dissertation on buying behaviour of fmcg products

Fast MovingFast Moving ConsumerConsumer

Goods Goods (FMCG)(FMCG)

1

Dissertation Report On

Buying Behavior of FMCG Products

Submitted To: Submitted By:Prof. R.P.Singh Vandana ChandraDirector (ABS) MBA (Agri-Business)AMITY University AMITY UniversityLucknow Campus Lucknow Campus

Under the supervision of:Mr. Ashish Chandra

2

Faculty Guide (ABS)AMITY UniversityLucknow Campus

Acknowledgement

I consider my proud privilege to express deep sense of

gratitude to Prof. R.P.Singh for his admirable and valuable

guidance, keen interest, encouragement and constructive

suggestions during the course of the project.

I would also like to express my hearty gratitude

to my faculty guides, Dr. Arun Bhadauria and Mr. Ashish

Chandra of Amity University, Lucknow for their valuable

guidance and sincere cooperation, which helped me in

completing this summer project.

I would also like to thank my mother Mrs. Usha Rani

and my father Mr. Ramesh Chandra, for their inspiration

and moral support received in completing this work.

Last, but not the least, I sincerely thank all the

members of my department for their immense support and

assistance extended during the course of this project and in

making it a valuable experience.

Vandana Chandra

MBA (Agri - Business)

IVth Semester

3

Table of Content 1. Executive summary

1-1

2. Introduction

2-3

3. Overview of FMCG

3

4. FMCG in 2006

4

5. Comparison between FMCG in 2005 & 2006

4-5

6. Sector’s outlook

5-7

7. Scope of FMCG

8

8. Growth prospects

8-11

9. Top players in FMCG sector

11

4

10. Secondary players

12

11.Review of literature

12-14

12. Research objectives

15

13.Research methodology

16-19

14.Panoramic View

20-22

15. Income based classification

23-24

16.Socio – economic classification

25-28

17.Age demographics

28-29

18. Geographical dispersion

30

19. Analysis

31-60

20.Conclusion

61-62

21.Suggestions & recommendations

63

22.References

64-65

5

23.Questionnaire

66-68

Executive Summary

In this research the researcher has put an effort to

understand the buying behavior of the consumers towards

FMCG products.

1. In this report, the researcher has first of all given a

brief review about FMCG sector as a whole.

2. Then she has given a review of the findings of some of

the researches that has already been conducted by

various researchers.

3. Then she has enumerated her research objectives.

4. Then she has given the panoramic view regarding the

topic.

5. Then she has described her research methodology i.e.,

the sample unit, sample size, sampling region,

sampling procedure that she has used in her report.

6. She has used stratified random sampling as her

sampling procedure.

7. Then she has analyzed the data which was collected

by a questionnaire.

8. Then she has concluded the findings of the survey.

9. Then finally, she has given few suggestions &

recommendations regarding the topic.

6

Introduction

There was a time when the FMCG companies

ignores rural market, they took no any interest to produced

or sell products in rural market in India. It was the initial

stage of FMCG companies in India. As per as the time had

passed, the strategy and marketing style of FMCG

companies had been changed.

The rural market is the one of the best

opportunity for the FMCG sector in the India. It is wider and

less competitive market for the FMCG. As the income level of

the rural consumers increasing, the demand of FMCG is

increasing continuously.

Fast moving consumer goods (FMCG) are

popularly named 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,

tooth paste, shaving products, shoe polish, packaged food

stuff, household accessories, extends to certain electronic

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goods. These items are meant for daily or frequent

consumption & have a high return.

A major portion of the monthly budget of each

household is reserved for FMCG products. The volume of

products circulated in the economy against FMCG products is

very high, as the number of products the consumer uses, is

comparatively very high. Competition in FMCG sector is very

high resulting in high pressure on margins.

FMCG companies maintain intense distribution

network. Companies spend a large portion of their budget on

maintaining distribution networks. New entrants who wish to

bring their products in the national level need to invest huge

sums of money on promoting brands. Manufacturing can be

outsourced. A recent phenomenon in the sector was entry of

multinationals and cheaper imports. Also the market is more

pressurized with presence of local players in rural areas and

state brands.

Overview of FMCG Sector

FMCG is an acronym for Fast Moving Consumer

Goods, which refer to things that we buy from local

8

supermarkets on daily basis, the things that have high

turnover & are relatively cheaper.

FMCG in 2006

After 4 years of dull performance in both revenues

& profits, FMCG sector has now, i.e., since 2005, gained the

momentum, principally because of the smaller companies

that have substantially improved their market shares at the

cost of larger players, & in some cases, the regional players.

If we carefully observe the FMCG index & BSE index,

we would realize that the returns on money invested in

FMCG index are much lower than the returns in benchmark

index. The FMCG sector has under performed the benchmark

BSE sensex in 2006. Though both the indices were close to

each other till august 2006, however, in the later part of the

year the sensex surpassed the FMCG index by a reasonable

margin.

