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Buying Behavior of FMCG Products

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					Fast Moving
 Consumer
   Goods
  (FMCG)


              1
Buying Behavior of FMCG
        Products




                          2
                      Table of Content
1. Executive summary                     1-1
2. Introduction                          2-3
3. Overview of FMCG                      3
4. FMCG in 2006                          4
5. Comparison between FMCG                4-5
6. Sector’s outlook                       5-7
7. Scope of FMCG                          8
8. Growth prospects                      8-11
9. Top players in FMCG sector             11
10. Secondary players                        12
11. Review of literature                     12-14
12. Research objectives                      15
13. Research methodology                     16-19
14. Panoramic View                           20-22
15. Income based classification              23-24
16. Socio – economic classification          25-28
17. Age demographics                         28-29
18. Geographical dispersion                   30
19. Analysis                                 31-60
20. Conclusion                               61-62
21. Suggestions & recommendations            63
22. References                               64-65
23. Questionnaire                            66-68



                                                   3
                   Executive Summary
In this research the researcher has put an effort to understand the
buying behavior of the consumers towards FMCG products.
   1. In this report, the researcher has first of all given a brief review
      about FMCG sector as a whole.
   2. Then she has 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 objectives.
   4. Then she has given the panoramic view regarding the topic.
   5. Then she has described her research methodology i.e., the sample
      unit, sample size, sampling region, sampling procedure that she
      has used in her report.
   6. She has used stratified random sampling as her sampling
      procedure.
   7. Then she has analyzed the data which was collected by a
      questionnaire.
   8. Then she has concluded the findings of the survey.
   9. Then finally, she has given few suggestions & recommendations
      regarding the topic.




                                                                        4
                          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 initial 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 less 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 category include all
consumables (other than groceries/pulses) people buy at regular intervals.
The most common in the list are toilet soaps, detergents, shampoos, tooth
paste, shaving products, shoe polish, packaged food stuff, household
accessories, extends to certain electronic goods. These items are meant for
daily or frequent consumption & have a high return.


         A major portion of the monthly budget of each household is
reserved for FMCG products. The volume of products circulated in the
economy against FMCG products is very high, as the number of products




                                                                         5
the consumer uses, is comparatively very high. Competition in FMCG
sector is very high resulting in high pressure on margins.


          FMCG companies maintain intense distribution network.
Companies spend a large 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
is more pressurized with presence of local players in rural areas and state
brands.



               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.




                                                                         6
                          FMCG in 2006

           After 4 years of dull performance in both revenues & profits,
FMCG sector has now, i.e., since 2005, gained the momentum, principally
because of the smaller companies that have substantially improved their
market shares at the cost of larger players, & in some cases, the regional
players.


       If we carefully observe the FMCG index & 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
performed 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 witnessed the FMCG’s demand growing. Strong growth was
seen across various segments in FY06. 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 around 8%.
Packets and sachets contributed to the highest growth in rural areas.
Growth in FMCG depends on two factors:


                                                                          7
      Increase in penetration and consumption in rural areas
      Change in aspirations and tastes of the urban population



       Both these factors contributed to growth in 2006. Besides demand,
prices also increased, because of which only the selected consumers moved
up in the value chain. 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 the country and is creating employment for three
million people, especially in small 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 network, intense competition between the



                                                                        8
organized & unorganized 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 take 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
competition 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 registered an up trend in growth across categories, such as
health supplement, shampoo, toothpaste, hair oils, and mosquito
repellant,        as         shown          in        table         below:




                                                                         9
Sales Value Growth %

Categories             2004-2005      2005-2006   Apr.2006-Sept.
                                                  2006
Health  Supplement -5%                0%          23%
(Chyawanprash)
Shampoo                10%            23%         19%
Toothpaste             5%             6%          16%
Hair Oils              9%             18%         23%
Mosquito Repellant     13%            10%         29%



Source: CII – A T Kearney Report, (2000)


Sector Financials                                 In millions
                     31-03-2006      31-03-2005   31-03-2004
Net Sales            164,196         148,241      145,380

