UNIT-2 Industry: Fast Moving Consumer Goods (FMCG)
UNIT-2 Industry: Fast Moving Consumer Goods (FMCG)
UNIT-2 Industry: Fast Moving Consumer Goods (FMCG)
INDUSTRY
FAST MOVING CONSUMER GOODS (FMCG)
Fast-moving consumer goods are products that sell quickly at relatively low cost. These goods
are also called consumer packaged goods.
FMCGs have a short shelf life because of high consumer demand (e.g., soft drinks and
confections) or because they are perishable (e.g., meat, dairy products, and baked goods). These
goods are purchased frequently, are consumed rapidly, are priced low, and are sold in large
quantities. They also have a high turnover when they're on the shelf at the store.
INDUSTRY PROFILE
Soap is one of the commodities which have become an indispensable part of the life of modern
world. Since it is non-durable consumer goods, there is a large market for it. The whole soap
industry is experiencing changes due to innumerable reasons such as government relations
environment and energy problems increase in cost of raw material etc.
The changing technology and ever existing desire by the individual and the organization to
produce a better product at a more economical rate has also acted as catalyst for the dynamic
process of change.
More and more soap manufactures are trying to capture a commanding market share by
introducing new products. The soap industry in India faces a cut throat competition with
multinational companies dominate the market. They are also facing several threats from dynamic
and enterprising new entrance especially during 1991-92.Soap is produced by a saponification or
basic hydrolysis reaction of a fat or oil. Currently, sodium carbonate or sodium hydroxide is used
to neutralize the fatty acid and convert it to the salt.
SIZE OF THE INDUSTRY The Indian Soap Industry includes about 700
companies with combined annual revenue of
about 17 Billion dollars.
Growth of population.
Increase in urbanization.
Organized sectors.
Unorganized sectors.
MARKET CAPITALIZATION
Today in the Indian economy the popular segments are 4/5ths of the entire soaps market. The
penetration level of toilet soaps is 88.6%. Indian per capita consumption of soap is at 460 Gms
per annum, while in Brazil it is at 1,100 grams per annum.
In India, available stores of soaps are five million retail stores, out of which, 3.75 million retail
stores are in the rural areas. 70% of India's population resides in the rural areas and around 50%
of the soaps are sold in the rural markets.
EMPLOYMENT OPPORTUNITIES
In Indian Soap Industry the entry of new players in the 6,500-crore toilet soaps industry is
expected to bring about a new twist in the "Indian soap opera". ITC Ltd has started investing in
aggressive brand-building and product development projects to promote its brands, Fiama De
Wills, Vivel and Superia. Godrej Consumer Products Ltd and Wipro Consumer Care Lighting
are established players in the Industry which are beefing up their research projects and
advertising plans to take on new rivals.
With increasing competition, the Indian Soap Industry is expected to register a healthy growth
this fiscal. The sector registered a 15% value growth. GCPL is hiking its advertising budget by
20% to gain high visibility for its brands.
INDIAN SCENARIO
Hindustan Unilever limited, formerly Hindustan lever limited, is India’s largest consumer
products company and name was formed in 1933 as lever brothers India limited. It is currently
headquartered in Mumbai, India and its 41000 employees are working there. HUL is the market
leader in Indian products such as tea, soaps, detergents, as its product have become a daily
household name in India. The Anglo-Dutch company Unilever limited downs a majority stake in
Hindustan Unilever limited.
Hindustan Unilever limited (HUL) is India’s largest fast-moving consumer goods company with
a heritage of over 80 years. It has over 35 brands. HUL is the market leader in Indian consumer
products with presence in over 20 consumer categories. Nine out of ten Indian households use
their products every day to feel good, look good, and get more out of life; giving us a unique
opportunity to build a brighter future.
Nearly 900 suppliers work with their supply chain that spans 28 of our own factories and several
others that manufacture on their behalf. Their products are stocked in warehouses dotted across
the country and delivered to 3,500 customers. HUL has 28 factories and 9 offices and creates
employment opportunities for several thousand more across its value chain — from smallholder
farmers, who provide raw materials to the distribution partners
who take the products to customers and consumers. Your Company has a clear and compelling
strategy that focuses on Winning with Brands and Innovation, Winning in the Marketplace,
Winning through Continuous Improvement and Winning with People. This is underpinned by the
Unilever Sustainable Living Plan (USLP) that sets our vision to increase the size of the business,
whilst decoupling it with our environmental footprint and increasing our positive social impact.
