Introduction to FMCG

Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods (CPG), are products that have a quick turnover, and relatively low cost. Consumers generally put less thought into the purchase of FMCG than they do for other products. hough the a!solute profit made on FMCG products is relatively small, they generally sell in large num!ers and so the cumulative profit on such products can !e large.

FMCG industry is innovative, full of rich e"perience, reaches world wide, people working with FMCG may get frequent opportunity to travel meet new culture, gets e"perience very quickly and chances to rise in status is much easier. #nlike other sectors FMCG shares float in a steady manner irrespective of market dip world wide. $o !asically, fast moving consumer goods are pretty awesome. . his he Fast Moving Consumer Goods (FMCG) industry in %ndia is

one of the largest sectors in the country and over the years has !een growing at a very steady pace. he sector consists of consumer non& dura!le products which !roadly consists, personal care, household care and food ' !everages. he %ndian FMCG industry is largely classified as organised and unorganised. his sector is also !uoyed !y intense competition. (esides competition, this industry is also marked !y a ro!ust distri!ution network coupled with increasing influ" of M)Cs across the entire value chainsector continues to remain highly fragmented.

Industry Classification
he FMCG industry is volume driven and is characterised !y low margins. he products are !randed and !acked !y marketing, heavy advertising, slick packaging and strong distri!ution networks. he FMCG segment can !e classified under the premium segment and popular segment. he premium segment caters mostly to the higher*upper middle class which is not as price sensitive apart from !eing !rand conscious. he price sensitive popular or mass segment consists of consumers !elonging mainly to the semi&ur!an or rural areas who are not particularly !rand conscious. +roducts sold in the popular segment have considera!ly lower prices than their premium counterparts. Following are the segment-wise product details along with the major players:

FMCG MARKETINGMarketing fast-moving consumer goods (FMCG) is one of t e !"urest# and most so" isticated forms of se$$ing t ere is% T e great FMCG-se$$ing com"anies& suc as 'rocter ( Gam)$e and Coca-Co$a& invented mass marketing a$most sing$e- anded$* and gre+ to )ecome mu$tinationa$ giants in t e "rocess% FMCG "$a*ed a ma,or ro$e in t e rise of consumerism during t e t+entiet centur* and drove t e deve$o"ment of t e media from t e da*s of t e s"onsored radio s o+ of t e -./0s% 1e$$ing FMCG "rovided t e funds for t e mus rooming gro+t of te$evision and t e esta)$is ment of advertising agencies as a vast& $ucrative industr*% In t e 2est& and no+ increasing$* in t e rest of t e +or$d& a$most ever*one3s $ives are touc ed )* FMCG% 4efinitions of FMCG var*& )ut genera$$* t e term is used to mean )randed "roducts t at are5 6 used at $east once a mont 7 6 used direct$* )* t e end-consumer7 6 non-dura)$e7 and 6 so$d in "ackaged form%

T e main FMCG segments are5

"roducts suc as tissues and sanitar* to+e$s7 6 ouse o$d care 8 fa)ric +as ($aundr* soa"s and s*nt etic detergents) and ouse o$d c$eaners (suc as dis 9utensi$ c$eaners& air-fres eners and insecticides)7 6 )randed and "ackaged food and )everages 8 soft drinks& cerea$s& )iscuits& snack food& c oco$ates& ice cream& tea& coffee& vegeta)$es& meat& )ott$ed +ater& etc%7 and 6 s"irits and to)acco% It3s not ard to see ,ust o+ dee"$* t e* "enetrate our domestic $ives% In t e !"ost-modern# 2est& attitudes to+ards FMCG are c anging a$ong +it consumer )e avior& and numerous $o))* grou"s "ressuri:e $arge cor"orations as "art of a genera$ attem"t to foster man* kinds of socia$ reform% FMCG firms are eas* targets of consumer )o*cotts& and must "a* c$oser attention to notions of cor"orate res"onsi)i$it* t an ever )efore% !Green# issues& ea$t issues& and fears a)out )iotec no$og* are ,ust a fe+ matters t at com"anies cannot afford to ignore% In muc of t e deve$o"ing +or$d& o+ever& FMCG are sti$$ +e$comed as a s*m)o$ of "rogress to+ards "ros"erit*% Man* "eo"$e in Russia and C ina& for instance& +ant as muc

FMCG as t e* can get% For $eading )rand manufacturers& t e rea$ o""ortunities for gro+t $ie in t ese ne+er markets% In t e 2est& "o+er as s ifted from t e manufacturers to t e retai$ers& and com"etition as intensified% It3s often a )itter strugg$e& as sa$es"eo"$e for su"ermarket su""$iers )att$e for s"ace on t e s e$ves and are tra""ed in a c*c$e of +astefu$ trade "romotions t at t e* cannot contro$% Retai$ers are conso$idating& )ut are on$* ,ust )eginning to ste" outside t eir ome territories% If t e* are successfu$& it is $ike$* to drive do+n manufacturers3 "rices& urting )rand e;uit*% T e $eading FMCG )rands se$$ at a eft* "remium& )ut +it t e greater "o+er of t e retai$ers& and t e introduction of t eir o+n !"rivate $a)e$# )rands& second-tier )rands are $osing out and sma$$er manufacturers ma* go out of )usiness% It3s a secretive& ig $* com"$e< +ar& + ere too man* "roducts are v*ing for customers3 mone*% Man* se$$ing tactics are on$* successfu$ for a s ort + i$e& as com"etitors strang$e one anot er in + at in man* res"ects is a :ero-sum game% For t e sa$es"erson in t e fie$d& it can )e difficu$t to get a co erent overvie+ of + at is rea$$* a""ening% 1e$$ing into stores as $itt$e to do +it "ersona$ se$$ing ski$$s& and is focused on getting a sma$$ edge in an end$ess& "ro)a)$* un+inna)$e& +ar% T at sma$$ edge& o+ever& can trans$ate into eft* "rofits 8 for a + i$e% T is )ook aims to give a "icture of o+ "roducts are so$d in t is d*namic and ever-c anging industr*%