FMCG in Pakistan

Institute of Business Administration
Assignment Topic:-
FMCG Sector of Pakistan

Presented To:Prof. Basharat Naeem Course:Marketing Research BBA (Hons.) Evening 2007
Presented BY:-
Naveed Raza Butt Shoaib Ahmed Khurram Arshad Ahmad Iftikhar
08 31-06 49 32-06
Fast Moving Consumer Goods (FMCG)

Definition :
FMCG is also known as Consumer Packaged Goods (CPG), are products that have a quick turnover and relatively low cost.
Though the absolute profit made on FMCG products is relatively small, they generally sell in large numbers and so the cumulative profit on such products can be large. The Pakistans FMCG market has been divided for a long time between the organized sector and the unorganized sector. While the latter has been crowded by a large number of local players, competing on margins, the former has varied between a two-player-scenario to a multiplayer one.
Unlike, the U.S. market for fast moving consumer goods (FMCG), which is dominated by a handful of global players, Pakistan's FMCG market remains highly fragmented with roughly half the market going to unbranded, unpackaged home made products. This presents a tremendous opportunity for makers of branded products who can convert consumers to branded products.
FMCG Evolution :
1950s-80s Low Investment in the sector Low purchasing power Govts emphasis on small scale sector HLL and other companys urbane focus
Post Liberalization:
Entry of MNCs Focus shifted to getting to rural consumer first Others, like Nestle, remained with the urban population Latest fad to hit the market is the sachet bug. Mushrooming of regional brands
CHARACTERISTICS:
The 3 very distinct characteristics of FMCG are like : necessity comfort and luxury
o Consumer spends little time on the purchase decision. Customer seldom ever looks at the technical specifications. o Brand loyalties or recommendations of reliable retailer/ dealer drive purchase decisions. o Limited inventory of these products (many of which are perishable) are kept by consumer. o Brand switching is often induced by heavy advertisement, recommendation of the retailer or word of mouth.
FMCG Industry:
FMCG is alternatively called as CPG (Consumer Packaged Goods) industry primarily deals with the production, distribution and marketing of consumer packaged goods. The Fast
Moving Consumer Goods (FMCG) are those consumables which are normally consumed by the consumers at a regular interval. Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc. The industry also engaged in operations, supply chain, production and general management. A subset of FMCGs are Fast Moving Consumer Electronics which include innovative electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems and Laptops. These are replaced more frequently than other electronic products.
Common FMCG Products:

Some common FMCG product categories include food and dairy products, glassware, paper products, pharmaceuticals, consumer electronics, packaged food products, plastic goods, printing and stationery, household products, photography, drinks etc. and some of the examples of FMCG products are coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and cigarettes, watches, soaps etc.
FMCG Industry Economy:

FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in Pakistan, where FMCG industry is regarded as the fourth largest sector.
Market Potentiality of FMCG Industry:

Some of the merits of FMCG industry, which made this industry as a potential one are low operational cost, strong distribution networks, presence of renowned FMCG companies. Population growth is another factor which is responsible behind the success of this industry.
Leading FMCG Companies in Pakistan:

Some of the well known FMCG companies are : Nestl, Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Gourmet Foods, Cadbury, Nurpur, Haleeb, Pepsi etc.
How Do Multinational Corporations Of FMCG's Cope Up With The Concept Of Brand Image In The Pakistani Market?
In all candor, image has to be the most pre-eminent determinant when it comes to evaluating the position of a respective product in the market. For Multinational Corporations specially, they have very high standards in maintaining their image. The modifications and enhancements in their products are always done in such a way that the image of the product bolsters with the particular alteration and has no negative effect whatsoever on the goodwill of the organization. In other words, people's viewpoints have illustrated that image makes a product unique. The stronger the image of the product, the greater the impact on the consumers. Not only that but also image enhancement helps in widening the scope of the target market and gives the product an edge over its competitors. As far as buying decisions are concerned, they rate image at a high extent, throwing light on the fact that image plays a great role in shaping up the buyer's attitude. It helps
to facilitate a consumer's dilemma to choose between the alternatives of buying or not buying a product. For Pakistani consumers, image is such a pivotal element in their mindsets that depending on it, they continue to buy the product even if its quality diminishes as they have full faith in the already created image of the good.
ISSUES:
Problematic distribution Managing the price increase Promotional pressure Price war Category leader Product introduction Concentration Local marketing Information lumber

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Institute of Business Administration

FMCG Sector of Pakistan

Naveed Raza Butt Shoaib Ahmed Khurram Arshad Ahmad Iftikhar

Fast Moving Consumer Goods (FMCG)

Common FMCG Products:

FMCG Industry Economy:

Market Potentiality of FMCG Industry:

Leading FMCG Companies in Pakistan:

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