Fast Moving

Consumer
Goods
(FMCG)

1
 Dissertation Report On

Buying Behavior of FMCG

Products

Submitted To: Submitted By:

Prof. R.P.Singh Vandana Chandra
Director (ABS) MBA (Agri-
Business)
AMITY University AMITY University
Lucknow Campus Lucknow Campus

Under the supervision of:

Mr. Ashish Chandra
Faculty Guide (ABS)
AMITY University
Lucknow Campus

2
 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
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

4
 22.References 64-
65
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.

5
 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 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

6
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 supermarkets on daily basis, the things that
have high turnover & are relatively cheaper.

FMCG in 2006

7
 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.

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

8
 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.

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

9
consumers to branded products and offer new generation products.

The sector's lack-luster performance in the last few years 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 -5% 0% 23%
(Chyawanprash)
Shampoo 10% 23% 19%
Toothpaste 5% 6% 16%

10
Hair Oils 9% 18% 23%
Mosquito Repellant 13% 10% 29%

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

Sector Financials In millions

  31-03-2006 31-03-2005 31-03-2004
Net Sales 164,196 148,241 145,380

Sales Growth 10.8% 2.0% -

Profit after Tax 19,595 17,001 21,008

PAT Growth 16.6% -24.2% -

Market
74,746 65,810 63,072
Capitalization
Enterprise Value 662,540 645,477 551,971
Return on Capital
Employed 47.1% 51.0% 45.5%
(ROCE)
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 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,

11
& 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 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

12
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:

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

13
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.

14
 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

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

15
 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 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

16
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.

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.

17
 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.

18
 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%

19
Sampling region:
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 12,97,570
Mahanagar 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 Population
Vishwas Khand 2,83,563
Vipul Khand 3,93,768
Vivek Khand 2,86,786

20
 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 Population
Chandra Lok 2,34,863
Mahanagar Colony 3,84,683

Source: Lucknow Development Authority

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 Population
Jankipuram 2,78,675
Sahara City 1,89,986

Source: Lucknow Development Authority

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.

21
 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 are readily understandable to all
respondent. Also technical jargons are avoided to ensure that there is no
confusion for respondents.

22
 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.

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.

23
As the restrictions on foreign investments were relaxed in 1991, Multi-
National Companies have been entering India since then.

Market Size
Market Share in %
in $ million
Indian Indian
15 MNCs MNCs
Companies Companies
1992 2004 1992 2004
Breakfast
2 25 100 0 52 48
cereals
Wafers,
potato 6 35 100 0 37 63
chips
Washing
40 570 98 2 51 49
Machines
TV 630 3,030 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

24
 Urba
  Rural
n
Population 2001-02 (m
53 135
household)
Population 2009-10 (m
69 153
household)
% Distribution (2001-02) 28 72
Market (Towns/Villages) 3,768 627,000

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

25
 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:

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 Classification
According 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.

26
 Consumer Annual Income
1996 2001 2007 Change
Classes in Rs.
Rs. 215,000 and
The Rich 1.2 2.0 6.2 416%
more
The Consuming
Rs 45- 215,000 32.5 54.6 90.9 179%
Class
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%
Total 164.8 180.7 199.2 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 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

27
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
Less
5-9 School Post-
Illiterat than 4 Some Graduat
yrs of certificat graduat
e yrs in college e
school e e
school
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

28
 Petty
E2 D D C C B2 B2
trader
Employer of-
Above 10
B1 B1 A2 A2 A1 A1 A1
persons
Below 10
C B2 B2 B1 A2 A1 A1
persons
None D C B2 B1 A2 A1 A1
Clerk D D D C B2 B1 B1
Supervisor D D C C B2 B1 A2
Professiona
D D D B2 B1 A2 A1
l
Senior
B1 B1 B1 B1 A2 A1 A1
executive
Junior
C C C B2 B1 A2 A2
executive

Source: Indian readership survey (IRS)

Sections A & B refer to High-class- constitutes over a quarter of urban
population
Sec C refers to Middle-class-- constitutes 21% of the urban population
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%

29
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.

