MS FINAL

PRESENTATION ON MARKETING STRATEGY OF FMCG INDUSTRY

Nature of the industry

0 FMCG:

0Products which have a quick turnover and relatively low cost .

0 Principle constituents 0Household Care, 0Personal Care and Food & 0Beverages.

Cont.…..

0Fourth largest sector in the economy

0Market size of Rs. 85000 crores

0Growing at the rate of 11.2%

India’s FMCG Market Size (In USD Billion)

Sources: Naukri Hub, IBEF, Chennai Online

Growth drivers

0Rapid urbanization0Increased literacy0Rising per capita income0Focus on Rural penetration0Boosting purchasing power 0Improved infrastructure

Top Ten Players in FMCG Sector

0 Hindustan Unilever ltd..0 ITC0 Nestle India0 Amul0 Dabur India0 Cadbury India0 Britania Industries0 Procter & Gamble Hygiene and Health Care0 Marico Industries

• Removal of import restrictions resulting in replacing of domestic brands

• Slowdown in rural demand• Tax and regulatory structure

• Untapped rural market• Rising income levels, i.e. increase in

purchasing power of consumers• Large domestic market- a population of over

one billion.• Export potential• High consumer goods spending

•Lower scope of investing in technology and achieving economies of scale, especially in small sectors

•Low exports levels•"Me-too” products, which illegally mimic the labels of the established brands..

• Low operational costs• Presence of established distribution

networks in both urban and rural areas• Presence of well-known brands in FMCG

sector

Strength Weakness

ThreatOpportunity

Future Prospect

0Large Market0Spending Pattern0Changing Profile and Mind Set of Consumer0Vast rural market0Low labor cost0Continuous growth in net FDI Inflow

HINDUSTAN UNILEVER

INTRODUCTION0 Hindustan Vanaspati Manufacturing Company+ Lever Brothers India

Limited (1933) + United Traders Limited (1935) = Hindustan lever Ltd.(1956)

0 Later in 2007 it was named as HUL.

0 India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians.

0 Over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.

0 Historically grew through acquisitions.

PRODUCTBathing soaps

Laundry items

Skin care

Hair care

Oral care

Deodorants

Beverages and food

Lux Surf Excel Fair & Lovely,

Sunsilk Close up Axe Tea- Lipton

Lifebuoy Rin Pond’s Clinic Pepsodent

Rexona Coffee- Bru

Liril Wheel Vaseline Kissan

Hamam Annapurna

Breeze Knorr

Dove Ice Cream

Pears and Rexona

PRICE

0 Strategy used, “matching the value that customer pays to buy the product.”

0 Right price level for each segment.

PLACE

0 At Hindustan Unilever Ltd(HUL), they believe that selling FMCG is it like selling soft drinks.

HUL’s Distribution network consists of;2,000- suppliers and associates4,000- Distributors6.3million- million retail outlets

PROMOTION

0 HUL spend 14% of sales as a part of promotion.0 Promotion through TV Ads, Outdoor ads, Radio, Print

ads.0 Also in cinemas and at bank’s ATM.0 Through catchy sentences;0 Ex:- hasso to khul k hasso - close up cream bathing bar- dove soap and daag ache hai - surf excel

Corporate Social Responsibility program

0 Lifebouy Swasthya Chetana- Health and Hygiene

0 Shakti- Empowerment of women through micro-enterprise opportunity

0 Asha Daan- Happy Home actively supported by Unilever

POSITIONING

0 In today’s world they positioned themselves as a ‘More for Less’.

Ex:- Positioning of individual product Lifebuoy- provides hygiene and health Fair & Lovely- fairness cream

COMPETITIVE STRATEGY

0 Now also focusing on booming Retail chains

FUTURE COMPETITIVE STRATEGY

0 Launching of new high end Dove soap for men’s also.0 Spreading of wings globally through joint ventures

and acquisition.0 Increase the spending on advertisements.

DABUR

PRODUCT LINE

Foods Baby Care Health Supplements

Digestives Natural Cures

RealReal ActivHommadeLemoneezCapsico

Dabur Lal TailDabur Baby Olive OilDabur Janma Ghunti

Dabur ChyawanprashDabur Glucose D

Hajmola YumstickHajmola Mast MasalaAnardanaHajmolaHajmola CandyHajmola Candy Fun2Pudin Hara (Liquid and Pearls)Pudin Hara GDabur Hingoli

Shilajit GoldNature CareSat IsabgolShilajitRing RingItch CareBackaidShankha PushpiDabur BalmSarbyna Strong

Cont….

Hair Care Oil Hair Care Shampoo

Oral Care Skin Care Ayurvedic Specialities

Amla Hair OilAmla Lite Hair OilVatika Hair OilAnmol Sarson Amla

Anmol Silky Black ShampooVatika Henna Conditioning ShampooVatika AntiDandruff ShampooAnmol Natural Shine Shampoo

Dabur Red GelDabur Red ToothpasteBabool ToothpasteDabur Lal Dant ManjanDabur Binaca Toothbrush

GulabariVatika Fairness Face Pack

AyurvedaAyurveda Vikas

MARKETING MIX

Product Price Place Promotion

FunctionalityAppearanceQualityPackagingBrandWarrantyService/Support

List priceDiscountsAllowancesFinancingLeasing options

Channel membersChannel motivationMarket coverageLocationsLogisticsService levels

AdvertisingPersonal sellingPublic relationsMessageMediaBudget

Quantitative Analysis

Economy & Markets

0 GDP 6.7%

0 Service sector 7.9%

0 Industrial sector 11.6%

0 FMCG continues to be attractive.

0 New entrants increased competitive intensity.

0 Inflation had a dampening impact on the demand.

Dabur’s strategy

0 Comprehensive planning, forecasting and hedging strategy for procurement of raw and packing materials.

0 Promotional expenditure, which increased from 12.1% to 14.4% of sales.

0 Acquisition of Fem Care Pharma Ltd. added about 3.5% to the topline.

0 Dabur continues to move forward on the double digit growth track with sustained volume growth across all product lines.

