Presented by: Group 3

(Section F)
Asutosh Patro (UM15321)
Bibhu Prasad Mishra
(UM15323)
Biswajit Routray (UM15324)
Chetan Swain (UM15325)
Hitesh Asnani (UM15329)

FMCG Industry (Home care and Personal Care)

Indian consumer market has evolved in two phases
Phase I: In 1980s and 1990s because of changes in income distribution, increased product availability,
increased competition, increased media penetration and improved advertising
Phase II: In 2000s with increasing concern towards health, environment and sustainability
FMCG sector is the fourth largest sector in the economy with current market size more than 534000 crores 1
It has shown a CAGR of 9.64% in past 14 years1
Industry life cycle: Growth Stage

World market is estimated to grow to US$ 100 billion

by 20252
Indian FMCG industry will grow from $37 billion in
2013 to $49 billion in 20162
Current size of FMCG Industry is 5% of GDP
Because of nature of Industry, total population is
available market size
Serviceable market size has been increasing with new
products and rural penetration

Market Size
600000
500000
400000
Market Size 300000
200000
100000
0
2000 2002 2004 2006 2008 2010 2012 2014 2016
Year

Growth Drivers Of The Industry

Identified from 3 perspectives

Demand Side
Supply side
Systemic Side

Key Growth drivers

Demand-side Drivers
1. Increasing disposable Income of
Consumer

2. Increasing Discretionary
Income
3.

Suitable demographic segment

4. Distribution Depth - Rural

Penetration

Rationale

India has seen increased economic growth, with a continuing and substantial impact
on consumer disposable incomes enabling good growth for the FMCG sector
DPI has increased at an average rate of 14 %( CAGR) in the period 1950-2016 and at
the rate of 21.6% (CAGR) in the period 2010-2015
Another encouraging factor is the falling spends on basic food items which frees up
consumer income for other categories of FMCG products. This trend is noticeable among
both urban and rural consumers.

45% people in India are between 20-30 years of age and this is likely to rise to 60% till
2030
Urban
Semi-urban
Rural
Market size(2010)

59

21 %

20%

Market size(2015)

52

19 %

29%

This clearly indicates that rural market is going to be the major demand centre in the
upcoming time.

Supply-side Drivers

1. Growth of Modern Retail

The emergence of organized retail have led to more variety with ease in browsing,
opportunity to compare with different products in a category, one stop destination
(entertainment, food and shopping), which is acting as a significant growth driver.

2. Newer product categories

meeting
consumer needs
3. Low Labour cost

Through intensive backward integration, this industry has responded better to the
market dynamics by identifying key consumer needs and developing products
accordingly.
India has by far the lowest labour cost compared to many emerging countries giving it
an edge for establishing manufacturing base for both Domestic and International FMCG
brands.
India
China
Thailand
Taiwan
Average labour cost
90
190
210
1300
(in USD/per month)

Systemic Drivers

1. Favourable changes in
Government Policies

Automatic investment approval and relaxation in norms for foreign investments

Relaxed custom duty and tax policy
De-reservation of most FMCG categories from SSI

2.

Improvement in transport infrastructure( roads and freights both)

Development of warehouse and storage facility across the country

Infrastructure Development

Identification of Critical Success Factors

(CSF)

Critical Success Factor identified

Rationale

CSF 1 Rural penetration

70% of the nation's population in rural India that means rural India can bring in the
much-needed volumes and help FMCG companies to log in volume-driven growth.
That should be the target of FMCGs who have already hit saturation points in urban
India

Not just rural population is numerically large, it is growing richer by the day

CSF 2 Efficiency of Distribution

system

Reducing supply chain costs by reducing intermediaries

Increasing sales by driving channel width

CSF 3 Securing the right retail real

estate

Balancing your retail estate and warehousing among tier-I,ii,iii cities to leverage upon
the low costs associate with tier-ii/iii cities
You need to balance between your economy of scale and response time to market
dynamics

CSF 4 Innovation in product offering

To stay ahead of the competition companies need to constantly introduce new and
better products
Product innovation capabilities, track record in creating successful brands can be
analysed to determine the innovation strength of the firm