With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin
care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water
purifiers, the Company is a part of the everyday life of millions of consumers across
India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin,
Wheel, Fair & Lovely, Pond's, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup,
Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall's and Pureit.
The Company has about 18,000 employees and has a sales of INR 34619 crores (financial year
2017-18). HUL is a subsidiary of Unilever, one of the world's leading suppliers of Food, Home
Care, Personal Care and Refreshment products with sales in over 190 countries and an annual
sales turnover of €53.7 billion in 2017. Unilever has over 67% shareholding in HUL.
HUL PRODUCTS
PERSONAL WASH
Lux
Lifebuoy
Hamam
Liril
Pears
Dove
International Breeze
Rexona
Ayush
LAUNDRY
Surf excel
Rin
Wheel
Sunlight
Ala bleech
BEAUTY PRODUCTS
Fair & Lovely
Ayush
Lakme
Vaseline
Aviance
DISINFECTANTS
Cif
Domex
DISHWASHER
Vim
FOODS
Kissan (Jam, Ketchup, Squashes)
Annapurna (Aata and Salt)
Knoor (Soups, Noodles, Masala)
BEVERAGES
Tea
Brooke bond
Lipton
Taj mahal
Bru
Brooke Bond Red Label
WATER PURIFIER
Pureit
ICE CREAMS
Kwality walls
HAIR CARE
Clinic plus
Sunsilk
Dove
Ayush
Tresremme
ORAL CARE
Pepsodent
Closeup
Ayush
DEO SPRAY
Axe
Dove
Rexona
HUL COMPETITORS
Proctor & Gamble
ITC
Colgate
Patanjali
Dabur
Nestle
Marico
Lifestyle changes
Quality
Smell
Flavors
Easily available
Due to a great change in lifestyle and direct foreign investment, there is a drastic change in
Indian culture and cosmetics. Most of the family members are ready to buy the personal products
because of the Brand Name, quality. Many of the consumers buy the product which is more
quality, and some of the persons choose upon the price of the product.
Cosmetic Segment
Indians buy a lot of makeup, lotions, skin creams, and lightning creams. Here also HUL
Company introduced the Fair & Lovely and sells 2 other popular brand of skin care product.
Working women purchase the majority of the cosmetics in India.
HAMAM SOAP
Hamam brings alive the wisdom behind time-less skincare rituals in convenient and
contemporary formats. Launched in 1931 as a 'mild, family soap', Hamam soon drew a large
natural following long before it was trendy or fashionable to use products with natural
ingredients. Perhaps the only Indian-made natural soap at the time, Hamam was embraced by
mothers and doctors alike, for its purity and safety on skin.
Only Hamam has Neem, Tulsi and Aloe Vera which give effective protection from 10 skin
problems like rashes, pimples, prickly heat, body odor etc. Hamam is the most recommended
soap by doctors in Tamil Nadu and has a long standing heritage of use traditional ingredients to
bring effective skin protection to its consumers.
The first chapter explains about the introduction part of the study topic & company profile. Then
concepts that are used for this project and its definition are explained clearly in this chapter.
Scope of the study contains objectives for this project and how it is going to be used to analyze
the result. This scope of study contains consumer satisfaction towards certain brand. Limitations
of the study explain the drawbacks of this project especially time constrain, targeting particular
segment people (Hamam soap users for survey). Survey is conducted around Thanjavur city and
not in other district due to time constrain. These are the major limitations of this study. Then the
profile of the company from its history and the way how it becomes one of the biggest FMCG in
India is given. The company profile, its vision, its products, competitors and its sales turnover is
presented. HUL segmentation (personal product) and its classification is explained. Then
Hamam soap history and also the newly launched new hamam neem soap with its categories,
picture is briefly presented. The upcoming chapter focuses on literature survey which gives more
information related to the study.
RESEARCH METHODOLOGY
This chapter dealt with researches what have done in this survey. It talks about formulation and
statement of the problem in this study. It also explains research design which method is used.
Objective of the study explains why this study is undertaken and also expected outcome from the
study. It is the important one in the study. Then discusses variables used in this study. Sampling
design shows the sampling method used for this customer satisfaction survey. Types of data tell
where the data is collected and what method & tools are used to collect information regarding
this study. Methods of data analysis also explain in this survey.
Variables considered
Age
Gender
Occupation
Brand name
Product
Price
Place
Promotion
Awareness
Satisfaction
Customer behavior
Positioning Quality
Sampling Design
The study has been undertaken by survey method. The data is collected with the help of non-
probability convenient sampling from the super markets in Chennai city. A sample of 150
individual is selected for this purpose. This sampling technique was adopted mainly due to time
and financial constraints.