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

Education of
chief wage Type of House
earner
Pucca Semi-pucca Kuchcha
Professional
R1 R2 R3
degree
Graduation/
R1 R2 R3
PG
College R1 R2 R3
SSC/HSC R2 R3 R3
Class 4-Class
R3 R3 R4
9
Up to class 4 R3 R3 R4

30
 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 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

31
Consumption Trends

Food Essentials 45.68%

Essential Services (water,
10.1%
power, rent, and fuels)
Clothing 4.9%
Footwear 0.63%
Medicare 4.25%
Transport & Communication 14.51%
Recreation, Education, and
Less than 4%
Culture
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.

32
 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 others

Percentage 36 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 with a market share of 22%, which is then followed by
LIFEBUOY, the product of HUL with a market share of 18%.

33
 This data can be graphically explained with the help of the following bar
graph:

demand of soap brands

40
35
30 lux
25
dettol
percentage 20
lifebuoy
15
others
10
5
0
brands

34
2. Which pack u prefer to use?

In order to determine the income pattern of the consumers, it

was necessary for the researcher to 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 pack Family 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.

35
 This data can be graphically explained with the help of the
following bar graph:

demand of packs of soap

60
50
40
percentage 30 single pack
family pack ( 3 in 1 )
20
10
0
packs preferred by
customers

36
 1. Which tea u prefer to use?

The reaction of people towards various TEA brands can be tabulated in

the following manner:

Brooke
Brands Tata Tea Taj Mahal Others
Bond
Percentage 32 28 18 22

In the survey that the researcher conducted, it 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.

37
This data can be graphically explained with the help of the following bar
graph:

demand of tea brands

35
30
25 tata tea
20 brooke bond
percentage taj mahal
15
others
10
5
0
brands

38
2. Which tea pack u prefer to use?

In order to determine the income pattern of the consumers, it was

necessary for the researcher to distribute the consumers on the basis of
their demand for 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 Sachet Medium pack Large 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.

39
 This data can be graphically explained with the help of the
following diagram:

demand of tea packs

50

40
sachet
30
medium pack
percentage
20 large pack

10

0
packs preferred by customers

40
 3. Which tooth paste u prefer to use?

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.

However, the reaction of people towards various TOOTH

PASTES can be tabulated as follows:

Brands Pepsodent Colgate Close Up Others

Percentage 27 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.

This data can be graphically explained with the help of the

following bar graph:

41
 demand of tooth paste

35
30
25 pepsodent
20 colgate
percentage close up
15
others
10
5
0
brands

4. Which pack u prefer to use?

42
 In order to determine the income pattern of the consumers, it was
necessary for the researcher to distribute the consumers on the basis of
their demand for the various packs of TOOTH PASTE brands available
in the market.
However, the reaction of people towards various TOOTH PASTE
packs can be tabulated in the following manner:

Tooth paste
Small pack Medium pack Family pack
pack
Percentage 34 48 18

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 34% consumers demand small packs.
48% consumers demand medium packs. 18% consumers demand large pack.

This data can be graphically explained with the help of the

following graph:

43
 demand of packs of tooth paste

50

40
small pack
30
medium pack
percentage
20 family pack

10

0
packs preferred by customers

5. Which detergent u prefer to use?

The reaction of people towards various DETERGENT brands can be

tabulated in the following manner:

44
 Brands Surf Rin Tide Others
Percentage 27 35 22 16

In the survey that the researcher conducted, it 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.

This data can be graphically explained with the help of the

following bar graph:

45
 demand of detergents

35
30
25 surf

20 rin
percentage tide
15
others
10
5
0
brands

6. Which pack u prefer to use?

In order to determine the income pattern of the consumers, it was

necessary for the researcher to distribute the consumers on the basis of

46
 their demand for the various packs of DETERGENT brands available in
the market.
However, the reaction of people towards various DETERGENT
packs can be tabulated in the following manner:

Detergent packs Sachet Medium pack Family pack

Percentage 43 27 30

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, 43% consumers demand sachet packs. 30% consumers demand
family packs. 27% consumers demand medium packs.