Market Segmentation
Market Share

others;
2% Care; 10%
Home
Tobbaco; 15%

Personal Care; 20%

Food & beverages; 53%

Buying Criteria Analysis of the Industry

Parameter

Details

End-user Segments

Price

The price at which the product

is available depends on
purchasing power

Quality

The utility and effectiveness of

the product also shapes the
buying pattern

Individual Customers

High

Reference group

Certain recommendations
regarding whether the product
is good or not

Individual Customers

Medium

Packaging

Portability, easy to open ,

storing in the package itself
are some of the things

Individual customers
(both rural and urban)

Medium

Perception of brand

The brand perception to which Individual

a consumer can attach himself/ Individual
herself

Individual
The process adopted in
production as well as the effect Individual
of the product after use

Sustainability and
environmental friendly

Individual Customers
More sensitive parameter
for rural customers

Significance Attached (Low,

Medium, High)
High

Rural Customers Low

Urban Customers Medium-high

rural customers
Low
Urban Customers High

Competitive Strength Assessment

Normal
Strength Name

Weigh
ts

HUL

Weighted
GCPL

EMA
MI

MARIC
O

Strength Name

0.1

Differentiation

Market share

0.15

10

Pricing Power

0.05

Brand Equity

0.05

Product Mix
Operating
Efficiency
Distribution
Network
Supply chain
Management
Manufacturing
Facilities
Raw material
sourcing

0.05

0.1

0.25

0.1

0.05

0.1

Differentiation

Weigh
ts

HUL

GCPL

EMAM
I

MARI
CO

0.1

0.8

0.7

0.9

0.8

Market share

0.15

1.5

1.2

1.05

1.2

Pricing Power

0.05

0.35

0.3

0.4

0.35

Brand Equity

0.05

0.4

0.35

0.35

0.4

Product Mix
Operating
Efficiency
Distribution
Network
Supply chain
Management
Manufacturing
Facilities
Raw material
sourcing
Total ( overall
strength)

0.05

0.45

0.35

0.3

0.35

0.1

0.7

0.8

0.7

0.8

0.25

2.25

1.75

1.5

0.1

0.8

0.8

0.7

0.8

0.05

0.35

0.45

0.4

0.35

0.1

0.7

0.8

0.8

0.7

8.3

7.5

7.1

7.75

Strategic Group Mapping

Value/Price: How consumers

perceive the utility of products per
unit of rupee consumption
(on a scale of 1-10, 1- lowest, 10highest)
Retail Network reach: the
penetration of the supply chain to
the end customer
(on a scale of 1-6, 1- lowest, 6Highest)
The size of the bubble represents
the size of the total market
capitalisation of the company

Competitor Analysis
1.Based on Critical Success
factors
Critical
success
factors

Weights

HUL

Marico

Colgate

GCPL

Emami

rating

weighted

rating

weighted

rating

weighted

rating

weighted

rating

weighted

2.4

1.8

2.1

1.8

1.8

Rural
penetration

0.3

Efficiency of
distribution
system

0.4

3.6

3.2

2.8

3.2

2.8

Securing the
right retail
estate

0.1

0.6

0.7

0.8

0.6

0.6

Innovation in
product
offering

0.2

1.6

1.4

1.8

1.4

1.6

Total

31

8.2

28

7.1

31

7.5

27

7.0

27

6.8

Competitor Analysis
2. Based on Financial indicators
Parameters taken into consideration
I.
Total Market share
II. Operating Margin
III. Net Income(Profit/Loss)
Category of
products
Fruit Juice

Daburs Share
58% Real and
Active

Hair oil Coconut

Base

6.4% Vatika

Main
Competitors
Tropicana.
HUL, Marico.

Shampoo Vatika

7.1%

HUL and P&G.

Hair
(overall)

27%

HUL,
P&G
Himalaya.

Chyawanprash

64%

Himami,
Zandu
and Himalaya.

Honey

40%

Himami, Hamdard
and local players.

Digestive

37%

Paras and
players.

Care

and

local

Porters Five Forces:

FMCG Industry
Threat of New Entrants
Level of Impact Low
to Medium

Economies of Scale

Not Easy to Achieve

Positive

Product Differentiation

Requires huge R&D

Positive

Capital Requirements

High

Positive

Access to Distribution Channels

Not Easy

Positive

Cost Disadvantages

More

Positive

Access to raw materials, Cheap labor

Easy

Negative

Switching Costs

Low

Negative

Threat of Substitutes
Level of Impact High

Substitution reduces demand for a particular 'class' of products as customers switch to

Products with improving price/performance tradeoffs relative to present industry products
in Dabur's case there is a threat of generic substitution which happens where products
and services compete for disposable income.

