Export Import

Procedure &
Documentation
Fast Moving Consumer Goods
(FMCG)

Group No. 02
S.Y.BMS
(2011-2012)
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SUBMITTED TO:
ASSOCIATE PROFESSOR
Mr. RAJKUMAR DHARIRA

Group Members
Rohit Ahuja (01)
Ankita Jain (13)
Anand Rawal (37)
Sonal Jain (42)
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Poonam Yadav (52)

Nirali Trivedi(65)

Acknowledgement

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We are pleased to submit this project on FMCG Sector and would like to
thank everyone who has been involved in the success of this research work;
more specifically we would like to acknowledge the following people:
We would like to particularly like to thank our Professor Mr. Rahul
Malhotra for granting us the opportunity to work on this project. The
brainstorming sessions with her gave us enormous information on the
Adverse effects of reality shows and her constant support also helped us a lot
to acquire necessary equipments from time to time.
We offer our heartfelt thanks to Ms. Manju Nichani (Principal Of
K.C.College) and Mr. Kailash Chandak (HOD BMS Department) for his
enthusiasm & contribution towards our project. Her sessions enhanced our
knowledge about the mounting and the specifications of the IC helped us to
establish a suitable framework of this project.
We would like to express our gratitude towards Kishinchand Chellaram
College for approving our FMCG Sector project and providing us with
various facilities in the institute.
We would also like to thank the entire Teaching and Non-Teaching Staff for
being a strong backbone to us in time of need and providing us all the
information needed for the project.
We finally would like to mention a special thanks to our Families and
Friends for their direct and indirect support and for helping throughout the
year.

CONTENTS
1. Introduction..(06)
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2. Market Potentiality of FMCG Industry

3. Common FMCG Products
4. Top 10 Companies
5. HUL..
6. Dabur
7. P&G.
8. ITC...
9. Future of FMCG..
10. Current Scenario..

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Introduction
The Fast Moving Consumer Goods (FMCG) industry primarily deals with the
production, distribution and marketing of consumer packaged goods, i.e. those
categories of products that are consumed at regular intervals. Examples include
food & beverage, personal care, pharmaceuticals, plastic goods, paper & stationery
and household products etc
Global leaders in the FMCG segment are Sara Lee, Nestl, Reckitt Benckiser,
Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi
and Mars etc
In India, the FMCG industry is the fourth largest sector with a total (organized)
market size of over US$15 billion in 2007,
The market growth over the past 5 years has been phenomenal, primarily due to
consumers growing disposable income which is directly linked to an increased
demand for FMCG goods and services.
At a time when the economy and other large industrial sectors such as automobiles,
aviation and financial services are reeling from the global slowdown, the consumer
goods sector in India has managed to defy the trend. According to the recent
reports by Zeus Consulting, India's FMCG industry has so far been resilient to the
slowdown in the economy and a dip in consumer sentiment, with most companies
posting double-digit growth in net profits in the first half of fiscal 2009, backed by
healthy sales. As very categorically said by the Amway India Enterprises managing
director and chief executive, Mr. William Pinckney, I am not saying that our
company [sector] is recession-proof but it is recession-resilient. This statement on
the whole stands strong for most the leading players in the FMCG sector.

Market Potentiality of FMCG Industry

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Some of the merits of FMCG industry, which made this industry as a potential one
are low operational cost, strong distribution networks, presence of renowned
FMCG companies. Population growth is another factor which is responsible behind
the success of this industry.

Common FMCG products

Some common FMCG product categories include food and dairy products,
glassware, paper products, pharmaceuticals, consumer electronics, packaged food
products, plastic goods, printing and stationery, household products, photography,
drinks etc. and some of the examples of FMCG products are coffee, tea, dry cells,
greeting cards, gifts, detergents, tobacco and cigarettes, watches, soaps etc.
FMCG in India has a strong and competitive MNC presence across the entire value
chain. It has been predicted that the FMCG market will reach to US$ 33.4 billion
in 2015 from US $ billion 11.6 in 2003. The middle class and the rural segments of
the Indian population are the most promising market for FMCG, and give brand
makers the opportunity to convert them to branded products.