Sales Growth         10.8%           2.0%         -
Profit after Tax     19,595          17,001       21,008

PAT Growth           16.6%           -24.2%       -
Market
                     74,746          65,810       63,072
Capitalization
Enterprise Value     662,540         645,477      551,971
Return on Capital
                  47.1%              51.0%        45.5%
Employed (ROCE)
P/E Ratio            26.7%           27.1%        21.0%


Source: CII – A T Kearney Report, (2000)


                                                                   10
               Scope of the FMCG Sector

The Indian FMCG sector has a market size of US $13.1 billion. FMCG
sector is expected 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 from around Rs. 56,500 crores in 2005 to Rs.
92,100 crores in 2010. Hair care, household care, male grooming, female
hygiene, & the chocolates & confectionary categories 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 fine 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
next 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 no one can overlook.
Increased focus on farm sector will boost rural incomes, hence providing
better growth prospects to the FMCG companies. Better infrastructure
facilities will improve their supply chain. FMCG sector is also likely to
benefit from growing demand in the market. Because of the low per

                                                                       11
capita consumption for almost all the products in the country, FMCG
companies have immense possibilities for growth. And if the companies
are able to change the mindset of the consumers, i.e. if they are able to
take the consumers to branded products and offer 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
purchasing 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, would help the urban areas maintain their
position in terms of consumption. At present, 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 hot beverages. In urban areas, home and personal care category,
including skin care, household care and feminine hygiene, will keep
growing at relatively attractive rates. Within the foods segment, it is
estimated 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 factors make India a competitive player in FMCG sector:

1.           Availability           of           raw            materials
Because of the diverse agro-climatic conditions in India, there is a large


                                                                        12
raw material base suitable for food processing industries. India is the
largest producer of livestock, milk, sugarcane, coconut, spices and cashew
and is the second largest producer of rice, wheat and fruits &vegetables.
India also produces caustic soda and soda ash, which are required for the
production of soaps and detergents. The availability of these raw
materials gives India the location advantage.

2. Labor cost comparison




Low cost labor gives India a competitive advantage. India's labor cost is
amongst the lowest in the world, after China & Indonesia. Low labor
costs give the advantage of low cost of production. Many MNC's have

                                                                       13
established their plants in India to outsource for domestic and export
markets.

3.             Presence          across          value           chain
Indian companies have their presence across the value chain of FMCG
sector, right from the supply of raw materials to packaged goods in the
food-processing sector. This brings India a more cost competitive
advantage. For example, Amul 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. Britannia Industries
     9. Procter & Gamble Hygiene & Health Care
     10. Marico Industries




                                                                     14
                      Secondary Players

1. Colgate-Palmolive (India) Ltd.

2. Godrej Consumers Product Ltd.

3. Nirma Ltd.

4. Tata Tea Ltd.

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 FMCG majors. She added
the strategies of different FMCG companies for capturing rural market
like Titan’s Sonata watches, Coco Cola’s 200ml bottle, different strategies
of HUL and Marico etc.       She takes into consideration the study of
National Council for Applied Economic Research (NCAER). According to
the NCAER projections, the number of middle and high-income



                                                                        15
households in rural area is expected to grow from 140 million to 190
million by 2007. In urban India, the same is expected to grow from 65
million to 79 million. Thus, the absolute size of rural India is expected to
be double that of urban India.


2. Tognatta Pradeep (2003), suggested that, the economic growth in
India's agricultural sector in last year was over 10%, compared with 8.5%
in the industrial sector. This implies a huge market potentiality for the
marketer to meet up increasing demand. Factors such as village psyche,
strong distribution network and market 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 enjoyed 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 its
products in tiny packages. Its sachets of detergent and shampoo are in
great demand 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 products and services including
telecom. The characteristics of the market in terms of low and spread out
population and limited purchasing power make it a difficult market to
capture. The Bottom of the pyramid marketing strategies and the 4 A's
model of Availability, Affordability, Acceptability and Awareness
provide us with a means of developing appropriate strategies to tackle the
marketing issues for marketing telecom services in rural areas. Successful

                                                                          16
cases like the Grameen Phone in Bangladesh and Smart Communications
Inc 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 preferences towards a good number of
FMCG products which is too unique and different from those above
researches.