9

Comparison of 2006 and 2005 After two years of sinking performance of

FMCG sector, the year 2005 has witnessed the FMCG’s

demand growing. Strong growth was seen across various

segments in FY06. With the rise in disposable income and

the economy in good health, the urban consumers continued

with their shopping spree. The rural demand grew at around

11%, while both the urban and rural sector together

registered a growth of around 8%. Packets and sachets

contributed to the highest growth in rural areas. Growth

in FMCG depends on two factors:

• Increase in penetration and consumption in rural areas

• Change in aspirations and tastes of the urban

population

Both these factors contributed to growth in 2006.

Besides demand, prices also increased, because of which

only the selected consumers moved up in the value chain.

The large format retail stores in metros also stimulated sales,

even if on a very small base. Some companies absorbed

higher input prices, while others were able to pass on the

cost to the consumers.

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Sector’s Outlook

FMCG is the fourth largest sector in the Indian Economy with

a total market size of Rs.60,000 crores. FMCG sector

generates 5% of total factory employment in the country and

is creating employment for three million people, especially in

small towns and rural India.

According to a CII – A T Kearney Report, the FMCG sector in

India is expected to grow at a compounded growth rate

(CAGR) of 9% to a size of Rs.1,43,000 crores by 2010 from

Rs. 93,000 crores at present.

With a growth of 52.5%, the BSE FMCG index has, during the

last 1 year outperformed the sensex, which could manage a

growth of 41% only. A well established distribution network,

intense competition between the organized & unorganized

segments, low operating costs, strong branding

characterizes the market.

The large consumer base, particularly in rural sector, and the

growing middle class open up huge opportunities to FMCG

companies to take the consumers to branded products and

offer new generation products.

The sector's lack-luster performance in the last few years

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was due to price competition and increase in raw materials

cost. However, in the FY06, the sector has witnessed a

double-digit growth in profits and revenues. The sector has

registered an up trend in growth across categories, such as

health supplement, shampoo, toothpaste, hair oils, and

mosquito repellant, as shown in table below:

Sales Value Growth %

Categories 2004-2005 2005-2006 Apr.2006-Sept. 2006

Health Supplement (Chyawanprash)

-5% 0% 23%

Shampoo 10% 23% 19%

Toothpaste 5% 6% 16%

Hair Oils 9% 18% 23%

Mosquito 13% 10% 29%

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Repellant

Source: CII – A T Kearney Report, (2000)

Sector Financials In millions

31-03-2006 31-03-2005 31-03-2004

Net Sales

Sales Growth

164,196

10.8%

148,241

2.0%

145,380

-

Profit after Tax

PAT Growth

19,595

16.6%

17,001

-24.2%

21,008

-

Market Capitalization 74,746 65,810 63,072

Enterprise Value 662,540 645,477 551,971

Return on Capital Employed (ROCE)

47.1% 51.0% 45.5%

P/E Ratio 26.7% 27.1% 21.0%

Source: CII – A T Kearney Report, (2000)

Scope of the FMCG Sector

The Indian FMCG sector has a market size of US $13.1 billion.

FMCG sector is expected to grow by over 60% by 2010. That

will translate into an annual growth of 10% over a period of 5

13

years. It has been estimated that FMCG sector will rise from

around Rs. 56,500 crores in 2005 to Rs. 92,100 crores in

2010. Hair care, household care, male grooming, female

hygiene, & the chocolates & confectionary categories are

estimated to be the fastest growing segments, says an

HSBC Report. Though the sector witnessed a slower growth

in 2002 – 04, it has been to make a fine recovery since then.

For example, Hindustan Levers Limited (HLL) has shown a

healthy growth in the last quarter. An estimated double-digit

growth over the next few years shows that the good times

are likely to continue.

Growth Prospects

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

14

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.

Indian Competitiveness and Comparison with the World

Markets:

The following factors make India a competitive player in

FMCG sector:

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1. Availability of raw materials

Because of the diverse agro-climatic conditions in India,

there is a large raw material base suitable for food

processing industries. India is the largest producer of

livestock, milk, sugarcane, coconut, spices and cashew and

is the second largest producer of rice, wheat and fruits

&vegetables. India also produces caustic soda and soda ash,

which are required for the production of soaps and

detergents. The availability of these raw materials gives

India the location advantage.

2. Labor cost comparison

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Low cost labor gives India a competitive advantage. India's

labor cost is amongst the lowest in the world, after China &

Indonesia. Low labor costs give the advantage of low cost of

production. Many MNC's have established their plants in

India to outsource for domestic and export markets.

3. Presence across value chain

Indian companies have their presence across the value chain

of FMCG sector, right from the supply of raw materials to

packaged goods in the food-processing sector. This brings

India a more cost competitive advantage. For example, Amul

supplies milk as well as dairy products like cheese, butter,

etc.

Top Players 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

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Secondary Players

1. Colgate-Palmolive (India) Ltd.

2. Godrej Consumers Product Ltd.

3. Nirma Ltd.

4. Tata Tea Ltd.

5. Parle Agro

6. H. J. Heinz

Review of Literature

Rural market is one of the best

opportunities for the FMCG sector. In some sense we can say

that rural market is future of FMCG.