Sampling unit
Hamam soap users in Chennai town constitute the population of the present study.
Sampling size
In this survey the sample size was determined as 150 arbitrarily.
Primary data
The primary data are those which are collected as a fresh and for first time and thus happen to be
original in nature. In this survey primary data used was the information collected from hamam
customers in various stores through a survey.
Questionnaire method
For this survey I used questionnaire method to collect details regarding the satisfaction level with
respect to new hamam neem soap. A questionnaire consists 25 questions with options.
In his study qualitative method is used to find out the satisfaction level of hamam consumers.
In order to analyze the collected data, the statistical tool used is SPSS version 2.0 software.
This research methodology chapter is to formulate the statement of the problem regarding soap
industry. An objective of the study clearly explains the expectations from this study. Next
chapter deals with data analysis and interpretation work based on survey taken. Using Chi-square
method the data has been analyzed.
REVIEW OF LITERATURE
Survey of literature takes an important part in all researches and it is a systematic quest for
available truths on a particular topic. It is very useful to know what's happening in the particular
topic and what has been found out and to decide what should be found out in future
research. The researcher can understand the gap in which aspect no research has been
undertaken in the past period. In this way, such surveys take an important role in a research
process. The following is a brief summary of review of literature- ‘customer satisfaction’.
● Andrew K. & Lawrence V (1984) found out that the customer was very much
sensitive in the context of frequent hike in price of commodities.
● William J. Stanton (1990) concluded that the customer satisfaction would be
determined by various psychological attributes rather than explicit factors such as
change in quality, design of the commodity, packing etc.
● Edward F. Flippo (1990) has told that the determinants of customer satisfaction would
make the customer more sensitive and they influenced their buying process.
● John R. Dillon (1991) discussed various determinants of customer satisfaction such as
Income, age, sex, religion, and other socio economic background and he came to
a conclusion that the customers were very clear in their choice.
● K.V. Charles and V. Kohil (1994) decided in their study on customer preference of
cosmetics that the customers ‘attention would be on the price and utility of the products.
● P.K. Ghosh (1998) described in his review that the economic status was the major
factor to influence customers' attitude.
● V.R. Choudhri (1999) explained that the customer would be willing to buy again and
again when they were satisfied with their sentimental feelings and they usually
evaluate their buying decisions in terms of expectations and satisfactions.
● J. Santhosh and K. Kamalesh Guptha (2000) listed various strategies of customer
satisfaction in the automobile industry and they concluded that the customers’ attitude
would be influenced by the price and value of the products.
● Oliver (1999) found that with marketing, customer satisfaction also comes along with it
which means it ascertains the expectation of the customer on how the goods and services
are being facilitated by the companies. Actionable information on how to make
customers further satisfied is therefore, a crucial outcome.
● Hill, Roche & Allen (2007) explained that At a glance, customer satisfaction is a crucial
component of a business strategy as well as customer retention
and product repurchase. To maximize the customer satisfaction companies should sell
ideas and methods after the completion with all the necessary documents. As for
example, customers will buy a car after taking a closer look at it such as how is the
engine, what is its model, how many kilometers it has been traveling, and is there any
cracks or not. Therefore, they do not feel disappointed after purchasing it. Otherwise, if
the company uses only their sell and build method customers might expect that the car is
exactly the same as what they see in the pictures or during the exhibition and later on the
company might receive complaint if anything is wrong. Customer satisfaction is a
barometer that predicts the future customer behavior.
● Hague (2016) explained that However, the product and its features, functions, reliability,
sales activity and customer support are the most important topics required to meet or
exceed the satisfaction of the customers. Satisfied customers usually rebound and buy
more. Besides buying more they also work as a network to reach other potential
customers by sharing experiences.
● Rebekah & Sharyn (2004) pointed out that The value of keeping a customer is only one-
tenth of winning a new one. Therefore, when the organization wins a customer it should
continue to build up a good relationship with the client. Providing the quality of goods
and services in the 20th century is not only to satisfy the customers but also to have a safe
position. Indeed, this has benefited the customers significantly on consuming qualitative
products.
● Hill, Brierley & MacDougall (2003) figured out such that mentation, etc. Moreover, from
profitability and productivity perspectives only activities that produce value for
customers should be carried out. Hence, firms have to get to know their customers much
better than has normally been. However, the company should be able to build trust with
the customer so it is easy to get the feedback from the customer. This is how customer
oriented product or service could be developed.
