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PRESENTED BY

RAJKUMAR & VENKATESH

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Fast Moving ConsumerGoodsSupply Supply is the amount of something, such as a product or

service, that a market has available.

Demand Demand is the amount of the product or service thatbuyers want to purchase. The relationship

between supply and demand has a good deal ofinfluence on the price of goods and services.

Barriers to Entry Huge investments in promoting brands, setting up distributionnetworks and intense competition, but the sector is not capitalintensive.

Bargaining Power ofSuppliers

Some of the companies are integrated backwards, which reducesthe supplier's clout. Manufacturing is largely outsourced.

Bargaining Power of

Customers

In case of branded products, there is little that the consumer can

influence, but intense competition within the FMCG companiesresults in value for money deals for consumers (e.g. buy one,get one free concept).

Competition Competition is faced from both domestic, MNCs and also fromcheaper imports, which are increasingly visible in urbanmarkets. Price wars are a common phenomenon.

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FMCG Evolution

1950s-80s Low Investment in the sector

Low purchasing power

Govts emphasis on small scale sector

HLL and other companys urbane focus

Post liberalization

Entry of MNCs Focus shifted to getting to rural consumer first

Others, like Nestle, remained with the urban population

Latest fad to hit the market is the sachet bug.

Mushrooming of regional brands

Nirma enters and changes the focus to Value for Money in the 70s

Post liberalization, Jyothi Laboratories, Ghari Detergent andAnchor toothpaste giving the nation-wide brands a run for theirmoney.

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Financial Analysis KeyPlayers

Company Name Revenue(Rs. Cr.)

3- YearCAGR

PAT (Rs.Cr.)

3-YearCAGR

PBDIT 3-Year

Hind. Lever 11193.88 4.6 1408.1 -10.85 1722.71 -15.22

Dabur India 1345.5 11.28 188.57 36.54 242.01 33.41

Colgate Palm. 1127.55 9.65 137.6 12.87 224.7 12.76

Marico Ltd. 1045.16 11.05 98.88 30.57 140.79 34.3

Reckitt Benckiser 757.35 18.17 95.19 138.8 135.71 63.26

Procter andGamble

567.59 -0.63 139.51 23.03 201.37 16.43

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Forecast 2010

Rural and semi-urban 128 million population thrice the urban Market size growth from 48k to 100k Crores (Growth of

50% at 10%CAGR) Increase penetration from the current less than 1%

Problems in the rural sector Low per capita disposable incomes Large number of daily wage earners Acute dependence on vagaries of monsoon Seasonal consumption Poor infrastructure roads and power supply

Urban Market 16.5k to 35k Crores (Growth of 100% at 20%CAGR) Intense competition severe pressure on margins Focus

on newer products, such as fruit juices

Source: Assocham Report Future Prospects of FMCG

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Marketing Management in theOrganization

Accounting

Finance

Human Resources

Marketing

Research & Development/Production

Marketing and the Organizational

System

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The Processing Pipeline

OutputsInputs

Marketing MarketingFinance

Pers

onal

Production

Accounting

Capital, Machines,Raw Materials,

Labor, Technology,

Information, Time,

Effort

Goods/ Services,Sales (revenue),

Market share, Profits,

Information

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The Marketing Concept

Customers are the Lifeblood of theOrganization

Customer is King

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Evolving Views ofMarketings Role

The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

Hum

an

resources

Fina

nce

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Customers

Front-line people

Middle Management

Top

Management

Traditional OrganizationChart

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Customer-OrientedOrganization Chart

Customers

Front-line people

Middle management

Top

manage-

ment

Cu

stomers

Cus

tom

ers

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Inactive or

ex-customers

Customer Development

PartnersAdvocatesClientsRepeat

customers

First-time

customers

Suspects

Prospects

Disqualified

prospects

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The Marketing Concept

Marketing Has Veto Power

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The Profit Triangle

Valu

ecrea

tio

n

Competitive advantage

Internaloper

ationsProfitProfit

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