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Submitted ByGroup 3Swarit Yadav (14PGP051)Kirti Rai Chanchal (14PGP084)FMCG (P&G, Colgate Palmolive, Pepsico, Coca cola and Godrej agrovet)

Beauty and Personal Care in FMCGProcter and Gamble

About IndustryBeauty and Personal Care Registers Strong Growth, Driven byIncreased AwarenessInternational Players Continue To Dominate the Competitive Landscape as urban becomes stagnant

New Product Launches Focus on Variants and price points

Internet Retailing Will Be the Next Big Distribution Channel in DRI

GROWTH PROSPECTSLarge Market:-India has a population of more than 1.150 Billions which is just behind China.According to the estimates, by 2030 India population will be around 1.450BillionWill surpass China to become the World largest in terms of population. FMCG Industry which is directly related to the population is expected to maintain a robust growth rate.

MARKET OPPORTUNITIESVast Rural Market:-Rural India accounts for more than 700 Million consumers, or ~70 per cent of the Indian population and accounts for ~50 per cent of the total FMCG market.The working rural population is approximately 400 Millions which is an untapped market for rural fmcgThe market for FMCG products in rural India is esti-mated ~ 52 per cent and is projected to touch ~ 60 per cent within a year.

CompetitionMajor Players in terms of market share

Unilever Colgate palmoliveP&GDaburLOrealGodrej

East and North East IndiaTrends

Beauty and personal care in East and Northeast India increased by 15% in current value terms in 2014.

This growth was driven by the increased use of deodorants, mouthwashes/dental rinses and mass firming/anti-cellulite body care, which grew by 23%,

Consumers in East and Northeast India continue to prefer natural beauty and personal care products and home-made products.Competitive landscape

Hindustan Unilever continues to have the strongest presence in East and Northeast India.

The use of hair oil is very common as a conditioner, and one of the brands which has its primary consumer base only in this region is Deys Medical Stores Mfgs Keo Karpin

ProspectsExpected to see a value CAGR of 5% at constant 2014 prices during the forecast period 2014-2019.

Continue to have an affinity for home-made remedies and natural products, as these are considered healthy and better, without any side-effects

North IndiaTrends

Colour cosmetics registered growth of 23% in current value terms in North India in 2014. home-made products.Biggest consumer base in IndiaHence more flamboyant and also have the tendency to try new brands and products in beauty and personal care. Do it yourself kits becoming popular service providers such as beauticians and hairdressers also registered growth

Competitive landscapeHUL and colgate palmolive market leader due to strong distribution network Companies such as Lotus Herbal and VLCC Personal Care gained significantly in 2014, because they increased their penetration strongly and multi channel marketingmore inclined to buy branded and luxury products, as the per capita income in this region is the highest in India,

ProspectsExpected to see a value CAGR of 6% at constant 2014 prices during the forecast period 2014-2019.

South IndiaTrends

the second biggest region in terms of value sales in beauty and personal South India mostly remains warm, as a result of which the use of oil-control products, whether in hair care, skin care or colour cosmetics

Competitive Landscape

HUL and colgate-palmolive again market leader mainly due to regional celebrity endorsement and high penetration

Prospects

Expected to see a value CAGR of 6% at constant 2014 prices during the forecast period 2014-2019.

Unconventional products such as dental floss, mouthwash/dental rinse, foundation, firming/anti-cellulite body care and anti-agers, amongst others, will drive growth in South India

The literacy rate in India is highest in the southern states, as a result of which the knowledge and awareness of these products is highest in this region, and hence their use is more accepted on a regular basis.

West IndiaTrends

disposable incomes in the region are amongst the highest, with Maharashtra and Gujarat being located in this region consumers earn more in this region, and are willing to spend more in order to look good.the launch of most premium brands and retail outlets takes place in West India because of presence of mumbai, consumers in this region are aware of these brands and have access to international brands faster than any other consumer base in the country

Competition

HUL is market leader with well established market presence and brand imagestrong affinity for herbal brands and products, with companies such as Lotus Herbal, Dabur India and The Himalaya Drug Co being quite popular.

Prospects

Expected to see a value CAGR of 6% at constant 2014 prices during the forecast period 2014-2019.Higher disposable incomes and a willingness to spend amongst upper-class and upper-middle-class households in first tier and second tier cities such as Pune, Mumbai, Kolhapur and Nagpur will drive growth in West India.