                                                                     17
                 Research objectives

 To understand the demand pattern of FMCG products in the rural
   market.


 To know the amount of household income spent on the
   consumption of FMCG products.


 To understand the image of the products in the eyes of the
   consumers.




                                                               18
                   Research methodology
                            Data collection
Sample unit:
  1.      working people (including men & women)
  2.      college students
  3.      school students
  4.      senior citizens


Sample size:
  1.      working people: 32%
  2.      college students: 29%
  3.      school students: 23%
  4.      senior 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 of research. In these areas she can easily meet working
       people (both male & female), school students, college students &
       senior citizens.




                                                                           19
The population status of these areas can be shown in a tabulated manner,
which is given as follows:


                Area                               Population
             Gomti Nagar                           12,97,570
             Mahanagar                              8,12,230
               Aliganj                              8,75,640

Population is in approximate figures.
Source: http://www.upgov.nic.in/upinfo/census01/cen01-1.htm

   Note: As the examiner can see that the population of areas (areas that
   are chosen by the researcher) is very large, therefore the researcher has
   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 Khand, Vibhuti Khand . the population level of these
   areas are:
                Area                                Population
            Vishwas Khand                            2,83,563
             Vipul Khand                             3,93,768
             Vivek Khand                             2,86,786


   Source: Lucknow Development Authority
   Note: the researcher took these areas because these areas are near to
   various school & colleges. The researcher took school & college
   students as her sample unit.




                                                                           20
  The areas covered by the researcher in Maha Nagar are Chandra Lok
  & Mahanagar Colony. The population statuses of these areas are:


Area                                  Population
Chandra Lok                           2,34,863
Mahanagar Colony                      3,84,683


  Source: Lucknow Development Authority
  Note: The researcher took these areas because there are various schools
  & institutes nearby these places.


  The areas covered by the researcher in ALIGANJ are Jankipuram &
  Sahara City. The population statuses of these areas are:


Area                                  Population
Jankipuram                            2,78,675
Sahara City                           1,89,986


  Source: Lucknow Development Authority
  Note: The researcher took Aliganj as one of the areas for her study
  because she lives in jankipuram & it was quite easy for her to conduct
  the survey in that particular place.




                                                                        21
   Sampling procedure:

   The researcher will take stratified random sampling as the sampling
   procedure.


   Data collection method:

   1.   Primary data:        it will be collected with the help of a self

        administered questionnaire. This questionnaire aims to gather
        information 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 user friendly. Words used in questionnaire are readily understandable
to all respondent. Also technical jargons are avoided to ensure that there
is no confusion for respondents.




                                                                            22
                             Panoramic View
          India has a population of over 1 billion & 4 climatic Zones.
Several religious & personal beliefs, 15 languages, different social customs
& food habits categorize Indian consumer class. Besides this, India is also
different in culture if compared with other Asian countries. Therefore,
India has high distinctiveness in demand and the companies in India can
get lot of market opportunities for various classes of consumers.
Consumer goods marketers’ experience that dealing with India is like
dealing       with    many      small   markets   at    the   same      time.


              Indian consumer goods market is expected to reach $400
billion by 2010. India has the youngest population amongst the major
countries. There are a lot of young people in India in different income
categories.


          Consumer goods marketers are often faced with a dilemma
regarding       the    choice      of   appropriate     market      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            consumer            business            opportunity.




                                                                           23
As the restrictions on foreign investments were relaxed in 1991, Multi-
National Companies have been entering India since then.



                Market Size
                                    Market Share in %
                in $ million
                                      Indian                 Indian
                        15                          MNCs             MNCs
                                    Companies              Companies
                1992         2004            1992                  2004
    Breakfast
                   2          25       100           0        52          48
     cereals
     Wafers,
     potato        6          35       100           0        37          63
      chips
    Washing
                 40          570       98            2        51          49
    Machines
       TV       630        3,030       97            3        49          51

1992 $=30 rupees
2004 $=45 rupees
Source: Center for Monitoring Indian Economy (CMIE)


                       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 total 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.




