INDUSTRY PROFILE FMCG INDUSTRY

The Indian FMCG sector is the fourth largest sector in the economy with an estimated size of Rs.1,300 billion. The sector has shown an average annual growth of about 11% per annum over the last decade. Unlike the developed markets, which are prominently dominated by few large players, Indias FMCG market is highly fragmented and a considerable part of the market comprises of unorganized players selling unbranded and unpackaged products. There are approximately 12-13 million retail stores in India, out of which 9 million are FMCG kirana stores. India FMCG sectors significant characteristics can be listed as strong MNC presence, well established distribution network, intense competition between the organised and unorganised players and low operational cost. Easy availability of important raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage.

Products which have a swift turnover and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG items are those which generally get replaced within a year. Examples of FMCG commonly include a wide range of repeatedly purchased consumer products such as toiletries, soap, cosmetics, oral care products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products etc.

Penetration level and per capita consumption in many product categories is very low compared to world average standards representing the unexploited market potential. Mushrooming Indian population, particularly the middle class and the rural segments, presents the huge untapped opportunity to FMCG players. Growth is also likely to come from consumer 'upgrading' in the matured product categories like processed and packaged food, mouth wash etc. A distinct feature of the FMCG industry is the presence of international players through their subsidiaries (HLL, P&G, Nestle), which ensures innovative product launches in the market from their parent's portfolio.

Our country has a varied agro-climatic condition which enables to offer extended raw material base suitable for many FMCG sub sections like food processing industries etc. India is the one of the major producer of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest producer of rice, wheat and fruits & vegetables. Similarly, India has an abundant supply of caustic soda and soda ash, the chief raw materials required in the production of soaps and detergents, which enables the household section of the industry to excel and grow. The accessibility of these raw materials gives India the locational advantage.

INDIAN FMCG SECTOR Indian FMCG sector is the fourth largest sector in the economy characterized by strong MNC presence, well established distribution network, intense competition between the organised and unorganised players and low operational cost. Easy availability of important raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage. Penetration level and per capita consumption in many product categories is very low compared to world average standards representing the unexploited market potential. Mushrooming Indian population, particularly the middle class and the rural segments, presents the huge untapped opportunity to FMCG players.

MAJOR SEGMENTS OF THE FMCG INDUSTRY:

Household Care The detergents segment is growing at an annual growth rate of 10 to 11 per cent during the past five years. The local and unorganized players account for a major share of the total volume of the detergent market. The preference is given to detergents in urban area compared to bars. Household care segment is featured by intense competition and high level of penetration. With rapid urbanization, emergence of small pack size and sachets, the demand for the household care products is booming. In washing powder segment, HUL is the leader with ~38 per cent of market share. Other major players are Nirma, Henkel and Proctor & Gamble. Personal Care Personal care segment includes personal wash products, hair care products, oral care products, cosmetics etc. The Indian skin care and cosmetics market is valued at $274 million and is dominated by HUL, Colgate Palmolive, Gillette India and Godrej. The coconut oil market accounts for 72 per cent share in the hair oil market. The hair care market can be segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels. In the branded coconut hair oil market, Marico (with Parachute) and Dabur are the leading players. Sachet makes up to 40 per cent of the total shampoo sale. Again the market is dominated by
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HUL with around ~47 per cent market share; P&G occupies second position with market share of around ~23 per cent. Personal wash can be further segregated into three segments namely Premium, Economy and Popular. Here also, HUL is the leader with market share of ~53 per cent; Godrej occupies second position with market share of ~10 per cent. Swelling disposable incomes of the Indian consumers, growth in rural demand and upgrading to the premium products are the key drivers for future demand growth in major FMCG categories. The skin care market is at a primary stage in India. With the change in life styles, increase in disposable incomes, greater product choice and availability, people are becoming more alert about personal grooming. The major players in this segment are Hindustan Unilever with a market share of ~54 per cent, followed by CavinKare with a market share of ~12 per cent and Godrej with a market share of ~3 per cent. The oral care market can be segmented into toothpaste - 60 per cent; toothpowder - 23 per cent; toothbrushes - 17 per cent. This segment is dominated by Colgate-Palmolive with market share of ~49 per cent, while HUL occupies second position with market share of ~30 per cent. In toothpowders market, Colgate and Dabur are the major players. Food and Beverages This segment comprises of the food processing industry, health beverage industry, bread and biscuits, chocolates & confectionery, Mineral Water and ice creams. The three largest consumed categories of packaged foods are packed tea, biscuits and soft drinks. Indian hot beverage market is a tea dominant market. The major share of tea market is dominated by unorganized players. Leading branded tea players are HUL and Tata Tea. Mjaor players in food segment are HUL, ITC, Godrej, Nestle and Amul.

