Fast Moving Consumer Goods (FMCG)

1
Dissertation Report On
Buying Behavior of FMCG Products
Submitted Submitted By: Prof. Vandana Chandra Director (ABS) (Agri-Business) AMI
TY AMITY University Lucknow Lucknow Campus
To: R.P.Singh MBA University Campus
2
Under the supervision of: Mr. Ashish Chandra Faculty Guide (ABS) AMITY Universit
y Lucknow Campus
Acknowledgement
I consider my proud privilege to express deep sense of gratitude to Prof. R.P.Si
ngh for his admirable and valuable guidance, keen interest, encouragement and co
nstructive suggestions during the course of the project. I would also like to ex
press my hearty gratitude to my faculty guides, Dr. Arun Bhadauria and Mr. Ashis
h Chandra of Amity University, Lucknow for their valuable guidance and sincere c
ooperation, which helped me in completing this summer project. I would also like
to thank my mother Mrs. Usha Rani and my father Mr. Ramesh Chandra, for their i
nspiration and moral support received in completing this work. Last, but not the
least, I sincerely thank all the members of my department for their immense sup
port and assistance extended during the course of this project and in making it
a valuable experience. Vandana Chandra
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MBA (Agri - Business) IVth Semester
Table of Content
1. Executive summary
1-1 2. Introduction 2-3 3. Overview of FMCG 3 4. FMCG in 2006 4 5. Comparison be
tween FMCG in 2005 & 2006 4-5 6. Sector’s outlook 5-7 7. Scope of FMCG 8 8. Growth
prospects 8-11
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9. Top players in FMCG sector 11 10. 12 11. 12. 15 13. 14. 15. 16. 17. 18. 30 19
. 20. 21. 63 Analysis Conclusion Suggestions & recommendations 31-60 61-62 Resea
rch methodology Panoramic View Income based classification Socio – economic classi
fication Age demographics Geographical dispersion 16-19 20-22 23-24 25-28 28-29
Review of literature Research objectives 12-14 Secondary players
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22.
References 23. Questionnaire 66-68
64-65
Executive Summary
In this research the researcher has put an effort to understand the buying behav
ior of the consumers towards FMCG products. 1. In this report, the researcher ha
s first of all given a brief review about FMCG sector as a whole. 2. Then she ha
s given a review of the findings of some of the researches that has already been
conducted by various researchers. 3. Then she has enumerated her research objec
tives. 4. Then she has given the panoramic view regarding the topic.
5. Then she has described her research methodology i.e.,
the 6.
sample
unit,
sample
size,
sampling
region,
sampling procedure that she has used in her report. She has used stratified rand
om sampling as her sampling procedure. 7. Then she has analyzed the data which w
as collected by a questionnaire. 8. Then she has concluded the findings of the s
urvey. 9. Then finally, she has given few suggestions & recommendations regardin
g the topic.
6
Introduction
There was a time when the FMCG companies ignores rural market, they took no any
interest to produced or sell products in rural market in India. It was the initi
al stage of FMCG companies in India. As per as the time had passed, the strategy
and marketing style of FMCG companies had been changed. The rural market is the
one of the best opportunity for the FMCG sector in the India. It is wider and l
ess competitive market for the FMCG. As the income level of the rural consumers
increasing, the demand of FMCG is increasing continuously. Fast moving consumer
goods (FMCG) are popularly named as consumer packaged goods. Items in this categ
ory include all consumables (other than groceries/pulses) people buy at regular
intervals. The most common in the list are toilet soaps, detergents, shampoos, t
ooth paste, shaving products, shoe polish, packaged food stuff, household access
ories, extends to certain electronic goods. These items are meant for daily or f
requent consumption & have a high return.
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A major portion of the monthly budget of each household is reserved for FMCG pro
ducts. The volume of products circulated in the economy against FMCG products is
very high, as the number of products the consumer uses, is comparatively very h
igh. Competition in FMCG sector is very high resulting in high pressure on margi
ns. FMCG companies maintain intense distribution network. Companies spend a larg
e portion of their budget on maintaining distribution networks. New entrants who
wish to bring their products in the national level need to invest huge sums of
money on promoting brands. Manufacturing can be outsourced. A recent phenomenon
in the sector was entry of multinationals and cheaper imports. Also the market i
s more pressurized with presence of local players in rural areas and state brand
s.
Overview of FMCG Sector
FMCG is an acronym for Fast Moving Consumer Goods, which refer to things that we
buy from local supermarkets on daily basis, the things that have high turnover
& are relatively cheaper. After 4 years of dull performance in both revenues & p
rofits, FMCG sector has now, i.e., since 2005, gained the momentum, principally
because of the smaller companies
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that have substantially improved their market shares at the cost of larger playe
rs, & in some cases, the regional players. If we carefully observe the FMCG inde
x & BSE index, we would realize that the returns on money invested in FMCG index
are much lower than the returns in benchmark index. The FMCG sector has under p
erformed the benchmark BSE sensex in 2006. Though both the indices were close to
each other till august 2006, however, in the later part of the year the sensex
surpassed the FMCG index by a reasonable margin.
Comparison of 2006 and 2005
After two years of sinking performance of FMCG sector, the year 2005 has witness
ed the FMCG’s demand growing. Strong growth was seen across various segments in FY
06. With the rise in disposable income and the economy in good health, the urban
consumers continued with their shopping spree. The rural demand grew at around
11%, while both the urban and rural sector together registered a growth of aroun
d 8%. Packets and sachets contributed to the highest growth in rural areas. in F
MCG depends on two factors:
• •
Growth
Increase in penetration and consumption in rural areas Change in aspirations and
tastes of the urban population
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Both these factors contributed to growth in 2006. Besides demand, prices also in
creased, because of which only the selected consumers moved up in the value chai
n. The large format retail stores in metros also stimulated sales, even if on a
very small base. Some companies absorbed higher input prices, while others were
able to pass on the cost to the consumers.