1. Basu Purba (2004), suggested that the lifestyle of

rural consumers is changing. Rural Indian market and the

marketing strategy have become the latest marketing

buzzword for most of the FMCG majors. She added the

strategies of different FMCG companies for capturing rural

market like Titan’s Sonata watches, Coco Cola’s 200ml

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http://www.naukrihub.com/india/fmcg/companies/heinz/

http://www.naukrihub.com/india/fmcg/companies/parle/

http://www.naukrihub.com/india/fmcg/companies/tata-tea/

http://www.naukrihub.com/india/fmcg/companies/nirma/

http://www.naukrihub.com/india/fmcg/companies/godrej/

http://www.naukrihub.com/india/fmcg/companies/colgate-palmolive/

bottle, different strategies of HUL and Marico etc. She takes

into consideration the study of National Council for Applied

Economic Research (NCAER). According to the NCAER

projections, the number of middle and high-income

households in rural area is expected to grow from 140 million

to 190 million by 2007. In urban India, the same is expected

to grow from 65 million to 79 million. Thus, the absolute size

of rural India is expected to be double that of urban India.

2. Tognatta Pradeep (2003), suggested that , the

economic growth in India's agricultural sector in last year

was over 10%, compared with 8.5% in the industrial sector.

This implies a huge market potentiality for the marketer to

meet up increasing demand. Factors such as village psyche,

strong distribution network and market awareness are few

prerequisites for making a dent in the rural markets. The

model is of the stolid Anglo-Dutch conglomerate Unilever

Group, which has enjoyed a century-long presence in India

through its subsidiary Hindustan Lever Ltd. It was Hindustan

Lever that several years ago popularized the idea of selling

its products in tiny packages. Its sachets of detergent and

shampoo are in great demand in Indian villages. Britannia

with its low priced Tiger brand biscuits has become some of

the success story in rural marketing.

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3. Aithal, K Rajesh (2004), suggested that rural

markets are an important and growing market for most

products and services including telecom. The characteristics

of the market in terms of low and spread out population and

limited purchasing power make it a difficult market to

capture. The Bottom of the pyramid marketing strategies

and the 4 A's model of Availability, Affordability,

Acceptability and Awareness provide us with a means of

developing appropriate strategies to tackle the marketing

issues for marketing telecom services in rural areas.

Successful cases like the Grameen Phone in Bangladesh and

Smart Communications Inc in Philippines also provide us with

some guidelines to tackling the issue.

As per my concern of the research, it is a

detail study of different FMCG products used by rural

consumers. It will provide detail information about consumer

preferences towards a good number of FMCG products which

is too unique and different from those above researches.

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Research objectives

• To understand the demand pattern of FMCG products in

the rural market.

• To know the amount of household income spent on the

consumption of FMCG products.

• To understand the image of the products in the eyes of

the consumers.

21

Research methodology

Data collection

Sample unit:

1. working people (including men & women)

2. college students

3. school students

4. senior citizens

Sample size:

1. working people: 32%

2. college students: 29%

3. school students: 23%

4. senior citizens: 16%

Sampling region:

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1. The researcher has selected LUCKNOW, the Capital city

of Uttar Pradesh as her area of study.

2. She has chosen GOMTI NAGAR, MAHANAGAR, ALIGANJ

as her areas of research. In these areas she can easily

meet working people (both male & female), school

students, college students & senior citizens.

The population status of these areas can be shown in a

tabulated manner, which is given as follows:

Area Population Gomti Nagar 12,97,570Mahanagar 8,12,230

Aliganj 8,75,640

Population is in approximate figures.Source: http://www.upgov.nic.in/upinfo/census01/cen01-1.htm

Note: As the examiner can see that the population of

areas (areas that are chosen by the researcher) is very

large, therefore the researcher has stratified the area. She

has chosen various areas that come under these areas.

The areas covered by the researcher in Gomti Nagar are

Viram Khand, Vinamr Khand, Vibhuti Khand . the

population level of these areas are:

Area PopulationVishwas Khand 2,83,563

Vipul Khand 3,93,768Vivek Khand 2,86,786

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Source: Lucknow Development Authority

Note: the researcher took these areas because these

areas are near to various school & colleges. The

researcher took school & college students as her sample

unit.

The areas covered by the researcher in Maha Nagar are

Chandra Lok & Mahanagar Colony. The population

statuses of these areas are:

Area PopulationChandra Lok 2,34,863Mahanagar Colony 3,84,683


Note: The researcher took these areas because there are

various schools & institutes nearby these places.

The areas covered by the researcher in ALIGANJ are

Jankipuram & Sahara City. The population statuses of

these areas are:

Area PopulationJankipuram 2,78,675Sahara City 1,89,986


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Note: The researcher took Aliganj as one of the areas for

her study because she lives in jankipuram & it was quite

easy for her to conduct the survey in that particular place.

Sampling procedure:

The researcher will take stratified random sampling as

the sampling procedure.

Data collection method:

1. Primary data: it will be collected with the help

of a self administered questionnaire. This questionnaire

aims to gather information related to various Branded

products.