● Lovelock, C & Wright, L. (2007,86-87) pinpointed that Customer satisfaction is dynamic
and relative. Only the idea “customer-centric” can help companies improve satisfaction
and keep customer truly, conversely, if competitors improve customer satisfaction, then it
may loss corporate customers. While improving customer satisfaction, customer
expectations should be noticed. Service quality, product quality and value for money
have a direct positive impact on customer satisfaction. Employee satisfaction is equally
important before achieving customer satisfaction. If employees have a positive influence,
then they can play a big role to increase customer satisfaction level. Satisfaction is a
dynamic, moving target that may evolve overtime, influenced by a variety of factors.
Particularly when product usage or the service experience takes place over time,
satisfaction may be highly variable depending on which point in the usage or experience
cycle one is focusing.
● Prashad, A. (2006). In this study, the author says FMCG has the personal care products
like soaps, shampoos, etc. so this project mainly focuses on the market and study of bath
soaps in India. It consists of various multinational and domestic companies. The main
focus is on Hindustan lever ltd, Nirma, and Godrej. This project study related to 3 major
players of bath soap market and their SWOT analysis, BCG Matrix, 5 forces model of the
industry and the companies. Various suggestions and recommendations are also been
given to the FMCG sector bath soap segment. HUL is the most dominating company
across the world in FMCG sector due to its vertical and horizontal integration. Then also
Nirma and Godrej are trying to give tough fight to it. My study also related to HUL
product (Hamam neem soap). Here it will useful for me to compare my product with
competitor product.
● Kureshi, S. and Vyas, P. (2007). It's about understanding perceptions of retailers and
customers regarding sales promotion activities improve the effectiveness of these
activities. Extensive usage of sales promotion activities in Fast Moving Consumer Goods
(FMCG) sector makes it imperative that manufacturers take into account retailers and
customers perception before planning such programs. In this paper, an attempt has been
made to examine the nature of sales promotion activities in toilet soap category in India.
It studies retailer perceptions with respect to these activities and also gets awareness into
customer perceptions of these activities. Their findings indicate that with respect to the
nature of the schemes, premiums (free gifts) were found to be the most frequently used in
both premium and popular toilet soap category, followed by price offs. Retailer's
perceived price offs to have relatively greater impact compared to any other forms of
sales promotion. The findings of customer perceptions indicated that price offs were the
most preferred type of sales promotion. Retailers said that word of mouth and television
advertising was very important to provide information to the customers regarding sales
promotion activities. In Hamam neem soap retailers also may link its sales promotion
activity may success or not.
● Walfried, Mittal, B. and Sharma, A. (2009). This article is related to brand equity in
FMCG products. Brand equity is very important to marketers of consumer goods and
services. Brand equity facilitates in the effectiveness of brand extensions and brand
introductions. It teaches customer trust towards same brand. These brand equity test are
determined under five dimensions are performance, value, social image, trustworthiness
and commitment. In empirical tests, brands that scored higher on the customer-based
brand equity scale generally had higher prices. Compared this article with my project, it
teaches how hamam customers are giving preference to same brand when it comes in
different flavors. Company has to retain their regular hamam soap users.
● Jose, M.M., Bloemer, Hans, D.P. and Kesper, (2010). This article teaches brand loyalty
and customer satisfaction in one product. It showed customers buying same product in
the market without moving to other company product. First, in defining brand loyalty, a
distinction is made between repeat purchasing behavior and brand loyalty. Next, true
brand loyalty is distinguished from fake brand loyalty. Second, two types of customer
satisfaction are distinguished based on the amount of explanation upon the evaluation of
the brand choice. This study gives positive results towards customer satisfaction in same
product. It is related to my project in whether same customers buying hamam soap for
long years or new customers buying more new hamam neem soap. It is to test my
customer's loyalty towards hamam soap.
● Adithya, H.S. (2011). This study regards to customer satisfaction towards soap market in
Bangalore city. The present study would definitely help to learn about the sources of
information's for the customers during different stages of buying toilet soaps and hence
increase their level of awareness and brand preference for toilet soaps. In this they found
out customer awareness towards soap and its promotion level. . It is essential for the
marketers to understand the important sources to create awareness of their products.
Respondent explained about their purchase pattern on toilet soap. The basic idea of the
research is to survey the behavior of the customers while consuming the toilet soaps in
the market and how they utilize the marketing skills. Compared with my project, it will
be useful for me in analyzing the result related to customer awareness.