Rural Vs Urban IndiaTrends

Basic beauty and personal care products such as talcum powder, bar soap, eye liner, standard shampoos, hair oil, toothpaste and moisturisers continue to have the highest penetration in rural IndiaThe use of relatively more expensive products, such as shower gel, deodorant, regular hair conditioner and colour cosmetics, amongst others, registered higher acceptance amongst rural consumers in 2014Consumers have lower disposable incomes in rural India, as a result of which manufacturers of premium brands have not entered this market, Consumers continue to have negligible knowledge of such products.

Competition

HUL , Colgate plamolive and Dabur are market leader with streamlined market penetration efforts

ProspectsSales to rural consumers are expected to continue growing rapidly, as the leading manufacturers will continue to carry out marketing campaigns and social campaigns to encourage consumers to use their products.The differences between rural and urban consumers will continue to be pack size and variant type.For rural consumers brands may stick to basic variants, whereas for urban consumers new innovations will be seen more frequently.

SECTORAL OPPORTUNITIESThere are 4 Major Key Sectoral opportunities for Indian FMCG Sector are:

Dairy Based Products

Packaged Food

Oral Care

Beverages

Future ProspectThreat High portion of unorganized trade,

The limited distribution network of new entrants

The pressure on profit margins due to increasing competition.Still Industry prospects remain attractive

Procter and Gamble

HISTORY OF P&GStarted in 1837 by William Procter and James Gamble.First products were soaps and candles.Procter and Gamble has nearly 300 brands in more then 160 countries.Main Headquarter in Cincinnati, Ohio.Employs 138,000 people in 160+ countries.

SWOT ANALYSIS

4 PsOlayOld SpiceCamayPRODUCT

PRICE: It varies according to product.

PLACEThrough Strategic account management team develops supply chain improvements that boosts the sales by 9%.

49 other places other than India.

PROMOTIONPrint and electronic media have effective recall & persuasion scores.

Celebrity Endorsement.

the buyers perceptions of value, not the sellers cost18

Rural Initiative

TRENDS AND TECHNOLOGY

TOP 10 FMCG IN INDIA

AWARDS

Pepsico

Generic Value Chain

Inbound LogisticsOperationsOutbound LogisticsMarketing and SalesService Packaging

COMPANYCOBOFOBO

WAREHOUSE

C & FDISTRIBUTOR

WHOLESALERSLUMSRETAILERRETAILERCUSTOMER

CUSTOMER

SALESMENSALESMEN

Distribution Points

Company (PepsiCo): PepsiCo India provides the salt to all the bottling plants in the Country that carry out the bottling operations.

COBO: These are Company owned bottling operations operating directly under the Company. Out of 32 bottling plants, PepsiCo owns 15.

FOBO: These are Franchise owned bottling operations. R K Jaipuria group does all the franchisee-bottling operations for PepsiCo India; currently R K J Group has 17 bottling plants for Pepsi.

Distribution Points

Warehouses: These are Company or franchisee owned warehouses spread over various locations that cover the respective territories and come under the purview of their respective Area or Territory Offices. Stocks are sent from the bottling plants to these warehouses, from where they are sent to the C & F centers and Distributor Points.

C & F Centers: These are the biggest centers in the distribution network and receive proper assistance from the Company (either COBO or FOBO). The C & F center is owned by a private player and not by the Company. The vehicles (Delivery Vans) are owned by the Company, and the Salesmen at the C & F points are on the Company Payroll.

Distribution Points

Distributors: These are small, compared to C & F centers. Everything at the Distributor point owned and managed by the distributor, even the salespersons are on the Distributors payroll.

Wholesalers: These are smaller than C & F centers and Distributor points and get the stock directly from the Company or Franchisee. They get their stock directly from the Company and thus get special rates and extra discounts from the Company.

Distribution Points

Slums: They are generally smaller than the Wholesalers are. However, they get special discounts from the C & F centers and Distributor points.

Retailer: Retailers are the most important chain in the distribution channel of Pepsi as they are the only point of contact with the customers. Retailers get their stock from all the other channel members in the distribution channel.

