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Project 2015

Final Stage

ndian

FMCG INDUSTRY

By: Ravi, Shiv, Namrata, Mewa, Ratnakar and Chetan

Market Segmentation
2015

‡ Geographic ‡ Demographic ‡ Socio Economic

Recap« 2015 ‡Detailed industry analysis Meaning and characteristics of FMCG Market segments Rural market SWOT analysis Top players ‡Individual company analysis .

5. but high cumulative profit ‡Non-durable ‡Include essential commodities ‡Calls for little time on purchase decision ‡Extremely price sensitive. 10 etc. Characterized by: ‡Low absolute profit.ABOUT FMCG 2015 Products that are sold quickly at relatively low cost. .companies like to stick to popular prices of Rs 2.

cheap labour and presence across value chain.6 billion.4 billion in 2015 from US $ billion 11. ‡Predicted to reach to US$ 33.INDIAN FMCG INDUSTRY 2015 ‡Fourth largest sector in the economy and has a market size of US$ 17. ‡Potential lies in untapped rural India consisting of 70% of country¶s population wherein FMCG penetration is 2% only ‡Increasing disposable income ‡Urban India is almost saturated for segments like household and personal care where penetration is about 80% and 70% respectively. ‡Competitiveness lies in easy availability of raw materials.6 in 2003. .

6 15 11.6 10 34% 5 0 2003 2010 2015 .4 Market Segments 2015 23% 30 25 Food & Beverages 43% Personal Care Household 20 17.FMCG Market Size ($bn) 40 35 33.

Hygiene & Beauty ‡Honey & Chyawanprash ‡Glucose .Product Mix 2015 HUL ‡Food Dabur ‡Hair Care Nestle ‡Milk Products and Nutrition ‡Beverages ‡Chocolates and confectionery ‡Prepared Dishes and Cooking Aids P&G ‡Fabric care ‡Personal Care ‡Home Care ‡Nutrition ‡Water ‡Oral Care ‡Skin Care ‡Digestives ‡Fruit Juices ‡Hair care ‡Baby care ‡Health.

HUL DISTRIBUTION NETWORK 2015 ‡ Setting up rural and small town distribution network. marketing ‡ Establishing new products at difference price points. .

of price points at which it offers its products .P&G DISTRIBUTION NETWORK 2015 ‡ Streamlining its distribution network in an exercise code named Operation Golden Eye Getting out of rural market. ‡ Focusing on the class A&B towns. ‡ Reducing the no. ‡ Moving to a demand based model which enables to reduce the quantum of waste.

DABUR DISTRIBUTION NETWORK Star 2015 ‡ Following the basic HLLs track i. ‡ Appointing super-stockist. demand should drive distribution . every possible price point ‡ Reducing the no. ‡ Instead of expanding distribution to increased demand for a product. of distributors where population of the town is less than 20.e.000.

Nestle Distribution 2015 .

Branding Strategy 2015 ‡HUL. 35 Power brands 2 umbrella brands ± Brooke Bond and Lipton ‡P&G.power brand ‡NESTLE.sub brand and power brand ‡DABUR.sub brand .Power branding strategy.

2015 FMCG INDUSTRYA RURAL JOURNEY .

Accounts for 50% of sales of soaps and detergents. 2015 . 50. Penetration of FMCG products. It has been growing 5 times the pace of the urban market.000 cr. Challenge to communicate the right message. esp tea and soaps has gotten deeper. 70% of India¶s population is dependent on the rural economy. Challenges which has to overcome Challenge of reach To ensure that consumers are aware of and want your brand. Disposable income of the consumer is low.Rural India Gaon Gaon Ki Kahani ‡ ‡ ‡ ‡ ‡ ‡  ‡ ‡ ‡ Annual size of rural market in FMCG Rs.

Haats and Melas. . are major components of rural distribution and marketing.Key Factors Key Factor 2015 ‡ Reasonable pricing would have to be the key factor of companies success in rural India. ‡ Components of rural distribution and marketing: Mandis.

stake in modern foods ‡ Acquired lipton tea and brooke-bond ‡ Acquired ponds cosmetics DABUR ‡ acquisition of balsara group( oral care) ‡ Acquired fem care pharma ‡ Acquired namaste laboratiories NESTLE ‡ Acquire medical nutrition division ‡ Merger with anglo Swiss condensed milk P&G ‡ Acquire gillette ‡ Acquisition of Sara lee air care( coffee and food brand) ‡ Merger of wella-AG ( Germany group deals in hair care and cosmetics). .Mergers and Acquisitions 2015 HUL ‡ Acquired govt.

2015 FINANCIAL ANALYSIS .

) 5222 4471 3647 2643 309368 2944 534 511 2008-09 655 613 2009-10 2015 sales profits 405 315 413450 total assets 20000 15000 10000 5000 0 2005 2006 2007 2362 1354 2796 1539 1743 1527 11975 13035 14715 17320 18220 sales(in crores) profits 2000 1987 2008-09 2583 2102 2009-10 total assets .) 6000 5000 4000 3000 2000 1000 0 2005-06 2006-07 2007-08 HUL (in cr.NESTLE ( in cr.