New Launches

0 Launched Dabur Uveda range of Ayurvedic skin care products.

0 Réal Burrst range of fruit-based beverages.

0 Vatika Enriched Almond hair oil.

0 Dabur Amla Flower Magic hair oil.

Developments across SBU’s

Consumer Care Division (CCD)

--low-priced SKUs-- Penetration in rural India

Health care-- cross the Rs 1,000-Crore turnover mark this fiscal.

-- Dabur Chyawanprash repositioned on the immunity plank. -- Massive Immune India campaign included experts and doctors. -- Brand ambassador was MS DHONI -- 2 kg value pack at Rs. 360. -- Dabur honey relaunched with a new logo.

Oral Care--launch of Babool Mint Fresh Gel.

-- Launch of Meswak in South India.

Food & Beverages --Launch of Real Burrst (nectar segment)

Consumer Health Division-- Development of new OTC products (Pudin Hara Lemon Fizz )

-- A new campaign was developed for Hingoli, marking the brand’s re-entry into television screens after a gap of seven years.

HUL’S strategy

Home & personnel care--Sales growth @ 6.6%--Volume growth was double digit.--Innovations by brand investments.

Soaps & detergents--Prices reduced by 100 bps--Wheel relaunched--Vim Bar price reduced due to less input costs--Lifebuoy relaunched (germ killing)--Lux on maturity was relaunched--Sunsilk ( co-created by experts)

Cont.….

Foods (double digit growth)--Kissan jam squeeze tubes & plastic ketchup bottles.--Knorr relaunched with 100% real vegetables and no MSG.--Launch of new soupy noodles--Massive launch of Brook Bond Sehatmand

Water--Pureit was relaunched at price point of Rs. 1000--One crore safety challenge.

BCG And Michel Porters

BCG MATRIX FOR HUL

SOAP& DETERGENT(1.5%)

PERSONAL PRODUCT CATEGORY(16.2%)

FOOD BRANDS

PUREIT

BCG MATRIX OF DABUR (DIVISION WISE)

CONSUMER CARE DIVISION (17.2%)

INTERNATIONAL BUSINESS DIVISION (38.8%)

CONSUMER HEALTH DIVISION (15.1%)

BCG MATRIX OF DABUR

CHYAWANPRASH,AMLA,VATIKA,HAJMOLA,REAL,FEM,HONEY,GLUCOSE.

NEW U

DAZZL,ODOPIC, LEMONEEZ,BURRSTGULABARI,

DABUR UVEDA, ODONIL,BABOOL,MESWAKDABUR LAL TOOTH POWDER & PASTE

Five Competitive ForcesThreat of

NewEntrants

Rivalry AmongExisting

Competitors

Bargaining Powerof Customers

Bargaining Powerof Suppliers

Threat ofSubstitutes

Threat of New

Entrants

Rivalry AmongExisting

Competitors

Bargaining Powerof Customers

Bargaining Powerof Suppliers

Threat ofSubstitutes

Threat of New

Entrants

Rivalry AmongExisting

Competitors

Bargaining Powerof Customers

Bargaining Powerof Suppliers

Threat ofSubstitutes

Threat of Substitute Products

Threat of New

Entrants

Threat of New Entrants

Rivalry Among Competing Firms in

Industry

Bargaining Power of Buyers

Bargaining Power of Suppliers

Porter’s Five Forces Model of Competition

The purpose of portersFive-Forces Analysis

0 The five forces are environmental forces that impact on a company’s ability to compete in a given market.

0 The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.

Bargaining Power of Suppliers

Suppliers exert power in the industry by:

Suppliers are likely to be powerful if:

Supplier industry is dominated by a few firms

Suppliers’ products have few substitutesBuyer is not an important customer to supplier

Suppliers’ product is an important input to buyers’ product

Suppliers’ products are differentiated

Suppliers’ products have high switching costs

Supplier poses credible threat of forward integration

Threat of New Entrants

Barriers to Entry

Economies of Scale

Product Differentiation

Capital Requirements

Switching Costs

Access to Distribution Channels

Bargaining Power of Buyers

Buyers compete with the

supplying

Buyer groups are likely to be powerful if:

Buyers are concentrated or purchases are large relative to seller’s sales

Purchase accounts for a significant fraction of supplier’s sales

Products are undifferentiated

Buyers face few switching costs

Buyers’ industry earns low profits

Buyer presents a credible threat of backward integration

Product is important in terms of quality

Buyer has full information

Threat of Substitute Products

Substitute Product

Keys to evaluate substitute products:

Products with improving price/performance tradeoffs relative to present industry products

Example:

Electronic security systems in place of security guards

Fax machines in place of overnight mail delivery