4 P of Pepsico with reference to rural

Productthe 300ml bottle and now days the new small or commonly known as the chota pepsi is very much popularsuccessful in introducing the big 1-1.5 liter PET bottles in the rural markets popular during festivals and marriages

4 P of Pepsico with reference to rural

PriceA price point of Rs 10 for a 300 ml bottle has proved a major deterrent hence unsuccessful200ml Pepsi was reasonably priced between Rs.5- Rs.7.Areas of concern 200 ml offering should not cannibalize 300 ml salesHence was used as an introductory offer

4 P of Pepsico with reference to rural

Placesuccessfully test marketed in Bangalore, Baroda and CoimbatoreSuccessfully implemented the hub and spoke model through its rural activation team.developed special freezers that allow its products to stay chilled despite power cuts of three to four hours

4 P of Pepsico with reference to rural

PromotionUnveiled a major campaign in Andhra Pradesh, roping in top Telugu film star, Pawan Kalyan,Started rural focused tvc with sachin tendulkar and amitabh bacchan in kite fight with rural theme and sachin playing with rural kids while rural voiced song as background

Coca-Cola India has chosen to go hightech and set up Wi-Fi services at 12 of its 16 stalls where people can download free Coke-Studio music.The strategy has paid off: it has logged more than 11,000 downloads a month since the nearly two-month fair began.

Coke isn't experimenting with too many new products.Instead, it is focusing on deeper penetration of existing products.In rural India, Coke is already experimenting with the hub-and-spoke system, for which it is partnering distributors.

Own Your Fridge SchemeMeasurable tool to measure sales team and distributors performance in the outlets with respect to all parameters of sales Cooler Brand Pack Availability Channel Activation

Rural brand ambasadorAamir khan Smart simple

In a research it is found thatHighest consumption of cold drinks at home is during festival season, functionsRural phenomenon of birthday and anniversaryHospitality to urban visitors

Rural consumptionOn picnic/get-together, marriages and routine outingsWhile having alcholLower during travel and along with food consumptionLower after school/college consumptionYouths in rural share a single bottle with friends

Coca cola campaign thanda matlab coca cola is an example of undifferentiated marketingThe ad targets both urban and rural marketsFor rural areas the positioning statement should be the generic benefit of the product like thanda matlab coca cola

Strategies to counter fakesCoca cola put in place 48 consumer response coordinatorsThese coordinators will work with their teams to redress consumer complaints about overcharging and spurious botttlingThe company have large number of route salesman who have one to one relationship with the retailers

Attracted rural consumer by halving the price of a 200-ml bottle to Rs 5Rs 5 is pyschological price pointGreater than Rs 5 means the consumer have to break Rs 10 noteThe psychology is that once a consumer spends Rs 6-7 on any product, he/she will end up spending whole Rs 10

Coinage pricing at Rs 5 addresses this pyschological barrier

The real reason of 200 ml package was to get rural people used to packaged beverageRival pepsiCo also tried to match the price in this price warNow both of the companies have droped this strategy

Coca cola also launched a powder-based beverage called vintigo at Rs 2/satcheIt was launched in orissa villagesPepsiCo also announced to launch the same for malnutrition and deficiencies

Coca cola first india foray faltered due to insufficent attention to refrigrationRefrigration is a critical criteria in the purchase of the cold drinksRefrigrators and electricity is scarce in india

In hinterlands of uttar pradesh the company provides the shop owners with brine coolersNow the product can be chilled up to 12 hours without electricityThe company also have trade agreements with local ice makers to address the bottleneck

Coca cola university on wheelsNamed as Parivartan20 seater buses for mom-and-pop retailers training in tier II and tier III townsObjective was to help retailers toSurviveCompeteSustainGrow in fast changing retail space

20 retailers were selected with 300-sq. ft kirana store were selectedThey were taught the tricks of the trade with the help of audio visual aids in a 2 hour sessionTraining content was designed onCustomerShopStockfinance

Most retailers adopted the new trade practicesNow company is developing Advanced parivartan. This will coverShop layoutLocationDisplayBasics of financeCredit card knowledgePeople management skills

Program has covered 30,000 retailers including agra, ludhiana, chandigarh and lucknowThe aim is to train 100,000 retailers in next 2 years

Distribution modelCompany understood that the central distribution system is not effective in ruralIn central distribution situation is like

Taking stock directly from bottling plants to retail stores would be very costly due to the long distances to be covered The company instead opted for a hub and spoke distribution system

Hub and spoke distribution system Stock was transported from the bottling plants to hubs and then from hubs, the stock was transported to spokes which were situated in small towns These spokes fed the retailers catering to the demand in rural areas.