The term FMCG refers to those retail goods that are generally replaced or fully
used up over a short period of days, weeks, or months, and within one year. This
contrasts with durable goods or major appliances such as kitchen appliances, which
are generally replaced over a period of several years.
FMCGs have a short shelf life, either as a result of high consumer demand or
because the product deteriorates rapidly. Some FMCGs such as meat, fruits and
vegetables, dairy products and baked goods are highly perishable. Other goods
such as alcohol, toiletries, pre-packaged foods, soft drinks and cleaning products
have high turnover rates.

The following are the main characteristics of FMCGs

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From the consumers' perspective:

Frequent purchase

Low involvement (little or no effort to choose the item products

with strong brand loyalty are exceptions to this rule)
Low price

From the marketers' angle:

High volumes

Low contribution margins

Extensive distribution networks

High stock turnover

THE TOP 10 COMPANIES IN FMCG SECTOR

S. NO.

Companies

1.

Hindustan Unilever Ltd.

2.

ITC (Indian Tobacco Company)

3.

Nestl India

4.

GCMMF (AMUL)

5.

Dabur India

6.

Asian Paints (India)

7.

Cadbury India

8.

Britannia Industries

9.

Procter & Gamble Hygiene and Health Care

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10.

FMCG

Marico Industries

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FMCG

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Dabur
Dabur India Ltd is one of Indias leading FMCG Companies. Building on a
legacy of quality and experience of over 125 years, Dabur is today Indias most
trusted name and the worlds largest Ayurvedic and Natural Health Care
Company.
The 125-year-old company, promoted by the
Burman family, had started operations in
1884 as an Ayurvedic medicines company.
From its humble beginnings in the bylanes
of Calcutta, Dabur India Ltd has come a long
way today to become one of the biggest
Indian-owned consumer goods companies
with the largest herbal and natural product
portfolio in the world. Overall, Dabur has
successfully transformed itself from being
a family-run business to become a
professionally managed enterprise. What sets Dabur apart from the crowd is its
ability to change ahead of others and to always set new standards in corporate
governance & innovation.
Dabur India is also a world leader in Ayurveda with a portfolio of over 250
Herbal/Ayurvedic products. Dabur's FMCG portfolio today includes five flagship
brands with distinct brand identities -- Dabur as the master brand for natural
healthcare
products, Vatika for
premium
personal
care,Hajmola for
digestives, Ral for fruit juices and beverages and Fem for fairness bleaches and
skin care products.
Dabur today operates in key consumer products categories like Hair Care, Oral
Care, Health Care, Skin Care, Home Care and Foods.

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Market Price of Dabur

The current price at which an asset or service can be bought or sold is commonly
known as the Market Price. Economic theory contends that the market price
converges at a point where the forces of supply and demand meet. Shocks to either
the supply side and/or demand side can cause the market price for a good or
service to be re-evaluated.
It is observed that from past 6 months there are huge fluctuations in the market
share of Dabur India Ltd. And the company as seen a drop that is close to 16.6
units from September 2011 to February 2012. The figures are stated below:

Month-year

Market Share

September 2011
October 2011
November 2011
December 2011
January 2012
February, 02, 2012

113.60
103.50
102.50
97.50
101.25
97

Market Share Volume of Dabur

Volume, or trading volume, is a term in capital markets, referring to the number of
shares or contracts traded in a security or in an entire market during a given period
of time.
Dabur has a total share volume of about 2,82,238 shares overall. It has Revenues of
about US$910 Million (Rs 4110 Crore) & Market Capitalisation of US$4
Billion (Rs 20,000 Crore). Building on a legacy of quality and experience of over
125 years, Dabur is today Indias most trusted name and the worlds largest
Ayurvedic and Natural Health Care Company.

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Products By Dabur
Dabur's FMCG portfolio today includes five flagship brands with distinct brand
identities -- Dabur as the master brand for natural healthcare products, Vatika for
premium personal care, Hajmola for digestives, Ral for fruit juices and beverages
and Fem for fairness bleaches and skin care products. These brands togethere
constitutes for Rs. 9 billion.
The Products sold under the leading brand DABUR
are Dabur Amla, Dabur Chyawanprash, Dabur Red
Toothpaste, Dabur Lal Dant Manjan and Dabur
Honey. The highest selling Item of them all is Dabur
Honey which is very popular in the market and has
coveed over 75% of Market Share gaining the Market
Leadership. Dabur Chyawanprash is Second highest
product having having 65% of Market Share in the
Sector of Ayurvedic Medicines.
Vatika is also a popular brand of Dabur India Ltd. And
offers personal care products such as Vatika Face Wash,
Shampoos & Hair Oils. Of them all, Vatika Shampoo is the
highest selling product and has been the fastest selling
shampoo brand for three years in a row.

