The document discusses the Indian FMCG sector, noting that it is the fourth largest sector in the Indian economy, generating over $50 billion in revenues by 2017. It provides an overview of key FMCG companies like Hindustan Unilever, ITC, and Nestle, as well as market segments like household and personal care which account for 50% of the market. The growth of the FMCG sector is expected to continue, driven by increasing incomes, awareness, and changing lifestyles in India.

1. Presented by
Y165308: BINDU GODAVARTHI

2.  The Indian FMCG industry witnessed significant changes through 1990s. By
the time of 20th century, Indian FMCG industries have changed significantly
with the liberalization and growth of economy. The realization of the
customer’s growing interests and the need to meet changing life style required
the FMCG producing companies to formulate customer-centric strategies.
These changes have positive impact, leading to the rapid growth in the FMCG
industry. The FMCG industry plays a significant role in shaping a country’s
economy and development. This sector can drive growth, enhance quality of
life, create jobs and support penetration of technology.
 The short term liquidity implies the capacity of the firm to repay the debt
of a short term creditor and trade payables. Long term solvency implies the
capacity of the firm to pay off the claims of debenture holders, preference
shareholders and other long term creditors.

3.  FMCG SECTOR generally deals with FMCG products or
‘Fast Moving Consumer Goods’
 FMCG products have a quick turnover and relatively low
cost
 India’s FMCG sector is 4th largest sector in the economy
and contribute to around 3million employment opportunities
 FMCG market is in excess of Rs. 85,000 Cr
 It includes household care, personal care, food & beverages
 FMCG Industry is characterized by a well established
distribution network, low operating cost, lower per capital
consumption and intense competition between the organized
and unorganized seg ments.

4.  Top 3 FMCG Industry:
1. Hindustan unilever ltd
2. ITC (Indian Tobacco Company)
3. Nestle India
 Bottom 3 FMCG Industry:
1. Britannia Industries ltd
2. Procter & Gamble Hygiene & health care
3. Marico Industries ltd

5.  It is India’s largest consumer goods company based in Mumbai,
Maharashtra.
 It is owned by the British - Dutch company unilever which controls 52%
majority stake in HUL.
 HUL was formed in 1933.
 Its products include foods, beverages, cleaning agents and personal care
products.
 Revenue 22,116 Cr
 Net income 2,691 Cr
 Employees more than 16,500
 Hindustan Unilever’s distribution covers over 2 million retail outlets
across india directly and its products are available in over 6.4 million
outlets in the country. As per Nielsen market research data, two out of
three Indians use HUL products.
 In 2012, HUL was recognised as one of the world’s most innovative
companies bye forbes. With a ranking of number 6, it was the highest
ranked FMCG company.

6.  It was formed in 1970 by Henry Overton wills and Yogesh Chander
Deveshwar ,(Chairman). Headquarters in Kolkata, West Bengal, India.
 In FMCG, ITC has a strong presence in:
 Cigarettes: W.D. & H.O. wills, gold flake kings, gold flake premium,
navy cut, insignia, india kings, classic (Verve, Menthol, Menthol Rush,
Regular, Citric Twist, Mild & Ultra Mild), 555, Benson & Hedges, Silk
cut, Scissors, Capstan, Berkeley, Bristol, Lucky Strike, Players &flake.
 Foods: (Kitchen of india; Aashirvaad, minto, sunfeast, candyman, bingo,
yippee, sunfeast pasta brands in ready to eat, staples, biscuits,
confectionery, noodles &snack foods).
 Apparel: (Wills lifestyle and john players brands)
 Personal care: (Fiama di wills; Vivel ; Essenza di wills; Superia; Vivel di
wills brands of products in perfumes, hair care and skin care)
 Stationery: (Classmate and PaperCraft brands)
 Safety Matches and Agarbattis: (Ship; Mangaldeep; Aim brands)

