Fmcg Sector

Dissertation Report On Buying Behaviour for FMCG SUBMITTED TOWARDS PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT (Approved by AICTE, Govt. of India) ACADEMIC SESSION 2011 – 2012 [pic] Submitted By: Krishn Kumar Sharma DM-1119 Batch 2011-2013 UNDER THE GUIDANCE OF DR. SARJUE PANDITA AJAY KUMAR GARG INSTITUTE OF MANAGEMENT 27Km Stone, Delhi-Hapur Bypass Road, P. O. Adhyatmik Nagar, Ghaziabad-201009 AcknowledgementI dedicate this page to all those who have silently or actively left indelible mark on my project report, so that they may give credits which richly deserve. Talent & capabilities are of course necessary but opportunities & right guidance is two very important backups without which any person cannot climb the ladder for success. Proper guidance and direction is required in order to achieve the goal & making optimum of each & every opportunity.

I am thankful from the core of my heart & express my feeling of gratitude and acknowledgement to my Project Mentor Mrs Namita Nath Kumar.. Whose constant support and faith in me always motivated me and their knowledge and brilliance has pulled me out of doldrums in this project. Mundane words are not enough to express our indebtedness towards other Faculty of AKGIM Ghaziabad” whose enormous assistance helped us in the completion of project. Krishn Kumar Sharma DM1119 PREFACE Today companies must urgently and critically rethink their business mission and marketing strategies .Instead of operating in a market place of fixed and known competition and stable consumer preferences, today companies work in war zone of rapidly changing customer/competitor, new law, managed trade policy and diminishing customer loyalty. Company considers the fact that today customer face a plenitude of product every category. Consider that customer exhibit varying and diverse requirement for product service combination and prices.

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In face of their vast choices, customer will gravitate to offering that best meet their individual needs and expectation.Therefore it is not surprising that today’s winning companies are those who succeed in satisfying their target customer . If they can’t bring something special to get market.

They will not last long. The companies should be market focused and consumer driven. They pay extreme attention to quality and service to meeting and even exceeding customer expectation Table of Content |S. No. |Topics |Page No. |1 |Executive Summary |01-05 | |2 |Introduction Of Company |06-36 | |3 |Research Objective |37-38 | |4 |Research Methodology |39-41 | |5 |Analysis of Questionnaire |42-56 | |6 |Findings |57-59 | |7 |Recommendations |60-61 | |8 |Conclusion |61-62 | |9 |Limitations of Study |63-65 | |10 |References |66-67 | |11 |Annexures |68-72 | 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 in 2005 & 2006 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 24. 66-68 01 EXECUTIVE SUMMARYIn this research I have put an effort to understand the buying behavior of the consumers towards FMCG products. 1. In this report, I have 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.

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 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 SectorFMCG 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.

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: • 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 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: Sales Value Growth % |Categories |2004-2005 |2005-2006 |Apr. 2006-Sept. 006 | |Health Supplement (Chyawanprash) |-5% |0% |23% | |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.

% |- | |Market Capitalization |74,746 |65,810 |63,072 | |Enterprise Value |662,540 |645,477 |551,971 | |Return on Capital Employed (ROCE) |47. 1% |51. 0% |45. 5% | |P/E Ratio |26.

7% |27. 1% |21. 0% | Source: CII – A T Kearney Report, (2000) Scope of the FMCG SectorThe 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 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. f 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 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 .

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 [pic] 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 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 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 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 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. 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. Research methodologyData 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. 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 AuthorityNote: the researcher took these areas because these areas are near to various school ; colleges. The researcher took school ; college students as her sample unit. The areas covered by the researcher in Maha Nagar are Chandra Lok ; Mahanagar Colony.

The population statuses of these areas are: |Area |Population | |Chandra Lok |2,34,863 | |Mahanagar Colony |3,84,683 | Source: Lucknow Development AuthorityNote: 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 AuthorityNote: 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. 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.

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.