COMPANY PROFILE

Emami Limited is an Indian producer of fast moving consumer goods (FMCG), such as cosmetics and health and baby products. The company is based in Kolkata. Products In 2008 the company announced that it intended to offer baby care products. The company's health products unit offers tonics for colds and coughs as well as nutraceuticals. Subsidiaries The company has the following subsidiaries:

Emami Paper Mills Limited Emami Chisel Art CRI Limited South City Projects (Kolkata) Ltd Advanced Medicare & Research Institute Ltd (AMRI) Frank Ross Limited Emami Realty Limited Emami Retail Pvt Limited (Starmark) Emami Biotech Limited Emami Cement Ltd

History The inception of Emami Group took place in the mid 1970s when two childhood friends, Mr. R.S. Agarwal and Mr. R.S. Goenka, left their management jobs with the Birla Group to set up Kemco Chemicals, an Ayurvedic medicine and cosmetic manufacturing unit in Kolkata in 1974. At that time the Indian FMCG market was still dominated by multinationals. Several such companies headquartered in Kolkata were considering shifting out of West Bengal due to labor unrest and political problems. The company was established with modest capital of Rs. 20,000 and started manufacturing cosmetic products as well as Ayurvedic medicines under the brand name of Emami from a small factory in Kolkata, targeting sales at the Indian middle class. In the early days the founders personally sold their cosmetics from shop to shop, using handpulled rickshaws. They soon established recurring consumer demand, and gradually hired additional staff. A chain of distributors was established and the sale of Emami products spread from West Bengal to rest of Eastern India and gradually to other states. Emami Talcum, Emami Vanishing Cream and Emami Cold Cream sold well. The company's marketing techniques were to sell dreams of beauty to Indian women using radio and TV advertising. In 1978, Agarwal acquired Himani Ltd, a privately owned cosmetics company with a factory in Kolkata. The business of Himani was almost 100 years old, although it had only been incorporated in 1949 company; it had a good brand equity in Eastern India, but was in financial trouble. Agarwal and Goenka managed to restore it to profit, at considerable risk considering the small capital base of their own company at the time; this later proved to be the turning point for their business. In the 1983 Bollywood film Agar Tum Na Hote, one of the earliest brand placement campaigns was achieved with lead actor Rajesh Khanna playing the managing director of Emami. In the 1990s, Emami launches another flagship brand under the Himani Umbrella, Navratna Cool Oil, and expanded production by opening its second factory, at Pondicherry. The introduction of new brands continued and the company extended its distribution network to South India, with Navratna spearheading the process. In 1995, the partnership firm Kemco
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Chemicals was converted into a Public Limited Company under the name Emami Ltd. In 1998, Himani Ltd was merged into Emami Ltd. In 2000, with a view to concentrate on its core FMCG business, Emami's investment undertaking was demerged by issuing shares in Pan Emami Cosmed Ltd to shareholders of Emami. In 2003 a new factory unit was set up at Amingaon, Guwahati. A public issue of 50 lakhs equity shares at Rs.70 followed in 2005. The issue was oversubscribed by 36 times. The share price later rose to Rs.210. In 2005 Emami launched Fair and Handsome, the first fairness cream for men.

