Fast Moving Consumer Goods ( FMCG ) Marketing

• One of the fastest growing sector in early 1980’s till 1990’s • The dream of every creative man, any investor, advertising agency, or B-school graduate to work in or for FMCG company. • After 1990’s,
o FMCG started losing their sheen due to introduction of other product types o Total lack of imagination on the part of FMCG companies.

• By 2000, volumes & margins either shrank or stagnated • During 2006, Consumers willingness to upgrade to better, value added products helped FMCG.

What is FMCG ?
• Also known as Consumer Packaged Goods (CPG) • Products with quick turnover &relatively low cost • Less thinking by consumers • Absolute profit made on FMCG products is relatively small but they sell in large quantity & earn large profits. • Durable Products; E.g. Soaps, Cosmetics, teeth cleaning products, shaving products etc. • Non-Durable Products; E.g. Glassware's, bulbs, batteries, plastic goods etc.

• FMCG companies are Nestle, Unilever, Proctor & Gamble. • Their products are in varieties of soft drinks, chocolate bars etc. • Few FMCG brands are Coca-Cola, Kleenex, Pepsi etc. • FMCG industry is
o o o o Innovative Full of Rich Experience Worldwide reach Frequently travelling opportunities

FMCG Category & Products

• Household Care
e.g. laundry soaps, mosquito repellents, dish cleaners etc.

• Food & beverages
e.g. soft drinks, bakery products, tea, coffee, vegetables etc.

• Personal Care
e.g. oral care, hair care, skin care, cosmetics, deodorants, perfumes etc.

1. 2. 3. 4. 5. 6. Large Domestic Market:Large Consumer Goods Spender:Low Penetration & Low per Capita consumption :Changing Lifestyles:Retailing – New growth area Demand & Supply Gap

India’s competitiveness & Comparison with World Market
1. 2. Materials Availability:Leveraging The Cost Advantage:e.g. P & G outsourced Vicks Vaporub to Australia, Japan etc. from Hyderabad

Domestic Players
1. 2. 3. 4. 5. Britannia India Ltd. (BIL) Dabur India Ltd. Indian Tobacco Corporation Ltd. (ITCL) Marico Nirma Ltd.

Foreign Players
1. 2. 3. 4. 5. 6. 7. 8. Cadbury India Ltd. (CIL) Cargill Coca-Cola Colgate Palmolive India H.J. Heinz Co. Hindustan Lever Ltd. (HLL) Nestle India Ltd. Procter & Gamble

FMCG Vs. Industrial Marketing
Industrial Marketing
Relationship driven

Product Driven

Maximize value of relationship Maximize value of transaction Small focused target market Multi-step Buying process, longer sales cycle Rational buying decision based on business value Large target market Single-step Buying process, shorter sales cycle Emotional buying decision based on status, desire or price

Market Segmentation
• Geographic • Demographic • Social and Economic • Behavioral

• Zone region- nearest zone will be targeted first • Villages and town- helps to analyze marketing strategy • Density • Climate

• Age- children or adult • Gender-male or female

• Income group- high, medium or low • Social and Economic- Education (illiterate, literate , highly literate), social class

• Occasions ( Diwali, Deshehra, Eid) • Brand loyalty (rural area people are more brand loyal)

Marketing Strategy
• Direct on-screen marketing (e.g. Harpic) • Power brand strategy (Include those brand that have maximum pulling power and growth e.g. lifebuoy soap) • Power brand extension (e.g. lifebuoy talcum powder) • Exit from non power brand • Using “India” as a brand

• • 1. 2. 3. 4. • •

Small size packet strategy Pricing strategy Mark up Go- deterring (e.g. bingo chips) Competitor based Product bundling Same value, size increase Same value, size decrease (e.g. society tea)

Target market
• Differs from product to product examples: 1. Mc Donald's – Youth 2. Vim bar - Housewives 3. Pepsodent – Kids 4. Kellogg's – Previously kids now adults too 5. Sugar free – Age group of 35 and more

• • • • • • • Huge investment on advertisement Frequent broadcast Specially during peak hours During live matches During popular TV shows Target TV channels ( M TV, V TV) Through banners, posters, trial packs, events, hoardings, radio etc. • Based on Market Research

Why advertisement?
• • • • • As a reminder To inform about our product To show the success of brand To attract the customers To hamper the unsecured mind of consumer (e.g. saffola,dettol) • To arise the need purposely • To attach consumer emotionally with product • To show facts and figures of products

Message delivery
• • • • • • • • Surf excel for washing machine Vim bar gel Gillette razor Bingo chips Happy dent chewing gum Bourn vita, Horlicks Pepsodent, Colgate Pepsi, sprite, coca-cola

Why product line extension is done?
• According to the need of consumer • To avoid the loss of product diversification • To balance the profit through product line • To avoid penetration by competitor ( perk glucose)

• • • • • • • • Attractive packs Vibrant colors Pack will show the important feature of product Protective packaging( bru coffee) Size wise packing (Navratna oil and Colgate) According to segmentation of Market Packaging should be enhanced time by time Affordable packs ( coca cola 200 ml).

Latest scenario in FMCG market
• Increasing per year with the growth rate of 9 percent • Price of raw materials are decreasing • Cost of machinery required for consumer goods are less then durable goods. - mint newspaper 23rd Jan 2010

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