Fmcg Consumer Non Durable

FMCG Consumer Non-Durables FMCG business is a hard core activity to be done on daily basis

CONTRIBUTORS NAME

• • • • • •

KAUSHIK BHASKAR KHYATI DEDHIA PREETI IYER JOY KHISTY SHRADDHA PIMPLE SUNIL SINGH

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8105 8115 8125 8135 8145 8155

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INDEX Objective what is FMCG

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What is FMCG Consumer non durables.

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Characteristics of FMCG Consumer non durables.

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Challenges of FMCG Consumer non durables.

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Opportunities for FMCG Consumer non durables. Understanding the sector through product analysis •Shampoo industry

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Sectorial analysis.

OBJECTIVE • Basically to understand the concept of FMCG- consumer non durables. • To Analyze & Study the characteristics, challenge & opportunities of Industry.

What is FMCG • FMCG means Fast moving consumers goods available in market as per the daily demand of the consumers. • It includes: • Eatable items & • Non eatable items

What is FMCG Consumer non-durables • It is a classification of frequently purchased consumer goods; nondurables are those items which are consumed by the consumer in one use or a few uses; expendables.

Set of Consumer Non-Durables • • • • • • • •

Cleaning Products Office Supplies Packaging & Containers Paper & Paper Products Personal Products Rubber & Plastics Textile - Apparel Clothing Textile - Apparel Footwear & Accessories

Characteristics of FMCG -CND •

Many of these products are perishable

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These products cater to necessities, comforts as well as luxuries

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They meet the demands of the entire cross section of population

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Price and income elasticity of demand varies across products and consumers .

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Brand loyalties or recommendations of reliable retailer / dealer drive purchase decision.

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Run by increasingly sophisticated and highly organized groups.

CHALLENGES for FMCG -CND Today's changing environment is the result of a wide range of challenges they ‘re as follows: • Price consciousness on Buyers/Customers part • Efficient, low cost manufacturing • Inefficient distribution network. • Category growth , leadership in retail • Maintaining leadership in category

Cntd…. • Increases in the price of raw materials and other costs. • Shortening product life cycles • Loyalty. • Changing buyer behavior and need

• Cold storage. • technology

Challenges for Rural Markets. • The rural and semi urban population is growing but the problem faced by the FMCG manufacturers is the logistics. • Some of the other problems associated with rural markets are acute dependence on the vagaries of the monsoon, seasonal consumption linked to harvests, festivals and special occasions, poor roads and power problem. • Value communication. • Storage • More preference is given to local venders.

OPPORTUNITIES • With 200 million people expected to shift to processed and packaged food by 2010. • India needs around US$ 28 billion of investment in the food-processing industry consumers to branded products. • Huge Untapped market-Rural. • Increasing Purchasing Power of the consumers.

Hair Care Category in India

SHAMPOO INDUSTRY

Hair Care Category in India  5 main products • Styling products • Herbal Remedies • Hair Dyes / colors • Hair Oil  

• Shampoo  

Types of Shampoos  Shampoo market benefit platforms

is

segmented

on

The top Shampoo brands in India

Hair Care Facts  • The frequency of shampoo usage is very low.  • Most consumers use shampoo only once or twice in a week.  • In many cases, these products are used on special occasions such as weddings, parties etc • Some customers use shampoo only to address a specific problem such as dandruff or when they need to condition their hair • Some consumers use natural conditioning agents such as henna • About 50% of consumers use ordinary toilet soaps to wash their hair

Cntd….. • Brand loyalties in shampoo are not very strong.  Consumers frequently look for a change, particularly in fragrance. • An Indian needs more shampoo for a proper wash ( average 6 ml ) compared to 4 ml needed in Western countries as most Indian women have long hair • In the North, local brands such as Ayur have strong equities and these products being low priced dilute sachet’s USP of low price . • About 50 % of consumers use toilet soaps as well as shampoo for cleaning their hair

Challenges for Shampoo Ind. Major 4 “A”s – Availability – Affordability – Acceptability – Awareness

4-P’s SHAMPOO INDUSTRY

Shampoo market Size in India

Shampoo Sales In India 

URBAN AREA

RURAL AREA

Shampoo Usage 

Shampoo Penetration in India 

SECTORIAL REVIEW FMCG –CONSUMER NON DURABLES

INDUSTRY SEGMENTS

Spirits and Tobacco

Major domestic players • • • • • • • • • •

Nirma Nestle ITC Britannia Pepsi Cavin care Dhara foods Pepsico foods MTR FOODS Paras industries ltd.