2. Secondary data: it will be collected with the

help of books, research papers, magazines, news

papers, journals, internet, etc.

Research instruments:

Questionnaire design:

As the questionnaire is self administrated one, the survey is

kept simple and user friendly. Words used in questionnaire

25

are readily understandable to all respondent. Also technical

jargons are avoided to ensure that there is no confusion for

respondents.

Panoramic View

India has a population of over 1 billion & 4 climatic

Zones. Several religious & personal beliefs, 15 languages,

different social customs & food habits categorize Indian

consumer class. Besides this, India is also different in culture

if compared with other Asian countries. Therefore, India has

high distinctiveness in demand and the companies in India

can get lot of market opportunities for various classes of

consumers. Consumer goods marketers’ experience that

dealing with India is like dealing with many small markets at

the same time.

Indian consumer goods market is expected to

reach $400 billion by 2010. India has the youngest

population amongst the major countries. There are a lot of

young people in India in different income categories.

26

Consumer goods marketers are often faced with a

dilemma regarding the choice of appropriate market

segment.

In India they do not have to face this dilemma

largely because rapid urbanization, increase in demand,

presence of large number of young population, any number

of opportunities is available. The bottom line is that Indian

market is changing rapidly and is showing unprecedented

consumer business opportunity.

As the restrictions on foreign investments were relaxed in

1991, Multi-National Companies have been entering India

since then.

Market Size in $ million

Market Share in %

15Indian

Companies

MNCsIndian

Companies

MNCs

1992 2004 1992 2004

Breakfast

cereals2 25 100 0 52 48

Wafers, potato chips

6 35 100 0 37 63

27

Washing

Machines

40 570 98 2 51 49

TV 6303,03

0 97 3 49 51

1992 $=30 rupees

2004 $=45 rupees

Source: Center for Monitoring Indian Economy (CMIE)

With a population of 1 billion people,

India is a big market for FMCG companies. Around 70% of

the total households in India reside in the rural areas. The

total number of rural households is expected to rise from

135 m in 2002 to 153 m in 2010, which represents the

largest potential market in the world.

Rural and urban potential

Urban

Rural

Population 2001-02 (m household) 53 135

Population 2009-10 (m household)

69 153

% Distribution (2001-02) 28 72

Market (Towns/Villages) 3,768

627,000

28

Source: Statistical Outline of India (2001-02), NCAER

Indian consumer class can be classified

according to the following criteria:

1. Income

2. Socio-Economic status

3. Age demographics

4. Geographical dispersion

Income based classification

India has a population of 1.095 billion people,

comprising of 1/6th of the world population. India's

population can be divided into 5 groups on the basis of

annual household income. These groups are:

29

http://www.naukrihub.com/india/fmcg/consumer-class/geography/

http://www.naukrihub.com/india/fmcg/consumer-class/age/

http://www.naukrihub.com/india/fmcg/consumer-class/socio-economic/

http://www.naukrihub.com/india/fmcg/consumer-class/income/

1. Higher income

2. Upper middle income

3. Middle middle income

4. Lower middle income

5. Lower income

The income classification does not represent a real

scenario for an international business because the

purchasing power of currencies differs significantly. The real

purchasing power of Indian rupee is higher than the

international exchange value.

In addition to that, income classification is not

an effective tool to ascertain consumption and ownership

trends in the economy.

Consumer ClassificationAccording to National Council of Applied Economic Research

(NCAER) there are 5 consumer classes that differ in their

ownership patterns and consumption behavior across

various segments of goods.

Consumer Classes

Annual Income in Rs.

1996

2001 2007

Change

30

The RichRs. 215,000 and more 1.2 2.0 6.2 416%

The Consuming

Class

Rs 45- 215,000

32.5 54.6 90.9 179%

The Climbers

Rs. 22-45,000 54.1 71.6 74.1 37%

The Aspirants

Rs. 16-22,000 44 28.1 15.3 -65%

The Destitute

Below Rs. 16,000 33 23.4 12.8 -61%

Total164.

8 180.7199.

2 21%

Source: NCAER

The 5 classes of consumer households

(consumer classification) show the economic development

across the country based on consumption trends.

Socio economic classification

In addition to income classification and

consumer classification, Indian households can also be

31

segmented according to the occupation and education levels

of the chief earner of the household (the person who

contributes most to the household expenses). This is called

as Socio-economic Classification (SEC), which is mainly used

by market planners to target market before launching their

new products. SEC is made to understand the purchase

behavior and the consumption pattern of the households.