Sector’s Outlook
FMCG is the fourth largest sector in the Indian Economy with a total market size
of Rs.60,000 crores. FMCG sector generates 5% of total factory employment in th
e country and is creating employment for three million people, especially in sma
ll towns and rural India. According to a CII – A T Kearney Report, the FMCG sector
in India is expected to grow at a compounded growth rate (CAGR) of 9% to a size
of Rs.1,43,000 crores by 2010 from Rs. 93,000 crores at present. With a growth
of 52.5%, the BSE FMCG index has, during the last 1 year outperformed the sensex
, which could manage a growth of 41% only. A well established distribution netwo
rk, intense competition between the organized & unorganized
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segments,
low
operating
costs,
strong
branding
characterizes the market. The large consumer base, particularly in rural sector,
and the growing middle class open up huge opportunities to FMCG companies to ta
ke the consumers to branded products and offer new generation products.
The sector s lack-luster performance in the last few years was due to price comp
etition and increase in raw materials cost. However, in the FY06, the sector has
witnessed a double-digit growth in profits and revenues. The sector has registe
red an up trend in growth across categories, such as health supplement, shampoo,
toothpaste, hair oils, and mosquito repellant, as shown in table below:
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Sales Value Growth % Categories 2004-2005 2005-2006 Apr.2006Sept. 2006 0% 23%
Health -5% Supplement (Chyawanprash) Shampoo Toothpaste Hair Oils Mosquito Repel
lant 10% 5% 9% 13%
23% 6% 18% 10%
19% 16% 23% 29%
Source: CII – A T Kearney Report, (2000) Sector Financials 31-03-2006 Net Sales Sa
les Growth Profit Tax after 164,196 10.8% 19,595 16.6% 31-03-2005 148,241 2.0% 1
7,001 -24.2% 65,810 645,477 In millions 31-03-2004 145,380 21,008 63,072 551,971
PAT Growth
Market 74,746 Capitalization Enterprise Value Return Capital Employed (ROCE) P/E
Ratio on 47.1% 26.7% 662,540
51.0% 27.1%
45.5% 21.0%
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Source: CII – A T Kearney Report, (2000)
Scope of the FMCG Sector
The Indian FMCG sector has a market size of US $13.1 billion. FMCG sector is exp
ected to grow by over 60% by 2010. That will translate into an annual growth of
10% over a period of 5 years. It has been estimated that FMCG sector will rise f
rom around Rs. 56,500 crores in 2005 to Rs. 92,100 crores in 2010. Hair care, ho
usehold care, male grooming, female hygiene, & the chocolates & confectionary ca
tegories are estimated to be the fastest growing segments, says an HSBC Report.
Though the sector witnessed a slower growth in 2002 – 04, it has been to make a fi
ne recovery since then. For example, Hindustan Levers Limited (HLL) has shown a
healthy growth in the last quarter. An estimated double-digit growth over the ne
xt few years shows that the good times are likely to continue.
Growth Prospects
With the presence of 12.2% of the world population in the villages of India, the
Indian rural FMCG market is something
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no one can overlook. Increased focus on farm sector will boost rural incomes, he
nce providing better growth prospects to the FMCG companies. Better infrastructu
re facilities will improve their supply chain. FMCG sector is also likely to ben
efit from growing demand in the market. Because of the low per capita consumptio
n for almost all the products in the country, FMCG companies have immense possib
ilities for growth. And if the companies are able to change the mindset of the c
onsumers, i.e. if they are able to take the consumers to branded products and of
fer new generation products, they would be able to generate higher growth in the
near future. It is expected that the rural income will rise in 2007, boosting p
urchasing power in the countryside. However, the demand in urban areas would be
the key growth driver over the long term. Also, increase in the urban population
, along with increase in income levels and the availability of new categories, w
ould help the urban areas maintain their position in terms of consumption. At pr
esent, urban India accounts for 66% of total FMCG consumption, with rural India
accounting for the remaining 34%. However, rural India accounts for more than 40
% consumption in major FMCG categories such as personal care, fabric care, and h
ot beverages. In urban areas, home and personal care category, including skin ca
re, household care and feminine hygiene, will keep growing at relatively attract
ive rates. Within the foods segment, it is estimated
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that processed foods, bakery, and dairy are long-term growth categories in both
rural and urban areas.
Indian Competitiveness and Comparison with the World Markets: The following fact
ors make India a competitive player in FMCG sector: 1. Availability of raw mater
ials
Because of the diverse agro-climatic conditions in India, there is a large raw m
aterial base suitable for food processing industries. India is the largest produ
cer of livestock, milk, sugarcane, coconut, spices and cashew and is the second
largest producer of rice, wheat and fruits &vegetables. India also produces caus
tic soda and soda ash, which are required for the production of soaps and deterg
ents. The availability of these raw materials gives India the location advantage
. 2. Labor cost comparison
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Low cost labor gives India a competitive advantage. India s labor cost is amongs
t the lowest in the world, after China & Indonesia. Low labor costs give the adv
antage of low cost of production. Many MNC s have established their plants in In
dia to outsource for domestic and export markets. 3. Presence across value chain
Indian companies have their presence across the value chain of FMCG sector, righ
t from the supply of raw materials to packaged goods in the food-processing sect
or. This brings India a more cost competitive advantage. For example, Amul
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supplies milk as well as dairy products like cheese, butter, etc.