Also changed the type of vehicles used for transportationCompany used large trucks for transporting stock from bottling plants to hubs Medium commercial vehicles transported the stock from the hubs to spokes From spokes to village retailers the company utilized auto rickshaws and cycles hand carts to even camel carts in Rajasthan and mules in the hilly areas

CCI made an additional investment of Rs 7 million It also purchased 5,000 new trucks and auto rickshaws for boosting its rural distribution Coverage of 81,383 villages in 2001 to 1,58,342 villages in August 2003

Colgate palmoliveOral Care in India

Key FactsOral care sees current value growth of 13% in 2014, to reach INR94.0 billion Manufacturers focus on additional benefits in oral care products Toothpaste remains the biggest category, with an 80% share of value sales in oral care in 2014 The average unit price increases in 2014 due to premiumisation and inflation Colgate-Palmolive India continues to lead oral care in 2014, with a 48% value share Oral care is expected to see a value CAGR of 5% at constant 2014 prices in the forecast period of 2014-2019

TrendsBrand extensions and additional benefit toothpastes, such as acid neutralisers, whitening and gum care products, remained the focus for toothpaste manufacturers e.g Colgate visible white

Mouthwashes/dental rinses, relatively new products in India witnessed the highest current value growth of 37% in 2014

Per capita consumption, especially in toothpaste, is significantly lower compared with that in other developing countries. It is a quarter of the per capita consumption in Brazil, and half of that in China

Consumers in rural areas are gradually switching from toothpowder to toothpaste

manufacturers continued to premiumise oral care by extending their brands into whitening

Competitive LandscapeColgate-Palmolive India continued to lead oral care with a 48% value share

The company held a value share of 50% in toothpaste and 43% in toothbrushes in 2014

Colgate Visible White by Colgate-Palmolive India Ltd saw the fastest value growth of 80% in oral care in 2014

International companies such as Colgate-Palmolive India and Hindustan Unilever continued to dominate oral care in India in 2014

Domestic company Dabur India was in third position in value terms in 2014.

ProspectsOral care is expected to increase by a value CAGR of 5% at constant 2014 prices over the forecast period, to reach INR117.2 billion by 2019

Volume growth is also expected, as manufacturers are increasingly urging consumers via promotions to increase the amount of toothpaste used for brushing, and also to brush twice a day.

Whitening products are expected to perform better during the forecast period

This segment displays higher than average growth rates in terms of value sales, and this will also encourage manufacturers to extend their brands even further

Consumers will opt for traditional herbal-based toothpastes e.g Dabur lal toothpaste

Launches in the future are expected to be innovative products dealing with specific issues in oral care, rather than general oral care products.

Colgate Palmolive milestone1806: Company is founded by William Colgate in New York to make starch, soap, and candles. 1873: Toothpaste was launched 1928: Colgate and Palmolive-Peet merge, forming Colgate-Palmolive-Peet Company. 1937: the company moved into India. 1966: Palmolive dishwashing liquid is introduced .

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Colgate Palmolive milestone in India1937: launch first toothpaste Colgate dental cream 1949: launch tooth powder and toothbrush1950: Palmolive shave cream1976: launch programme young India.1989: Palmolive extra care soap launched.2003: launch oral health month program

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Colgate Palmolive productsORAL CARE:Tooth paste Colgate Total 12 Colgate cibaca Colgate Sensitive

Colgate Active saltColgate Max Fresh Colgate Fresh Energy Gel Tooth brushColgate360Colgate ZigzagColgate CibacaTooth powder

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Colgate the dominance continuespresent in the domestic oral care market for the last 70 years

dominant position in the toothpaste segment with a 48% market share in the domestic market

Cibaca was acquired by Colgate in 1994 from Ciba Geigy. The company today has two main brands in the toothpaste segment Colgate and Colgate Cibaca.