In 2006 the company decided to introduce a Health Care Division and a number of new brands of Ayurvedic OTC medicines. Among the brands created by the company, annual sales of Navratna are at Rs.300 crore followed by Boroplus at Rs.250 crore and Fairness at Rs.100 crore. Sona Chandi Chyawanprash, Menthoplus and Fast Relief also among the top brands in their respective categories. In 2006, J B Marketing & Finance Ltd., the erstwhile marketing company of the Emami Group merged with Emami Ltd. and the total turnover of Emami including sales in domestic and export market stood at Rs 516 crores at the end of the fiscal year 2006-07. Emami Limited acquired a major stake in Zandu Pharmaceuticals Works Ltd, a century-old household name in India, for Rs 700 crore. Emami added some of Zandu's prominent brands like

CONSUMER BEHAVIOR STUDY OF FAIR AND HANDSOME CREAM

Marketing mix of Fair & handsome

PRODUCT Core Product The hugely successful womens beauty products segment inspired Emami to explore the hitherto untapped mens fairness cream segment and theyve come up with a new product. It helps to regulate melanin production and thus increase fairness and relieve stress and fatigue signs. It also protects the mens face from harmful UV rays and gives the face a firm and fresh appearance. Quality Being a popular segment product and an offering by Emami quality parameters are thoroughly tested on Indian male skin ensuring consumer satisfaction. Sizes Emami Fair & Handsome is available in the 12 ml, 30 ml and 60 ml packs. PRICE The price plays a very significant role in decision making of a low involved customer. The rural markets are the ones which will contribute heavily to the future growth, thus product has to be made available in smaller and cheaper trial packs. For this, Emami has recently launched Fair and Handsome in a new stout sachet for Rs.5/- only, making it convenient and easy to pick up. Fair & Handsome is available in the 12 ml, 30 ml and 60 ml packs priced at Rs. 10/-, Rs. 35/and Rs. 65/-. So, bigger packs prove to be more economical

There are other products from competitors and thus company has adopted aggressive pricing strategy to cater to youth from all income groups and has become the undisputed market leader in this segment. PLACE As many brand choices of beauty products are made when customers enter the store, the product should be properly visible to the consumer otherwise the manufacturer might face the danger of losing the customer in favor of another brand, which is available. Fair and Handsome is available at all leading general stores, departmental stores, chemists, Kirana stores and all retail outlets across the country. This has been made possible due to Emamis distribution network which spans across all Indian States. Emamis products reach out to nearly 30 lakh retail outlets across India through 4,000 distributors. It has two sales channels in urban sales territories i.e. Modern Trade channel and retail outlets. Modern trade channel covers 2100 modern retail outlets and retail network has a coverage of 4, 00,000 outlets. In rural sales channels, Emami has tied up with Department of Post in Maharashtra and ITC Ltd. They have also allied with Indian Oil Corporation (IOC) for distribution through rural petrol pumps. The collaboration with ITC e-choupals is expected to target rural men who would usually shun beauty products and cosmetics outlets, while the post and telegraph tie-up in Maharashtra is to help get even more traditional customers. It also has a super stockist network development plan in place to increase rural penetration with a pilot project in the states of U.P, A.P, Gujarat, Rajasthan, Punjab and Maharashtra. This is backed by their 7500 mobile traders 130 small village shops in states like West Bengal, Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Orissa and Karnataka. The company has also engaged consultant Ernst and Young to leverage value for Emamis supply chain, sales and distribution. Fair and Handsome is also recently launched in African and GCC countries.

PROMOTION AdvertisingFour main instruments used by Emami for advertising are Television media, print media, online media and mobile services. In print media, they concentrate on Mens magazines (Like Health, The week, Autodrive etc.) along with featuring in weekend supplements of dailies like TOI, HT. During first year of its launch, advertisement were aired on TV Channels: Star News, Zee News, Star Gold, Zee Cinema, Max, Sahara TV, Star One, Sony, Zee Smile, MTV, Zoom, ESPN, Discovery, Alpha Marathi Radio : Radio City and Radio Mirchi. Emami spends more than 70 per cent of its advertising budget on television spots, favouring cricket, music and new channels

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Market Segmentation Characteristics Family Income Age Gender Education Geography Loyality Personalty Benefit expected Customer Profile 1 lakh-5 lakh annually 15-35 Male High school and college educated Anywhere in India Loyal Wishes to take charge of his destiny Handsome look, Fairness