Top Players in FMCG Sector
1. Hindustan lever limited (HLL) 2. ITC (Indian Tobacco Company) 3. Nestle India
4. GCMMF (AMUL) 5. Dabur India 6. Asian Paints (India) 7. Cadbury India 8. Brit
annia Industries 9. Procter & Gamble Hygiene & Health Care 10. Marico Industries
Secondary Players
1. Colgate-Palmolive (India) Ltd. 2. Godrej Consumers Product Ltd. 3. Nirma Ltd.
4. Tata Tea Ltd.
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5. Parle Agro 6. H. J. Heinz
Review of Literature
Rural market is one of the best opportunities for the FMCG sector. In some sense
we can say that rural market is future of FMCG. 1. Basu Purba (2004), suggested
that the lifestyle of rural consumers is changing. Rural Indian market and the
marketing strategy have become the latest marketing buzzword for most of the FMC
G majors. She added the strategies of different FMCG companies for capturing rur
al market like Titan’s Sonata watches, Coco Cola’s 200ml bottle, different strategie
s of HUL and Marico etc. She takes into consideration the study of National Coun
cil for Applied Economic Research (NCAER). According to the NCAER projections, t
he number of middle and high-income households in rural area is expected to grow
from 140 million to 190 million by 2007. In urban India, the same is expected t
o grow from 65 million to 79 million. Thus, the absolute size of rural India is
expected to be double that of urban India.
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2. Tognatta Pradeep (2003), suggested that, the economic growth in India s agric
ultural sector in last year was over 10%, compared with 8.5% in the industrial s
ector. This implies a huge market potentiality for the marketer to meet up incre
asing demand. Factors such as village psyche, strong distribution network and ma
rket awareness are few prerequisites for making a dent in the rural markets. The
model is of the stolid Anglo-Dutch conglomerate Unilever Group, which has enjoy
ed a century-long presence in India through its subsidiary Hindustan Lever Ltd.
It was Hindustan Lever that several years ago popularized the idea of selling it
s products in tiny packages. Its sachets of detergent and shampoo are in great d
emand in Indian villages. Britannia with its low priced Tiger brand biscuits has
become some of the success story in rural marketing. 3. Aithal, K Rajesh (2004)
, suggested that rural markets are an important and growing market for most prod
ucts and services including telecom. The characteristics of the market in terms
of low and spread out population and limited purchasing power make it a difficul
t market to capture. The Bottom of the pyramid marketing strategies and the 4 A
s model of Availability, Affordability, Acceptability and Awareness provide us w
ith a means of developing appropriate strategies to tackle the marketing issues
for marketing telecom services in rural areas.
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Successful cases like the Grameen Phone in Bangladesh and Smart Communications I
nc in Philippines also provide us with some guidelines to tackling the issue. As
per my concern of the research, it is a detail study of different FMCG products
used by rural consumers. It will provide detail information about consumer pref
erences towards a good number of FMCG products which is too unique and different
from those above researches.
Research objectives
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• To understand the demand pattern of FMCG products in the rural market. • To know t
he amount of household income spent on the consumption of FMCG products.
•
To understand the image of the products in the eyes of the consumers.
Research methodology
21
Data collection
Sample unit:
1. 2. 3. 4. working people (including men & women) college students school stude
nts senior citizens
Sample size:
1. 2. 3. 4. working people: 32% college students: 29% school students: 23% senio
r citizens: 16%
Sampling region:
1. The researcher has selected LUCKNOW, the Capital city of Uttar Pradesh as her
area of study. 2. She has chosen GOMTI NAGAR, MAHANAGAR, ALIGANJ as her areas o
f research. In these areas she can easily meet working people (both male & femal
e), school students, college students & senior citizens. The population status o
f these areas can be shown in a tabulated manner, which is given as follows:
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Area Gomti Nagar Mahanagar Aliganj
Population 12,97,570 8,12,230 8,75,640
Population is in approximate figures. Source: http://www.upgov.nic.in/upinfo/cen
sus01/cen01-1.htm Note: As the examiner can see that the population of areas (ar
eas that are chosen by the researcher) is very large, therefore the researcher h
as stratified the area. She has chosen various areas that come under these areas
. The areas covered by the researcher in Gomti Nagar are Viram Khand, Vinamr Kha
nd, Vibhuti Khand . the population level of these areas are: Area Vishwas Khand
Vipul Khand Vivek Khand Population 2,83,563 3,93,768 2,86,786
Source: Lucknow Development Authority Note: the researcher took these areas beca
use these areas are near to various school & colleges. The researcher took schoo
l & college students as her sample unit. The areas covered by the researcher in
Maha Nagar are Chandra Lok & Mahanagar Colony. The population statuses of these
areas are:
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Area Chandra Lok Mahanagar Colony
Population 2,34,863 3,84,683
Source: Lucknow Development Authority Note: The researcher took these areas beca
use there are various schools & institutes nearby these places. The areas covere
d by the researcher in ALIGANJ are Jankipuram & Sahara City. The population stat
uses of these areas are: Area Jankipuram Sahara City Population 2,78,675 1,89,98
6
Source: Lucknow Development Authority Note: The researcher took Aliganj as one o
f the areas for her study because she lives in jankipuram & it was quite easy fo
r her to conduct the survey in that particular place.
Sampling procedure:
The researcher will take stratified random sampling as the sampling procedure.
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Data collection method:
1.
Primary data: it will be collected with the help
of a self administered questionnaire. This questionnaire aims to gather informat
ion related to various Branded products.
2.
