.
There are two sources of data: • Primary Source • Secondary Source
Primary Sources This data is that the researcher collects himself. It is reliable way to collect data as it requires the learner to interact with the source and extract information. It allows the learner to access original & unedited information. Its methods are • • • • Surveys Observations Questionnaire Experiments
I collected data using the primary method. Data Collection Sheet was provided by the company.
Secondary Sources Data sources are edited primary sources, second hand versions. It represent thinking of someone else. Secondary sources take the role of analysing, explaining & combining the information from the primary source with additional information. Its sources areINTERNAL SOURCE EXTERNAL SOURCE
Sales Records Marketing activities Cost Information Distribution Report Feed back
Internet Standardised Sources Electronic Published Data Printed Published Data
Analysis and Discussion CUSTOMER’S CHOICE
70 60 50 40 30 20 10 0 shops KBstores big-baazar other super stores
This analysis is important to basically know the choice of those people, who live in government society. The people who live in government society, most of them purchase the products from KB Stores (approximate 65%). The people who do not visit in these stores, most of them go to big-baazar
because of the good availability and good schemes (approximately 21%) and there are very less number of persons, who go to other super stores or on the shops because there are very less number of ordinary shops in government societies.
INFLUENCE OF KB STORES
81% people like to go in KB Store because of so many reasons, like- low prices, nearby home, self-service, government store. Further I asked the reason to those 19% persons (while assuming them as 100%), who don’t like to go in KB Stores, then they gave the following reasons.
REASON TO GO ANYWHERE ELSE
45 40 35 30 25 20 15 10 5 0 bad behaviour unavailability less schemes crowd
The people who do not like to go to the stores, they go to the super markets to purchase the products because they get all the products there in super markets as well as more schemes than KB Stores and bad behaviour of store people is also a problem for some people.
FREQUENCY TO GO IN KB STORES
40 35 30 25 20 15 10 5 0 anytime once in a week fortnightly once in a month
All the government employees get their salaries on a particular date that’s why they purchase the products in more quantity at a time. 22% people purchase the products once in a month, 29% people go their fortnightly, 38% people purchase the products once in a weak and there are 11% people who go their at the time of need.
REASON TO GO IN KB STORES
80 70 60 50 40 30 20 10 0 low prices near by home self-service government store store
Low price is the biggest positive point of KB Stores. There are 79% people who go in KB Stores because of low prices after that they go there because it is nearby home. There are 18% people who like the self-service facility of the stores and only 2% people go there because of their psychology that it is a government store.
EFFECT OF VISIBILITY
When I was checking the visibility of the products then I asked some persons that if they do not get the products on racks then whether they ask for it to the store persons or not. Only 35% people are there who ask for it to the store persons otherwise 65% people choose the same product of another company.
SUGGESTION TO THE CONSUMER
Oftenly, In self-service stores nobody suggest or force to anybody to purchase any product (in case of new launching). Only 10% people think that store persons tell them about new launching.
SALE OF ANTISEPTIC SOAPS
70 60 50 40 30 20 10 0 dettol savlon lifebuoy other
Most of the people use dettol soap as an antiseptic soap(approximately58%) after that savlon is the second popular antiseptic soap(approximately 24%). Mostly people(approximately 15%) use lifebuoy as a toilet soap and only 3% people are there who use other antiseptic soap than these three soaps.
SALE OF TOILET CLEANERS
50 40 30 20 10 0 harpic sanifresh domex other
Harpic is the most selling product of Reckitt Benckiser(approximately 42%) and also it has got a very good percentage in super markets among toilet cleaners. Sale of local toilet cleaners(approximately 24%) are more than sanifresh and domex.
Sale of Floor Cleaner
80 60 40 20 0 Lizol Dazzl Mr. Muscle other
When we talk about floor cleaners, then most of the middle class families prefer local toilet cleaners.
Findings and Evaluations SWOT ANALYSIS
STRENGTH • • • • • Brand Recognition and Loyality Diversification High Customer Satisfaction Well Established Distribution Network Company’s Strong and Effective Segmentation
WEAKNESSES • • • Dependent on Dettol and Harpic for Revenue Less promotion Unable to fulfill Distributors’ Demand
OPPORTUNITIES • • Increasing Demand and Consumption of FMCG Goods Increasing Demand in Rural Areas also
THREATS • Increasing Number of Competitors
Competition from both Domestic and International Markets
On the basis of analysis drawn and findings made, it can be concluded that;• There is neck to neck competition in the FMCG Industry. Companies on large scale are using advertising & counter advertising strategies to increase their market share. • Though, the company holds a strong position in FMCG industry with strong distribution network, aggressive marketing effort and advertising along with attractive schemes. But still, there exists potential markets to be exploited which need a good and well organized sales promotion programs. • The emphasis is not only creating the market but also retaining it. The availability of right brand at the right place, at the right time is the key for building Customer Loyalty and satisfaction. • Availability of the products also affects the customer. In its shortage customer gets diverted to other Brands. • Outlets visibility and product display affects the customer’s attraction. Making Customer Brand Loyal for a product is not easy. • Proper Coordination among the wholesalers, retailers, distributor and dealer should be practiced so that it may not affect the availability of the products.
Most of the people visit KB Stores, who live in government society. Low price is the main reason to go in KB Stores.