                                                                               24
                        Rural and urban potential

                                            Urban Rural
            Population 2001-02 (m household) 53     135
            Population 2009-10 (m household) 69     153
                % Distribution (2001-02)     28      72
                Market (Towns/Villages)     3,768 627,000


Source: Statistical Outline of India (2001-02), NCAER
             Indian consumer class can be classified according to the
following criteria:
1. Income
2. Socio-Economic status
3. Age demographics
4. Geographical dispersion




                                                                        25
                 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 annual household income. These groups are:


   1.    Higher income
   2.    Upper middle income
   3.    Middle middle income
   4.    Lower middle income
   5.    Lower income


        The income classification does not represent a real scenario for
an international business because the purchasing power of currencies
differs significantly. The real purchasing power of Indian rupee is higher
than the international exchange value.


            In addition to that, income classification is not an effective
tool to ascertain consumption and ownership trends in the economy.




                                                                             26
Consumer Classification
According to National Council of Applied Economic Research (NCAER)
there are 5 consumer classes that differ in their ownership patterns and
consumption behavior across various segments of goods.

     Consumer        Annual Income
                                           1996   2001     2007     Change
      Classes           in Rs.
                     Rs. 215,000 and
      The Rich                             1.2       2.0    6.2     416%
                          more
  The Consuming
                      Rs 45- 215,000       32.5   54.6     90.9     179%
       Class
    The Climbers         Rs. 22-45,000     54.1   71.6     74.1      37%
   The Aspirants         Rs. 16-22,000      44    28.1     15.3     -65%
   The Destitute     Below Rs. 16,000       33    23.4     12.8     -61%
       Total                              164.8 180.7      199.2     21%

Source: NCAER

               The   5     classes   of   consumer     households   (consumer
classification) show the economic development across the country based
on consumption trends.




                                                                             27
                Socio economic classification
               In addition to income classification and consumer
classification, Indian households can also be segmented according to the
occupation and education levels of the chief earner of the household (the
person who contributes most to the household expenses). This is called as
Socio-economic Classification (SEC), which is mainly 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




                                                                       28
Socio-Economic Classification

Occupation                             Education
                          Less
                          than 5-9
                                       School Some               Post-
               Illiterat 4 yrs yrs of                   Graduat
                                      certificat colleg         graduat
                   e       in schoo                        e
                                          e        e               e
                         schoo   l
                            l
  Skilled        E2     E1      D         C        C        B2        B2
 Unskilled       E2     E2      E1       D         D        D         D
Shop owner       D       D      C        B2        B2      A2         A2
Petty trader     E2      D      D         C        C        B2        B2
Employer of-
 Above 10
                 B1     B1      A2       A2        A1      A1         A1
  persons
 Below 10
                 C      B2      B2       B1        A2      A1         A1
  persons
   None          D       C      B2       B1        A2      A1         A1
   Clerk         D       D      D         C        B2       B1        B1
Supervisor       D       D      C         C        B2       B1        A2
Professiona
                 D       D      D        B2        B1      A2         A1
     l
  Senior
                 B1     B1      B1       B1        A2      A1         A1
 executive
  Junior
                 C       C      C        B2        B1      A2         A2
 executive

Source: Indian readership survey (IRS)
Sections A & B refer to High-class- constitutes over a quarter of urban
population
Sec C refers to Middle-class-- constitutes 21% of the urban population


                                                                           29
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 section A
cannot be included in this SEC because his educational qualification or
occupations do not qualify him for inclusion.

Sec C constitutes households whose Chief Wage Earners are employed as:

                      Skilled workers                33%

                          Petty traders              12%

                     Clerk/Supervisor                37%

                          Shop owners                18%




3/4th of them have studied till 10th or 12th class while the remaining
1/4th         have             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                 annually.