● Onwumere, J. and Onyemachi, O.N.D. (2012). The purpose of this study is to analyze the
factors that determine the customers repurchase intention, analyze the socioeconomic
characteristics of customers. To determine the relationship between customer
satisfactions, perceived value and branding as most major variables that influence the
customers repurchase intention. The data used for analysis were collected via
questionnaire. The technique of data analysis employed were simple descriptive statistics
such as means, percentages, tables and frequencies; Pearson product moment correlation
and stepwise multiple regression analysis. The findings of the study showed that
perceived value, brand preference and customer satisfaction are significant and positively
correlated with repurchase intention. The factors affecting the customers repurchase
intention of the soap products under studied included production of low quality goods,
improper use of distribution channels and lack of promotional campaign to back up the
product and the use of improper pricing policy adequate for the product. The
management of the company takes the necessary steps to promote the brand image so as
to positively influence the customers repurchases intention.
● Rajendra, K. and Gupta, (2014). The author explains about how to develop world class
brands. The brands often reflect collected intelligent property-Unique product ideas,
processes, patents, copyrights and state of the art technology, superior data acquisition
and processing capability and not the least, wonderful customer goodwill acquired by
company over the years. Brand is a variety of successfully adapting to changes in
business environment, technology and preferences of customers shaped by changing
lifestyles, awareness and standards of living, further complicated by globalization of
information and resources. Hence, brands have to fight battles throughout their existence,
trying to remain significant and at top. Brand loyalty can only be built by repeated
satisfaction delivered to customer. In products where product differentiation is negligible,
the customer has a carrier of preferential brands and keeps switching one brand with
another.
● Dhanalakshmi, S. and Ganeshan, M. (2015). The author states that customer satisfaction
has been widely accepted as an important issue for many marketing managers, especially
in FMCG product (bath soaps). It is commonly used as a marketing standard of a
company's performance. It is generally believed that customer who satisfied more likely
to display loyalty behavior, i.e. purchase repeatedly and ready to give positive opinion
about that. This paper aims to study the relationships between product attributes of bath
soap and customer satisfaction, loyalty intention in the context of bath soap products. In
my study, it is more useful to link relationship between brand loyalty and customer
satisfaction. By the same time, it will teach about how to improve brand loyalty.
● Sankaranarayanan, K. (2015). This article explains about the brand loyalty, satisfaction
and awareness about dove soap. This study is conducted in Mayiladuthurai town. In
FMCG industry sector there has been severe competition among the multinational
companies, national and local players. Brand loyalty is determined by several distinct
psychological processes of the customers. Product features is one of the most important
factors that affect brand loyalty. The relationship between the availability of the toilet
soap and brand loyalty was also found to be significant. The toilet soaps can be divided
into four price segments Premium, popular, economy and carbolic soaps. At the same
time, penetration level of toilet soaps in urban areas is very high. In this scenario, it is
very important for marketers to know the customer behavior with respect to toilet soaps,
which will be very useful in adopting suitable strategies. Link between my project and
this article is customer satisfaction towards toilet soap in a town.
● Ganesan, M. (2016). In this article, author says market that forced brands to redefine their
norms of existence all told industries. Within the FMCG business, particularly in bath
soap sector there has been severe competition among the MNCs, national and native
players. At an equivalent time, penetration level of bath soaps in urban areas is extremely
high, however per capita consumption levels stay low. During this situation, it's important
for marketers to grasp the buyer behavior with regard to bath soaps, which can be terribly
helpful in adopting appropriate ways. This analysis paper tries to research the whole
loyalty, satisfaction, awareness, and change behavior of shoppers relating to soaps. It also
examines the factors controlling brand choices.
● Atanaska, R. (2018). The article reports the survey may aim at studying the influence of
brands on the levels of customer satisfaction with products in the category of fast-moving
consumer goods. Here they conducted laboratory experiment; two independent groups of
customers were given the same product but with and without information about its brand.
The collected satisfaction data was analyzed using the method of structural equation
modeling, with particular attention being paid to the findings of the "importance —
performance" analysis. We found that the availability of information about the brand
actually affects the level of customer satisfaction with the product. In hamam also
possible chances are high for expecting more from the customers.
● The chapter has dealt about the various opinions, principles and philosophies of
prominent authors who have discussed about the factors, reasons and other external
issues influencing customer satisfaction. These reviews are from books, journals and
articles. All articles are related to the topic. From this review more information related to
customer satisfaction, brand loyalty and customer awareness was acquired. The next
chapter discusses about the research methodology and the concepts involved in detail.