Hajmola tabets has a high command with 60% market share of

digestive tablets category. About 2.5 crore Hajmola tablets are
consumed in India every day.
Fem Bleach has been the pioneer amongst bleaches in the
Indian market and is the undisputed leader since 1982. It offers
products such as Fem Cream & Herbal Bleach for Women,
Saka- Mens Bleach, Fem Hand Wash etc.

Strengths of Dabur
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The strengths of the business could be seen in terms of your staff, products,
customer loyalty, processes, or location. Strengths are what your business does
well; it could be your marketing expertise, your environmentally-friendly
packaging, or your excellent customer service. It's important to try to evaluate your
strengths in terms of how they compare to those of your competitors.
The following section will outline main strengths of dabur india.
Being a market leader constitutes as a key
to their success as it boosts reputation,
profit
and
market
share.
The
services/products offered by dabur india
are original, meaning many people will
return to dabur india to obtain them.
Dabur Indias marketing strategy has
proved to be effective, helping to raise
profiles and profits and standing out as a
major strength. Competitive pricing is a
vital element of dabur indias overall
success, as this keeps them in line with
their rivals, if not above them. Keeping costs lower than their competitors and
keeping the cost advantages helps the company to pass on some of the benefits to
consumers.
As far as staff is concerned, experienced employees are key to the success of dabur
India helping to drive them forward with expertise and knowledge. High quality
machinery, staff, offices and equipment ensure the job is done to the utmost
standard, and is a strength of dabur india.
An extensive customer base, is a major strength regarding sales and profit for the
company. Having little competition, being one of very few companies providing
this service/product is a major factor in dabur indias performance.

Weaknesses
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Weaknesses of a company or organization are things that need to be improved or

perform better, which are under their control. Weaknesses are also things that place
you behind competitors, or stop you being able to meet objectives. This section
will present main weaknesses of dabur india.
A serious weakness for dabur india is the
fact their products/services are of low
quality as compared to its competitors i.e.
P&G, HUL, etc. people will have betterquality substitutes. Not reducing costs in
the same way as their competitors means
dabur india is outlaying more of their
profits. Having higher like its competitors
is a major weakness.
The lack of business alliances is a major
weakness for dabur india, as they will struggle to get deals, favours and
partnerships. Dabur India is in a poor financial position as compared to its rivals in
the market which makes it weaker than its competitors.
Problems with stock are a weakness for dabur india as they need to keep up with
demand. Even when it comes to Online presence, it is vital for success these days,
and lack of one is a limitation for dabur india.
Dabur India's underdeveloped distribution chain has a marked effect on
performance as it affects the distribution of their products/services. Its limited
product line is a major weakness. Its weak supplier relationships also have an
adverse effect on success, as it cuts ability to negotiate.
Dabur India is behind its competitors with comparatively a low share in the
market, which in turn leads to lower turnover.

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India Tobacco Company Limited

(ITC):
ITC was incorporated on August 24, 1910 under the name Imperial Tobacco
Company of India Limited. As the Company's ownership progressively Indianised,
the name of the Company was changed from Imperial Tobacco Company of
India Limited to India Tobacco Company Limited in 1970 and then to I.T.C.
Limited in 1974. Later on the full stops in the Company's name were removed
effective September 18, 2001. The Company now stands rechristened 'ITC
Limited'.
ITC is one of India biggest and best-known private sector companies. In fact it is
one of the World most high profile consumer operations. Its businesses and brands
are focused almost entirely on the Indian markets, and despite being most wellknown for its tobacco brands such as Gold Flake, the business is now diversifying
into new FMCG (Fast Moving Consumer Goods) brands in a number of market
sectors. It has a wide range of business including - Cigarettes & Tobacco, Hotels,
Information Technology, Packaging, Paperboards & Specialty Papers, Agribusiness, Foods, Lifestyle Retailing, Education & Stationery and Personal Care.
The headquarters of ITC is in KOLKATA and INDIA. The chairman of ITC is Y C
DEVESHWAR.

