SHRI MATA VAISHNO DEVI UNIVERSITY

A Dissertation Report on the Study on the performance of the FMCG firms

in India

Submitted to the

FACULTY OF MANAGEMENT

In partial fulfillment of the requirements for the award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

By

SURBHI NARGOTRA

Under the guidance of

DR. SAURABH SRIVASTAV

FACULTY OF MANAGEMENT

SCHOOL OF BUSINESS

SMVD UNIVERSITY ACADEMIC YEAR: 2013-15

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 CERTIFICATE

This is to certify that the dissertation entitled “THE STUDY ON THE

PERFORMANCE OF FMCG FIRMS IN INDIA” is a bona-fide work of Ms.
Surbhi Nargotra carried out in partial fulfillment for the award of degree of
Masters of Business Administration. This dissertation is not submitted earlier
for the award of any degree/diploma/fellowship of any other
University/Institution. Also, certified that the student have fulfilled all the
essential requirements regarding this dissertation.

Signature Signature
Project Supervisor Director (School of Business,
College of Management)

Dr.SaurabhSrivastav Dr.AshutoshVashistha
Date: ___________ Date: _____________

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 ACKNOWLEDGEMENT

To acknowledge all the persons who help in the completion of a project is not
possible for any researcher, but, in spite of all this, it is the foremost
responsibility of any researcher and also the part of the research ethics, to
acknowledge those who play a vital role in the completion of the dissertation.

I express my sincere gratitude to my project guide Dr.Saurabh, Director,

School of Business Management, Shri Mata Vaishno Devi University for his
able guidance, continuous support and cooperation throughout the project,
without which the present work would not have been possible.

A special thanks to Dr. D. Mukhopadhyay, Dean- Faculty of Management, who

made all the efforts to provide me with a very conducive Environment. I am
also highly grateful to all other faculty members who taught me with the never
ending vigor.

Last but not the least I would like to thank all those who directly or indirectly
helped me in the successful completion of this very project.

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 DECLARATION

I, hereby declare that the dissertation titled “The study on the performance of
FMCG firms in India” submitted by me in fulfillment of the requirement of
M.B.A at Faculty of Management under the guidance of Dr. Saurabh, Faculty
of Management, SMVDU, and KATRA during the period of 2013-15. This is
my original work and no part of it has been submitted earlier to SMVDU.

Yours Sincerely

(SurbhiNargotra)

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Chapter No. Title Page No.

Certificate

Acknowledgement

Declaration

1 Introduction 6

II Literature review 12

1II Research methodology 14

IV Description of the company 16

V Discussion 37

VI Limitation of study 40

VII Conclusion 41

VIII Bibliography 42

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 INTRODUCTION

FMCG goods are popularly known 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, toothpaste, shaving products,
shoe polish, packaged foodstuff, and household accessories and extends to certain electronic
goods. These items are meant for daily of frequent consumption and have a high return

India’s FMCG sector is the fourth largest sector in the economy and creates employment for
more than three million people in downstream activities. Its principal constituents are
household Care, Personal Care and Food & Beverages. The total FMCG market is in excess
of Rs. 85,000 Crores. It is currently growing at double digit growth rate and is expected to
maintain a high growth rate.

In recent years, the fast moving consumer goods sector (FMCG) is witnessing increased use
of sales promotion activities all over the world. This sector is characterized by products
having low unit value and requiring frequent purchases and consumer behaviour reflecting
less loyalty, impulse buying, and low involvement on the part of a consumer.

KEY SECTOR CHARACTERISTICS

The FMCG sector is characterized by increasing consumption, high brand awareness, intense
competition between the organized and unorganized segments, and a strong MNC presence.
Since FMCG products are items of daily consumption, demand is slow to be impacted by
economic slowdown. However, providing good price points is the key to success. Food
products and personal care together make up two-third of the sector’s revenues. Rural India
accounts for almost 50% of the total Indian FMCG market. Managing the distribution
network to reach millions of stores, and keep them stocked is a big challenge. Extensive
distribution networks and logistics are keys to achieving a high level of penetration in both
the urban and rural markets.

Customer does not have bargaining power in case of branded products, but intense
competition between FMCG companies’ results in value for money deals for consumers.
Price wars are a common phenomenon.

History Of FMCG In India

In India, companies like ITC, HLL, Colgate, Cadbury and Nestle have been a dominant force
in the FMCG sector well supported by relatively less competition and high entry barriers
(import duty was high). These companies were, therefore, able to charge a premium for their
products. In this context, the margins were also on the higher side. With the gradual opening

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up of the economy over the last decade, FMCG companies have been forced to fight for a
market share. In the process, margins have been compromised, more so in the last six years
(FMCG sector witnessed decline in demand.

Top Companies 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
11. Colgate-Palmolive (India) Ltd.
12. Godrej Consumers Product Ltd.

Following are the list of major Indian firms:

1. Hindustan lever limited (HLL): The Company earned revenues of Rs. 5,000 crores
with a net profit margin 12%. Its parent company is Unilever, which holds about
52% of the equity. With a market capitalization of Rs. 61,000 crores, the Company is
a part of the everyday life of millions of consumers across India.