As the restrictions on foreign investments were relaxed in 1991, Multi-National Companies have been entering India since then. |Market Size in $ million |Market Share in % | | | | |15 |Indian Companies |MNCs |Indian Companies |MNCs | | |1992 |2004 |1992 |2004 | |Breakfast cereals |2 |25 |100 |0 |52 |48 | |Wafers, potato |6 |35 |100 |0 |37 |63 | |chips | | | | | | | |Washing Machines |40 |570 |98 |2 |51 |49 | |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. 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 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. 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 Classes |Annual Income in Rs. |1996 |2001 |2007 |Change | |The Rich |Rs. 215,000 and more |1. 2 |2.

0 |6. |416% | |The Consuming Class |Rs 45- 215,000 |32. 5 |54. 6 |90. 9 |179% | |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: NCAERThe 5 classes of consumer households (consumer classification) show the economic development across the country based on consumption trends. Socio economic classification In addition to income classification and consumer classification, Indian 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 Socio-Economic Classification Occupation |Education | | |Illiterate |Less than 4 |5-9 yrs of |School certificate|Some college|Graduate |Post-graduate | | | |yrs in |school | | | | | | | |school | | | | | | |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 persons |B1 |B1 |A2 |A2 |A1 |A1 |A1 | |Below 10 persons |C |B2 |B2 |B1 |A2 |A1 |A1 | |None |D |C |B2 |B1 |A2 |A1 |A1 | |Clerk |D |D |D |C |B2 |B1 |B1 | |Supervisor |D |D |C |C |B2 |B1 |A2 | |Professional |D |D |D |B2 |B1 |A2 |A1 | |Senior executive |B1 |B1 |B1 |B1 |A2 |A1 |A1 | |Junior executive |C |C |C |B2 |B1 |A2 |A2 | 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 Sections D & E refer to Low-class– constitutes over half the urban populationTo 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. The rural area is segregated in to: R1, R2, R3, R4. |Education of chief wage |Type of House | |earner | | |Pucca |Semi-pucca |Kuchcha | |Professional degree |R1 |R2 |R3 | |Graduation/ PG |R1 |R2 |R3 | |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, 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.

| |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, rent, and fuels) |10. 1% | |Clothing |4. 9% | |Footwear |0.

63% | |Medicare |4. 25% | |Transport & Communication |14. 1% | |Recreation, Education, and Culture |Less than 4% | |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. 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%. This data can be graphically explained with the help of the following bar graph: [pic] 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. This data can be graphically explained with the help of the following bar graph: [pic] 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. This data can be graphically explained with the help of the following bar graph: [pic] 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. This data can be graphically explained with the help of the following diagram: [pic] 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. This data can be graphically explained with the help of the following bar graph: [pic] 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.

This data can be graphically explained with the help of the following graph: [pic] 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. This data can be graphically explained with the help of the following bar graph: [pic] 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.This data can be graphically explained with the help of the following bar graph: [pic] 7.

Which shampoo u prefer to use? The reaction of people towards various SHAMPOO brands can be tabulated in the following manner: |Brands |Clinic plus |Sunsilk |Head & shoulders |Others | |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%. This data can be graphically explained with the help of the following bar graph: [pic] 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 packs |sachet |Small pack |Medium pack |Family pack | |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.

This data can be graphically explained with the help of the following bar graph: [pic] 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%. This data can be graphically explained with the help of the following bar graph: pic] 10. which hair oil u prefer to use? The reaction of people towards various HAIR OIL brands can be tabulated in the following manner: |Brands |Parachute |Dabur Amla |Dabur Vatika |Others | |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. This data can be graphically explained with the help of the following bar graph: [pic] 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.This data can be graphically explained with the help of the following bar graph: [pic] 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. This data can be graphically explained with the help of the following bar graph: [pic] 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. This data can be graphically explained with the help of the following bar graph: [pic] 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 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. Suggestions & recommendationsThe 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. (*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. ttp://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/ 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 Questionnaire 1. name: . 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 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. thers 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 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