) 4000 3000 2000 1000 0 2005-06 2006-07 2007-08 2008-09 1757 624 214 2080 670 282 2396 749 333 2834 1060 391 3417 2015 Sales 1129 501 2009-10 profits total assets P&G (YEAR ENDING IN JUNE) ( in cr.DABUR: ( in cr.) 1000 800 600 400 200 0 2005-06 2006-07 2007-08 2008-09 597 273 139 553 445 291 90 351 131 179 773 652 913 Sales profits 180 total assets 2009-10 .

‡ Key Financial Ratios .

94 ITR EPS 160.) 180 163.com 42.92 10.39 11.02 11.39 60.61 49.09 55. Cr.29 .83 112.97 160 150.Nestle India (in Rs.68 ROCE (%) RONW (%) ROA 67.29 98.90 112.33 140 120 100 80 60 43.40 40 20 0 Dec'07 Dec'08 Dec'09 SOURCE: moneycontrol.

'07 Mar' 09 Mar' 10 SOURCE: moneycontrol.78 ROCE (%) RONW (%) ROA ITR EPS .99 10.61 9.84 8.72 122.20 8.25 80 60 40 20 0 Dec.34 118. Cr.12 6.) 160 140 120 100 85.45 11.Hindustan Unilever (in Rs.09 138.com 8.47 11.26 9.97 121.59 106.

94 8.43 4.6 4.99 51.95 3.Dabur India 80 70 60 50 40 30 20 12.31 8.04 ROCE (%) RONW (%) ROA ITR EPS (in Rs.32 11.) .20 47.67 10.98 67.51 61.52 10 0 Mar' 08 Mar' 09 Mar' 10 SOURCE: moneycontrol.com 5.62 58. Cr.58 61.

05 33.48 16.86 37.) 180 164.10 44.28 55.88 51. Cr.62 17.56 ROCE (%) RONW (%) ROA ITR EPS .38 106.com 52.70 160 140 120 100 80 60 40 20 0 June' 08 June' 09 June' 10 SOURCE: moneycontrol.64 55.79 135.Procter & Gamble (in Rs.79 21.91 40.60 40.

On the basis of key financial Ratios ‡ ‡ ‡ ‡ ‡ ROCE.92 .Nestle 42.P&G 16.33 RONW.97 ROA.Nestle 150.P&G 106.88 EPS.79 ITR.HUL 122.

Selection of a Potential Star .

7:1 2.8 23 11.2:1 200809 8.RATIO ANALYSIS Net Profit margin ratio (profit as a % 0f sales) YEAR 2007& 08 NAME NESTL 11.6:1 3.9:1 8.5 11.7 9.3 27 .8 13.3 E HUL DABU R P&G 11.7:1 200910 8.7:1 1.8 20 200809 12 2009-10 Total asset turnover ratio (sales as a ratio of total assets) 200708 7.2:1 1.54 13.53 14.7:1 7:1 3:1 121 27 37 121 24 40 81.7 19.5:1 2015 Return on equity ( PAT as a % of owners equity) 200708 98 200809 112 200910 113 12.

H&B STORES in Delhi ‡Official partner for IPL team KINGS XI PUNJAB ‡Launched Vitamin and Health suplement. Project SAMRUDHDHI DABUR ‡Re-branding of REAL JUICE ‡Launched retail subsidiary.NUTRIGO . ‡Project SHAKTI.FUTURE SCENARIO 2015 ‡HUL ‡Entered the noodles market and giving tough competition to NESTLE MAGGI ‡About to enter Rs100 crore pasta market through its KNORR subsidiary.

Contd« NESTLE 2015 ‡Setting up a R&D center in India which will be a part of its global network of 29 R&D centers. ‡Building capacity in India by spending Rs 650 crores in capital investments in the last 3 years ‡Launched Nutrition Awareness Programme. P&G ‡Connect and Develop model .

of consumers Project Peace: Environment Education Programme Opened Gujarat Earthquake Relief centres in partnership with SSP. Project Shiksha: Secure your child¶s Future. Improving affordability to a large no.Key success factor of P&G 2015 ‡ ‡ ‡ ‡ ‡ ‡ 70% spent on TV advertisement. . Refund offer to consumer on home products.

Good Profits and strong cash delivery during recession. ‡ Project Shakti ± a unique opportunity in accessing rural consumers. ‡ Winning relationships with customers.Key success factor of HUL 2015 ‡ Availability near the consumer through a wide distribution network. ‡ Developed advanced marketing mix modelling techniques. ‡ Continued efforts in reducing the brand cost. ‡ Good Turnover. .

Key success factor of Dabur ‡ ‡ ‡ ‡ ‡ ‡ 2015 Knowledge base and Modern Science Over 10 Research Areas Production of Ayurvedic medicines Leadership in health care Maintaining global standards Ranked as India¶s Most Customer Responsive FMCG Company (2010-11) .

. .THANK YOU.