Product of ITC in Fast Moving Consumer Goods:

Cigarettes:
ITC is the market leader in cigarettes in
India. With its wide range of invaluable
brands, ITC has a leadership position in
every segment of the market. ITCs highly
popular portfolio of brands includes
Insignia, India Kings, Lucky Strike,
Classic, Gold Flake, Navy Cut, Players,
Scissors, Capstan, Berkeley, Bristol, Flake,
Silk Cut, Duke & Royal.
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Food:
ITC made its entry into the branded & packaged Foods business in August 2001
with the launch of the "Kitchens of India" brand. In 2002 it expanded into
Confectionery, Staples and Snack Foods segments. ITC's brand in Food category
include: Kitchens of India, Aashirvaad, Sunfeast, Mint-O, Candyman, and Bingo!

Lifestyle Retailing:
ITC entered the Lifestyle Retailing business with the Wills Sport range of
international quality relaxed wear for men and women in 2000. The Wills Lifestyle
chain of exclusive stores later expanded its range to include Wills Classic formal
wear (2002) and Wills Clublife evening wear (2003). In 2002, ITC entered into the
popular segment with its men's wear brand, John Players. In 2005, ITC introduced
Essenza Di Wills, an exclusive line of prestige fragrance products.

Education and Stationary:

ITC made its entry to the education and stationery business with its Paperkraft
brand in the premium segment in 2002; and later expanded into the popular
segment with its Classmate brand in 2003. By 2007, Classmate became the largest
Notebook brand in the country. Together, Classmate and Paperkraft offer a range of
products in the Education & Stationery space to the discerning consumer,
providing unrivalled value in terms of product & price.

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Safety
Matches:
ITC's brands of safety matches include iKno,
Mangaldeep, VaxLit, Delite and Aim. The Aim
is the largest selling brand of Safety Matches
in India. ITC also exports premium brands to
markets such as Europe, Africa and the USA.

Aggarbattis:
ITC has launched Mangaldeep brand of Aggarbattis with a wide range of
fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Tarangini,
Anushri, Ananth and Mogra. Mangaldeep is also being exported to USA, UAE,
Bahrain,
Nepal,
Singapore,
Malaysia, Oman and South Africa.

Personal care:
In line with ITC's aspiration to be India's
premier FMCG company, recognised for its
world-class quality and enduring consumer
trust, ITC forayed into the Personal Care
business in July 2005. ITC's personal care
portfolio brings world-class products with
clearly differentiated benefits to qualityseeking consumers.
ITC's Personal Care portfolio under
the 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel
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UltraPro', 'Vivel' and 'Superia' brands has received encouraging consumer response
and is being progressively extended nationally.

Strengths of ITC:
ITC leveraged it traditional businesses to develop new brands for new segments.
For example, ITC used its experience of transporting and distributing tobacco
products to remote and distant parts of India to the advantage of its FMCG
products. ITC master chefs from its hotel chain are often asked to develop new
food concepts for its FMCG business.
ITC is a diversified company trading in a number of business sectors including
cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded
apparel, personal care, greetings cards, Information Technology, safety matches,
incense sticks and stationery.

Weaknesses of ITC:
The company's original business was traded in tobacco. ITC stands for Indian
Tobacco Company Limited. It is interesting that a business that is now so involved
in branding continues to use its original name, despite the negative connection of
tobacco with poor health and premature death.
To fund its cash guzzling FMCG start-up, the company is still dependent upon its
tobacco revenues. Cigarettes account for 47 per cent of the company's turnover,
and that in itself is responsible for 80% of its profits. So there is an argument that
ITC's move into FMCG (Fast Moving Consumer Goods) is being subsidized by its
tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in
India - and this single brand alone hold 70% of the tobacco market.

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The Future of FMCG

The anti-ageing skincare category grew five times between 2007 and 2008. Its
today the fastest-growing segment in the skincare market. Olay, Procter &
Gambles premium anti-ageing skincare brand, captured 20 per cent of the market
within a year of its launch in 2007 and today dominates it with 37 per cent share.
Who could have thought of ready acceptance for anti-ageing creams and lotions
some ten years ago? For that matter, who could have thought Indian consumers
would take oral hygiene so seriously? Mouth-rinsing seems to be picking up as a
habit mouthwash penetration is growing at 35 per cent a year. More so, who
could have thought rural consumers would fall for shampoos? Rural penetration of
shampoos increased to 46 per cent last year, way up from 16 per cent in 2001.