                                                                          30
The     rural    area     is   segregated    in      to:    R1,   R2,        R3,   R4.



        Education of
         chief wage                         Type of House
           earner
                               Pucca         Semi-pucca           Kuchcha
         Professional
                                R1                R2                    R3
           degree
         Graduation/
                                R1                R2                    R3
             PG
           College              R1                R2                    R3
          SSC/HSC               R2                R3                    R3
        Class 4-Class 9         R3                R3                    R4
        Up to class 4           R3                R3                    R4
        Self-learning           R3                R4                    R4
           Illiterate           R4                R4                    R4




                          Age demographics

                India is a very young nation, if compared with some
advanced and developed countries. 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 leisure
related expenditure is because of this young population. It will have a
significant impact over the consumer goods market. In addition to that,


                                                                                    31
it is expected 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 goods and services has a higher
share in developing countries as compared with that of developed
countries.
Age distribution if Indian population (In Millions)


      Year/ Age               2006          2001               1996
      Below 4 yrs             113.5         108.5              119.5
       5-14 yrs               221.2         239.1              233.2
       15-19 yrs              122.4         109.0              90.7
       20-34 yrs              279.1         246.8              224
       35-54 yrs              239.2         207.3              178.1
      55 & above              118.7         101.7              88.7
         Total                1094.1       1012.4              934.2



Consumption Trends


             Food Essentials                          45.68%
    Essential Services (water, power,
                                                      10.1%
            rent, and fuels)
                   Clothing                           4.9%
                  Footwear                            0.63%
                  Medicare                            4.25%
      Transport & Communication                       14.51%
       Recreation, Education, and                Less than 4%

                                                                       32
                 Culture
              Home Goods                            3.25%

                 Geographical dispersion

There is large difference in economic prosperity levels among several
states in India, linked to the wealth creation from trade, industrial, and
agricultural development. There are poor districts in many states,
classified according to their market potential. India has 500 districts, out
of which 150 districts (category A) and next 150 districts (category B)
account for 78% and 15% of the national market potential respectively.
Remaining 200 districts (category C) are backward and account for only
7% of national market potential. Category C districts have 40% of the
geographical share.




                                                                         33
                              Analysis

   1. Which soap u prefer to use?

       The reaction of people towards various SOAP brands can be
tabulated in the following manner:


   Brands           Lux             Dettol      Lifebuoy        others
 Percentage          36              22            18             24


              In the survey that the researcher conducted, it could easily
be concluded that LUX, 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%.




                                                                         34
 This data can be graphically explained with the help of the following
bar graph:




                         demand of soap brands




             40
             35
             30                                               lux
             25
                                                              dettol
  percentage 20
                                                              lifebuoy
             15
                                                              others
             10
              5
              0
                                brands




                                                                    35
2. 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 SOAP brands available
in the market.
     However, the reaction of people towards various packs of SOAP
can be tabulated in the following manner:


 Packs of soaps             Single pack         Family pack (3 in 1)
   Percentage                    56                      44




        In the survey that the researcher conducted, she tried to
differentiate amongst people, with below average household income,
average household income & above household income. This
classification can be done on the basis of the daily expenditure that
people make. 56% consumers demand single pack. 44% consumers
demand family packs i.e. 3 in 1 pack.




                                                                   36
    This data can be graphically explained with the help of the
following bar graph:




                       demand of packs of soap




           60
           50
           40
percentage 30                                    single pack
                                                 family pack ( 3 in 1 )
           20
           10
            0
                  packs preferred by
                      customers




                                                                     37
   1. Which tea u prefer to use?

     The reaction of people towards various TEA brands can be
tabulated in the following manner:


   Brands        Tata Tea     Brooke Bond    Taj Mahal       Others
 Percentage         32               28         18             22


        In the survey that the researcher conducted, it could easily be
concluded that TATA TEA, the product of TATA has a market share of
32%. This is followed by, BROOKE 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.