2. ITC (Indian Tobacco Company): With a market capitalization of Rs.137, 000 crores,
ITC is one of India’s foremost private sector companies. It earned revenues of
Rs.5,000 crores& a net profit margin of 25% in December 2010.

3. Nestle India: With a market cap of Rs.35, 000 crores it operates with seven factories
and a large number of co-packers.The company marked a steady growth in 2010 with
Rs. 1,000 crores as revenues & a net profit margin of 15%

4. GCMMF (AMUL): Every day Amul collects 447,000 litres of milk from 2.12 million
farmers (many illiterate), converts the milk into branded, packaged products, and

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 delivers goods worth Rs 6 crore (Rs 60 million) to over 500,000 retail outlets across
the country.

5. Dabur India: With Market Capitalization of Rs.16, 000 crores, Dabur India Limited is
the fourth largest FMCG Company in India. It earned a revenue of Rs.900 crores& a
net profit margin of 14% in Dec’10.

6. Asian Paints (India):Its deals in productslike Paints and Specialty products and it has
a revenue of 101 billion .

7. Cadbury India: Cadbury India is the market leader in the chocolate confectionery
market with a 70% market share.

8. Britannia Industries: Britannia has an estimated 38% market share. At present, 90% of
Britannia’s annual revenue of Rs. 22 billion comes from biscuits.

9. Procter & Gamble Hygiene & Health Care: It is the leader is most of the product
categories and in some of the as the challenger. In last five years it has outperformed
the leader like HUL also and it is earning high profit on year basis.

10. Marico Industries: The Company has a market capitalisation of Rs.8, 000 crores,
Marico’s Products generated a turnover of about Rs. 26.6 billion during 2009-10.

Various product launched by FMCG

Following are the new launches of various companies:

 Colgate has brought a new mid premium toothpaste brand called “Colgate Maximum
Cavity Protection plus Sugar Acid Neutralizer”. This will be available at Rs.94 for a
200gm pack and Rs.48 for a 100 gm pack
 HUL has launched “Close-Up Diamond Attraction” in whitening toothpaste category
at the price of Rs.40 for 50gm pack. HUL is re-entering into men cosmetics range
under Pond’s Men which will include face washes and moisturizers
 Zydus Wellness launched a new face wash under its “Everyuth Naturals” face wash
category at a price of Rs.35 for 50gm pack.

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  ITC has recently bought “B Natural”, a natural juice brand and entered Rs.1000 crore
branded juice market. It has also entered into the Nicotine Replacement Therapy
space with the launch of “KwikNic” - a 2mg Nicotine chewing gum.

Organised and Unorganised Sector In FMCG:

There is a stiff competition in the FMCG sector in India and the competition is expected to
increase in the coming years. The people of both urban and rural regions in India are
consuming high volume of fast moving consumer goods these days to the higher disposable
income.

The urban segment is the largest contributor to the sector, accounting for over two-thirds of
total revenue. In 2012, market size of the organised FMCG sector was 6 per cent of the
overall organised retail market and is expected to reach 30 per cent by 2020. This represents
the influence of modern retail over the FMCG sector.

Rural FMCG Market:

The rural market is not homogeneous. The individual sections of this market are not too big,
although the overall size is large. Rural India offers tremendous growth prospects for the
FMCG industry.FMCG products account for 53.0 per cent of total rural spending.During
FY11, more than 80 per cent of FMCG products posted faster growth in rural markets as
compared to urban ones.

1. The Melas:
Melas are of different types i.e. commodity fairs, cattle fairs and religious fairs and
may be held only for a day or may extend over a week. Many companies have come
out with creative ideas for participating in such melas.

2. The Haats:
For the marketer, the haat can be an ideal platform for advertising and selling of
goods. By participating in haats and melas, the company can not only promote and
sell the products but also understand the shared values, beliefs and perceptions of
rural customers that influence his buying behaviour.

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 3. Farm-to-Farm/House-to-House:
Rural people prefer face-to-face communication and farm visits facilitate two way
communications. The advantage is that the sales person can understand the needs and
wants of the rural customer by directly discussing with him and answer his queries on
products and services.

4. Mass media: In the present world mass media is a powerful medium of

communication. The following are the mass media generally used:
• Television.
• Cinema
• Radio

In this, the accounting performance is largely the past performance of the firm and it hardly
describes the potential performance of FMCG firm in India.

This dissertation is an attempt in line to evaluate the consistency of the performance of the
top FMCG firms with respect to various performance majors.

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LITERATURE REVIEW
The present chapter deals with review of literature, concepts and methodology. In order to
gain background knowledge of the problem and to identify appropriate methodology,
research design, techniques of analysis, it is logical to present a brief review of available
literature relating directly or indirectly to the field under study. What follows, makes no
claim of being an exhaustive review of all investigations done on this problem, rather an
attempt has been made to highlight the main issues related to the topic at various levels from
whatsoever, available material.

With respect to the previous literature there can be various majors for the
descriptive performance of the firm.

G. NAGARAJAN, DR. J. KHAJA SHERIFF, their paper explains the understanding of the
consumer mindset towards FMCG products. It focuses on some of the fundamental issues
pertaining to the emerging challenges and prospects of marketing FMCG products (new
product launch) in India.Emerging trends in sales and customer attraction which enable
improvements in new products development (FMCG).This paper also depicts that the
marketers want to fulfill the customer requirements they come up with challenges which are
new and unseen in yesteryears.