7.  It is a multinational nutritional and health-releated consumer
goods company headquartered in Vevey, Switzerland. It is the
largest food company in the world measured by revenues.
 Nestle was listed No. 1 in the fortune global 500 as the world’s
most profitable corporation.
 Nestle’s products include baby foods, bottled water, breakfast
cereals, coffee, confectionery, dairy products, ice cream, pet
foods and snacks.
 Nestle’s India’s first production facility was set up in1961 at
moga(Punjab)
 The nestle india head office is located at Gurgaon along with
other branch offices in Delhi, Mumbai, Chennai, and Kolkata.
 It has 2,50,000 employees, 500 factories and 8000 range of
products across the globe.

8.  It is an Indian food-products corporation based in Kolkata, india.
 It is famous for its Britannia and tiger brands of biscuit, which
are popular throughout India.
 Britannia has an estimated 38% market share in biscuit segment.
 Products: Bakery products, including biscuits, bread, cakes and
rusk, and dairy products, including milk, butter, cheese, ghee and
dhai.
 The company was established in 1892, with an investment of
Rs.295.
 The brand names of biscuits include VitamarieGold, Tiger,
Nutrichoice junior, Good day, 50-50, Treat, Pure magic, Milk
bikis, Good morning, Bourbon, Thin arrowroot, Nice, Little
hearts and many more.
 Revenue 4,670 Cr . Profit 134 Cr.

9.  P&G is one of the largest and amongst the fastest growing
consumer goods companies in india. Established in 1964
 P&G india now serves over 650 million consumers across india.
 Its presence pans across the beauty & grooming segments, the
household care segment as well as the health & well being
segments
 These includes Vicks, Ariel, Tide, Olay, Gillette, Ambipur,
Pampers, Pantene, Oral-B, Head & Shoulders, Wella and
Duracell.
 P&G operates under three entities in india – two listed entities
“Procter & Gamble Hygiene and Health care Limited” and
‘Gillette India Limited’, as well as one 100% subsidiary of the
parent company in the U.S. called ‘Procter & Gamble Home
Products’.

10.  Marico is an Indian consumer goods company
providing consumer products and services in the
areas of Health and Beauty based in Mumbai.
 Founded in 1987 and Headquarters is at Bandar,
Mumbai, India.
 The organisation holds a number of brands including
Parachute, Saffola, Hair&care, Nihar, Mediker,
Revive, Manjal, Kaya skin clinic, Aromatic, Fiancee,
Hair Code, Eclipse, Xmen, Hercules, Caivil, Code 78
and Black chic.
 Revenue4,008.3Cr
 Parachute is the flagship brand of marico which
consists of edible grade coconut oil.

11. COMPANY MARKET
SHARES
Hindustan
unilever ltd.
36.4%
Indian tobacco
company
30%
Nestle 8.2%
Britannia 6%
Others 19.4%
shares
HUL
ITC
NESTLE
BRITANNIA
OTHERS

12. 1. Food & beverages (18%)
2. Health care (32%)
3. Household and Personal care (50%)

13.  Understand customer
 Analyze market
 Analyze competition
 Research distribution
 Define marketing mix
 Financial analysis
 Review and revise

14.  FMCG is the fourth largest sector in the Indian
economy
 Household and personal care is the leading segment,
accounting for 50% of the overall market. Health
care (32%) and Food & Beverages (18%) comes next
in terms of market share
 Growing awareness, easier access, and changing
lifestyle have been the key growth drivers for the
sector
 Retail market in India is estimated to reach USD1
trillion by 2020 from USD600 billion in 2015, with
modern trade expected to grow at 20% per annum
this is likely to boost revenues of FMCG companies.