Secondary data:
it will be collected with the
help of books, research papers, magazines, news papers, journals, internet, etc.
Research instruments: Questionnaire design:
As the questionnaire is self administrated one, the survey is kept simple and us
er friendly. Words used in questionnaire are readily understandable to all respo
ndent. Also technical jargons are avoided to ensure that there is no confusion f
or respondents.
Panoramic View
25
India has a population of over 1 billion & 4 climatic Zones. Several religious &
personal beliefs, 15 languages, different social customs & food habits categori
ze Indian consumer class. Besides this, India is also different in culture if co
mpared with other Asian countries. Therefore, India has high distinctiveness in
demand and the companies in India can get lot of market opportunities for variou
s classes of consumers. Consumer goods marketers’ experience that dealing with Ind
ia is like dealing with many small markets at the same time.
Indian consumer goods market is expected to reach $400 billion by 2010. India ha
s the youngest population amongst the major countries. There are a lot of young
people in India in different income categories. Consumer goods marketers are oft
en faced with a dilemma segment. In India they do not have to face this dilemma
largely because rapid urbanization, increase in demand, presence of large number
of young population, any number of opportunities is available. The bottom line
is that Indian market is changing rapidly and is showing unprecedented regarding
the choice of appropriate market
26
consumer
business
opportunity.
As the restrictions on foreign investments were relaxed in 1991, Multi-National
Companies have been entering India since then.
Market Size in $ million 15 1992 2004 Breakfa st cereals Wafers, potato chips Wa
shin g Machin es TV 2 25
Market Share in % Indian Indian Compan MNCs Compan MNCs ies ies 1992 100 0 2004
52 48
6
35
100
0
37
63
40
570 3,03 0
98
2
51
49
630
97
3
49
51
1992 $=30 rupees 2004 $=45 rupees Source: Center for Monitoring Indian Economy (
CMIE)
27
With a population of 1 billion people, India is a big market for FMCG companies.
Around 70% of the total households in India reside in the rural areas. The tota
l number of rural households is expected to rise from 135 m in 2002 to 153 m in
2010, which represents the largest potential market in the world.
Rural and urban potential Urb Rural an Population 2001-02 (m household) Populati
on 2009-10 (m household) % Distribution (2001-02) 53 69 135 153
28 72 3,76 627,0 Market (Towns/Villages) 8 00
Source: Statistical Outline of India (2001-02), NCAER Indian consumer class can
be classified according to the following criteria: 1. Income 2. Socio-Economic s
tatus 3. Age demographics 4. Geographical dispersion
28
Income based classification
India has a population of 1.095 billion people, comprising of 1/6th of the world
population. India s population can be divided into 5 groups on the basis of ann
ual household income. These groups are: 1. 2.
3.
Higher income Upper middle income Middle middle income Lower middle income Lower
income The income classification does not represent a real
4. 5.
scenario
for
an
international
business
because
the
purchasing power of currencies differs significantly. The real
29
purchasing power of Indian rupee is higher than the international exchange value
. In addition to that, income classification is not an effective tool to ascerta
in consumption and ownership trends in the economy.
Consumer Classification
According to National Council of Applied Economic Research (NCAER) there are 5 c
onsumer classes that differ in their ownership patterns and consumption behavior
across various segments of goods. Consumer Classes The Rich The Consuming Class
The Climbers The Aspirants The Destitute Total Annual 199 200 2001 Change Incom
e in Rs. 6 7 Rs. 215,000 and more Rs 45215,000 Rs. 2245,000 Rs. 1622,000 Below R
s. 16,000 1.2 2.0 6.2 416% 179% 37% -65% -61% 21%
30
32.5 54.6 90.9 54.1 71.6 74.1 44 33 28.1 15.3 23.4 12.8
164. 180.7 199.
8 Source: NCAER
2
The 5 classes of consumer households (consumer classification) show the economic
development across the country based on consumption trends.
Socio economic classification
In addition to income classification and consumer classification, Indian househo
lds can also be segmented according to the occupation and education levels of th
e chief earner of the household (the person who contributes most to the househol
d expenses). This is called as Socio-economic Classification (SEC), which is mai
nly used by market planners to target market before launching their new products
. SEC is made to understand the purchase behavior and the consumption pattern of
the households. The urban area is segregated into: A1, A2, B1, B2, C, D, E1, E2
31
Socio-Economic Classification Occupati on Less than Illitera 4 yrs te in scho ol
Skilled Unskilled Shop owner Petty trader Above E2 E2 D E2 E1 E2 D D Education
5-9 Som yrs School Poste Gradu of certific gradu colle ate scho ate ate ge ol D
E1 C D C D B2 C C D B2 C B2 D A2 B2 B2 D A2 B2
Employer ofB1 B1 A2 A2 A1 A1 A1
32
10 persons Below 10 persons None Clerk Supervis or Professi onal Senior executiv
e Junior executiv e C D D D D B1 B2 C D D D B1 B2 B2 D C D B1 B1 B1 C C B2 B1 A
2 A2 B2 B2 B1 A2 A1 A1 B1 B1 A2 A1 A1 A1 B1 A2 A1 A1
C
C
C
B2
B1
A2
A2
Source: Indian readership survey (IRS) Sections A & B refer to High-class- const
itutes over a quarter of urban population Sec C refers to Middle-class-- constit
utes 21% of the urban population Sections D & E refer to Low-class-- constitutes
over half the urban population To understand the table, consider an example: A
trader whose monthly household income (MHI) is more than that of a person in sec
tion A cannot be included in this SEC because his educational qualification or o
ccupations do not qualify him for inclusion. Sec C constitutes households whose
Chief Wage Earners are employed as: Skilled workers 33%
33
Petty traders Clerk/Supervisor Shop owners
12% 37% 18%
3/4th of them have studied till 10th or 12th class while the remaining 1/4th hav
e studied till 9th class. Less than half of the Chief Wage Earners of households
belonging to sections D & E are unskilled workers. Petty Traders are 18%, while
Skilled Workers are about 28%. More than 80% of the population of upper strata
consumers is living in the top 7 cities. Those top 7 cities are Mumbai, Kolkata,
Delhi, Chennai, Ahmedabad, Bangalore, and Hyderabad. With increase in economic
prosperity, this population (upper strata consumers) is growing at 10 percent an
nually.