The urban area is segregated into: A1, A2, B1, B2, C, D, E1,

E2

Socio-Economic Classification

Occupation

Education

Illitera Less 5-9 School S Gradu Post-

32

te

than 4 yrs

in school

yrs of

school

certificate

ome college

ate graduate

Skilled E2 E1 D C C B2 B2

Unskilled E2 E2 E1 D D D D

Shop owner D D C B2 B2 A2 A2

Petty trader E2 D D C C B2 B2

Employer of-

Above 10 persons B1 B1 A2 A2 A1 A1 A1

Below 10 persons C B2 B2 B1 A2 A1 A1

None D C B2 B1 A2 A1 A1

Clerk D D D C B2 B1 B1

Supervisor D D C C B2 B1 A2

Professional D D D B2 B1 A2 A1

Senior executiv

e B1 B1 B1 B1 A2 A1 A1

Junior executiv

e C C C B2 B1 A2 A2

Source: Indian readership survey (IRS)Sections A & B refer to High-class- constitutes over a quarter of urban populationSec C refers to Middle-class-- constitutes 21% of the urban population

33

Sections D & E refer to Low-class-- constitutes over half the urban population

To understand the table, consider an example: A trader whose monthly household income (MHI) is more than that of a person in section A cannot be included in this SEC because his educational qualification or occupations do not qualify him for inclusion.

Sec C constitutes households whose Chief Wage Earners are employed as:

Skilled workers 33%

Petty traders 12%

Clerk/Supervisor 37%

Shop owners 18%

3/4th of them have studied till 10th or 12th class while the

remaining 1/4th have studied till 9th class.

Less than half of the Chief Wage Earners of households

belonging to sections D & E are unskilled workers. Petty

Traders are 18%, while Skilled Workers are about 28%.

More than 80% of the population of upper strata

consumers is living in the top 7 cities. Those top 7 cities are

Mumbai, Kolkata, Delhi, Chennai, Ahmedabad, Bangalore,

and Hyderabad. With increase in economic prosperity, this

population (upper strata consumers) is growing at 10

percent annually.

34

The rural area is segregated in to: R1, R2, R3, R4.

Education of chief wage

earner

Type of House

PuccaSemi-pucca Kuchcha

Professional degree R1 R2 R3

Graduation/ PG R1 R2 R3

College R1 R2 R3

SSC/HSC R2 R3 R3

Class 4-Class 9 R3 R3 R4

Up to class 4 R3 R3 R4

Self-learning R3 R4 R4

Illiterate R4 R4 R4

Age demographics

India is a very young nation, if compared with

some advanced and developed countries. Nearly two- thirds

of its population is below the age of 35, and nearly 50 % is

35

below 25.

Marketers explain that the boom in the consumption level

and leisure related expenditure is because of this young

population. It will have a significant impact over the

consumer goods market. In addition to that, it is expected

that this will generate trade opportunities and continuous

investment in the economy. There is huge potential for

further consumption of goods and services due to the

increased level of disposable income. The expenditure on

essential goods and services has a higher share in

developing countries as compared with that of developed

countries.

Age distribution if Indian population (In Millions)

Year/ Age 2006 2001 1996

Below 4 yrs 113.5 108.5 119.5

5-14 yrs 221.2 239.1 233.2

15-19 yrs 122.4 109.0 90.7

20-34 yrs 279.1 246.8 224

35-54 yrs 239.2 207.3 178.1

55 & above 118.7 101.7 88.7

Total 1094.1 1012.4 934.2

Consumption Trends

Food Essentials 45.68%

Essential Services (water, power, rent, and

10.1%

36

fuels)

Clothing 4.9%

Footwear 0.63%

Medicare 4.25%

Transport & Communication 14.51%

Recreation, Education, and Culture Less than 4%

Home Goods 3.25%

Geographical dispersion

There is large difference in economic prosperity levels

among several states in India, linked to the wealth creation

from trade, industrial, and agricultural development. There

are poor districts in many states, classified according to their

market potential. India has 500 districts, out of which 150

districts (category A) and next 150 districts (category B)

account for 78% and 15% of the national market potential

respectively. Remaining 200 districts (category C) are

backward and account for only 7% of national market

potential. Category C districts have 40% of the geographical

share.

37

Analysis

1. Which soap u prefer to use?

The reaction of people towards various SOAP brands

can be tabulated in the following manner:

Brands Lux Dettol Lifebuoy othersPercenta

ge36 22 18 24

In the survey that the researcher conducted, it

could easily be concluded that LUX, the product of HUL was

highly in demand. LUX, the product of HUL covers 36% of the

market share. After LUX, the other brands (EXCEPT LUX,

DETTOL, LIFEBUOY) covers 24% of the market share. This is

then followed by DETTOL, the product of RECKITT BENCKISER

38

with a market share of 22%, which is then followed by

LIFEBUOY, the product of HUL with a market share of 18%.

This data can be graphically explained with the help of the following bar graph:

39

0

5

10

15

20

25

30

35

40

percentage

brands

demand of soap brands

lux

dettol

lifebuoy

others

2. Which pack u prefer to use? In order to determine the income pattern of the

consumers, it was necessary for the researcher to

40

distribute the consumers on the basis of their demand for

the various packs of SOAP brands available in the market.

However, the reaction of people towards various

packs of SOAP can be tabulated in the following manner:

Packs of soaps Single packFamily pack (3 in

1)Percentage 56 44

In the survey that the researcher conducted, she

tried to differentiate amongst people, with below average

household income, average household income & above

household income. This classification can be done on the

basis of the daily expenditure that people make. 56%

consumers demand single pack. 44% consumers demand

family packs i.e. 3 in 1 pack.