Bargaining Power of
Customers Level of
Impact High

Low switching cost

Buyers are numerous and fragmented
In India 8% of an individual's income is spent on personal care products

Porters Five Forces:

FMCG Industry
Bargaining Power of
Suppliers Level of
Impact Medium to
High

Internal Rivalry
Level of Impact
High

Suppliers products have high switching costs

Supplier poses credible threat of forward integration
Suppliers products also have few substitutes
Buyer is not an important customer to supplier
Suppliers are also competing among themselves, there is no monopoly in
supplier side.

Using price competition, due to similar products

Advertising battles may increase total industry demand, but may be costly to
smaller competitors
Increasing consumer warranties or service, Differentiation is extremely
important in a FMCG industry
DABUR has maintained a clear differentiation strategy in toothpaste
segment by its product Dabur Lal Dant manjan
New product introductions, Regular R&D

PESTEL Analysis: FMCG Industry

Political

Economical

Social

Technological

Environmental

Legal

Indian government has abolished licensing for almost all food and agro-processing industries except for some items
like alcohol, hydrogenated animal fats and oils etc.
Automatic investment approval are allowed for most of the food processing sector.
Various states governments like Himachal Pradesh, Uttaranchal have encouraged companies to set up manufacturing
facilities in their regions through a package of fiscal incentives.

A rise in per capita consumption, with improvement in incomes and affordability and change in tastes and
preferences, may lead to an increase in the demand of goods in the FMCG sector.
Additionally, sustained economic growth has translated into increase in income levels and affluence.

Around 70 per cent of the total households in India (188 million) reside in the rural areas. This presents the largest
potential market in the world.
Rapid urbanization, increased literacy have all caused rapid growth and change in demand patterns, leading to an
explosion of new opportunities.
Aspiration levels in young age group have been fuelled by greater media exposure, unleashing a latent demand with
more money and a new mind-set.
With the growing rate of literacy in India the consumers are becoming internet savvy. With e-markets evolving rapidly
the firms should make internet as a medium for selling goods.

Companies are trying their best to meet the health and personal grooming needs of their target consumers with safe,
efficacious, natural solutions by synthesizing the deep knowledge of Ayurveda and herbs with modern science.

These laws are related to industry for example- no processing unit can be established in between cities i.e. it should be
outside the cities

Key trends and future

developments

Certainty of
Impact (Low
Impact on
probability,
Key Trend
Industry (Low,
medium
Medium, High)
probability,
high
probability)
Premiumisation: Despite the slowdown, consumers are Medium
Medium
willing to buy premium goods at higher prices in the
space of convenience
Focus on rural market: Which is growing at a rapid
High
High
pace and contributes about 50 per cent to the total
FMCG market
Reducing carbon footprint and eco-friendly Products:
High
Medium
increasingly focusing on reducing their carbon
footprint by creating eco-friendly products
Importance of smaller-sized packs: This helps them to
High
High
sustain margins, maintain volumes from priceconscious customers and expand their consumer base
Expanding horizons: A number of companies are
High
Medium
exploring the business potential of overseas markets
and several regional markets

Company Background
Dabur

Dabur- Key Milestones

September 16, 1975
Dabur India Ltd was
incorporated

1986
The Dabur was converted
into a public limited
company

2007
Dabur India decides to
merge its wholly-owned
subsidiary Dabur

2004
Dabur India inks pact with
Accenture for outsourcing

2015
Dabur India Ltd inks an
agreement with Starcom
MediaVest Group (SMG).

1998
Ties up with Godrej Foods
for the manufacture and
packaging of its `Real'
range of fruit juices and
fruit drinks in tetra packs

2003
Ties up with Free Markets
Inc.

1998
The company signed a
joint venture with Bongrain
International SA of France
to form a new company
under the name of Dabon
International Ltd