The rural area is segregated in to: R1, R2, R3, R4.
Education of chief wage earner Pucca Profession al degree Graduation R1 R1
Type of House Semipucca R2 R2
Kuchcha R3 R3
34
/ PG College SSC/HSC Class 4Class 9 Up to class 4 Selflearning Illiterate R1 R2
R3 R3 R3 R4 R2 R3 R3 R3 R4 R4 R3 R3 R4 R4 R4 R4
Age demographics
India is a very young nation, if compared with some advanced and developed count
ries. Nearly two- thirds of its population is below the age of 35, and nearly 50
% is below 25. Marketers explain that the boom in the consumption level and lei
sure related expenditure is because of this young population. It will have a sig
nificant impact over the consumer goods market. In addition to that, it is expec
ted that this will generate trade opportunities and continuous investment in the
economy. There is huge potential for further consumption of goods and services
due to the increased level of disposable income. The expenditure on essential go
ods and services has a higher share in
35
developing countries as compared with that of developed countries. Age distribut
ion if Indian population (In Millions) Year/ Age Below 4 yrs 5-14 yrs 15-19 yrs
20-34 yrs 35-54 yrs 55 & above Total 2006 113.5 221.2 122.4 279.1 239.2 118.7 10
94.1 2001 108.5 239.1 109.0 246.8 207.3 101.7 1012.4 1996 119.5 233.2 90.7 224 1
78.1 88.7 934.2
Consumption Trends Food Essentials Essential Services (water, power, rent, and f
uels) Clothing Footwear Medicare Transport & Communication Recreation, Education
, and Culture Home Goods 45.68% 10.1% 4.9% 0.63% 4.25% 14.51% Less than 4% 3.25%
Geographical dispersion
36
There is large difference in economic prosperity levels among several states in
India, linked to the wealth creation from trade, industrial, and agricultural de
velopment. There are poor districts in many states, classified according to thei
r market potential. India has 500 districts, out of which 150 districts (categor
y A) and next 150 districts (category B) account for 78% and 15% of the national
market potential respectively. Remaining 200 districts (category C) are backwar
d and account for only 7% of national market potential. Category C districts hav
e 40% of the geographical share.
Analysis
37
1. Which soap u prefer to use?
The reaction of people towards various SOAP brands can be tabulated in the follo
wing manner: Brands Percenta ge Lux 36 Dettol 22 Lifebuoy 18 others 24
In the survey that the researcher conducted, it could easily be concluded that L
UX, the product of HUL was highly in demand. LUX, the product of HUL covers 36%
of the market share. After LUX, the other brands (EXCEPT LUX, DETTOL, LIFEBUOY)
covers 24% of the market share. This is then followed by DETTOL, the product of
RECKITT BENCKISER with a market share of 22%, which is then followed by LIFEBUOY
, the product of HUL with a market share of 18%.
38
This data can be graphically explained with the help of the following bar graph:
de ma nd o f so a p bra n ds
40 35 30 25 pe r ce nt a ge 20 15 10 5 0 br a nds lux de t t o l life buo y o t
he rs
2. Which pack u prefer to use?
39
In order to determine the income pattern of the consumers, it was necessary for
the researcher to distribute the consumers on the basis of their demand for the
various packs of SOAP brands available in the market. However, the reaction of p
eople towards various packs of SOAP can be tabulated in the following manner: Fa
mily pack (3 in 1) 44
Packs of soaps Percentage
Single pack 56
In the survey that the researcher conducted, she tried to differentiate amongst
people, with below average household income, average household income & above ho
usehold income. This classification can be done on the basis of the daily expend
iture that people make. 56% consumers demand single pack. 44% consumers demand f
amily packs i.e. 3 in 1 pack.
40
This data can be graphically explained with the help of the following bar graph:
d e m a n d o f p a c ks o f s o a p
60 50 40 p e r c e n t a3 0 ge 20 10 0 p a c ks pr e fe r r e d b y customers s
in g le p a c k fa m ily p a c k ( 3 in 1 )
1. Which tea u prefer to use?
41
The reaction of people towards various TEA brands can be tabulated in the follow
ing manner: Brooke Bond 28
Brands Percenta ge
Tata Tea 32
Taj Mahal 18
Others 22
In the survey that the researcher conducted, it could easily be concluded that T
ATA TEA, the product of TATA has a market share of 32%. This is followed by, BRO
OKE BOND, with a market share of 28%. Followed by other brands (EXCEPT TATA TEA,
BROOKE BOND, TAJ MAHAL) with a market share of 22%. This is finally followed by
TAJ MAHAL, the product of HUL which holds18% of the market share.