                                                                      38
This data can be graphically explained with the help of the following bar
graph:



                            demand of tea brands




               35
               30
               25                                            tata tea
               20                                            brooke bond
  percentage                                                 taj mahal
               15
                                                             others
               10
               5
               0
                               brands




                                                                         39
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 people towards various TEA packs can
be tabulated in the following manner:


TEA packs           Sachet           Medium pack        Large pack
percentage            48                 32                 20


         In the survey that the researcher conducted, she tried to
differentiate amongst the people, with below average household
income, average household income & above household income. This
classification can be done on the basis of the daily expenditure that
people make. However, it can be concluded that sachets are most
commonly used by the people .i.e., 48% consumers demand sachet
packs. 32% consumers demand medium pack.20% consumers demand
large pack.




                                                                     40
             This data can be graphically explained with the help of the
following diagram:




                             demand of tea packs




             50

             40
                                                             sachet
             30
                                                             medium pack
percentage
             20                                              large pack

             10

             0
                     packs preferred by customers




                                                                          41
 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 been 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 tabulated as follows:


 Brands         Pepsodent      Colgate        Close Up          Others
Percentage          27            35             22              16


 In the survey that the researcher conducted, it could easily be seen
 that COLGATE, the product of COLGATE PALMOLIVE is the
 market leader, which covers 35% of the total market. After that,
 PEPSODENT, the product of HUL is demanded by the customers,
 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), which covers 16% of the
 total market share.




                                                                         42
         This data can be graphically explained with the help of the
following bar graph:




                         demand of tooth paste




             35
             30
             25                                           pepsodent

             20                                           colgate
percentage                                                close up
             15
                                                          others
             10
             5
             0
                             brands




                                                                     43
  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 the 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 can be tabulated in the following manner:


Tooth paste pack     Small pack        Medium pack         Family pack
  Percentage             34                 48                  18


        In the survey that the researcher conducted, she tried to
differentiate amongst the people, with below average household income,
average household income & above household income. This classification
can be done on the basis of the daily expenditure that people make.
However, it can be concluded that 34% consumers demand small packs.
48% consumers demand medium packs. 18% consumers demand large
pack.




                                                                         44
        This data can be graphically explained with the help of the
following graph:




                          demand of packs of tooth paste




                  50

                  40
                                                           small pack
                  30
                                                           medium pack
     percentage
                  20                                       family pack

                  10

                  0
                       packs preferred by customers




                                                                  45
   5. Which detergent u prefer to use?


     The reaction of people towards various DETERGENT brands can
be tabulated in the following manner:


   Brands          Surf            Rin            Tide          Others
 Percentage         27              35             22              16


            In the survey that the researcher conducted, it could be easily
   concluded that RIN, 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.




                                                                         46
             This data can be graphically explained with the help of the
following bar graph:




                             demand of detergents




             35
             30
             25                                                     surf

             20                                                     rin
percentage                                                          tide
             15
                                                                    others
             10
             5
             0
                                  brands




                                                                      47
  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 the basis of
  their demand for the various packs of DETERGENT brands available
  in the market.
       However, the reaction of people towards various DETERGENT
  packs can be tabulated in the following manner:


Detergent packs        Sachet          Medium pack         Family pack
  Percentage             43                 27                  30


          In the survey that the researcher conducted, she tried to
differentiate amongst the people, with below average household income,
average household income & above household income. This classification
can be done on the basis of the daily expenditure that people make.
However, 43% consumers demand sachet packs. 30% consumers demand
family packs. 27% consumers demand medium packs.




                                                                         48
          This data can be graphically explained with the help of the
following bar graph:




                            demand of detergent packs




             45
             40
             35
             30                                           sachet
             25                                           medium pack
  percentage
             20                                           family pack
             15
             10
              5
              0
                       packs preferred by customers




                                                                        49
   7. Which shampoo u prefer to use?

    The reaction of people towards various SHAMPOO brands can be
tabulated in the following manner:


                                                Head &
   Brands        Clinic plus     Sunsilk                       Others
                                               shoulders
 Percentage          33              25           28             14


            In the survey, that the researcher conducted it can easily be
concluded that CLINIC PLUS, the product of HUL, captures the major
portion of the market with a market 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
product of HUL which holds 25% of the market share. Finally followed
by other brands (EXCEPT CLINIC PLUS, SUNSILK, HEAD &
SHOULDERS) with a market share of 14%.