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Strong distribution940 direct accounts

3.8 million retail outlets. 2nd most widely distributed product in the country.

The company is tying up with initiatives like Echopal and Disha to further strengthen its distribution network.

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The Brand equity of ColgateColgate was ranked No 1 brand in all categories surveyed by annual brand power survey India.

In 1997 Colgate calciguard and Colgate plus get IDA seal of acceptance

Colgate was rated India's premier brand by A&M annual survey of India's top brand.

No 1 brand in India- surveyed by Taylor Nelson MODE

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The Brand equity of ColgateBest employer India- surveyed by BT Hewitt

2003-05 ranked Most trusted Brand in India Surveyed by AC neilson ORG-MARG.

2004 celebrated Colgate health month.

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PROMOTIONColgate skillfully communicate to rural market with a much larger but scattered audience characterized by variations in language, culture and lifestylesColgate has adopted the principle of think global and act local

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Sampark penetrationSuggesting and implementing a rural promotional scheme was what Colgate called Sampark for, as they were specialist in rural advertising category.Going in for mass media would not prove to be costly but the reach would be limited as, still only very few people own and possess a T.V. or a radio.Sampark decided to their advertising by door to door selling

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The requirement is three folds(for strategic promotion1. To explore the available media at the different locations.2. To develop region-specific consumer profiles to understand the characteristics of target market.3. To design right communication and motivation strategies to induce target audience to buy the product.

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The historically available people - places for distribution include

Whole seller,

Retailer,

Vans,

Weekly Haats,

Bazaars

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COLGATE JAGRUTI

INTRODUCTIONColgate-Palmolive, a leading oral hygiene product manufacturer, entered the rural market at a time when Neem twigs and non-dentifrice products like ash, charcoal, or salt were the norm for brushing teeth.

Operation Jagruti started in the year 2001.

To educate villagers about oral hygiene.

WHAT THEY ARE DOING

DEVELOPMENTHave increased penetration by doubling the villages from 33,000 to 55,000.Focusing on markets in the south, Uttar Pradesh and Bihar.Constantly monitor the viability. Experimenting with non-compete companies.

GROWTH2000 population rural India.

Campaign mode.

2.8 million outlets, Colgate is present in about 2.4 million outlets

CHALLENGESRural sampling and seeding exercise for Colgate Herbal .Economic slowdown.

Reducing overall total delivered cost .Reducing excess duty.

InitiativesTeachers Training ProgramTeachers Training Program is an integral part of the School Dental Health Program, conducted regularly across the country to promote preventive dental health care. Colgate also has launched its first-ever online school curriculum featuring fun and entertaining activities.

Oral Health Educational Program

TheColgate Rural Initiative, targeted at rural areas with a population between thirty and a hundred thousand people. The dental check up camps were supervised by teams of dentists and organisers who interacted with over 1 lakh people teaching them the benefits of oral hygiene.

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ITC E-Choupal Colgate, a company also tied up withITC E-Choupaland Rotary to spread the message of dental care and oral hygiene to villages across India.

The campaign successfully targeted over 156 villages in Uttar Pradesh in association with Project Disha and 36 villages in Maharashtra. In addition, dental camps were also conducted in the Dussera Mela at Kota.

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Major Competition to Colgate in rural India PepsodentClose upBaboolMeswakDabur redAmarAnchor white& other small players

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4 Ps adapted by Pepsodent to attract rural IndiaProducts - Germicheck+, Whitening, 2in1, Center Fresh, Gum Care, Sensitive, KidsPrice points combination of high & low price points for various classes of consumer.

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4 Ps adapted by Pepsodent to attract rural IndiaPromotion- through project streamline 1990, project shakti, Khushiyon Ki Doli campaign, organized health camps, free samplesCommunication - Pepsodent toothpaste fights germs to protect teeth against cavities

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Khushiyon Ki Doli campaign

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Close upProducts red, menthol, lemon mint, milk calciumPromotion in rural Mainly through project ShaktiCommunication Tazgi jo paas laye

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Dabur as a competitorBabool - mint fresh gel & normal & its lower price point for rural people is 30g for rs.5Dabur red- Dabur Red Toothpaste is available in 4 SKUs: 200gm, 100gm, 50gm and 20gm(5rs)Dabur lal dunt manjan