42
This data can be graphically explained with the help of the following bar graph:
dem and of tea brands
35 30 25 20 pe rce nta ge 15 10 5 0 bra nds tata tea b ro o ke bo n d taj mahal
othe rs
43
2. Which tea pack u prefer to use?
In order to determine the income pattern of the consumers, it was necessary for
the researcher to distribute the consumers on the basis of their demand for the
various packs of TEA brands available in the market. However, the reaction of pe
ople towards various TEA packs can be tabulated in the following manner: Medium
pack 32
TEA packs percentage
Sachet 48
Large pack 20
In the survey that the researcher conducted, she tried to differentiate amongst
the people, with below average household income, average household income & abov
e household income. This classification can be done on the basis of the daily ex
penditure that people make. However, it can be concluded that sachets are most c
ommonly used by the people .i.e., 48% consumers demand sachet packs. 32% consume
rs demand medium pack.20% consumers demand large pack.
44
This data can be graphically explained with the help of the following diagram:
d e m a n d o f t e a p a c ks
50 40 30 pe rcenta ge 20 10 0 p a c ks p r e fe r r e d b y c u s t o m e r s sa
chet m e d iu m p a c k la r g e p a c k
45
3. Which tooth paste u prefer to use?
In the initial years, the rural consumers preferred tooth powders, datoons etc.
But from the last decade, the preference of consumers towards toothpaste has bee
n changed. A huge number of toothpastes of different companies are sold in rural
market. However, the reaction of people towards various TOOTH PASTES can be tab
ulated as follows: Pepsoden t 27
Brands Percenta ge
Colgate 35
Close Up 22
Others 16
In the survey that the researcher conducted, it could easily be seen that COLGAT
E, the product of COLGATE PALMOLIVE is the market leader, which covers 35% of th
e total market. After that, PEPSODENT, the product of HUL is demanded by the cus
tomers, which covers 27% of the market share. Followed by CLOSE – UP, the product
of HUL is demanded by the customers, which covers 22% of the market share. Which
is then followed by others brands (EXCEPT PEPSODENT, COLGATE, CLOSE - UP), whic
h covers 16% of the total market share.
46
This data can be graphically explained with the help of the following bar graph:
dem and of tooth paste
35 30 25 20 pe rcenta ge 15 10 5 0 bra nds pepsodent c o lg a t e c lo s e u p o
the rs
47
4. Which pack u prefer to use?
In
order
to
determine
the
income
pattern
of
the
consumers, it was necessary for the researcher to distribute the consumers on th
e basis of their demand for the various packs of TOOTH PASTE brands available in
the market. However, the reaction of people towards various TOOTH PASTE packs c
an be tabulated in the following manner: Tooth paste pack Percentage Medium pack
48
Small pack 34
Family pack 18
In the survey that the researcher conducted, she tried to differentiate amongst
the people, with below average household income, average household income & abov
e household income. This classification can be done on the basis of the daily ex
penditure that people make. However, it can be concluded that 34% consumers dema
nd small packs. 48% consumers demand medium packs. 18% consumers demand large pa
ck.
48
This data can be graphically explained with the help of the following graph:
d e m a n d o f p a c ks o f to o th p a s te
50 40 30 pe rcenta ge 20 10 0 p a c ks p r e fe r r e d b y c u s t o m e r s s
m a ll p a c k m e d iu m p a c k f a m ily p a c k
49
5. Which detergent u prefer to use?
The reaction of people towards various DETERGENT brands can be tabulated in the
following manner: Brands Percenta ge Surf 27 Rin 35 Tide 22 Others 16
In the survey that the researcher conducted, it could be easily concluded that R
IN, the product of HUL captures 35% of the total market share. This is followed
by SURF, the product of HUL which has a market share of 27%. This is followed by
TIDE, the product of PROCTER & GAMBLE which has a market share of 27%. This is
finally followed by other brands (EXCEPT SURF, RIN, TIDE) which captures 16% of
the market share.
50
This data can be graphically explained with the help of the following bar graph:
dem a nd o f deterge nts
35 30 25 20 pe rce nta ge 15 10 5 0 brands surf r in t id e others
51
6. Which pack u prefer to use?
In
order
to
determine
the
income
pattern
of
the
consumers, it was necessary for the researcher to distribute the consumers on th
e basis of their demand for the various packs of DETERGENT brands available in t
he market. However, the reaction of people towards various DETERGENT packs can b
e tabulated in the following manner: Detergent packs Percentage Medium pack 27
Sachet 43
Family pack 30
In the survey that the researcher conducted, she tried to differentiate amongst
the people, with below average household income, average household income & abov
e household income. This classification can be done on the basis of the daily ex
penditure that people make. However, 43% consumers demand sachet packs. 30%
52
consumers demand family packs. 27% consumers demand medium packs.
This data can be graphically explained with the help of the following bar graph:
53
de m a nd o f de te rge n t p a cks
45 40 35 30 25 pe rcenta ge 20 15 10 5 0
sachet m e d iu m p a c k f a m ily p a c k
p a c ks p r e fe r r e d b y c u s t o m e r s
7. Which shampoo u prefer to use?
The reaction of people towards various SHAMPOO brands can be tabulated in the fo
llowing manner:
54
Brands Percenta ge
Clinic plus 33
Sunsilk 25
Head & shoulders 28
Others 14
In the survey, that the researcher conducted it can easily be concluded that CLI
NIC PLUS, the product of HUL, captures the major portion of the market with a ma
rket share of 33%. This is followed by HEAD & SHOULDERS, the product of PROCTER
& GAMBLE which holds 28% of the market share. This is followed by SUNSILK, the p
roduct of HUL which holds 25% of the market share. Finally followed by other bra
nds (EXCEPT CLINIC PLUS, SUNSILK, HEAD & SHOULDERS) with a market share of 14%.