Target Market
Full Size pack

Target group: 1-10 lakh INCOME User group: 3-5 lakh Trial pack

Target and user group< 1 lakh AGE GENDER Target and user group: men Target and user group: men

POSITIONING
Worlds no. 1 fairness cream for men Mardon wali cream
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MOTIVATION

Previously, domain of ladies only. Male became more conscious for their look. The growing demand of different cosmetics and skin care products for men proves that men are now taking care of their skin. Male skin in India Three times more exposed to the sun UV rays Five times more exposed to pollution Twice more exposed to stress, More Abused by abrasive shaving blade action than women's skin. Need for male cream

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Other Aspects o Operant Conditioning 5 Unique Power Fairness system (comparison) Positive Reinforcement

o Novelty New Product First Movers Advantage

o Values and Lifestyle (VALSTM) Strivers- trendy, fun- loving, narrow interests, stylish products Experiencers- impulsive, trying new, offbeat products, spend on fashion and socilaizing. o Maslows Need Hierarchy Social Needs- love, affection, acceptance Egoistic Needs- Pride, status, self- esteem, Confidence

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PERSONALITY

Personality is defined as the unique pattern of relatively stable behaviors and mental processes that characterize an individual and how he or she interacts with their environment

Brand ambassador: Shahrukh Khan Consumer wants to be like him and wishes to take charge of his destiny so he choose the cream for becoming handsome.

PERCEPTION

Fair and handsome cream is being positioned as the fairness cream that can make men handsome and also attractive to girls. Fair and handsome provides quality as per the price.

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ATTITUDE

Emami annual turnover has increased with the introduction of Fair And Handsome cream because of behavioural intention of consumer i.e. to buy the brand

Tricomponent Attitude Model

o Cognitive Fairness Cream Looking good o Conation Usage More avg time spend in front of mirror 30% male users o Affective Confidence Self esteem More attractive to females price

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Functional Approach- changing motivation

Utilitarian Approach- focusing on functional attributes of product (Moisturizer, UV protection, stress buster, etc.) Ego- defensive function- protect self image (offering reassurance, focusing on self image, confidence, etc.) Value- Expression function- attitude towards owning new products of their interest and being hi- tech, targeting the metrosexual male who want to look good and confident Knowledge Function- emphasizing on advantages over the fairness cream for women

LEARNING
It is process of purchase and consumption knowledge and experience that they apply to future related behavior Behavioral learning theory(based on obs) Cognitive learning theory (based on others)

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SOCIO CULTURE FACTOR Involvement

Emotional appeal of Fair and Handsome cream caused more involvement of men towards this brand It is identified with particular group of people i.e. men group only

Self Image
Aspiration, upward mobility Consumers want to become the dream boy of their girlfriends and wives, and of course can go to any extent. This urge of a man has been well depicted in the Fair and Handsome ad where a boy enters a girl hostel to steal their fairness cream

Imagery
Brand salience, as evaluated by the degree of "top of the mind recall" and "brand awareness" is good which leads to repeat purchase decision

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BIBLIOGRAPHY Book:

Consumer Behavior
Author: Leon G. Schiffman Publication: PEARSON Edition: 10th

Websites:
http://www.termpaperwarehouse.com/essay-on/Consumer-Behaviour-Of-Fair-AndHandsome/128318 http://marketingpractice.blogspot.in/2007/07/fair-and-handsome-be-fair-behandsome.html http://www.wikipedia/marketingmix/30232 http://gauravbhagtaniblog.wordpress.com/2013/10/06/marketing-mix-of-fair-handsome/ https://www.google.co.in/#q=emami+ltd http://economictimes.indiatimes.com/emami-ltd/stocknews/companyid-5619.cms http://www.ibef.org/artdisplay.aspx?art_id=33899 http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved =0CEYQFjAE&url=http%3A%2F%2Fwww.ibef.org%2Fartdisplay.aspx%3Fart_id%3D 33899&ei=jqVgUqK3H4mOrQfXzYG4Cg&usg=AFQjCNEhOSITMEUNtRQTJOfD9o HqI2QdPQ&bvm=bv.54934254,d.bmk

http://en.wikipedia.org/wiki/Fast-moving_consumer_goods

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