Dettol and Harpic are the most selling product of Reckitt Benckiser.
Limitations of the Project
During the project duration the main purpose was to collect the data and interpret it with reliability and consistency. During the project there were various constraints, which were faced, as:• The project was taken as a part of my summer training. As the time was limited so the survey was confined to few stores only. • The data collected in my report also contains views and information provided by the distributor, store persons, DBSRs, KSRs and general people. So these observations might not be fully free from errors. • The project contains the details of some stores only so it may happen that the other stores may reveal different facts. • The opinions of all the persons are often in opposition, non cooperating, causing difficulty in data collection. • • Lack of proper coordination sometimes results in de-motivation. People were hesitant to disclose the true facts.
Books • • Principle of Management (Kotler) Kothari, C.R. “Research Methodology: Method and Techniques” Wishva Prakashan Pvt Ltd.
Websites • • • • • • • www.google.com http://en.wikipedia.org/wiki/Fast_moving_consumer_goods http://www.reckittbenckiser.com/site/RKBR/Templates/Home.aspx?pageid=1 http://www.hotfrog.in/Companies/RECKITT-BENCKISER http://suppliers.jimtrade.com/150/149733/ http://hindlatex.com/adminRight.aspx?id=21&par_id=21 http://en.wikipedia.org/wiki/Dabur
As we know about the objectives of the project, then now we should know that how to achieve those objectives. All the objectives with the proper suggestions are there in the data analysis and discussion. I identified some problems related to the KB Stores, which tends to suffer the sale.
Identified the following problems related to KB Stores: Supply Interval Due to the high gap of ordering and delivering the product, there can be the shortage of many products. So, distributor should consider this issue very carefully.
Supply System They take orders at the time of delivering the items, that’s why every time they are not able to fulfill the demand of all the stores, whichever they visit later in the day. So, distributor’s persons should take orders earlier.
No proper display There are no proper display of all the items in the stores but this problem does not create from the side of distributor. This is only because of the shortage of space in the stores.
No proper supply of products, which are in schemes There are no proper supply of those items, which are in schemes. This problem is also not from the side of distributor because he needs to take the permission from the head office of these stores. Sometimes distributor does not get the items Sometimes distributor does not get the item according to the demand from the side of the company and after all, sale suffers. When I was doing my summer training then also this problem occurred because at that time there was the shortage of Easy off Bang and everybody was demanding that item.
Now we can say that there is the great influence of the availability and visibility of all the products. If we will carefully consider these aspects then we can easily increase the sale.
__________________________________________ __________________________________________ __________________________________________
Between 1 Lac to 2 Lac Above 5 Lac
Between 2 Lac to 5 Lac
1) Where do you purchase the product from? a)Shops c)Big-Baazar b)KB Stores d)Other super markets
2) Do you always purchase the products from KB Stores? a) Yes b)No
3) Why do you not go in KB Store? a)Bad behavior of store persons c)Less schemes b)Unavailability d)Crowd
4) How frequently do you come in store? a)Anytime c)Fortnightly b)Once in a week d)Once in a month
5) Why do come in KB Stores? a)Low prices c)Self-service store b)Near by home d)Government store
6) Do you ever ask for any product to the store incharge (In case you don’t find.)? a)Yes b)No
7) Is anybody force or suggest you ever to buy any particular product? a)Yes b)No
8) Which antiseptic soap doo you like the most? a)Dettol c)Lifebuoy b)Savlon d)Other
9) Which toilet cleaner do you use? a)Harpic c)Domex 10) Which floor cleaner do you prefer? a) Lizol c) Mr. Muscle b) Dazzl d) other b)Sanifresh d)other
The project was concerned only with providing the organization with all the necessary information required to study the category movement of Reckitt Benckiser and its competitor products in the form of reports incorporating all information in an analysed and summarized form. But some critical and major issues which have been identified on account of extensive analysis required recommendations to be put forward on the current market scenario. Few recommendations have been listed below:• • Measures should be made in order to educate the Customer about the duplicate products. The company should modify its advertising strategy and educate the customer about its age old existence and enhance its brand image. • Every possible step should be taken nationwide for sales promotion measures and campaigns of the company in context of boosting sales and brand enhancement. • In big KB Stores company should appoint a person concerned with making the customer aware of its products and providing the necessary information of the products that how
this product would be more satisfactory or beneficial. This will help in converting customers mind to buy ITC Products. • Activities of sub distributors should be controlled and checked in order to ensure fair prices and distribution of schemes and incentives to small retailers to avoid discontent among small holdings and outlet.
During the study of RB products with competitors products, I also analysed the behavior between distributor and store incharge as well as between company’s persons and distributors. Regarding that, some suggestions are;• Proper Coordination among the retailers, distributor, salesman and company officers should be practised so that it may not affect the availability of the products in the store. Selection of skilled and trained salesman affects the sales. • Right on time concept is very important in the FMCG Industry because in the absence of it customers purchase other company products. • Company must also take care of small retailers and small stores. Company should develop some sales promotion schemes for them. • During my study I was also complained by some customers regarding the packaging of Collin and the unavailability of Easy of Bang.
Television is the best media for advertising of products that may compel consumers to buy. It is the one of the major strength of Reckitt Benckiser. Frequency of advertisement except television should also be increased to make the consumer familiar to products.
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