• • • • • • • • •

HLL Dabur Godrej Coca-Cola Marico indutries Perfetti india ltd Haldiram Parakh foods Himalayas

Major international players •

FRITO LAYS

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UNILEVER

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NESTLE

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GSK

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JOHNSON AND JOHNSON

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OZONE AYURVEDICS

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PROCTER AND GAMBLE

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RECKITT BENCKISER

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COLGATE PALMOLIVE

QUICK FACTS •

Fast moving consumer goods – Consumer Durables has gained importance with retailing gaining prominence.

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The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion

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FMCG is characterized by strong presence of MNC and well established distribution network.

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The intense competition between the organized and unorganized segments operating at low operational cost.

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Availability of key raw materials, cheaper labour costs and presence of highly effective supply chain system gives competitive advantage.

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STRENGTHS: 1. Low operational costs 2. Presence of established distribution networks in both urban and rural areas 3. Presence of well-known brands in FMCG-& there by in CND sector. 4. Increase in the income level of the consumer. 5. Availability of raw material in India & Cheap Labour 7. Less presence of MNC’S

WEAKNESSES: 4.Lower scope of investing in technology and achieving economies of scale, especially in small sectors. 6.Low exports levels. 8. "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. 10.Unaiviaibliy of infrastructure. 12.Education in rural India. 13.Pilferage 14.Unavaiblity of storage 15.India VS Bharat.

OPPORTUNITIES 1. Untapped rural market

2. Rising income levels, i.e. increase in purchasing power of consumers & increase in the demand. 3. Large domestic market- a population of over one billion. 4. Export potential 5. High consumer goods spending

THREATS: 3.Removal of import restrictions resulting in replacing of domestic brands 4.Slowdown in rural demand 6.Tax and regulatory structure. 8.New entrants. 10.spurious goods and illegal foreign imports. 12.Low infrastructure.

Trends in the growth of consumer Goods MONTH

Consumer Durable (%)

Consumer Non-Durables (%)

2205-06 2006-07 2007-08

2205-06

2006-07

2007-08

April

18.7

7.4

2.4

11.9

9.4

18.7

May

17.7

17.5

-0.7

18.6

8.2

12.1

June

12.8

19.9

-3.6

27.5

1.8

6.3

July

3.8

16.1

-2.7

4.7

17.1

10.5

August

13.0

19.0

-6.2

8.0

13.6

2.4

Septe.

15.2

11.8

-7.3

10.5

12.2

2.6

5.4%

23.3 %

IIP:

Sectoral and Use- based Classification of Industries

INDUSTRY GROUP WEIGHT IN THE IIP

GROWT RATE

WEIGHTED CONTRIBUTION

200607

200708

200607

200708

Consumer Durables (a)

5.4%

9.2%

-1.0%

6.7%

-1.0%

Consumer non Durables (b)

23.3%

10.4%

8.5%

21.8%

24.0%

Consumer Goods (a+b)

28.7%

10.1%

6.1%

28.5%

22.9%

Economic Contribution •

The FMCG sector in India is expected to grow at a compounded annual growth rate (CAGR) of 9% to a size of Rs 1,43,000 corer by 2010 from Rs 93,000 corer at present.

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With a growth of 52.5%, the BSE FMCG Index has, during the last one year, outperformed the Sensex, which could manage a growth of 41% only.

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A well-established distribution network, intense competition between the organized and unorganized segments, low operating cost, strong branding characterizes the sector.