RALLABANDI SRINIVASU stated that the fast-moving consumer goods (FMCG) sector is
an important contributor to India’s GDP. Fast moving consumer goods (FMCGs) constitute a
large part of consumers’ budget in all countries. This paper also focused on the analysis of
competitive within the sector, and draws lessons for competition policy. FMCG Industry is
characterized by a well established distribution network, low operating cost, lower per capita
consumption and intense competition between the organized and unorganized segments.
India’s FMCG sector creates employment for more than three million people in downstream
activities.

Ranjit Kumar Paswan, in this paper an attempt has been made to know the solvency
position of selected FMCG companies in India. The data collected from the annual reports
from 2005-06 to 2010-11 from the selected six FMCG companies in India. This study
concentrates on the various accounting ratios to analyze the financial performance in terms of
solvency of the selected companies. The statistical tools like Average, Standard Deviation
and Co-efficient of variation have been applied.

There is a significant contribution in terms of describing the performance of the firms in

terms of economic profit of the firm relate to the concept of EVA

EVA is a vital measure that reflects all the dimensions by which management can increase
value. EVA is the financial measure that comes closer than any other measure in capturing
true economic profit of an enterprise (Management Guru Peter Drucker).

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EVA is based on the concept that a successful firm should earn at least its cost of capital.
Firms that earn higher returns than financing costs benefit shareholders and account for
increased shareholder value. In its simplest form, EVA can be expressed as the following
equation:

EVA = Net Operating Profit After Tax (NOPAT) - Cost of Capital

V.ANANDAVEL Dr.A.SELVARASU, Their research paper studies the companies profile

to demonstrate a direct correlation between the investment in stakeholder relationships and
corporate performance. Economic Value Added (EVA) is now being considered as an
important management tool across the corporate world for measuring and rewarding
performance inside the companies. Most of the companies measure performance with
accounting profits which are often seriously biased measure of true profitability. EVA is an
unbiased measure of true profitability. EVA indicates the value to what extent created by
management or agent for shareholders. The paper aims at analyzing Companies performance
through EVA.

It has been found that over the period, there have been significant studies on the performance
measures; however specific study that describes the consistency of the FMCG sector over the
various performance variables has been missing.

This study is the humble attempt to understand this concept.

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III
RESEARCH METHODOLOGY

Methodology is the systematic, theoretical analysis of the methods applied to a field of study.
It comprises the theoretical analysis of the body of methods and principles associated with a
branch of knowledge

DATA:

The study has used existing literature and relevant available information for analysing the
various reasons to study the performance of FMCG sector in India

OBJECTIVE OF THE STUDY:

1. The degree of relation between the different companies

2. Economic profit generation by company over the period
3. Reason for consistent performance of company.
4. Ranking of company on performance of variables.

RESEARCH DESIGN:

This study is based on secondary data mainly taken from annual reports of FMCG companies
taken in the study. The financial data used in the research are taken from Moneycontrol.com,
Valueresearchonline.com, published balance sheets and research reports.

SAMPLE:

Top ten FMCG companies were examined for on the basis of Net Profit, Market
capitalization and revenue. From those ten firms five were taken for study whose revenue and
Net profit were consistently high. Those sample companies are:

1. Dabur

2. Colgate Palmolive

3.Marico

4.Emami

5. P&G

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DATA DESCRIPTION:

Company who had the consistent performance on revenue generation over the last 10 years is
taken into consideration. The present study used statistical tools like correlation, EVA with
PAT, DPS, and EPS for analyzing the financial data of sample firms.

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 CHAPTER IV

Description of the Companies

To analyse the performance of various firm in FMCG sector, a comprehensive analysis of

various firm in industry is done. The parameters of the performance of analysis was the Net
profit and revenue generated by the firm. Companies who had the consistent performance on
revenue generation over the last 10 year are taken into consideration.

1. BRITANNIA:

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

2,317.1
REVENUE 5,615.49 4,974.19 4,250.13 3,427.97 3,142.89 2,617.66 1,817.92 1,615.45 1,470.53
1

NET PROFIT 233.87 186.74 145.29 116.51 180.40 191.0 107.65 146.43 148.77 118.8

2. COLGATE PALMOLIVE

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

REVEN 1,042.
3,163.8 2,805.5 2,381.5 2,079.4 1,810.6 1,597.3 1,421.1 1,237. 1,072. 08
UE
1 4 1 8 5 0 8 99 53

NET 150.9
PROFIT 177.9 0
656.81 578.53 520.19 486.47 334.89 274.81 250.36 206.47
7

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 3. DABUR INDIA

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

REVENUE 1,151.
4,349.39 3,798.05 3,305.42 2,891.00 2,435.85 2,128.02 1,782.08 1,372.39 1,273.58 87

NET 131.0
PROFIT 754.42 659.92 624.38 551.52 444.10 389.85 304.67 240.96 181.32 2

4. EMAMI

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

REVENUE 223.09
1,627.09 1,414.25 1,221.15 1,006.85 739.60 585.90 519.22 307.37 225.62

NET 26.12
PROFIT 346.83 293.00 253.72 242.00 135.71 96.01 66.30 52.67 34.71

5. GODREJ CONSUMER

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

REVENUE 768.78
1,464.63 1,510.02 1,121.56 856.29 873.47 796.02 714.26 800.54 821.99

NET 84.30
PROFIT 91.56 190.05 43.63 13.36 -29.51 82.03 22.94 50.69 76.01

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Dabur India ltd :
Dabur India ltd. Is the fourth largest FMCG company in india with the revenues of us$ 750
million (3390 crore) and market capitalization of us$ 3.5 billion building on a legacy of
quality and experience of over 125 years. Dabur operates in key consumer products
categories like hair care, oral care, health care, skin care, home care & foods.