This data can be graphically explained with the help

of the following bar graph:

41

0

10

20

30

40

50

60

percentage

packs preferred bycustomers

demand of packs of soap

single pack

family pack ( 3 in 1 )

1. Which tea u prefer to use?

The reaction of people towards various TEA brands can

be tabulated in the following manner:

42

Brands Tata TeaBrooke

BondTaj Mahal Others

Percenta

ge32 28 18 22


could easily be concluded that TATA TEA, the product of TATA

has a market share of 32%. This is followed by, BROOKE

BOND, with a market share of 28%. Followed by other brands

(EXCEPT TATA TEA, BROOKE BOND, TAJ MAHAL) with a

market share of 22%. This is finally followed by TAJ MAHAL,

the product of HUL which holds18% of the market share.

This data can be graphically explained with the help of the following bar graph:

43

0

5

10

15

20

25

30

35

percentage

brands

demand of tea brands

tata tea

brooke bond

taj mahal

others

2. Which tea pack u prefer to use?

44

In order to determine the income pattern of the



the various packs of TEA brands available in the market.

However, the reaction of people towards various TEA

packs can be tabulated in the following manner:

TEA packs SachetMedium

packLarge pack

percentage 48 32 20

In the survey that the researcher conducted,

she tried to differentiate amongst the people, with below

average household income, average household income &

above household income. This classification can be done

on the basis of the daily expenditure that people make.

However, it can be concluded that sachets are most

commonly used by the people .i.e., 48% consumers

demand sachet packs. 32% consumers demand medium

pack.20% consumers demand large pack.

45

This data can be graphically explained with the

help of the following diagram:

0

10

20

30

40

50

percentage

packs preferred by customers

demand of tea packs

sachet

medium pack

large pack

3. Which tooth paste u prefer to use?

46

In the initial years, the rural consumers

preferred tooth powders, datoons etc. But from the last

decade, the preference of consumers towards toothpaste

has been changed. A huge number of toothpastes of

different companies are sold in rural market.


TOOTH PASTES can be tabulated as follows:

BrandsPepsoden

tColgate Close Up Others

Percenta

ge27 35 22 16

In the survey that the researcher conducted, it could

easily be seen that COLGATE, the product of COLGATE

PALMOLIVE is the market leader, which covers 35% of the

total market. After that, PEPSODENT, the product of HUL is

demanded by the customers, which covers 27% of the

market share. Followed by CLOSE – UP, the product of HUL

is demanded by the customers, which covers 22% of the

market share. Which is then followed by others brands

(EXCEPT PEPSODENT, COLGATE, CLOSE - UP), which

covers 16% of the total market share.

47


help of the following bar graph:

0

5

10

15

20

25

30

35

percentage

brands

demand of tooth paste

pepsodent

colgate

close up

others

48

4. Which pack u prefer to use?




the various packs of TOOTH PASTE brands available in the

market.


TOOTH PASTE packs can be tabulated in the following

manner:

Tooth paste

packSmall pack

Medium

packFamily pack

Percentage 34 48 18


tried to differentiate amongst the people, with below


above household income. This classification can be done on

the basis of the daily expenditure that people make.

However, it can be concluded that 34% consumers demand

small packs. 48% consumers demand medium packs. 18%

consumers demand large pack.

49

This data can be graphically explained with the help

of the following graph:

0

10

20

30

40

50

percentage


demand of packs of tooth paste

small pack

medium pack

family pack

50

5. Which detergent u prefer to use?

The reaction of people towards various DETERGENT

brands can be tabulated in the following manner:

Brands Surf Rin Tide OthersPercenta

ge27 35 22 16


could be easily concluded that RIN, the product of HUL

captures 35% of the total market share. This is followed by

SURF, the product of HUL which has a market share of

27%. This is followed by TIDE, the product of PROCTER &

GAMBLE which has a market share of 27%. This is finally

followed by other brands (EXCEPT SURF, RIN, TIDE) which

captures 16% of the market share.

51



0

5

10

15

20

25

30

35

percentage

brands

demand of detergents

surf

rin

tide

others

52





the various packs of DETERGENT brands available in the

market.


DETERGENT packs can be tabulated in the following

manner:

Detergent

packsSachet

Medium

packFamily pack

Percentage 43 27 30






However, 43% consumers demand sachet packs. 30%

consumers demand family packs. 27% consumers demand

medium packs.

53



54

05

1015202530354045

percentage


demand of detergent packs

sachet

medium pack

family pack

7. Which shampoo u prefer to use?

The reaction of people towards various SHAMPOO

brands can be tabulated in the following manner:

55

BrandsClinic

plusSunsilk

Head &

shouldersOthers

Percenta

ge33 25 28 14

In the survey, that the researcher conducted it

can easily be concluded that CLINIC PLUS, the product of

HUL, captures the major portion of the market with a market

share of 33%. This is followed by HEAD & SHOULDERS, the

product of PROCTER & GAMBLE which holds 28% of the

market share. This is followed by SUNSILK, the product of

HUL which holds 25% of the market share. Finally followed

by other brands (EXCEPT CLINIC PLUS, SUNSILK, HEAD &

SHOULDERS) with a market share of 14%.