                                                                        50
 This data can be graphically explained with the help of the following
bar graph:




                            demand of shampoo




               35
               30
               25                                        clinic plus
               20                                        sunsilk
  percentage
               15                                        head & shoulders
                                                         others
               10
               5
               0
                            brands




                                                                       51
   8. 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 SHAMPOO brands available in
   the market.
     However, the reaction of people towards various SHAMPOO packs
can be tabulated in the following manner:


  Shampoo
                  sachet       Small pack     Medium pack Family pack
   packs
 Percentage         23              32             28              17


         In the survey that the researcher conducted, she tried to
differentiate amongst the people, with below average household income,
average household income & above household income. This classification
can be done on the basis of the daily expenditure that people make.
However, 32% consumers demand SMALL PACK. 28% consumers
demand medium pack. 17% consumers demand large packs.




                                                                        52
          This data can be graphically explained with the help of the
following bar graph:




                            demand of shampoo packs




               35
               30
               25                                         sachet
               20                                         small pack
  percentage                                              medium pack
               15
                                                          large pack
               10
               5
               0
                       packs preferred by customers




                                                                       53
   9. Which biscuits u prefer to use?


The reaction of people towards various BISCUITS brands can be
tabulated in the following manner:


   Brands       Marie gold      Good Day     Parle G       Others
 Percentage         24               38        21            17


       In the survey, that the researcher conducted, it can easily be
concluded that GOOD DAY, the product of BRITANNIA holds a major
market share of 38%. This is followed by MARIE GOLD, another
product of BRITANNIA which holds 24% of the market share. 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%.




                                                                    54
This data can be graphically explained with the help of the following bar
graph:




                             demand of biscuits




            40
            35
            30                                                 marie gold
            25                                                 good day
  percentage 20                                                parle G
            15                                                 others
            10
             5
             0
                               brands




                                                                          55
   10. which hair oil u prefer to use?


The reaction of people towards various HAIR OIL brands can be
tabulated in the following manner:


                                              Dabur
   Brands        Parachute      Dabur Amla                  Others
                                              Vatika
 Percentage          37                  29     19            15


        In the survey, that the researcher conducted, it can easily be
concluded that PARACHUTE, the product of MERICO captures 37% of
the total market share. This is followed by DABUR AMLA, the product
of DABUR which captures 29% of the total market share. This is
followed by DABUR VATIKA, another product of DABUR which
captures 19% of the market. And after that, followed by other brands
(EXCEPT PARACHUTE, DABUR AMLA, DABUR VATIKA)
captures 15% of the market share.




                                                                     56
  This data can be graphically explained with the help of the following
bar graph:




                            demand of hair oil




             40
             35
             30                                             parachute
             25                                             dabur amla
  percentage 20                                             dabur vatika
             15                                             others
             10
             5
             0
                             brands




                                                                         57
   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 manner:


Hair oil packs    Small pack         Medium pack        Large pack
Percentage        32                 41                 27


         In the survey that the researcher conducted, she tried to
differentiate amongst the people, with below average household income,
average household income & above household income. This classification
can be done on the basis of the daily expenditure that people make.
However, 41% consumers demand medium packs. After that, 32%
consumers demand small pack. 27% consumers demand large packs.




                                                                      58
This data can be graphically explained with the help of the following bar
graph:




                          demand of packs of hair oil




             45
             40
             35
             30                                              small pack
             25                                              medium pack
  percentage
             20                                              large pack
             15
             10
              5
              0
                    packs preferred by customers




                                                                          59
   12. Which cream u prefer to use?


The reaction of people towards various CREAM brands can be tabulated
in the following manner:


   Brands         Pond’s      Fair & lovely     Ayur          Others
 Percentage           28              32         14             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 26%
of the market share. This is followed by AYUR, the brand of AYUR
ACADEMY OF NATURAL BEAUTY (AANB) which holds 14% of the
total market share.