Some of the well-known brands of Dabur are: Amla Chyawanprash, Hajmola, Lal
Dantmanjan, Nature Care, Pudin Hara, Babool Toothpaste, Hingoli, Dabur Honey,
Lemoneez, Meswak, Odonil, Real, RealActiv and Vatika.

Under one brand name Dabur it has marketed a variety of products, ranging from hair care to
honey, oil, chyawanprash, Amla, Vatika, Hajmola and Real. The company is taking care of
young and old generation demands into mid for development of products. It is having its
manufacturing plants mainly in hilly areas where it can get the raw materials of herbs for
production of ayurvedic medicines and other products.

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4 P’S OF DABUR:

PRODUCT PRICE PLACE OR PROMOTION

DISTRIBUTION
CHANNEL
Consumer
TV commercials
Retailer Newspapers
POP Display
a) Candy 0.50 paisa
Wholesaler Wall Painting
Video Vans
Manufacturer Sales Proportions

Retailers
TV commercials
Agents Newspapers
Rs.695 (with POP Display
b)Chawyanprash
shipping) Wholesaler Wall Painting
Video Vans
Manufacturer Sales Proportions

SWOT ANALYSIS:

The SWOT process for Dabur is carried out as follows:

(i) Strengths: The strengths of the company are:

 Support from leading businesses houses from abroad.
 Financial position of the company is sound.
 Research and development facilities are adequate for further development
of the products.
 Market position is well maintained
 Niche marketing strategy is doing well.

(ii) Weaknesses:
 The impact of Dabur products is slow and of low quality and that is to be improved

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  Production and operating costs are higher and these reduce the profits of the company.

 Dabur India’s R&D facilities are comparatively inadequate and needs improvements.

 In experienced staff sometimes creating problems and giving weak performance.

 Old and outdated technologies not helping in production of more production of higher
quality.
 Lack of innovative approach in the company exists.

(iii) Opportunities
 Indian market is very wide and having great potential for further development.

 The knowledge of the company regarding customers and there profile is good.

 The availability of raw materials and low labour cost is another opportunity.

 Less level of competition is herbal based products

(iv)Threats
 Export expansion chances are very less.
 Competition is slowly increasing and for further it would be threat.
 Higher inflation increasing the total costs

I. Marico Ltd Company

Marico is a leading Indian Group in Consumer Products and Services in the Global Beauty
space. Marico’s Products and Services in Hair care, Skin Care and Healthy Foods generated a
Turnover of about Rs.26.61 billion during 2009-10.

Marico markets well-known brands such as Parachute, Saffola, Sweekar, Hair & Care, Nihar,
Shanti, Mediker, Revive, Manjal, Kaya, Sundari, Aromatic, Camelia, Fiancée and Hair Code.
Marico’s brands and their extensions occupy leadership positions with significant market
shares in most categories- Coconut Oil, Hair Oils, Post Wash Hair Care, Anti-lice Treatment,
and Premium Refined Edible Oils, niche Fabric Care etc. Marico is present in the Skin Care

19
solutions segment through Kaya Skin Clinics, the Sundari range of Spa skin care products (in
the USA & other countries) and its soaps.

Marico’s Strategic Business Unit:

Consumer Products Business:

Over the past 17 years, Marico has been continually improvising and building new brands.
Marico's Consumer Products Business houses well-known brands such as Parachute, Saffola,
Sweekar, Hair & Care, Nihar, Shanti, Mediker, Revive, Manjal, among others, which occupy
leadership positions with significant market shares in most categories- Coconut Oil, Hair
Oils, Post wash hair care, Anti-lice Treatment, Premium Refined Edible Oils, niche Fabric
Care etc

International Business Group:

The International Business Group of Marico operates in more than 20 countries spread across
Asia, Middle East and Africa and has manufacturing facilities in Egypt, South Africa &
Bangladesh.The International Business group is actively involved in creating opportunities
for future growth and has enabled our brands to be present in many other markets across the
globe.

Kaya:
Kaya Ltd was an entrepreneurial leap of faith marking Marico's entry into skin care solutions
business. It was a true reflection of uncommon sense for a company in hair care products to
move, instead of merely logical product extensions, straight into skin care services. It

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attempted to leverage Marico's strengths in the Personal Care business and in-depth
understanding of the needs of the Indian consumer and her desire to enhance her natural
beauty with the best cosmetic dermatology procedures available internationally.