This data can be graphically explained with the help of the

following bar graph:

56

0

5

10

15

20

25

30

35

percentage

brands

demand of shampoo

clinic plus

sunsilk

head & shoulders

others


57




the various packs of SHAMPOO brands available in the

market.


SHAMPOO packs can be tabulated in the following manner:

Shampoo

packssachet

Small

pack

Medium

pack

Family

packPercenta

ge23 32 28 17






However, 32% consumers demand SMALL PACK. 28%

consumers demand medium pack. 17% consumers demand

large packs.

58



0

5

10

15

20

25

30

35

percentage


demand of shampoo packs

sachet

small pack

medium pack

large pack

59

9. Which biscuits u prefer to use?

The reaction of people towards various BISCUITS brands can


BrandsMarie

goldGood Day Parle G Others

Percenta

ge24 38 21 17

In the survey, that the researcher conducted, it can

easily be concluded that GOOD DAY, the product of

BRITANNIA holds a major market share of 38%. This is

followed by MARIE GOLD, another product of BRITANNIA

which holds 24% of the market share. After that, PARLE- G,

the product of PARLE, holds 21% of the market share. This is

followed by other brands (EXCEPT MARIE GOLD, GOOD DAY,

PARLE- G) which hold a market share of 17%.

60



0

5

10

15

20

25

30

35

40

percentage

brands

demand of biscuits

marie gold

good day

parle G

others

61

10.which hair oil u prefer to use?

The reaction of people towards various HAIR OIL brands can


BrandsParachut

e

Dabur

Amla

Dabur

VatikaOthers

Percenta

ge37 29 19 15


easily be concluded that PARACHUTE, the product of MERICO

captures 37% of the total market share. This is followed by

DABUR AMLA, the product of DABUR which captures 29% of

the total market share. This is followed by DABUR VATIKA,

another product of DABUR which captures 19% of the

market. And after that, followed by other brands (EXCEPT

PARACHUTE, DABUR AMLA, DABUR VATIKA) captures 15% of

the market share.

62

This data can be graphically explained with the help of

the following bar graph:

0

5

10

15

20

25

30

35

40

percentage

brands

demand of hair oil

parachute

dabur amla

dabur vatika

others

63

11.Which pack u prefer to use?

In order to determine the income pattern of

the consumers, it was necessary for the researcher to


the various packs of HAIR OIL brands available in the

market.

However, the reaction of people towards

various HAIR OIL packs can be tabulated in the following

manner:

Hair oil

packs

Small pack Medium

pack

Large pack

Percentage 32 41 27






However, 41% consumers demand medium packs. After that,

32% consumers demand small pack. 27% consumers

demand large packs.

64



05

1015202530354045

percentage


demand of packs of hair oil

small pack

medium pack

large pack

65

12.Which cream u prefer to use?

The reaction of people towards various CREAM brands can


Brands Pond’sFair &

lovelyAyur Others

Percenta

ge28 32 14 26

In the survey, that I conducted, it can easily be

concluded that FAIR & LOVELY, the product of HUL, holds the

major market with a share of 32%. This is followed by,

POND’s, another product of HUL, which holds 28% of the

market share. This is followed by, other brands (EXCEPT,

POND’s, FAIR & LOVELY & AYUR), which captures 26% of the

market share. This is followed by AYUR, the brand of AYUR

ACADEMY OF NATURAL BEAUTY (AANB) which holds 14% of

the total market share.

66



67

0

5

10

15

20

25

30

35

percentage

brands

demand of creams

ponds

fair & lovely

ayur

others

13.Which coffee u prefer to use?

The reaction of people towards various COFFEE brands can


68

Brands Bru Nestle Nescafe OthersPercenta

ge26 32 32 10


be easily concluded that all the brands are facing tough

competition. NESTLE, the product of NESTLE S.A. &

NESCAFE, another product of NESTLE S.A., shares equal

market share of 32% each. This means that they are in a

very tough competition. This is followed by BRU, the product

of HUL which holds, 26% of the market share. While the

other brands hold only 10% of the market share.



69

0

5

10

15

20

25

30

35

percenatge

brands

demand of coffee

bru

nestle

nescafe

others

Conclusions

In this report, it can very easily be

concluded that HUL, holds major portion of the FMCG

market. It holds major shares in the soap, detergent,

70

shampoo & cream’s category. HUL’s products are mainly in

demand, because they provide these products in different

packs. They consider the fact that rural consumers do not

have that much money to be spent on these products. So,

they prefer buying the small or the medium packs. However,

large or family packs are still been bought by few

consumers, who are from a well – off families.

In the case of TEA, TATA holds a major share. In

the case of COFFEE, NESTLE & NESCAFE holds the major

share. Rural consumers favor TATA because it is an old

organization & it has gained a lot of BRAND EQUITY which

finally creates BRAND LOYALTY. In these products, consumers

do get brand loyal, because they do not want to take a risk

with their tastes. So they prefer sticking to one brand. These

organizations supply their products in various packs (small,

medium & large), considering the buying capacity of their

consumers.

