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Overview
The burgeoning middle class Indian population, as well as the rural sector, present a huge
potential for this sector. The FMCG sector in India is at present, the fourth largest sector
with a total market size in excess of USD 13 billion as of 2012. This sector is expected to
grow to a USD 33 billion industry by 2015 and to a whooping USD 100 billion by the
year 2025.
This sector is characterized by strong MNC presence and a well-established distribution
network. In India the easy availability of raw materials as well as cheap labour makes it
an ideal destination for this sector. There is also intense competition between the
organised and unorganised segments and the fight to keep operational costs low.
FMCG Companies are among the top contenders that pursue the brand positioning
process to establish their products in market. Product differentiation, portable & attractive
package styling, tag lines and punch lines in advertising, competent marketing and
innovative product promotion strategies are very important for this industry to perform
well. Due to high competition in the FMCG sector pressure on margins is very high that
makes advertisement a prerequisite for this sector. Subsequently, FMCG industry has
actually been responsible for the growth of advertisement industry in India and
consequently for creating a large number of jobs in this sector also.
FMCG sector in India has been experiencing a phenomenal pace of growth since last
decade owing to increasing consumer incomes and rapidly changing consumer tastes and
preferences. Large scale and low cost production, modern retailing strategies, branding
and maintenance of intense distribution network have given FMCGs an edge over others
in raising hovering revenues. At present Indian FMCG sector is worth Rs. 1300 billion
and expected to be around a whopping value of Rs. 4000 to Rs. 6000 billion by 2020.
FMCG industry provides a wide range of consumables and accordingly the amount of
money circulated against FMCG products is also very high. The competition among
FMCG manufacturers is also growing and as a result of this, investment in FMCG
industry is also increasing, specifically in India, where FMCG industry is regarded as the
fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is
estimated to grow 60% by 2010. FMCG industry is regarded as the largest sector in New
Zealand which accounts for 5% of Gross Domestic Product (GDP).
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. 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. 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.
India's fast moving consumer goods (FMCG) sector is the fourth largest sector in
the economy. Its principal constituents are foods, personal care, fabric care and
household products. The total FMCG market is in excess of US$ 17.36 billion
and is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.
The importance of consumer sales promotion in the marketing mix of the fast
moving consumer goods (FMCG) category throughout the world has increased.
Companies spend considerable time in planning such activities. However, in
order to enhance the effectiveness of these activities, manufacturers should
understand consumer and retailer interpretations of their promotional activities.
The study here pertains to consumers perceptions regarding sales promotion.
Some past researches have suggested that promotion itself has an effect on the
perceived value of the brand. This is because promotions provide utilitarian
benefits such as monetary savings, added value, increased quality and
Broadly speaking most of the companies using Marketing Mix which includes
Price
Place (Channel of Distribution)
Product
Promotion
These are the four basic pillar of marketing mix. Most of the marketing strategies
are built on the basis of these criteria.
Promotion is one of the important elements of marketing mix. There are so many
elements of promotion such as
Advertising
Direct Marketing
Public Relations
Sales Promotion
Traditionally, sales Promotions have been used by marketer to increase sales in
the short term. However, in the last few decades this communication tool has
evolved and now is considered from a strategic point of view. For this reason, it is
necessary to realize new studies in this area and study how consumers evaluate
sales promotions.
Sales promotions have grown in both importance and frequency over the past
Sales promotion serves three essential roles: It informs, persuades and reminds
prospective customers about a company and its products. Even the most useful
product or brand will be a failure if no one knows that it is available. As we know,
channels of distribution take more time in creating awareness because a product
has to pass through many hands between a producer and consumers.
From these elements Sales Promotion is the element which is in the focus of this
project. Further Sales Promotion is quite broad term it includes
INDUSTRY
CEMENT INDUSTRY
PAINT INDUSTRY
5 COMPANIES
Binani Cement Ltd
LOCATION
Junagadh,Gujarat
Beawar, Rajasthan
Mumbai, Maharashtra
Gurgaon,Haryana
BANKING INDUSTRY
AUTOMOBILE
INDUSTRY
PAPER INDUSTRY
POWER (ENERGY)
SECTOR
TELECOM SECTOR
COAL INDUSTRY
REALTY/ESTATE
SECTOR
PHARMACEUTICAL
SECTOR
Berger Paints
Shalimar Paints
State Bank of India
ICICI Bank Ltd.
Axis Bank Ltd.
HDFC Bank Ltd.
IDBI Bank Ltd
Mahindra & Mahindra Limited
Mumbai, Maharashtra
Mumbai, Maharashtra
Vadodara, Gujarat
Ahmedabad, Gujarat
Mumbai, Maharashtra
Mumbai, Maharashtra
Mumbai, Maharashtra
Ltd.
Mahanadi Coalfields ltd.
DLF Limited
Pearl Apartments Ltd.
Alchemist Realty Ltd
Omaxe Limited
Phoenix Township Ltd.
Cipla Ltd.
Dr. Reddy's Laboratories Limited
Wyeth Ltd.
GlaxoSmithKline
Pharmaceuticals Limited
Novartis India Limited
Indian Oil Corporation Ltd.
Mumbai, Maharashtra
New Delhi, Delhi
Mumbai, Maharashtra
Noida
Dehradun
Gandhinagar, Gujarat
Corporation
STEEL INDUSTRY
ALUMINIUM SECTOR
TYRE SECTOR
TEXTILE INDUSTRY
Hisar, Haryana
Mumbai, Maharashtra
Mumbai, Maharashtra
New Delhi, Delhi
Bharuch, Gujarat
Pune
Mumbai, Maharashtra
New Delhi, Delhi
Mumbai, Maharashtra
New Delhi, Delhi
Bengaluru, Karnataka
Mumbai, Maharashtra
Mumbai, Maharashtra
Aplab Ltd.