BRANDS & TARGETED CUSTOMER'S

PARACHUTE- Primary Target Women of All Age's
PARACHUTEADVANCED - Young Girls (College & School Going)
HAIR & CARE- appealing to Both Men & Women of All Age’s, Primary User the Young
Age Group
SHANTI AMLA- Customer Looking for Value for Money (H.OIL+Badam)
SILK & SHINE- Primary Target Female Of age 18 – 34
AFTER SHOWER- Primary Target Young Males 18 – 34
MEDIKER- Young Children Age Group 3-13 (Due to Lice Problem)
SWEEKAR- Primary Target Housewives (Due to Economic, Healthy Life for Family)
SAFFOLA - All Health Conscious Consumers (especially for Heart Patient's)
REVIVE- Housewives of Urban Area (Higher & Middle Class).

 Recently, Marico’s brand Saffola launches Saffola Masala Oats, in 3 lip-smacking

flavors that are filled with nutrition and are a great way to start your day. Saffola
Masala oats is a unique combination of whole grain oats, spices and real vegetables
and comes in the variants of –Veggie Twist, Peppy Tomato and Classic Masala (for
the North, West, East Markets) and in Masala & Coriander, Curry and Pepper, Pepper
& Spice, Veggie Twist (for the South Markets). It is available in convenient single-
serve sachets and can be prepared by adding to water and cooking, in just 3 minutes.

SWOT ANALYSIS:

STRENGTH:
1. Excellent distribution network and product availability

2. The product portfolio of Marico has brands covering Edible Oil, Hair Oils, Skin Care,

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Fabric Care, etc.
3. Popular brands, good brand visibility and excellent advertising of products has led to
strong brand loyalty

4. Experience management and good R&D

WEAKNESS:

1. Market share is limited due to presence of other strong FMCG brands.

2. Marico products has stiff competition from big domestic players and international
brands

OPPORTUNITY:

1. Tap rural markets and increase penetration in urban areas

2.Mergers and acquisitions to strengthen the brand

3.Increasing purchasing power of people thereby increasing demand

THREAT:

1. Intense and increasing competition amongst other FMCG companies

2.FDI in retail thereby allowing international brands

3. Competition from unbranded and local products

II. COLGATE- PALMOLIVE:

In a society that cares about appearances consumers continually look for new, innovative oral
care products to provide an extra sparkle to their smiles. Oral care companies are marketing
their products to different consumer segments in order to capture their share in the growing
segment market. Today’s consumer demands numerous benefits from their tooth pastes and
manufacturers are responding accordingly.

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The Personal Care and Household Cleaning Products Industry includes Companies that make
Personal Care and Hygiene Care Products such as cosmetics, perfumes and toiletries as well
as household cleaning products. Some leading companies in Personal Care and Household
care are Procter & Gamble, Unilever, Colgate Palmolive, Johnson & JohnsonGillette and
Reckitt & Benckiser etc.

 Colgate has brought a new mid premium toothpaste brand called “Colgate Maximum
Cavity Protection plus Sugar Acid Neutralizer”. This will be available at Rs.94 for a
200gm pack and Rs.48 for a 100 gm pack.

MARKETING MIX
PRODUCT:-

 The product, the Precision toothbrush, is a product that should add value to a
buyer’s life.

 It should also add utility, and meet the wants and needs of targeted consumers.

 The product should be unique and different from all similar products that are already
available on the market.

 The strategy is to differentiate the product’s design and packaging, which in return
will cause the toothbrush to stand out.

PRICE:-
 The price of a product says something about the quality.

 Even though the quality of the Precision toothbrush will be significantly higher than
other leading toothbrushes, the price of the toothbrush will be determined by the
prices of the other toothbrushes already in the market.
 This pricing strategy is a result of positioning the toothbrush as a mainstream
product rather than a niche product.

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COLGATE 20g 40g 50g 75gm 80g 100g 150g 200g 300g
ms ms ms s ms ms ms ms ms

Dental cream 5rs ---- 14rs ---- ---- 30rs 45rs 56rs 86rs

Max fresh --- --- 15rs --- 32rs 35rs 55rs ---- ---

Total ---- ---- --- 35rs --- --- 65rs --- ---

Sensitive --- --- 35rs --- --- 60rs --- --- ---

Kids --- 26rs --- --- --- --- --- --- ---

Advance --- --- --- 27rs --- --- 53rs --- ---
whitening
Active salt ---- --- 14rs ---- ---- 30rs ---- 54rs ----

Cibaca --- --- --- --- --- 18rs --- 28rs ---

Herbal --- --- 14rs --- --- 30rs --- 55rs ---

Fresh energy --- ---- ---- ----- --- --- 55rs 60rs ---
gel

PLACE:-

 Place represents the location where a product can be purchased.

 The most important part of marketing is how a product will get from the
seller to the buyer.

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  Many products go through a channel of distribution, which involves
manufacturers, wholesalers, retailers, and consumers.

 The distribution strategy proposed for the Precision toothbrush is through dentists,
plastic surgeons, drug stores, grocery stores, large retail stores, and department
stores.
 The product is available in the all India market, including semi-urban & rural markets
which are their primary focus.

PROMOTION:-

 Product promotion is communication spread through advertising, Publicity and sales

promotion.