2003
Demerged their
pharmaceuticals business
from the FMCG business
into a separate company

Real, Real Active, Hommade,

Lemoneez, Capsico, Shankha
Pushpi, Dabur Balm, Sarbyna
Stron

Foods

Personal
Care

Health

Hair Care
Oil and
Shampoo

Amla Hair Oil, Vatika Hair Oil,

Anmol Silky Black Shampoo,
Vatika Henna Conditioning
Shampoo

Oral Care

Dabur Red Gel, Dabur Red

Toothpaste, Babool Toothpaste,
Dabur Lal Dant Manjan

Skin Care

Gulabari, Vatika Fairness Face

Pack,Fem, Uveda

Supplements

Glucose-D,
Dabur Honey

Digestives

Pudin Hara,
Hajmola

OTC-Health
Care

Dabur Honitus,
Dabur Baby
Ayurvedic

Homecare

Sani Fresh,
Odonil, Odomos,
Odopic

Professional
Range

OxyLife Facial,
Fem Body
Bleach,
Fem
Gold Facial

Vision
Dedicated to the health and well being of every household

Mission
To become the leader in the natural foods and beverage
industry

Strategic Intent
Dabur intends to significantlyaccelerate profitable growth by
focussing on growing their core brands across categories, reaching out
new geographies, improve operational efficiencies and provide superior
returns to the shareholders.

Core Competencies
Dabur's

BUSINESS MODEL
3 Business Units: Consumer Care Division (CCD), Consumer Health
Division (CHD) and International Business Division (IBD)

CC
D

Health
Care
Personal
Care
Home
Care

Foods

CH
D

Health
Care
Products

IBD

Dabur
Amla and
Vatika

Partners
- Shikobo Ltd. of Japan to design an integrated facility at Alwar, 1994
- Godrej Foods for the manufacture and packaging of its `Real' range, 1998
- Free Markets Inc. to use leading edge technologies to execute online
markets, 2003
- Merged its fully owned subsidiary, Dabur Foods Ltd., with itself, 2007

Suppliers
-

Huge global network of suppliers and vendors

Supplier diversity
Strict Vendor Certification guidelines
Implemented Supplier Relationship Management (SRM)

Key Resources
- Technology
- Efficiency
- Brand

VALUE PROPOSITIONS
Dabur India Ltd. intends to significantly accelerate their profitable growth.
To achieve this strategic goal the company proposes to
Focus on growing core brands across categories, reaching out to new
geographies, within and outside India, and improve operational
efficiencies by leveraging technology
Be the preferred company to meet the health and personal grooming
needs of target consumers with safe, efficacious, natural solutions by
synthesizing their deep knowledge of ayurveda and herbs with modern
science
Provide consumers with innovative products within easy reach
Build a platform to enable Dabur to become a global ayurvedic leader
Be a professionally managed employer of choice, attracting, developing
and retaining quality personnel
Be responsible citizens with a commitment to environmental protection
Provide superior returns, relative to our peer group, to our shareholders

REVENUE/ STREAMS
The following are the major revenue streams of the organization:
The strategic positioning of honey as food product has lead to market leadership (over
75%) in branded honey market
Dabur Chyawanprash is the largest selling Ayurvedic medicine with over 65% market
share
Vatika has been the fastest growing hair care brand in the Middle East
Hajmola tablets are in command with 60% market share of digestive tablets category.
About 2.5 crore Hajmola tablets are consumed in India every day
Leader in herbal digestives with 90% market share
The IBD contributes to about 30% of total sales

CUSTOMER RELATIONSHIPS

Being in the business of consumer care Dabur has placed customer well being at the core of
its operations.
DRDC : Dabur Research & Development Centre
Responsible Labelling
Stakeholder Engagement Strategy
Customized education programmes for its B2B customers
Participates in forums such as FICCIs CASCADE
Dedicated Consumer Cell

SWOT ANALYSIS FOR DABUR

Presence in 60 countries,
Distribution through 5000
distributors
Leader in herbal digestives
Extensive Supply Chain
Dabur trusted for natural and
herbal healthcare
Focus markets in GCC, Egypt,
Nigeria, US, Nepal etc
IT Initiatives & R & D

Seasonal: Chyawanprash in winter,

Vatika not in winter
Impact of Dabur products is slow
and of low quality
Profitability is uneven across
product line
Old and outdated technology

Strength

Weakness

Threat

Opportuni
ty

Existing Competition (like Himani

for Chyawanprash
Marico, Bajaj for Vatika Oil.
Threat from substitutes-Bryllcream
for Vatika hair oil
Herbal products are not recognized
in export markets