                                                                       60
          This data can be graphically explained with the help of the
following bar graph:




                            demand of creams




               35
               30
               25                                         ponds
               20                                         fair & lovely
  percentage                                              ayur
               15
                                                          others
               10
               5
               0
                              brands




                                                                      61
   13. Which coffee u prefer to use?


The reaction of people towards various COFFEE brands can be tabulated
in the following manner:


   Brands           Bru           Nestle       Nescafe        Others
 Percentage          26                32        32             10


        In the survey, that the researcher conducted, it can be easily
concluded that all 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, the product of HUL
which holds, 26% of the market share. While the other brands hold only
10% of the market share.




                                                                       62
         This data can be graphically explained with the help of the
following bar graph:



                            demand of coffee




               35
               30
               25                                            bru

               20                                            nestle
  percenatge                                                 nescafe
               15
                                                             others
               10
               5
               0
                               brands




                                                                      63
                           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, shampoo & cream’s category. HUL’s products are
mainly in demand, because they provide 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 buying 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, TATA 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 gained a
lot of BRAND EQUITY which finally creates BRAND LOYALTY. In
these products, 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 organizations supply their products in various packs (small,
medium & large), considering the buying capacity 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 case of BISCUITS, consumers do get


                                                                       64
brand loyal, because they do not want to take a risk with their tastes. So
they prefer sticking to one brand. These organizations supply their
products in various packs (small, medium & large), considering the
buying capacity of their consumers.


           In the case of TOOTH PASTES, COLGATE PALMOLIVE
holds a major market share. Consumers are very concerned about their
health, so if any 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 their 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 the 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. Therefore, they prefer buying it.




                                                                         65
            Suggestions & recommendations
The researcher would like to suggest the following points, so that the
organizations 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 definitely
      take some time to capture the market, because in the introduction
      stage, consumers are not much aware about the product. Therefore,
      it’s the responsibility of the organization to create awareness
      amongst the consumers.
   2. They should adapt 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
      strategies.
   6. Application of 4A’s has also become an important task for all the
      organizations.




                                                                       66
(*4A= Availability, Affordability, Acceptability, Awareness)



                              References
   1.      Kearney, A T, CII – Report, (2000)

   2.       Purba basu, research on living style of rural consumers, (2004),
        pg. no. 5-8.

   3.       Tognatta Pradeep, economic growth on agriculture sector,
        (2003), pg no. 6-10.

   4.       Aithal K Rajesh, importance & growth of rural markets,
        (2004), pg no. 8-12.

   5.        Center for Monitoring Indian Economy (CMIE)

   6.        Statistical Outline of India (2001-02), NCAER
   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/


                                                                          67
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

19.    *4A= Availability, Affordability, Acceptability, Awareness




                                                                    68
                            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 use?
     a. tata tea
     b. brooke bond
     c. taj mahal
     d. others

9. which pack u prefer to use?
     a. sachet
     b. medium pack
     c. large pack




                                            69
10. which tooth paste u prefer to use?
      a. pepsodent
      b. colgate
      c. close – up
      d. others

11. which pack u prefer to use?
      a. small pack
      b. medium pack
      c. family pack

12. which detergent u prefer to use?
      a. surf
      b. rin
      c. tide
      d. others

13. which pack u prefer to use?
      a. sachet
      b. medium pack
      c. large pack

14. which shampoo u prefer to use?
      a. clinic plus
      b. sunsilk
      c. head & shoulders
      d. others

15. which pack u prefer to use?
      a. sachet
      b. small pack
      c. medium pack
      d. large pack




                                         70
16. which biscuits u prefer to use?
      a. marie gold
      b. good day
      c. parle - G
      d. others

17. which hair oil u prefer to use?
      a. parachute
      b. dabur amla
      c. dabur vatika
      d. others

18. which pack u prefer to use?
      a. small pack
      b. medium pack
      c. large pack

19. which cream u prefer to use?
      a. ponds
      b. fair & lovely
      c. ayur
      d. others

20. which coffee u prefer to use?
      a. bru
      b. nestle
      c. Nescafe
      d. others




                                      71

				
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