 Promotion represents all of the communication that marketers use in the market.

 We suggest that Colgate-Palmolive advertise their products by using commercial,

magazine ads, the radio, ads that are to be placed in dentist offices, billboards, and the
sides of buses.

 Advertising is done to promote new products, remind consumers of existing products,

and also promote the image of the company at hand. We also suggested that Colgate
offer special coupons and rebates through their other products, and also food
products.

 Also, Colgate could benefit from the usage of in-store displays.

 Most of the promotional activities would be T.V. media.

 T.V., FM radio for urban population.

 Promotion towards rural population also.

SWOT ANALYSIS:

Strengths:
 Due to long experience in Indian market it has a well-established distribution
network.
 Brands of the company are very popular and customers are not ready to
change over to products of competitors’.

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  Better production technology, skilled and motivated manpower and with
sound financial position the company is doing its business in India.

Weaknesses:
 Export earning is less due to internationally tough competition faced.

 In some of the cases the knowledge of Indian customers is low to understand

their requirements.

 Due to tough competition the operating costs are going up.

 Small scale operation permission from governments.

Opportunities:
 Indian market with huge potential for future.

 Export potential with special planning can be increased.

 Business expansion possibility is there in Indian markets.

 Availability of raw materials and cheaper labour costs in operation.

 Low cost operations due to availability of raw materials and workers

for their factories

Threats:

 Tough competition from foreign and local players.

 Inflation creates problems because it adds to the costs.

 Government policies and taxation law are to be implemented

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 III. PROCTOR & GAMBLE
Procter & Gamble Co. (P&G) is an American company based in Cincinnati, Ohio that
manufactures a wide range of consumer goods. In India Proctor & Gamble have two
subsidiaries: P&G Hygiene and Health Care Ltd. and P&G Home Products Ltd. P&G
Hygiene and Health Care Limited is one of India's fastest growing Fast Moving Consumer
Goods Companies with a turnover of more than Rs. 500 crores.

It has in its portfolio famous brands like Vicks & Whisper. P&G Home Products Limited
deals in Fabric Care segment and Hair Care segment. It has in its kitty global brands such as
Ariel and Tide in the Fabric Care segment, and Head & Shoulders, Pantene, and Rejoice in
the Hair Care segment.

P&G Home Products Limited was incorporated as 100% subsidiary of The Procter & Gamble
Company, USA in 1993 and it launched launches Ariel Super Soaker. In the same year
Procter & Gamble India divested the Detergents business to Procter & Gamble Home
Products. In 1995, Procter & Gamble Home Products entered the Hair care Category with the
launch of Pantene Pro-V shampoo.

Procter & Gamble Home Products launches Head & Shoulders shampoo. In 2000, Procter &
Gamble Home Products introduced Tide Detergent Powder - the largest selling detergent in
the world.

Procter & Gamble Home Products Limited launched Pampers - world's number one selling
diaper brand. Today, Proctor & Gamble is the second largest FMCG Company in India after
Hindustan Lever Limited.

SWOT ANALYSIS:

Strengths:
 In India the distribution network has been well established with the local
dealers.

 Brands of the company are very popular among customers.

 Low cost operations due to better technology and well managed workforce.

 Competent employees along with updated technology.

Weaknesses:
 Export of the company is limited due to high consumption in local markets.

 Knowledge of local customers and territory sometimes not available

27
Opportunities:
 Indian Territory is still untapped and it is with huge potential for growth.

 Export potential can be utilized by the company.

 Cost competitive advantage to the company due to favourable Indian market

position.

 Opportunity for expansion in all relevant aspects of FMCG sector exists.

Threats:
 Threats from low cost production imports.

 Necessary implementation of policies and taxation rules in India.

 Sometime the local market conditions affect the demands and sales.

 Connectivity in rural areas is not good for better coverage.

IV. Emami Ltd Company

Emami Limited is one of the leading and fastest growing personal and healthcare businesses
in India, with an enviable portfolio of household brand names such as BoroPlus, Navratna,
Fair and Handsome, Zandu Balm, MenthoPlus Balm and Fast Relief.Emami acquired the
heritage brand Zandu on the basis of huge business synergy between the two brand portfolios.

Subsidiaries
The company has the following subsidiaries

 Emami Paper Mills Limited

 Emami Chisel Art
 CRI Limited
 South City Projects (Kolkata) Ltd
 Advanced Medicare & Research Institute Ltd (AMRI)

28
  Frank Ross Limited
 Emami Realty Limited
 Emami Retail Pvt Limited (Starmark)
 Emami Biotech Limited
 Emami Cement Ltd

PRODUCTS OF EMAMI:

Fair and Handsome: The brand created a segment in Rs 1,400 crore fairness cream market.
Fair and Handsome has become a Rs 100 crore-plus brand with 84 per cent share in the Rs
137 crore domestic men’s fairness cream market, according to Emami’s annual report.

Navratna Oil: It is Emami’s largest brand that is positioned as‘therapeutic cooling oil’, the
company has followed a similar paradigm of developing a niche segment. Launched in the
early nineties, the brand continues to enjoy around 48 per cent market share of the Rs 550
crore ‘cool oil’ category.

