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Introduction of Fast Moving Consumer Goods

The Fast Moving Consumer Goods (FMCG) sector is the fourth largest sector in the economy with a total market size in excess of Rs. 60,000 crore. This industry essentially comprises Consumer Non Durable (CND) products and caters to the everyday need of the population. This has thrown up several opportunities and challenges for FMCG companies.

Important features and characteristics of FMCG sector:

Products with quick turnover and relatively low cost Absolute Profit is relatively small High Demand Low Involvement on Consumers part Easily substitutable or replaceable Profits driven by Sales Volume

SUCCESS OF FMCG

High Sales

Good Marketing Strategy

High Profit

INTRODUCTION
FMCG SECTOR generally deals with fmcg products or first moving consumer goods. Fmcg products have a quick turnover and relatively low cost . Indias fmcg sector is 4th largest Sector in the economy and contribute to around 3mln employment opportunities. Its principle constituents are household care, personal care , food & beverages. FMCG Industry is characterized by a well established distribution network, low penetration levels, low operating cost, lower per capital consumption and intense competition between the organized and unorganized segments.

GROWTH PROSPECTS
Large Market: India has a population of more than 1.150 Billions which is just behind China. According to the estimates, by 2030 India population will be around 1.450 Billion and will surpass China to become the World largest in terms of population. FMCG Industry which is directly related to the population is expected to maintain a robust growth rate.

MARKET OPPORTUNITIES
Vast Rural Market: Rural India accounts for more than 700 Million consumers, or ~70 per cent of the Indian population and accounts for ~50 per cent of the total FMCG market. The working rural population is approximately 400 Millions. There is an untapped market and most of the FMCG Companies are taking different steps to capture rural market share. The market for FMCG products in rural India is esti-mated ~ 52 per cent and is projected to touch ~ 60 per cent within a year.

SECTORAL OPPORTUNITIES
There are 4 Major Key Sectoral opportunities for Indian FMCG Sector are: Dairy Based Products Packaged Food Oral Care Beverages

Major players
Hindustan Unilever Ltd

Colgate Palmolive India Ltd

Marico Industries

ITC
Dabur India Ltd

Reckitt & Benkiser

Balsara Hygiene Ltd

Vicco Laboratories

FMCG company

DEMAND & SUPPLY OF FMCG IN A SUPER MARKET-

I f the product increases the price, the consumers will be less ready to buy such a product and the purchased quantity in a specific period will decrease. On the other hand if the price decreases, this might stimulate consumers to buy more.

Obviously the price sensitivity changes from product to product, from consumer to consumer, but also from one moment to another.

If Demand is greater than Supply, than the price increases and vice versa. On the other hand, if the Supply is greater than Demand, than the price decreases and vice versa. When the functions of Supply and Demand meet, the price is "agreed". Both Demand and Supply have their functions that represent the ratio between quantity and price of product. But this function or curve is not always the same. It depends from the type of the product, time, number of competitors, etc. Basically, the curve of Demand explains how much quantity the shoppers are prepared to pay for the product if the price changes. This means that if the product increases the price, the consumers will be less ready to buy such a product and the purchased quantity in a specific period will decrease. On the other hand if the price decreases, this might stimulate consumers to buy more.

1:DEMAND AND SUPPLY OF FMCG(CHOCOLATE)

As the price of chocolates rises,the quantity demanded falls,other things equal. We assume nobody buys any chocolate if the price exceeds. price 20 30 40 Quantity Demand 120 80 40 Quantity Supply 40 80 120

Suppliers offer 120 bars but nobody buys at this price. Sellers cut the price to clear their stock. Cutting the price to 30 has two effects.it raises the quantity demand to 80 and cuts the quantity producers wish to make and sell to 80.