A Study Of Marketing Strategy Of FMCG Companies Of India During The Global Recession A Case Study Of AMWAY With Special

l Reference To Uttar Pradesh. . Synopsis

Submitted to CMJ University for the registration of the topic for Doctor of Philosophy in the faculty of Management

CONTENTS Chapters 1. Introduction 2. Literature Review 3. Need of the Study Session- Spring 2011 4. Scope of the study Submitted by 5. Objectives of the study Mohd. Ali Daud 28/40, Sadiq Manzil, Beside Gulab Cinema Golaganj, Lucknow-226018 alidaud.sm@gmail.com Research Methodology 6. Supervised by Dr. Mansoor Ali Professor (Retired) 1/72, Vijay Khand, Gomti Nagar, Lucknow-226010

7. Tentative Chapter scheme CMJ UNIVERSITY SHILLONG 8. Bibliography

1- Introduction
The Fast Moving Consumer Goods (FMCG) industry in India is one of the largest sectors in the unorganized. This sector is also buoyed by intense competition. Besides competition, this industry is also marked by a robust distribution network coupled with increasing influx of MNCs across the entire value chain. This sector continues to remain highly fragmented country and over the years has been growing at a very steady pace. The sector consists of consumer non-durable products which broadly consists, personal care, household care and food & beverages. The Indian FMCG industry is largely classified as organized and Industry Classification The FMCG industry is volume driven and is characterized by low margins. The products are branded and backed by marketing, heavy advertising, slick packaging and strong distribution networks. The FMCG segment can be classified under the premium segment and popular segment. The premium segment caters mostly to the higher/upper middle class which is not as price sensitive apart from being brand conscious. The price sensitive popular or mass segment consists of consumers belonging mainly to the semi-urban or rural areas who are not particularly brand conscious. Products sold in the popular segment have considerably lower prices than their premium counterparts. Following are the segment-wise product details along with the major players:

The Global Meltdown and FMCG Industry

India's fast moving consumer goods industry has so far been resilient to the slowdown in the economy and a dip in consumer sentiment. If we go by the numbers for October 2008 and estimates for November 2008, the growth only seems to have got better when compared to the earlier months. In October 2008, the soap and colors categories recorded a 22% and 27% value growth respectively. The estimates for November2008 are also good, whereas in September 2008, the growth was 12% to 13%. As per report, consumers are holding on to their monies due to the uncertainties in the markets. However, they are spending, but on small purchases. Hence, the volumes and growth in the FMCG sector has not seen a dip. Despite the global meltdown, Amway, Indias number one direct selling company is confident of achieving a growth of over 25 per cent. "I am not saying that our company is recession-proof but it is recession-resilient," the Amway India Enterprises managing director and chief executive, Mr William Pinckney, said.

5 He was talking to a group of journalists from Kolkata during a factory-visit at Baddi in Himachal Pradesh. Over 80 per cent of the Amway products sold in India are manufactured at the Baddi factory. The state-of-art plant is spread over 110,000 square feet and employs 500 people. Mr Pinckney claimed that FMCG unlike the automobile industry would not be badly affected by the economic crisis. "People may stop or postpone purchasing a car but they will certainly not stop purchasing a shampoo bottle or a shaving cream tube," he added. He attributed what he described as "this year phenomenal growth" to a couple of factors: introduction of energy drink and energy bar segments and the launching of great value products such as coconut oil, Amla hair oil, dispensable razor and shaving cream.

2- Literature Review
In India, the FMCG industry is the fourth largest sector with a total (organized) market size of over US$15 billion in 2007, as per ASSOCHAM, and can be classified under the premium and popular segments. The premium segment (~25%) caters mostly to the higher/upper middle income consumers while the price sensitive popular or mass segment (~75%) consists of consumers belonging mainly to the semi-urban or rural areas that are not, and cannot afford to be, brand conscious. The market growth over the past 5 years has been phenomenal, primarily due to consumers growing disposable income which is directly linked to an increased demand for FMCG goods and services. Indeed, it is widely acknowledged that the large young population in the rural and semi-urban regions is driving demand growth, with the continuous rise in their disposable income, life style, food habits etc. On the supply side, the wide availability of raw materials, vast agricultural produce, low cost of labor and increased organized retail have helped the competitiveness of players.