This data can be graphically explained with the help of the following bar graph:
55
demand of shampoo
35 30 25 20 pe rce nta ge 15 10 5 0 brands c lin ic p lu s s u n s ilk h e a d &
s h o u ld e r s others
8. Which pack u prefer to use?
56
In
order
to
determine
the
income
pattern
of
the
consumers, it was necessary for the researcher to distribute the consumers on th
e basis of their demand for the various packs of SHAMPOO brands available in the
market. However, the reaction of people towards various SHAMPOO packs can be ta
bulated in the following manner: Shampoo packs Percenta ge Small pack 32 Medium
pack 28 Family pack 17
sachet 23
In the survey that the researcher conducted, she tried to differentiate amongst
the people, with below average household income, average household income & abov
e household income. This classification can be done on the basis of the daily ex
penditure that people make. However, 32% consumers demand SMALL PACK. 28% consum
ers demand medium pack. 17% consumers demand large packs.
57
This data can be graphically explained with the help of the following bar graph:
d e m a n d o f s h a m p o o p a c ks
35 30 25 20 pe rcenta ge 15 10 5 0 p a c ks p r e fe r r e d b y c u s t o m e r
s sachet s m a ll p a c k m e d iu m p a c k la r g e p a c k
58
9. Which biscuits u prefer to use?
The reaction of people towards various BISCUITS brands can be tabulated in the f
ollowing manner: Marie gold 24
Brands Percenta ge
Good Day 38
Parle G 21
Others 17
In the survey, that the researcher conducted, it can easily be concluded that GO
OD DAY, the product of BRITANNIA holds a major market share of 38%. This is foll
owed by MARIE GOLD, another product of BRITANNIA which holds 24% of the market s
hare. After that, PARLE- G, the product of PARLE, holds 21% of the market share.
This is followed by other brands (EXCEPT MARIE GOLD, GOOD DAY, PARLE- G) which
hold a market share of 17%.
59
This data can be graphically explained with the help of the following bar graph:
d e m a n d o f b is c u it s
40 35 30 25 p e r c e n t2a0g e 15 10 5 0 brands m a r ie g o ld good day p a r
le G others
60
10.
which hair oil u prefer to use?
The reaction of people towards various HAIR OIL brands can be tabulated in the f
ollowing manner: Parachut e 37 Dabur Amla 29 Dabur Vatika 19
Brands Percenta ge
Others 15
In the survey, that the researcher conducted, it can easily be concluded that PA
RACHUTE, the product of MERICO captures 37% of the total market share. This is f
ollowed by DABUR AMLA, the product of DABUR which captures 29% of the total mark
et share. This is followed by DABUR VATIKA, another product of DABUR which captu
res 19% of the market. And after that, followed by other brands (EXCEPT PARACHUT
E, DABUR AMLA, DABUR VATIKA) captures 15% of the market share.
61
This data can be graphically explained with the help of the following bar graph:
d e m a n d o f h a ir o il
40 35 30 25 p e r c e n t a0 g e 2 15 10 5 0 brands parachute d a b u r a m la d
a b u r v a t ik a others
62
11. Which pack u prefer to use?
In order to determine the income pattern of the consumers, it was necessary for
the researcher to distribute the consumers on the basis of their demand for the
various packs of HAIR OIL brands available in the market. However, the reaction
of people towards various HAIR OIL packs can be tabulated in the following manne
r: Hair oil Small pack 32 Medium pack 41 Large pack 27
packs Percentage
In the survey that the researcher conducted, she tried to differentiate amongst
the people, with below average household income, average household income & abov
e household income. This classification can be done on the basis of the daily ex
penditure that people make. However, 41% consumers demand medium packs. After th
at, 32% consumers demand small pack. 27% consumers demand large packs.
63
This data can be graphically explained with the help of the following bar graph:
d e m a n d o f p a c k s o f h a ir o il
45 40 35 30 25 pe rcenta ge 20 15 10 5 0
s m a ll p a c k m e d iu m p a c k la r g e p a c k
p a c ks p r e fe r r e d b y c u s t o m e r s
64
12. Which cream u prefer to use?
The reaction of people towards various CREAM brands can be tabulated in the foll
owing manner: Fair & lovely 32
Brands Percenta ge
Pond’s 28
Ayur 14
Others 26
In the survey, that I conducted, it can easily be concluded that FAIR & LOVELY,
the product of HUL, holds the major market with a share of 32%. This is followed
by, POND’s, another product of HUL, which holds 28% of the market share. This is
followed by, other brands (EXCEPT, POND’s, FAIR & LOVELY & AYUR), which captures 2
6% of the market share. This is followed by AYUR, the brand of AYUR ACADEMY OF N
ATURAL BEAUTY (AANB) which holds 14% of the total market share.
65
This data can be graphically explained with the help of the following bar graph:
66
demand of cre ams
35 30 25 20 pe rcenta ge 15 10 5 0 brands ponds f a ir & lo v e ly ayur others
13. Which coffee u prefer to use?
The reaction of people towards various COFFEE brands can be tabulated in the fol
lowing manner:
67
Brands Percenta ge
Bru 26
Nestle 32
Nescafe 32
Others 10
In the survey, that the researcher conducted, it can be easily concluded that al
l the brands are facing tough competition. NESTLE, the product of NESTLE S.A. &
NESCAFE, another product of NESTLE S.A., shares equal market share of 32% each.
This means that they are in a very tough competition. This is followed by BRU, t
he product of HUL which holds, 26% of the market share. While the other brands h
old only 10% of the market share.