Consumption patterns have evolved rapidly in the last five to ten years. The
consumer is trading up to experience the new or what he hasnt. Hes looking for
products with better functionality, quality, value, and so on. What he needs is fast
getting replaced with what he wants. A new report by Booz & Company for the
Confederation of Indian Industry (CII), called FMCG Roadmap to 2020: The
Game Changers, spells out the key growth drivers for the Indian fast moving
consumer goods (FMCG) industry in the past ten years and identifies the big trends
and factors that will impact its future.
The report estimates the FMCG sector witnessed robust year-on-year growth of
approximately 11 per cent in the last decade, almost tripling in size from Rs 47,000
crore in 2000-01 to Rs 130,000 crore now (it accounts for 2.2 per cent of the
countrys GDP). Growth was even faster in the past five years almost 17 per
cent annually since 2005. It identifies robust GDP growth, opening up of rural
markets, increased income in rural areas, growing urbanisation along with evolving
consumer lifestyles and buying behaviours as the key drivers of this growth.
The report further estimates that the FMCG industry will grow at least 12 per cent
annually to become Rs 400,000 crore in size by 2020. Additionally, if some of the
factors play out favourably, say, GDP grows a little faster, the government removes
bottlenecks such as the goods and services tax (GST), infrastructure investments
pick up, there is more efficient spending on government subsidy and so on, growth

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can be significantly higher. It could be as high as 17 per cent, leading to an overall

industry size of Rs 620,000 crore by 2020.
Based on research on industry evolutions in other markets and discussions with
industry experts and practitioners, Booz & Company has identified some important
trends that will change the face of the industry over the next ten years. Some key
ones related to evolution of consumer segments are as follows:

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Current Scenario
In India, the FMCG industry is the fourth largest sector with a total (organized)
market size of over US$15 billion in 2007, as per ASSOCHAM, and can be
classified under the premium and popular segments. The premium segment (~25%)
caters mostly to the higher/upper middle income consumers while the price
sensitive popular or mass segment (~75%) consists of consumers belonging mainly
to the semi-urban or rural areas who are not, and cannot afford to be, brand
conscious.
The market growth over the past 5 years has been phenomenal, primarily due to
consumers growing disposable income which is directly linked to an increased
demand for FMCG goods and services. Indeed, it is widely acknowledged that the
large young population in the rural and semi-urban regions is driving demand
growth, with the continuous rise in their disposable income, life style, food habits
etc. On the supply side, the wide availability of raw materials, vast agricultural
produce, low cost of labor and increased organized retail have helped the
competitiveness of players.
At a time when the economy and other large industrial sectors such as automobiles,
aviation and financial services are reeling from the global slowdown, the consumer
goods sector in India has managed to defy the trend. According to the recent
reports by Zeus Consulting, India's FMCG industry has so far been resilient to the
slowdown in the economy and a dip in consumer sentiment, with most companies
posting double-digit growth in net profits in the first half of fiscal 2009, backed by
healthy sales. As very categorically said by the Amway India Enterprises managing
director and chief executive, Mr. William Pinckney, I am not saying that our
company [sector] is recession-proof but it is recession-resilient. This statement on
the whole stands strong for most the leading players in the FMCG sector.

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While a price hike and cost-cutting were the first lines of defense in a bid to protect
margins, Indian manufacturers were able to let logic rather than bottom lines
dictate measures, with increased marketing efforts, a well-thought product mix and
new launches helping them emerge unscathed from the turmoil. The prospects
going forward also remain promising. Adi Godrej, Chairman and MD of Godrej
Consumer Products Limited (GCPL) and Chairman of Godrej Industries feels that
the best policy would be to provide tremendous fiscal and monetary stimuli to the
economy, [stimuli is needed] especially in industries connected with consumer
finance. Once that is done, the economic growth will come through and that will
generally create multiplier factors. FMCG already seems to be doing quite well and
FMCG sector will have its best year ever in 2009-10, he said.

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Wiblography
http://www.business-standard.com/india/news/the-futurefmcg/416391/
http://info.shine.com/Industry-Information/FMCG/780.aspx
http://www.dabur.com
http://www.moneycontrol.com

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