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Other competitorsAnchor white positioned as Indias first British Dental Health Society certified 100 per cent vegetarian toothpaste, in 1997came up with a promotional offer of over 60 per cent discount on the MRP for a combopack of Anchor White toothpaste together with an AchorPremium toothbrush for penetration. Ajanta toothpaste strong distribution & lower price pointsAttracting vegetarian customers Amar, Babool

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ConclusionColgate is still most successful brand in IndiaFuture for Colgate also seems brightMain reasons are Strategic initiativesCreating Demand in rural areas

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GodrejGodrej agrovet adhaar

About CompanyGodrej Agrovet is a subsidiary of Godrej Industries Ltd.

GIL holds 57% share of Godrej Agrovet.

Godrej Aadhaar is a program of Godrej Agrovet for rural India with its motto as - Khushiyon ka, Khushhali ka

Godrej agrovet and RuralGodrej Aadhaar is the agri service cum rural retail venture of Godrej Agrovet, an initiative started to strengthen its age old relations with the Indian farmers.

Godrej Aadhar is the retail outlet of Godrej Agrovet with a vision to be the complete solution provider to the farmers rendering farm advisory services, credit facility to farmers, providing up to date information on weather, price, soil & water testing facility, FMCG / consumer durables etc. to farmers.

Offers great value proposition Unnati Ghar Sansaar and Gaon Multi category retail service and retail outletStarted in December 2003 in Manchar, Pune District.Aadhaar Centres - Maharashtra, Gujarat, Punjab, Haryana, Andhra Pradesh, Tamil Nadu, Orissa and West Bengal.Adhaar got 65 outlets all over India

Objectives behind AdhaarImprove productivity

Higher returns

Improved cost benefit ratio

Offers crop advisory services

Soil and water testing services

Buy back of output

Crop finance

It is a complete solution provider for the Indian farmers and provides professional guidance.Have dedicated team of experts who cater to the farmers needs deliver direct to doorstep

Work profileIt services around 20 villages in its radius.

Team of qualified Agronomists who interacts with farmers on a daily basis

Educate the farmers on farm practices.Ensures better productivity.

ServicesThese centres provide valuable technical guidance, soil & water testing services.

They also retail quality products of leading companies.

Aadhaar centres also a facilitate credit to farmers and provide a platform to sell their produce, buy back of output, crop finance.

Supply of agri-inputs and animal feeds.

Transfer of information (weather, price, and demand supply).

Door-to-Door delivery of products among other things. To farmers, its a complete solution under one roof

OfferingsOn the basis of feed back they have also developed :Basic foodGroceryApparelFootwear to furnitureKitchenware Home appliancesValue-added services including Banking,Postal ServicesPharmacy

CollaborationsApollo - Godrej Aadhaar, the rural services cum retail initiative of Godrej Agrovet has signed an agreement with Apollo Pharmacy, part of the Apollo Hospitals group, to offer medicine support across Godrej Aadhaar outlets in rural India. The agreement establishes areas of collaboration that include setting up of Apollo Pharmacies at Aadhaar outlets called Apollo Aadhaar Pharmacy, offering genuine medicine and life saving drugs, round the clock to nearby villages. Fortis - , to open pharmacies in rural areas. the company seeks to empower the rural India mainly the farming community by providing all encompassing health needs under one roof.Future group - Future Group picks up 70% stake in Godrej Aadhaar. The tie-up is mainly to increase the penetration of our insurance business, micro-finance, credit business and sourcing of agri-products. trying to create more value by combining two big groups as Future group has excellent knowledge of retailing while Godrej has good reach of rural consumers in the country. The benefits are mutual for both the companies.

Collaborations4. EICHER : to provide Commercial Vehicles to Rural India. Through this agreement Eichers Light commercial vehicles (LCVs) will be showcased and made available at Godrej Aadhaar outlets across nine locations in Maharashtra, Gujarat and Punjab. 5. Tyson Foods: Tyson foods stakes 51 % in JV with godrej agrovet which focuses all forms of processed chicken6. Bajaj Allianz : Agri services cum retail initiative of Godrej Agrovet Ltd, will offer life insurance products to the rural community by signing an agreement with Bajaj Allianz Life Insurance today.

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