3. Fast Moving Consumer Goods (FMCG) – or Consumer
Packaged Goods (CPG) – are products that are
• sold quickly and
• at relatively low cost.
Examples include non-durable goods such as soft
drinks, toiletries, and grocery items. 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 substantial.
Hence the profit in FMCG goods always translates to
the number of good sold .ITC Limited, Procter &
Gamble and Unilever are the three biggest consumer
goods company that operate across the globe.
The term FMCGs refers to those retail goods that
are generally replaced or fully used up over a short
period of days, weeks, or months, and within one year.
This is either because of the high consumer demand or
because they tend to deteriorate rapidly.
4. CHARACTERISTICS OF FMCG FROM CONSUMER’S
VIEW POINT
Frequent purchase
Low involvement (little or no effort to choose the
item – products with strong brand loyalty are
exceptions to this rule)
Low price
7. • Cumulative Profits
• For a retailer's bottom line, the key benefit of
CPGs/FMCGs is the cumulative profit they provide.
CPGs/FMCGs have low profit margins, which means that
a small percentage of each each unit sale represents
profit. However, CPGs/FMCGs also sell in very high
quantities. This means that those small profits add up and
can form a significant portion of a retailer's total profits for
a fiscal period. This profit serve any number of financial
purposes in the business.
• Cross Merchandising Opportunities
• Retailers thrive when customers buy multiple items on
each visit. CPGs/FMCGs provide opportunities for cross
merchandising, which occurs when a business places two
products from different categories close to one another in
a strategic arrangement. For example, an electronics
retailer may sell remote controls that have high profit
margins but don't fall into the CPG/FMCG category. A
shelf of batteries (which are CPGs/FMCGs) next to those
remotes provides a chance to boost sales and earn profit
on two items when customers choose to buy the batteries
8. • Brand Appeal
• When a retailer offers CPGs/FMCGs, it can rely on the
brand appeal that they generate to drive sales. Most
CPGs/FMCGs come from brands that advertise heavily.
This means that when customers see CPGs/FMCGs on
store shelves they have pre-existing emotional
relationships with those brands, which may not be true of
the other items that the retailer sells. Seeing recognizable
brands may build trust between the customer and retailer
or lead to an additional purchase based on brand
awareness, with no special effort from the retailer.
• Diversification
• Selling CPGs/FMCGs spreads a retailer's revenue sources
over a broader spectrum of goods. The profits can help
offset slow sales for other products during seasonal dips in
demand or periods of reduced consumer confidence. In
the category of CPGs/FMCGs, retailers can choose from
among an almost unlimited range of product types
including pharmaceuticals, food items, beverages,
household products and disposable items. The range is so
broad that some retailers, such as grocery stores and
convenience markets, stay in business selling them
exclusively.
10. Basically there are only three disadvantages of the fmcg
:
• Since these goods are cheap in nature that is they
have a low price , they are not capable of provididng
immediate profit result . To obtain results a long period
of time is required and the profits are cumulative in
nature
• A lot of money is spent on advertizing and making the
brand name popular in order to avail huge profits . This
increase the cost price considerably .
• It is not possible to store these goods for future supply
because these are homogenous good and are a part
of the perfect competition market . Thus it is not
possible to hoard these goods in expectation of higher
profits in future becauese both the sellers and buyers
are generally the price takers.
11. MARKET SHARE OF MAJOR
PLAYERSCompany Hindustan
Unilever
ltd.
Indian
Tobacco
company
Nestle Britania Dabur others
Market
Share
36.4 % 30 % 8.2 % 6 % 4.3 % 15.1 %
HUL ltd .
ITC
Nestle
Britania
Dabur
Others
13. INTRODUCTION
Nestlé’s products include baby food, bottled
water, breakfast cereals, coffee and tea,
confectionery, dairy products, ice cream, frozen
food, pet foods, and snacks. Twenty-nine of
Nestlé’s brands have annual sales of over CHF1
billion (about US$1.1 billion),[7] including Nespresso,
Nescafé, Kit Kat, Smarties, Nesquik, Stuffer’s, Vittel,
and Maggi. Nestlé has 447 factories, operates in
194 countries, and employs around 339,000
people.[1] It is one of the main shareholders of
L’Oreal, the world’s largest cosmetics company.[8]
14. HISTORY
Our history begins
back in 1866,
when the first
European
condensed milk
factory was
opened in Cham,
Switzerland, by the
Anglo-Swiss
Condensed Milk
Company
17. GROWTH INCOME
• NESTLE markets hundreds of brands in approximately 200
countries and territories around the world . The customers
have spent an estimated of 107 billion US $ on the
products of the same .
• NESTLE has megabrands that generate $ 1 billion or more
each year in annual retail sales. It’s economic reach is
deep and sustainable .
18. NESTLE AS AN FMCG
PRODUCT
from consumer’s view point :
– it is frequently purchased
– Consumer has low involvement in its purchase (little or
no effort to choose the item – products with strong
brand loyalty are exceptions to this rule)
– Low price
19. FACTORS THAT DETERMINE
IT’S DEMAND ARE:
• Brand name : nestle is a very popular brand name and
trusted among most of the people. This influences its demand
on a huge scale.
• Quality product : nestle is a product of standard quality
having registered itself with the indian health standards and
thus is trusted by all .
• Taste and preferences : the taste and preferences of a
consumer affects the demand of a product hugely . Since
the nestle products come in a huge variety of flavors it covers
the demand of a huge percentage of the population
20. • Chocapic-nestle cereals just like kellogs
• Magic masala/or maggi
• nescafe
• nestea
• Panna{water}
21. • Price : nestle has a nominal price and thus is
affordable by a huge range of people . It also follows
the law of demand because of which it’s demand is
more since it’s price is less.
• Population : nestle is a form of swiss tasty products
which is consumed by the people of all ages , be it
senior citizens or students.
• Government policy : there are no government
restrictions imposed on nestle as such because of
which it can produce in order to meet the demands.
22. • Advertisements : of all the factors mentioned
advertisements are the most important determinant.
