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BYAbhishek Singh

&Sriparna Chatterjee

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FM CG are products that have a quick shelf turnover,at relatively low cost and don't require a lot of thought, time and financial investment to purchase.The margin of profit on every individual FM CGproduct is less.Profit in FM CG goods always translates to numberof goods sold.

The Indian FM CG sector is an important contributorto the country's GDP. It is the fourth largest sector inthe economy and is responsible for 5% of the totalfactory employment in India.

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In India, companies like ITC, HLL, Colgate, Cadburyand Nestle have been a dominant force in the FM CG

sector well supported by relatively less competitionand high entry barriers (import duty was high).

With the gradual opening up of the economy over

the last decade,FM

CG companies have been forcedto fight for a market share. In the process, marginshave been compromised, more so in the last sixyears ( FM CG sector witnessed decline in demand).

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The lower-middle income group accounts forover 60% of the sector's sales. Rural markets

account for 56% of the total domestic FM CGdemand.

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The growth potential for FM CG companies lookspromising over the long-term horizon, as the per-capita consumption of almost all products in thecountry is amongst the lowest in the world.As per the Consumer Survey by KSA-Technopak , of the total consumption expenditure, almost 40% and8% was accounted by groceries and personal care

products respectively.Currently, organized retailing accounts for just 3%of total retail sales and is likely to touch 10% overthe next 3-5 years.

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COMPANY SALES RsCR

A&P SPENDRSCR

APR-SEP2009

3YRSAGO

HINDUSTANUNILEVER

8703 1132 13.0 8.9

DABUR INDIA 1591 234 14.7 11.9

M ARICO 1389 176 12.7 12.1

GLAXOSM ITHKLINE

964 156 16.2 13.1

CONSUM ERCOLGATEPOLM OLIVE

955 141 14.7 17.5

INDIA GODREJCONSUM ER

1014 94 9.3 10.3

EM AM I 400 75 18.7 2.5

ARGO TECHF OODS

305 31 10.1 1.3

JYOTHY LABS 250 14 5.5 8.0

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India offers a large and growing market of 1 billionpeople of which 300 million are middle class consumers.India offers a vibrant market of youth and vigor with54% of population below the age of 25 years.India is rated as the fifth most attractive emerging retailmarket.It has been ranked second in a Global RetailDevelopment Index of 30 developing countries.The Indian FM CG sector is the fourth largest sector inthe economy with a total market size in excess of US$13.1 billion.

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STRENGTHS:1. Low operational costs2. Presence of established distribution networks in both urbanand rural areas3. Presence of well-known brands in FMCG sectorWEAKNESSES:1. Lower scope of investing in technology and achievingeconomies of scale,especially in small sectors

2. Low exports levels3. "Me-too" products, which illegally mimic the labels of theestablished brands,narrow the scope of FMCG products in rural and semi-urbanmarket.

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OPPORTUNITIES:1. Untapped rural market2. Rising income levels i.e. increase in purchasing

power of consumers3. Large domestic market - a population of over onebillion4. Export potential 5. High consumer goods spending

THREATS :1. Removal of import restrictions resulting in replacingof domestic brands2. Slowdown in rural demand.3. Tax and regulatory structure

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1. Hindustan Unilever Ltd.2. ITC (Indian Tobacco Company)

3. Nestlé India4. GCMMF (AMUL)5. Dabur India6. Asian Paints (India)

7. Cadbury India8. Britannia Industries9. Procter & Gamble Hygiene and Health Care10. Marico Industries

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ITC Segment Breakup

HUL SEGMENT BREAKUP

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NOW THERE IS A BIG SCOPE FOR BRANDMANAGEMENT IN THIS SECTOR AS THIS

MARKET IS GOING TO GROW IN HUGE.

THERE IS A SCOPE FOR MARKETING

MANAGERS A LOT.

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http://www.coolavenues.com/know/mktg/competiti

ve-strategies-2.phphttp://www.rediff.com/money/2005/nov/15spec.htmwww.hll.comwww.itc.com

www.insightory.comwww.oppapers.comhttp://www.indianmba.com/ F aculty_Column/ F C448/fc448.html