This data can be graphically explained with the help of the

following bar graph:

47
 demand of detergent packs

45
40
35
30 sachet
25 medium pack
percentage
20 family pack
15
10
5
0
packs preferred by customers

7. Which shampoo u prefer to use?

The reaction of people towards various SHAMPOO brands can be

tabulated in the following manner:

48
 Head &
Brands Clinic plus Sunsilk Others
shoulders
Percentage 33 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:

49
 demand of shampoo

35
30
25 clinic plus
20 sunsilk
percentage
15 head & shoulders
others
10
5
0
brands

8. Which pack u prefer to use?

In order to determine the income pattern of the consumers, it was

necessary for the researcher to distribute the consumers on the basis of

50
 their demand for the various packs of SHAMPOO brands available in the
market.
However, the reaction of people towards various SHAMPOO packs
can be tabulated in the following manner:

Shampoo Medium
sachet Small pack Family pack
packs pack
Percentage 23 32 28 17

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, 32% consumers demand SMALL PACK. 28% consumers demand
medium pack. 17% consumers demand large packs.

This data can be graphically explained with the help of the

following bar graph:

51
 demand of shampoo packs

35
30
25 sachet
20 small pack
percentage medium pack
15
large pack
10
5
0
packs preferred by customers

9. Which biscuits u prefer to use?

The reaction of people towards various BISCUITS brands can be tabulated

in the following manner:

52
 Brands Marie gold Good Day Parle G Others
Percentage 24 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%.

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

53
 demand of biscuits

40
35
30 marie gold
25 good day
percentage 20 parle G
15 others
10
5
0
brands

10.which hair oil u prefer to use?

The reaction of people towards various HAIR OIL brands can be tabulated
in the following manner:

54
 Dabur
Brands Parachute Dabur Amla Others
Vatika
Percentage 37 29 19 15

In the survey, that the researcher conducted, it can 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.

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

55
 demand of hair oil

40
35
30 parachute
25 dabur amla
percentage 20 dabur vatika
15 others
10
5
0
brands

11.Which pack u prefer to use?

In order to determine the income pattern of the consumers, it

was necessary for the researcher to distribute the consumers on the basis

56
 of their demand for 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

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, 41% consumers demand medium packs. After that, 32%
consumers demand small pack. 27% consumers demand large packs.

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

57
 demand of packs of hair oil

45
40
35
30 small pack
25 medium pack
percentage
20 large pack
15
10
5
0
packs preferred by customers

12.Which cream u prefer to use?

The reaction of people towards various CREAM brands can be tabulated in

the following manner:

58
 Fair &
Brands Pond’s Ayur Others
lovely
Percentage 28 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.

This data can be graphically explained with the help of the

following bar graph:

59
 demand of creams

35
30
25 ponds
20 fair & lovely
percentage ayur
15
others
10
5
0
brands

13.Which coffee u prefer to use?

The reaction of people towards various COFFEE brands can be tabulated in

the following manner:

60
 Brands Bru Nestle Nescafe Others
Percentage 26 32 32 10

In the survey, that the researcher conducted, it can 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.

This data can be graphically explained with the help of the

following bar graph:

61
 demand of coffee

35
30
25 bru

20 nestle
percenatge nescafe
15
others
10
5
0
brands

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

62
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 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

63
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.

Suggestions & recommendations

The 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

64
 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.

(*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.

65
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/

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

66
 Questionnaire

1. name:
2. occupation:
3. monthly salary:
a. less than 10,000
b. 10,000 – 25,000
c. 25,000 – 50,000
d. More than 50,000
4. address:
5. phone no.:

6. which soap u prefer to use?

a. Lux
b. dettol
c. lifebuoy
d. 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 tea
b. brooke bond
c. taj mahal
d. others

67
9. which pack u prefer to use?
a. sachet
b. medium pack
c. large pack

10.which tooth paste u prefer to use?

a. pepsodent
b. colgate
c. close – up
d. 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. surf
b. rin
c. tide
d. others

13.which pack u prefer to use?

a. sachet
b. medium pack
c. large pack

14.which shampoo u prefer to use?

a. clinic plus
b. sunsilk
c. head & shoulders
d. others

15.which pack u prefer to use?

68
 a. sachet
b. small pack
c. medium pack
d. large pack

16.which biscuits u prefer to use?

a. marie gold
b. good day
c. parle - G
d. others

17.which hair oil u prefer to use?

a. parachute
b. dabur amla
c. dabur vatika
d. 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. ponds
b. fair & lovely
c. ayur
d. others

20.which coffee u prefer to use?

a. bru
b. nestle
c. Nescafe
d. others

69
70