HCL Technologies Ltd.
Thane, Maharashtra
HINDALCO
Mumbai, Maharashtra
NALCO
Bhubaneswar
PG Foils
Pali, Rajasthan
Hind Aluminium
Mumbai, Maharashtra
Sacheta metals
Mumbai, Maharashtra
Apollo Tyres
Gurgaon, Haryana
MRF Tyres
Chennai
Ceat Tyres
Mumbai, Maharashtra
Goodyear
Faridabad
Balkrishna Industry
Thane, Maharashtra
Vadodara, Gujarat
Surat, Gujarat
FMCG SECTOR
ITC Limited
HEALTHCARE SECTOR
CONSUMER DURABLES
SECTOR
PSU SECTOR
AVIATION SECTOR
HOTEL (HOSPITALITY)
SECTOR
ACCOUNTING
Marico Ltd
Mumbai, Maharashtra
Mumbai, Maharashtra
GlaxoSmithKline Consumer
Nabha, Punjab
Healthcare Ltd
Piramal Healthcare Ltd
Mumbai, Maharashtra
Mumbai, Maharashtra
Ahmedabad, Gujarat
Gurgaon, Delhi
Ltd.
Whirlpool
Gurgaon, Delhi
LG Electronics
Vikhroli, Mumbai
Pharmaceuticals
Central Warehousing Corporation
Eastern Coalfields
Burdwan, W.B.
Byculla, Mumbai
Corporation
Kingfisher Airlines Ltd
Bengaluru, Karnataka
SpiceJet Ltd.
Gurgaon, Haryana
Mumbai, Maharashtra
Gurgaon, Haryana
Mumbai, Maharashtra
Hyderabad
Royal Orchid
Bangalore, Karnataka
Jindal Hotels
Vadodara, Gujarat
ITC Hotels
KPMG
Mumbai, Maharashtra
COMPANY
(INCLUDING
BIG-4)
Arthur Anderson
PWC
Mumbai, Maharashtra
Delloite
Ahmedabad, Gujarat
1.2.1 INTODUCTION
To be a market leader, the most important aspect is to understand consumer needs and then make
them understand by comparing its utilities with their needs. In present market conditions, it takes
years for a product to cement its place and compete with the existing brands. If we just imagine
the scenario some years back, the only brand in deodorant market which we could remember was
Axe. In less than a year axe, a market leader with market share of 18 % has been toppled by
Fogg, taking a market share of 12% in short span of 2 years. Presently Axe, has even lost the 2nd
spot and is on 3rd position in market share after Fogg and Park Avenue.
Axe, launched in India in 1999 and is a global brand available in 60 countries. Axe has
consistently strengthened its imagery of a cool, iconic and youth brand. Fogg was launched in
India in 2011 with a new concept of no gas and only perfume. The basic idea of Fogg was to tap
a market gap and understand human psyche.
With Deodorant market today stands at 1500 crore, growing 5 folds in past 5 years. We would
analyze both the brands with some parameters to have better understanding.
FOGG: A new brand was launched in the deodorant category of 1200 crore. Deodrant
have continuously harped on the communication of attraction wherein the females have
always being the targets of male fantasies. Fogg striked out differently with Bina gas
wala spray (deodorant without gas) increasing the number of sprays compared to the
competition. One bottle of Deodrant gives almost 800 sprays. Thats reduced cost per
spray. A new communication had taken birth. The 2500 crore deodorant market followed
a different suit than onwards making Fogg gaining a 15%-17% market share even after
selling at 15-20% premium to the peers.
Axe, on the other hand was concentrating on more fragrances by keeping an image of cool and
iconic brand.
1.2.3 STP
Fogg, identified distinct group of buyers as fashion oriented and trendy. It segmented the people
who are willing to try new products with a common notion of getting more for less. The target
group of Fogg was similar to other deodorant brands as young and middle class. The brand even
targeted women by selling large varieties of women deodorants. The market share of Fogg in
women deodorant segments has garnered share of around 10%. It positioned its product as a
deodorant with only liquid and which lasts longer than any other deodorant in the market.
Axe, also segmented mainly students and bachelors with middle and upper middle income group
with similar psychographic as outdoor-oriented and trendy. The target group of Axe was Males
(18-30 years). It tried to target youngsters mind by showcasing the product which can attract
girls. They targeted the audience presuming that Indians will adopt the foreign commercial
easily. It positioned its product by continuously launching new fragrances with internet based
marketing.
Vini Cosmetics, a Indian based firm strategized Fogg with an image which could directly strike
the Indian psyche. They understood the market and came with a product which could set their
image as a product with utilitarian use. Instead of having a same strategy of gas based product
they tapped the Indian market with a deodorant full of liquid. It was never happened before that a
similar product came with a similar idea.
One more important was advertising the product with a different angle. The theme of 85 % of the
deodorant advertisements could be summed to hulk, foreign girls and the girls attraction after he
sprays deodorant on his body. Fogg never advertised in this way. It projected itself with a product
who values Indians by giving them product which can be utilized more in a similar price. The
other aspect which Fogg concentrated was showing other deodorants as wasteful and with long
lasting aroma.
The other area which Fogg tapped was women deodorant market. Axe was mainly concentrated
on Mens grooming products.
Weaknesses
Opportunities
1. Coming up with Limited Edition fragrances
2. Tie up with hotel chains and large organizations like gym chains etc.
Threats
1. Deodorants sales are seasonal. Maximum sales happen in the summer months
2. Competition from Premium Segment Deodorants like Burberry, Body Shop