3 Need of the Study

At a time when the economy and other large industrial sectors such as automobiles, aviation and financial services are reeling from the global slowdown, the consumer goods sector in India has managed to defy the trend. According to the recent reports by Zeus Consulting, India's FMCG industry has so far been resilient to the slowdown in the economy and a dip in consumer sentiment, with most companies posting double-digit growth in net profits in the first half of fiscal 2009, backed by healthy sales. As very categorically said by the Amway India Enterprises managing director and chief executive, Mr. William Pinckney, I am not saying that our company [sector] is recession-proof but it is recession-resilient. This statement on the whole stands strong for most the leading players in the FMCG sector. Despite that there should be something that has to be done to make it grow even faster. This study will at the end try to approach the basic problem of meltdown and its affect on the FMCG industry. This will ensure better growth and a cautious approach by the players involve in FMCG sector.

4 Scope of the study

There is wide scope of the study. Despite the global meltdown, Amway, Indias number one direct selling company is confident of achieving a growth of over 25 per cent. This is one of the eye openers for those who affected badly. This study will interview and get the view of the experts and will try to ensure that the market research done should be of immense help to everyone.

5 Objectives of the Study

The aim of the research would be to study this particular sector and its performance within the Indian boundaries, besides that efficacious results of global meltdown, moreover the study would emphasize also on marketing strategy study of this area. The objective of a marketing strategy is to provide a foundation from which tactical plan is developed. This allows the organization to carry out its mission effectively and efficiently. The following techniques will be used to device the marketing strategy for the product/service: Segmentation Targeting Positioning The study will aim to answer the following as well. 1. What is our marketing environment? 2. What is our competitive advantage over other countries?

How is the market acting towards the present scenario? What is the position among the close rivals? Are growth paths still lucrative as they were before the meltdown?

6 Research Methodology
Primary and secondary data will be used .The relevant material and data in connection with the research work will be collected from various reports, books and official websites of the mutual fund companies and government bodies including the secondary data. The data will be analyzed by using simple mathematical and statistical tools. The data will also be collected by directly interacting with those who are involved in this business and various marketing experts.

7 The suggestions of various investors will also be taken into consideration before concluding.

7 Tentative Chapter scheme

The research work contains VII Chapters Chapter I Chapter II Chapter III Chapter IV Chapter V Chapter VI Chapter VII : : : : : : Introduction Strategies of FMCG Companies Global meltdown Impact of global meltdown on FMCG Sector AMWAY in global meltdown in Uttar Pradesh Suggestions and Recommendations

: Conclusion and Future Outlook

Data Analysis
The various data collected will be analyzed and will reach to a conclusion already discussed. Various tools of data interpretation will be applied to the primary and secondary data that will be collected.

IMPACT ON UTTAR PRADESH

Rate of Industrial growth-U.P

U.P State contribution in national Income

Per Capita State Income and National Income

Uttar Pradesh (UP) is the largest economy of North India and second largest economy of India.

8 Bibliography
1. Kearney, A T, CII Report, (2000) 2. Purba basu, research on living style of ruralconsumers, (2004), pg. no. 5-8. 3. Tognatta Pradeep, economic growth on agriculturesector, (2003), pg no. 6-10. 4. Aithal K Rajesh, importance & growth of ruralmarkets, (2004), pg no. 8-12. 5. Center for Monitoring Indian Economy (CMIE) 6. Statistical Outline of India (2001-02), NCAER

10 7. National Council of Applied Economic Research(NCAER) 8. Indian readership survey (IRS) 9. http://www.upgov.nic.in/upinfo/census01/cen01-1.htm 10. Lucknow Development Authority 11. http://www.naukrihub.com/india/fmcg/overview/ 12. http://www.naukrihub.com/india/fmcg/ 13. http://www.naukrihub.com/india/fmcg/consumer-class/ 14. http://www.naukrihub.com/india/fmcg/consumer-class/income/ 15. http://www.naukrihub.com/india/fmcg/consumer-class/socio-economic/ 16. http://www.naukrihub.com/india/fmcg/consumer-class/age/ 17. http://www.naukrihub.com/india/fmcg/consumer-class/geography/ 18. http://en.wikipedia.org/wiki/Fast_moving_consumer_goods