AMITY UNIVERSITY

LUCKNOW

ASSIGNMENT OF INDUSTRIAL MARKETING.

CHANGING TRENDS IN FMCG INDUSTRY IN INDIA

SUBMITTED TO:

SUBMITTED BY:

DR. FATIMA BEENA

KHALID HUSSAIN
MBA(G)-4th SEM
A7001914032

ASSIGNMENT ON CHANGING TRENDS IN FMCG INDUSTRY IN

INDIA

Introduction to FMCG Industry

FMCG Concept and Definition:
The term FMCG (fast moving consumer goods), although popular and
frequently used does not have a standard definition and is generally used in
India to refer to products of everyday use. Conceptually, however, the term
refers to relatively fast moving items that are used directly by the consumer.
Thus, a significant gap exists between the general use and the conceptual
meaning of the term FMCG.
Further, difficulties crop up when attempts to devise a definition for FMCG.
The problem arises because the concept has a retail orientation and
distinguishes between consumer products on the basis of how quickly they
move at the retailers shelves. The moot question therefore, is what industry
turnaround threshold should be for the item to qualify as an FMCG. Should the
turnaround happen daily, weekly, or monthly?
One of the factors on which the turnaround depends is the purchase cycle.
However, the purchase cycle for the same product tend to vary across
population segments.

ABOUT THE INDUSTRY IN INDIA

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. Most of the
product categories like jams, toothpaste, skin care, shampoos, etc, in India, have
low per capita consumption as well as low penetration level, but the potential
for growth is huge.
The Indian Economy is surging ahead by leaps and bounds, keeping pace with
rapid urbanization, increased literacy levels, and rising per capita income.
The big firms are growing bigger and small-time companies are catching up as
well.
According to the study conducted by AC Nielsen, 62 of the top 100 brands are
owned by MNCs, and the balance by Indian companies.

Household Care
Personal Wash:The market size of personal wash is estimated to be around Rs. 8,300 Cr. The
personal wash can be segregated into three segments: Premium, Economy
and Popular. The penetration level of soaps is ~92 per cent. It is available in 5
million retail stores, out of which, 75 per cent are in the rural areas. HUL is the
leader with market share of ~53 per cent; Godrej occupies second position
with market share of ~10 per cent.
Detergents:The size of the detergent market is estimated to be Rs. 12,000 Cr. Household
care segment is characterized by high degree of competition and high level of
penetration. In washing powder HUL is the leader with ~38 per cent of
mar-ket share. Other major players are Nirma, Henkel and Proctor & Gamble.
Demographic
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.
Because of the low per 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.
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.
Procter & Gamble Hygiene & Health Care Limited (P&G)
Procter & Gamble was founded in 1837 by William Procter, a British citizen
who immigrated to the United States. The company first sold candles. Procter &
Gamble Co. (P&G, NYSE: PG ) is a Fortune 500 American multinational
corporation headquartered in Downtown Cincinnati, Ohio that manufactures a
wide range of consumer goods. As of mid 2010, P&G is the 6th most profitable
corporation in the world, and the 5th largest corporation in the United States by
market capitalization, surpassed only by Apple, Exxon Mobil, Microsoft, and
Wal-Mart. It is 6th in Fortune's Most Admired Companies 2010 list P&G is
credited with many business innovations including brand management and the
soap opera. According to the Nielsen Company, in 2007 P&G spent more on
U.S. advertising than any other company; the $2.62 billion spent by P&G is
almost twice as much as that spent by General Motors, the next company on the
Nielsen list. P&G was named 2008 Advertiser of the Year by Cannes
International Advertising Festival. Proctor & Gamble is a leading member of the
U.S. Global Leadership Coalition, a Washington D.C.-based coalition of over
400 major companies and NGOs that advocates for a larger International Affairs
Budget, which funds American diplomatic and development efforts abroad.