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Amity Business School

Amity Business School

Fast moving consumer goods (FMCG) / Consumer Packaged Goods (CPG) are :
Products that are sold quickly At relatively low cost Absolute profit is low, but cumulative profit can be large. Replaced or fully used up over a short period of days, weeks, or months, and within one year. FMCGs have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly

Amity Business School

CATEGORY Household Care

PRODUCTS Fabric wash (laundry soaps and synthetic detergents); household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides & mosquito repellents, metal polish and furniture polish)

Food and Health

beverages; soft drinks;Staples/cereals; Beverages bakery products (biscuits, bread, cakes); snackfood; chocolates; ice cream; tea; coffee; soft drinks; processed fruits, vegetables; dairy products; bottled water; branded flour; brandedrice; branded sugar; juices
Oral care, hair care, skin care, personal wash (soaps); cosmetics and toiletries; deodorants;

Personal Care

Amity Business School

The Indian FMCG sector, with a market size of $ 25 billion (200708 retail sales), constitutes 2.15 per cent of Indias GDP.

The industry is poised to grow at CAGR between 10 to 12 per cent annually.


Annual profit of FMCG sector is $14.74 billion. Market growth rate Rural -40%, Urban -25% Average Indian spending on groceries and personal care is 48% (Groceries 40% & personal care 8%). Implementation of the proposed GST and opening of FDI are expected to fuel growth of industrys size to $47 billion (Rs 225,000 crore) by 2013 and $95 billion (Rs 456,000 crore) by 2018, according to a new Ficci- Technopak report.

Amity Business School

1.Hindustan Unilever Ltd. 2.ITC (Indian Tobacco Company) 3.Nestl India 4.GCMMF (AMUL) 5.Dabur India 6.Asian Paints (India) 7.Cadbury India 8.Britannia Industries 9.Procter & Gamble Hygiene and Health Care 10.Marico Industries

1. 2.

3. 4. 5. 6. 7. 8. 9. 1. 2. 3. 4. 5. 6.

GST Regime Transportation and infrastructure development in rural areas helps in distribution network. Restrictions in import policies. Help for agricultural sector . Policies aimed at attained international competitiveness. Reduction in Excise Duties. Use of foreign brand name. 100% export oriented units. Automatic foreign investment.

1. GDP rate increase along 2. Increase in disposable income at 10 % annually for next 8 yrs. Amity Business School 3. Indian FMCG Recorded 16% Sales Growth in Last Fiscal. 4. It is a 4th largest sector of Indian 5. Reduction in excise duty by 4%.. 6. Spending on setting up warehousing and cold storages. 7. Fall in duty for sanitary napkins & dippers . 8. Imposition of 1% excise duty on ayurvedic medicines
PEST

7.

Analysis Rural employment Volume-driven growth in rural market. 1. Major young population can increase revenue . 2. The Indian culture, social & life styles are changing drastically. 3. Most of the companies start targeting 4. social markets. Have made a lots of innovation in 5. providing food to the persons having busy schedules Product available for each segment of society.

Technology has been simplified and available in the industry. Foreign players helps in high technological development. Bar code reader. RFID tagging of products (future) for supply chain management. GPS locative technology

Strengths
1. Low operational costs 2. Established distribution networks in both urban and rural areas. 3. Presence of well-known brands in FMCG sector.

WeaknessesSchool Amity Business


1. Lower scope of investing in technology and achieving economies of scale. 2. Low exports levels 3. Counterfeit Products.

SWOT
Analysis
(FMCG Sector)

Opportunities
1. Scope of further scope in rural market 2. Rising income levels 3. Large domestic market-. 4. Export potential 5. High consumer goods spending

Threats
1. Removal of import restrictions 2. Slowdown in rural demand 3.Tax and regulatory structure

Amity Business School

Distribution channel of NESTLE

Amity Business School

Nestle India is a vibrant company providing Indian consumers with quality global products and is committed to long- tern sustainable growth.

Nestle Professionals is a part of Nestle India Ltd catering to the bulk needs of organizations. Nestle Professionals deals with business to business needs.
Nestle Professional has a sales turnover of Rs. 1471 crore and a net profit of Rs. 194 crore for the year 2010. The products under Nestle Professionals : Milk Products Beverages Prepared Dishes Chocolates and Confectionaries

Amity Business School

Nestle has its presence across India with seven manufacturing facilities and four branch office spread across the region. Nestl's first production facility was set up in 1961 at Moga (Punjab). Consequently , Nestle India set up factories in Choladi (Tamil Nadu) 1967, Nanjangud (Karnataka) 1989, Samalkha (Haryana) 1993, Ponda and Bicholim (Goa) 1995 and 1997 and the latest one is set up in Pant Nagar (Uttarakhand). There are set of distributors in separate regions catering to the various needs as per different sectors. Head office of Nestle is situated at Gurgaon and four branch offices in Delhi, Mumbai, Chennai and Kolkata. Distribution channels of Nestle Professional is : HORECA B&I STREET

Amity Business School

Amity Business School

Amity Business School

Amity Business School

Amity Business School

The company has created two kinds of distributors, namely Trade and Chocolate. The former deals with the Maggie range, Nestle dahi, Aquafina etc. Chocolate deals with all confectionery items like chocolates, sweets etc. A representative of each distributor goes to the various outlets, once or twice a week (depending upon the area), takes the order and then either delivers the goods there and then, or on the same day. It has been realized that a retailer has a limited pocket for a days purchase. The company has also taken an initiative for deeper reach and penetration into the market with its operation STING. Whereby the sales representatives on the company go on bicycles and try to fulfill the order of small ignored and unserved outlets. For example the panwallas, the kinara stores etc.

STOCKS ARE COMPANY PROPERTY

FACTORY

Amity Business School


Transfer Challan

MOTHER GODOWN
Transfer D.A

C&S AGENTS

C&S AGENTS

C&S AGENTS

INVOICING AGAINST PAYMENT

C.D

C.D

C.D

STOCKISTS

OWNERSHIP TRANSFER OWNERSHIP TRANSFER

Moga Factory

Amity Business School


By Rail
Direct Sahibabad Mother Godown Delhi-UP border Transhipment Godown

By Road

Trucks

C&S

Direct by rail containers


C.D. C.D.

Indore

Hyderabad Mostly by Road : Containers / trucks

Patna/ Calcutta

Guwahati

By trucks

C&S By Canters / Vns

C&S

C&S

C.D.

C.D.

C.D.

C.D.

C.D.

Amity Business School

Moga (factory)
Ghaziabad (Mother Godown) Guwahati Indore Patna

Hyderabad

RAIL

EXAMPLE OF DISTRIBUTION STRUCTURE OF NESTLE INDIA LTD. ( NCR)


Mother Godown at Ghaziabad, Delhi UP Border
Amity Business School

Formal Structure Informal Structure

Respective C&F Agents

Distributors as per assigned territories Retailers in their respective territories

Wholesalers in their area.

End Consumer Wholesalers are not a part of the formal structure of Nestle Indias distribution network for NCR .They make bulk purchases from the distributors directly thereby leveraging on the margins.

Amity Business School

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