Less level of competition in herbal

based products
Tap rural markets, increase
penetration in urban areas
Mergers and acquisitions to
strengthen the brand
New Product Discovery

Portfolio Analysis: BCG Matrix

Market
Share
Home care 20%
Oral care
13%
Skin care
6.60%
Foods
52%
Health
61%
Suppleme
nts
Digestives 32%
Hair Care
11%

Growth
rate
18%
15%
11%
25%
16%

7%
12%

OTC and Ethicals ,the Ayurveda

medicines, is a new BU. It has
shown a growth rate of 12%. It
is not shown in BCG matrix but
heavy R&D investment has
been made in this sector

Strategic Roadmap- Near Term

Growth
Areas

Enhancing
distribution
network

High Level Tasks

Potential
Benefits to be
achieved

Rewards

Risks

1. Developing an
OTC distribution
network
2. Rural penetration
3. Improving urban
channel efficiencies
4. leveraging IT to
improve sales

1. Focused sales &

marketing team
2. Efficient
distribution
network
3. Efficient sales
forecasting
4. Larger market
share

1. Shorter lead
time for
distributors
2. First mover
advantage in
unexplored
regions
3. Larger Brand
equity

1. Increased
dependence
on
distributors 2.
No major
diversification

Key Success Factors

Focus on supplier partnership and customer
relationship

Strategic Roadmap- Mid Term

Growth
Areas

1. New
product
development
2. Dedicated
retail
business

High Level Tasks

Potential
Benefits to be
achieved

1. R&D Investment 1. Improve

-Development of
product portfolio
drug on malaria,
in OTC business
diabetes
unit
2. Mergers and
2. Create foothold
acquisitions
in generic drug
3. Recruitment of
market
talented and
3. International
dedicated
image through
professionals
beauty product
4. Increase
like NewU and
footprint of NewU
Zensual
Key Success Factors

Rewards

Risks

1. Competetive
advantage with
the help of
R&D and
distribution
network
2. International
brand to the
likes of Loreal
and P&G

1.Availability
of talented
professionals
2. Increase in
number of
direct
competitors
3. High capital
and R&D
investments
4. Employee
poaching

Talent acquisition and futuristic view

Strategic Roadmap- Long Term

Growth
Areas

1.Growth in
emerging
economies
2.Operational
Improvements

High Level
Tasks

1. Overseas
operation and
distribution
2. Operational
excellence and
Lean
management
3. Products
specific to
geographies e.g.
Godrej Frika is
specific for Africa

Potential
Benefits to be
achieved
1. Healthy trade
relationship with
emerging
economies
2. World class
R&D, regulatory,
quality, and
manufacturing
capabilities

Key Success Factors

Improving the Brand

Rewards

1. Good
revenue levels
and good
operational
efficiency
2. Increase
market
capitalization
3. International
brand

Risks

1. Investor
confidence
2. Brand
repositioning
(if needed)

Re-imagining the Organization

Business Processes
Resource allocation to SBUs based on business plan and landscape of business
Streamline sales network using information technology
Order capturing system, supply chain maintenance, claims submissions are some of
the IT systems
Sales analytics and data visualization tools in decision making

Customer Segments
Mass market
Niche market (Premium products)
Segmented Market (e.g. Baby product
segmented to mothers)
BOP market
Psychographic segment (e.g. organic
product)

Product and Services

Ayurvedic drugs
Baby care products
Drugs (Honitus, malaria, diabetes
etc.)
Premium beauty care product and
fashion accessories

Re-imagining the Organization

Channels
Chemist Outlets: Essential for Daburs products like ethical, health supplements etc.
Dedicated sales force called Healthcare associates has to be deployed.
Dedicated channel focused teams to enhance efficiencies: Grocery channel
teams have to be divided to focus on wholesale and retail separately.
Rural penetration: By expanding distribution reach, customize trade promotions
Organized retail and e-commerce: Listed with all key players such as Amazon,
Snapdeal, Flipkart, ebay etc and available at all organised retail stores.
Retail Business: Brand NewU under Daburs at wholly-owned subsidiary H&B Stores

Workplaces

Hiring of talented professionals and industry experts in R&D and management

Accelerating career development
Competence development of professionals
Autonomy of decision making in BUs
Increased competition among BUs

Thank You