Boroplus Antiseptic Cream: Flagship brand of Emami, Boroplus, and now marketed as
‘India’s No. 1 antiseptic cream’, accounts for about 74 per cent of the Rs 269 croreboro
creams segment in the country

Taken together, these three brands – Fair and Handsome, Navratna Oil and Boroplus
Antiseptic Cream – contribute about half of Emami’s total revenues.

SWOT ANALYSIS:

STRENGTH:

1.Its strategy is to develop niche segments into brands which have always given it the first
mover’s advantage

2. Strong brands in its portfolio; Boroplus, Navaratna, Fair & Handsome, Zandu are all Rs
100 crore pluss brands.

WEAKNESS:

1. It has not diversified much. It had planned to enter into baby care segment but later on
pulled back.

29
THREATS:

1. Intense and increasing competition amongst other FMCG companies

2. FDI in retail thereby allowing international brands and increasing bargaining power of big
retailers which could negotiate for better margins

3. Competition from unbranded and local products

OPPORTUNITY:

1. Demographic trends like increasing population and purchasing power favor the consumer
healthcare market, thus opportunities for growth.

2. Related diversification into growing categories

3. With growth in modern retail, it should look into opportunities of how to cater to this
channel

30
The various performance of the firm were analysed on the basis of various
factors.

1) Economic Value Added performance analysis:

Interpretation:
EVA analysis is presented for sample FMCG units below. Thereafter, an intersect oral
comparison and correlation analysis of EVA and other related measures are elaborated. EVA
figures for the FMCG sector under study are shown in Table 1. According to the table, the
average amount of EVA created by FMCG sector during the period of study has been Rs.
172.206 cr. Dabur ltd reported the highest average EVA (Rs. 291.94 cr) followed by the
Colgate ltd (Rs. 232.67) and Marico ltd (Rs. 134.3 cr). Emami ranked the lowest amongst all
(rs. 81.701cr). Only three companies, viz., dabur ltd, colgate ltd and marico ltd created EVA
above the average of entire sector group. As far as variability of EVA for ten years are
concerned, Emami ltd reported the highest inconsistency as evident by the highest Coefficient
Variation (CV) (88.94%), the lowest positive CV (35.5%) is reported by P&G. It indicates
that there is uniformity in EVA in ten years in case of Emami as compared to other FMCG
companies

The year 2013 may be considered as successful year for this sector because the FMCG
companies reported the highest average EVA (Rs. 305.712 cr).While the year 2004 is
considered the worst year, because the FMCG companies generated the lowest EVA (Rs.
78.678 cr) at an average. The variability in the performance of FMCG sector in creating EVA
over the period of analysis has been fairly low (average of company wise CV being 40.95%).
On the other hand, variability among EVA figures year-wise has been much higher (average
of year wise CV being 42.5%). This phenomenon may be because of the high degree of size
variation among the sample companies.

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 1) Table 1: EVA for Selected FMCG sector (crores)

EVA(cr)

Rank Company

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Average CV%

1. Daburindia 442.58 347.27 370 374.22 307.89 376.73 259 200 143.92 97.79 291.94 36.76

2. Colgate ltd 451.91 406.5 325 325 195.08 149 82 97 157.84 137.37 232.67 54.28

3. Marico 283 199 175 196 144 132 79 51 46 38 134.3 55.65

4. P&G 130.61 115.69 91.9 131.3 138 149.18 114.17 106.78 114.76 111.82 120.421 35.5

5. Emami 220.46 166.52 139.79 130.19 68.04 30 24.38 22.61 6.61 8.41 81.701 88.94

average 305.712 246.996 220.338 231.342 170.602 167.382 111.71 95.478 93.826 78.678 172.206 42.5

SD 125.34 110.92 108.06 100.67 79.67 253.8 79.094 60.56 58.2 47.95 70.53 -

cv% 40.99 44.9 49.04 43.51 46.69 151.62 70.79 63.42 62.02 60.94 40.95 -

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 2) CORRELATION ANALYSIS:

In order to find out the degree of correlation between EVA and other related measures, Karl
Pearson’s coefficient of correlation has been calculated. The calculated values have been
shown in Table 2:

Table 2: Correlation Between EVA and Selected Measures

YEAR EVA& EPS EVA AND PAT EVA AND DPS
2013 0.85 0.88 -0.10
2012 -0.26 0.84 0.08
2011 -0.37 0.96 -0.13
20010 -0.30 0.99 -0.08
2009 -0.19 0.98 -0.10
Average -0.05 0.93 -0.07

As presented in Table 2, correlations between EVA and EPSfor FMCG sector companies
have been negative (coefficient being -0.056).

A probable error-based significance test indicates that the coefficients are insignificant. In
case of correlation of EVA with PAT, however, high positive correlation has been found
(0.9360), which is significant.

Correlation between EVA and DPS in this case is negative (-0.07) has been very low which is
also not significant.

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 3) Ranking of Companies:

TABLE 3: Rank of FMCG Companies.

RANK

Company 2013 2008 2004 average

Dabur india 1 1 3 1.66

Colgate ltd 2 3 1 2

Marico 3 4 4 3.67

P&G 5 2 2 3

Emami 4 5 5 4.67

As per the data, the company having low average is the best performer and vice versa.
Clearly from the table, Dabur Company is most consistent company in FMCG sector.

