FMCG Products – A Write Up

It is hard to imagine your day without FMCG products. These products meet our day to day requirement. It does not include only grocery items alone, but also includes packaged food stuff, dairy items, confectionery products, cosmetics, personal care items, electronic goods like cell phone, laptop etc. On an average people spend a big part of their monthly income on FMCG products.

The characteristic feature of FMCG market is that it does not get adversely affected by inflation or price hike as its market base is strong and wide. Whenever consumer or market trend start showing a diversion in interest FMCG companies come forward with innovative ideas and strategies.

The FMCG market of India is going through a highly competitive phase and this competition is going to get tough in the coming years. The growth rate of FMCG sector is tremendous and the emerging number of FMCG companies has made the scenario highly competitive.

The last decade saw a phenomenal growth in the FMCG sector. FMCG has emerged as a leading revenue generator. The growth in per capita income and change in lifestyle has played significant role in the growth of FMCG sector. Not just the urban people, but now rural people are also spending their salary on FMCG products. Items like toothpaste, biscuits, shampoo, soaps and many more cosmetic and personal care items have become popular among rural people and these people are now willingly spending their earned money on such products. To tame the rural market and to motivate people to buy the products companies have planned several packaging and marketing strategies and one of the most successful trend is launching of products in small packaging, a common person of a village will not spend big amount of money on a shampoo bottle, but he will happily buy a pouch of rupees 5 for his daily use.

Market share movements indicate that companies such as Marico Ltd and Nestle India Ltd, with domination in their key categories, have improved their market shares and outperformed peers in the FMCG sector. Strong players in the economy segment like Godrej Consumer Products Ltd in soaps and Dabur in toothpaste have also posted market share improvement, with revived growth in semi-urban and rural markets. One of the characteristic features of FMCG companies is that it mostly produces labor intensive products. It is predicted that the Indian FMCG market will value Rs.4000 to Rs.6, 000 billion by the year 2020.

The future of FMCG is very promising. The rapid urbanization, increased literacy and increase in per capita income have brought significant changes in living style. It is expected that the urban population ranging between 15 to 34 years is expected to increase to 138 million in 2011. By 2020 the average age in Indian will be 29 years. That is they will have more earning power and will spend more on their luxury and necessities. The market potential is going to expand further in the coming years.

FMCG companies are following different marketing strategies and promotional activities to catch the attention of the potential customers. Leading brands like Dabur, P&G, and Marico are choosing Bollywood Stars, celebrities to endorse the products.

Today consumers have several alternatives and it is really a tough task for the FMCG companies to retain and expand their consumer group.

Leading companies follow attractive packaging, engaging promotional activities, competitive price, deals and offers on the items to attract the consumer class.  Strong distribution network, well designed research and analysis of the market and marketing trend and low operational cost helps FMCG companies.

Some of the well known FMCG companies are Sara Lee, Nestlé, Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi and Mars etc. 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.

Companies are investing good amount of time and money in R&D work as it is the proper R&D that will bring forth the untamed potential of market and will provide an opportunity to FMCG Companies to explore the area and earn the profit. Keeping a sharp eye over the competitor, reading the market trend and following the consumer’s mood is the key to success in the FMCG sector.