15.  The FMCG sector in
india generated revenues
worth USD 47.3 billion
in 2015
 Over 20012-16f, the
sector is expected to post
CAGR of 11.9% in
revenues
 In 2017, revenues for
FMCG sector is expected
to reach USD50 billion 0
20
40
60
80
100
120
2012 2013 2014 2015 2016 2017 2020
Growth
Growth

16.  Some of the major strategies adopted by FMCG
companies for making their brands outstanding
compared to competitions are as follows:
1. Multi brand strategy
2. Product flanking
3. Brand extensions
4. Building product lines
5. New product development
6. Product life cycle strategy
7. Taking advantages of wide distribution
8. Sales promotion

17.  P&D strategies can be conceived and developed in a variety
of ways. It an be derived from the object attributes,
competition, application, the types of consumer involved, or
the characteristics of the product class.
 There are seven approaches to P&D strategies:
1. Using product characteristics
2. Pricing as a positioning strategy
3. Positioning strategy based on use or application
4. Positioning strategy based on product process
5. Positioning strategy based on product class
6. Positioning strategy based on cultural symbols
7. Positioning strategy based on competitors

18.  Price is the exchange value of the product. It is the
amount of money needed to acquire a product/
service. Pricing is the most important strategy in
rural marketing. Pricing must be compatible with the
marketing strategy, including target market selection
and positioning. This should have a balance between
quality on offer and price.
1. Customer segment pricing
2. Product form pricing
3. Economy pricing
4. Value pricing
5. Differential pricing

19.  In 2015, revenue from
consumer durables sector
in india stood at US$ 9.7
billion, which further
increased to US$ 12.5
billion in FY16.
 Consumer durable market
expected to grow at CAGR
of 13% from FY05 to
FY20.
 Around two third of the
total revenue is generated
from urban population and
rest is generated from rural
population. 0
5
10
15
20
25
FY11 FY12 FY13 FY14 FY15 FY16 FY20
CAPACITY
CAPACITY

20.  The only threats to this strong growth trajectory
remain the high portion of unorganised trade, the
limited distribution network of new entrants and the
pressure on profit margins due to increasing
competition.
 But these are likely to be of diminished importance
as proportion of organized trade increases and
players invest in improving distribution.
 Going forward, the industry prospects remain
attractive, and new graduates can hope to leverage
the training and on-the-job learning at the leading
players in various functional roles, across the metros
as well as the interior heartlands on india.

21. Industry
Competitors
Potential
Entrants
Buyers
Substitute
Suppliers

22.  IDENTIFY the System’s Constraint
 As per Dr. Goldratt , “Until the consumer has bought,
nobody has really sold...
 The system constraints found is in market demand or the
No of Consumers willing to buy
 Decide how to EXPLOIT the System’s Constraint
 “Exploiting the System Constraint” means “Having the
Right SKU, at the right place(in the downstream supply
chain) and right time (when consumer is willing to buy).
 What conditions block better exploitation?
 Shortages of products already stocked by the downstream
supply chain members. Unavailability of products that sell
elsewhere but which is not stocked due to shelf-space
constraints(occupied by Surpluses).

23.  The Indian FMCG sector is the fourth largest sector in
the economy with a total market size of US$18
billion.
 FMCG industry is expected to maintain a robust
growth rate as the population is increasing.
 The organised sector is account to 14-18% of the
shares.
 However, it witnessed phenomenal growth rate in the
next half of the decade.
 Overall, the FMCG industry is expected to increase at
a compound annual growth rate at 14.7%, with a rural
FMCG market expected to increase at 17.7%.

24. STRENGTHS 1.Low operational cost
2.well established distribution network
3.Strong brand & large market
WEAKNESS 1.High advertisement cost
2.low export level
3.Lower scope of investing in
technology
OPPORTUNITES 1.Large domestic market
2.Rising income level
3.online social network
THREAT 1.Tax and regulatory structure
2.Rural demand is cyclical in nature
3.Different monsoon

25.  It is high risk area but with the promise of a
large customer fallowing as the prize for those
who succeed.
 The key to reducing the risk is to understand
the market the consumer need and behaviour.
 The consumer groups differs by occupations
,income, social and cultural grouping.
 More and more people these days have
started involving themselves in this field as it
creates tremendous job opportunities for