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 V
DISCUSSION

 SWOT Analysis of FMCG Sector in INDIA

Swot Analysis includes its Strengths, Weaknesses, Opportunities and Threats. Swot analysis
of FMCG is done on the basis of EVA analysis, correlation, revenue, profit. Here I am going
to discuss these four points of Swot analysis.

STRENGTH
1. Its operational cost is very low.

2. Its distribution network is present both in Rural as well as Urban areas.

3. In FMCG sector there is also a presence of well known brands.

4. It has excellent R&D facilities.

5. Presence of well-known brands in FMCG sector

OPPORTUNITIES:
1. Changing lifestyle of society, unused rural market.

2. There is increase in purchasing power of consumer by increase in their income

level.

3. People spend high on consumer goods.

4. There are also good opportunities available for those people who wants to
invest in business of value added products like desserts , puddings etc.

5. There are only 10-12 percent of products which are consumed in the packed
form so it shows the strength of FMCG industry.

6. Demand of FMCG products in rural areas.

WEAKNESSES:
 In FMCG industries there is very less scope of investment in technology and achieving the
condition of economies of scale mostly in small sectors.

35
 It has very low exports

THREATS :
 In case of FMCG if the product if failed in the market then it is very difficult to revive it back
in the market.

 In case of these companies if the company launches the new product in the market then the
other competitive companies also launch the same product in the market which results in
reducing profits and increasing profits

 Due to easy availability of other options customer tolerance and satisfaction level is very low

 Rural demand depends upon the monsoon and its cyclical nature of demand.

 With the removal on the restriction on imports resulting in replacement of domestic brands of
the country.

STRATEGY OF FMCG COMPANIES

COMPETITIVE STRATEGIES FOLLOWED BY FMCG COMPANIES

IN INDIA

The main objective of Competitive Strategy is to generate a competitive advantage, increase

the loyalty of customers and to beat competitors.

Five main competitive strategies are:

 Overall low cost leadership strategy

 Best cost provider’s strategy
 Broad differentiation strategy
 Focused low cost strategy
 Focused differentiation strategy

Here competitive strategy varies from sector to sector and company to company. Thus, it
is not easy to predict a single or to find a single strategy for the whole sector. When we
come on to FMCG Sector main strategies lay behind market strategies, cost, and quality
strategies.

36
FUTURE OF FMCG SECTOR IN INDIA:

The consumers today are endowed with a wide range of options to make their pick in FMCG
products. There is a lot of competition in the FMCG sector as a number of factors are to be
considered while selling the products. This denotes that only the innovators can survive the
tough competition. The investors must be very proactive to the market needs and also build
strong and powerful distribution channel.

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 VI

LIMITATION

 Time and resource is a common constraint for any research. Therefore, same has been
the case with this research as well
 Availability of online journals and data bases was another constraint during the course
of study
 This study was undertaken for limited period & done purely for academic purpose only.

38
 VIII
CONCLUSION
In this report, it is found that the firms with high level of EVA are very highly valued.
Although, there is significant difference in mean value creation across low, moderate and
high total productivity for FMCG firms. EVA is only variable which has unique influence on
MVA of FMCG. Hence, it is concluded that Economic value added has positive significant
impact on Value Creation for FMCG firm in India. EVA acts as a genuine explanatory
variable for creating value to the organization in order to justify its usefulness for
performance measurement, shareholder value creation, executive compensation, and financial
reporting. The negative correlation value in this sector indicates that further analysis needs to
be done but that is outside the scope of this paper and hence it is not attempted.

39
VII

BIBLIOGRAPHY

 G. NAGARAJAN, DR. J. KHAJA SHERIFF,International Journal of Marketing,

Financial Services & Management Research Vol.2, No. 1, (emerging challenges and
prospects of fmcg product development in india) (2013)

 Ranjit Kumar Paswan, Analysis of Solvency of Selected FMCG Companies in India(2013)

 RALLABANDI SRINIVASU, International Journal of Innovative Research in

Science,Engineering and Technology, Vol. 3, Issue1,(fast moving consumer goods
retail market, growth prospect, market overview and food inflation in indian market –
an overview2014)

 HTTP://WWW.INDIAINFOLINE.COM/MARKETSTATISTICS/SECTOR-
PERFORMANCE/NSE-FMCG-SECTOR

 Prof. Ritesh Patel, Prof. Mitesh Patel, Impact of Economic value added (EVA) on
Share price(2012)

 V.ANANDAVEL Dr .A.SELVARASU, international journal of management (2012)

 WWW.MOTILALOSWAL.COM

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SHUBHAMGOSWAMI, Pacific Business Review International Volume 5 Issue 3
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 HTTP://EN.WIKIPEDIA.ORG/WIKI/FAST_MOVING_CONSUMER_GOODS

 WWW.DABUR.COM

 WWW.EMAMI.COM

 WWW.MARICO.COM

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 WWW.COLGATE.CO.IN

 WWW.PG.COM

 WWW.PWC.IN

 WWW.MONEYCONTROL.COM

 HTTP://NAUKRIHUB.COM/INDIA/FMCG

 www.ibef.com

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