This data can be graphically explained with the help of the following bar graph:
68
d e m a n d o f c o ffe e
35 30 25 20 pe rcena tge 15 10 5 0 brands bru n e s t le n e s c a fe othe rs
Conclusions
In this report, it can very easily be concluded that HUL, holds major portion of
the FMCG market. It holds major shares in the soap, detergent,
69
shampoo & cream’s category. HUL’s products are mainly in demand, because they provid
e these products in different packs. They consider the fact that rural consumers
do not have that much money to be spent on these products. So, they prefer buyi
ng the small or the medium packs. However, large or family packs are still been
bought by few consumers, who are from a well – off families. In the case of TEA, T
ATA holds a major share. In the case of COFFEE, NESTLE & NESCAFE holds the major
share. Rural consumers favor TATA because it is an old organization & it has ga
ined a lot of BRAND EQUITY which finally creates BRAND LOYALTY. In these product
s, consumers do get brand loyal, because they do not want to take a risk with th
eir tastes. So they prefer sticking to one brand. These organizations supply the
ir products in various packs (small, medium & large), considering the buying cap
acity of their consumers. As in the case of BISCUITS, BRITANNIA holds the major
market share. Rural consumers favor BRITANNIA because it is an old organization
& it has gained a lot of BRAND EQUITY which finally creates BRAND LOYALTY. In ca
se of BISCUITS, consumers do get brand loyal, because they do not want to take a
risk with their tastes. So they prefer sticking to one brand. These organizatio
ns supply
70
their products in various packs (small, medium & large), considering the buying
capacity of their consumers. In the case of TOOTH PASTES, COLGATE PALMOLIVE hold
s a major market share. Consumers are very concerned about their health, so if a
ny product suits them they prefer sticking to that product. And this product is
also available in various packs, so rural consumers can use it according to thei
r buying capacity. In the case of HAIR OILS, MERICO holds the major market share
. MERICO is a much known organization & its product PARACHUTE has reached all th
e places. So it is a known product, which has created a good amount of goodwill
for the organization. Consumers have confidence & trust in their product. Theref
ore, they prefer buying it.
71
Suggestions & recommendations
The researcher would like to suggest the following points, so that the organizat
ions can easily sell their products to their consumers:
1. However, the demand of a product is also affected by
its life cycle. If the product is in the introduction stage, then it will defini
tely take some time to capture the market, because in the introduction stage, co
nsumers are not much aware about the product. Therefore, it’s the responsibility o
f the organization to create awareness amongst the consumers. 2. They should ada
pt rigorous marketing strategies, in order to sustain in the market. 3. There is
immense competition in this sector. Therefore, the organizations should try to
gain competitive advantage against their competitor’s. 4. They should try to reach
as many people as possible. 5. For the organizations that are not much popular
amongst the consumers, should adopt Sales Promotion, as their marketing strategi
es. 6. Application of 4A’s has also become an important task for all the organizat
ions.
72
(*4A=
Availability,
Affordability,
Acceptability,
Awareness)
References 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Kearney, A T, CII – Report, (2000) Purba basu, research on living style of rural c
onsumers, (2004), pg. no. 5-8. Tognatta Pradeep, economic growth on agriculture
sector, (2003), pg no. 6-10. Aithal K Rajesh, importance & growth of rural marke
ts, (2004), pg no. 8-12. Center for Monitoring Indian Economy (CMIE) Statistical
Outline of India (2001-02), NCAER National Council of Applied Economic Research
(NCAER) Indian readership survey (IRS) http://www.upgov.nic.in/upinfo/census01/
cen011.htm Lucknow Development Authority http://www.naukrihub.com/india/fmcg/ove
rview/ http://www.naukrihub.com/india/fmcg/
73
13. 14. 15. 16. 17. 18. 19.
http://www.naukrihub.com/india/fmcg/consumerclass/ http://www.naukrihub.com/indi
a/fmcg/consumerclass/income/ http://www.naukrihub.com/india/fmcg/consumerclass/s
ocio-economic/ http://www.naukrihub.com/india/fmcg/consumerclass/age/ http://www
.naukrihub.com/india/fmcg/consumerclass/geography/ http://en.wikipedia.org/wiki/
Fast_moving_consume r_goods *4A= Availability, Affordability, Acceptability, Awa
reness
74
Questionnaire 1. name: 2. occupation: 3. monthly salary: a. less than 10,000 b.
10,000 – 25,000 c. 25,000 – 50,000 d. More than 50,000 4. address: 5. phone no.: 6.
which soap u prefer to use? a. Lux b. dettol c. lifebuoy d. others 7. which pack
u prefer to use? a. single b. family pack ( 3 in 1) 8. which tea u prefer to us
e? a. tata tea b. brooke bond c. taj mahal d. others
75
9. which pack u prefer to use? a. sachet b. medium pack c. large pack
10. a. b. c. d. 11.
which tooth paste u prefer to use? pepsodent colgate close – up others
which pack u prefer to use? a. small pack b. medium pack c. family pack a. b. c.
d. which detergent u prefer to use? surf rin tide others
12.
13.
which pack u prefer to use? a. sachet b. medium pack c. large pack a. b. c. d. w
hich shampoo u prefer to use? clinic plus sunsilk head & shoulders others which
pack u prefer to use?
14.
15.
76
a. b. c. d.
sachet small pack medium pack large pack
16. a. b. c. d. 17. a. b. c. d. 18.
which biscuits u prefer to use? marie gold good day parle - G others which hair
oil u prefer to use? parachute dabur amla dabur vatika others
which pack u prefer to use? a. small pack b. medium pack c. large pack a. b. c.
d. which cream u prefer to use? ponds fair & lovely ayur others which coffee u p
refer to use? bru nestle Nescafe others
19.
20. a. b. c. d.
77
78