As in the case of BISCUITS, BRITANNIA holds

the major market share. Rural consumers favor BRITANNIA

because it is an old organization & it has gained a lot of

BRAND EQUITY which finally creates BRAND LOYALTY. In case

of BISCUITS, consumers do get brand loyal, because they do

not want to take a risk with their tastes. So they prefer

sticking to one brand. These organizations supply their

71

products in various packs (small, medium & large),

considering the buying capacity of their consumers.

In the case of TOOTH PASTES, COLGATE

PALMOLIVE holds a major market share. Consumers are very

concerned about their health, so if any product suits them

they prefer sticking to that product. And this product is also

available in various packs, so rural consumers can use it

according to their buying capacity.

In the case of HAIR OILS, MERICO holds the

major market share. MERICO is a much known organization &

its product PARACHUTE has reached all the places. So it is a

known product, which has created a good amount of

goodwill for the organization. Consumers have confidence &

trust in their product. Therefore, they prefer buying it.

72

Suggestions & recommendationsThe researcher would like to suggest the following points, so

that the organizations can easily sell their products to their

consumers:

1. However, the demand of a product is also affected by

its life cycle. If the product is in the introduction stage,

then it will definitely take some time to capture the

market, because in the introduction stage, consumers

are not much aware about the product. Therefore, it’s

the responsibility of the organization to create

awareness amongst the consumers.

2. They should adapt rigorous marketing strategies, in

order to sustain in the market.

3. There is immense competition in this sector. Therefore,

the organizations should try to gain competitive

advantage against their competitor’s.

4. They should try to reach as many people as possible.

5. For the organizations that are not much popular

amongst the consumers, should adopt Sales Promotion,

as their marketing strategies.

6. Application of 4A’s has also become an important task

for all the organizations.

73

(*4A= Availability, Affordability, Acceptability,

Awareness)

References

1. Kearney, A T, CII – Report, (2000)

2. Purba basu, research on living style of rural consumers, (2004), pg. no. 5-8.

3. Tognatta Pradeep, economic growth on agriculture sector, (2003), pg no. 6-10.

4. Aithal K Rajesh, importance & growth of rural markets, (2004), pg no. 8-12.

5. Center for Monitoring Indian Economy (CMIE)

6. Statistical Outline of India (2001-02), NCAER

7. National Council of Applied Economic Research (NCAER)

8. Indian readership survey (IRS)

9. http://www.upgov.nic.in/upinfo/census01/cen01-1.htm

10.Lucknow Development Authority

11.http://www.naukrihub.com/india/fmcg/overview/

12.http://www.naukrihub.com/india/fmcg/

74

http://www.naukrihub.com/india/fmcg/

http://www.naukrihub.com/india/fmcg/overview/

13.http://www.naukrihub.com/india/fmcg/consumer-class/

14.http://www.naukrihub.com/india/fmcg/consumer- class/income/

15.http://www.naukrihub.com/india/fmcg/consumer-class/socio-economic/

16.http://www.naukrihub.com/india/fmcg/consumer-class/age/

17.http://www.naukrihub.com/india/fmcg/consumer-class/geography/

18.http://en.wikipedia.org/wiki/Fast_moving_consumer_goods

19.*4A= Availability, Affordability, Acceptability, Awareness

75

http://en.wikipedia.org/wiki/Fast_moving_consumer_goods

http://en.wikipedia.org/wiki/Fast_moving_consumer_goods







http://www.naukrihub.com/india/fmcg/consumer- class/income/

http://www.naukrihub.com/india/fmcg/consumer- class/income/

http://www.naukrihub.com/india/fmcg/consumer-class/

Questionnaire

1. name:2. occupation:3. monthly salary:

a. less than 10,000 b. 10,000 – 25,000c. 25,000 – 50,000d. More than 50,000

4. address:5. phone no.:

6. which soap u prefer to use?a. Luxb. dettolc. lifebuoyd. others

7. which pack u prefer to use?a. single b. family pack ( 3 in 1)

8. which tea u prefer to use?a. tata teab. brooke bondc. taj mahald. others

9. which pack u prefer to use?

76

a. sachetb. medium packc. large pack

10.which tooth paste u prefer to use?a. pepsodentb. colgatec. close – upd. others

11.which pack u prefer to use?a. small pack b. medium pack c. family pack

12.which detergent u prefer to use?a. surfb. rinc. tided. others

13.which pack u prefer to use?a. sachetb. medium pack c. large pack

14.which shampoo u prefer to use?a. clinic plusb. sunsilkc. head & shouldersd. others

15.which pack u prefer to use?a. sachet

77

b. small pack c. medium pack d. large pack

16.which biscuits u prefer to use?a. marie goldb. good dayc. parle - Gd. others

17.which hair oil u prefer to use?a. parachuteb. dabur amla c. dabur vatikad. others

18.which pack u prefer to use?a. small pack b. medium pack c. large pack

19.which cream u prefer to use?a. pondsb. fair & lovelyc. ayurd. others

20.which coffee u prefer to use?a. brub. nestle c. Nescafed. others

78