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Fast Moving Consumer Goods (FMCG)

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Arshan Shaikh

on 25 February 2014

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Transcript of Fast Moving Consumer Goods (FMCG)

Challenges for FMCG Sector
Rapid new product innovation
Notable Trends in FMCG
Focus on Rural Market
Top 3 FMCG companies in India
Fast Moving Consumer Goods (FMCG)
Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products that are sold quickly and at relatively low cost.
India’s FMCG sector is 4th largest Sector in the economy
FMCG Industry is characterized by a well established distribution network, low penetration levels, low operating cost, lower per capital consumption and intense competition.
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.

Integration of various data sources
Evaluation of various scenarios
Improving sales and marketing effectiveness
Expanding Distribution Network
Brand Consciousness
Product Innovation
Rising importance of smaller-sized packs
Focus on enhancing presence in Africa
Reducing carbon footprint and eco-friendly products
Major Players with Market Share
Company Selected
Emami Ltd is an India producer of FMCG, such as cosmetics, health and baby products. The company is based in Kolkata
Founded in 1974 by Mr R S Agarwal and Mr R S Goenka (Joint Chairman)
Emami's began its production under the name of Kemco Chemicals, an Ayurvedic medicine and cosmetics manufacturing unit in Kolkata
Emami Acquired Himani Ltd in the year 1978 which was holding brand image in Eastern India
In 1995, Kemco Chemicals, the partnership firm was converted Public Limited Company under the name and style of Emami Ltd
In 2003 a new factory unit was set up at Amingaon, Guwahati
In 2006 the company introduced a Health Care Division and a number of new brands of Ayurvedic OTC medicines
In 2005 Emami created a marketing history in India by launching Fair and Handsome, the first fairness cream for MEN
Brief History
Emami Milestone
1974 :
• Two childhood friends Mr RS Agarwal and Mr RS Goenka quit their jobs to start their own business, Emami

1978 :
• Acquired Himani Ltd and set up factory in Kolkata

1984 :
• Boroplus Antiseptic Cream launched, under Himani umbrella

1989 :
• Navratna Cool Oil launched, under the Himani name
• Set up second factory in Pondicherry

1988 :
• Expanded the distribution network of the company to South India
• Emami merged with Himani Ltd

2010 :
• Crossed net sales of Rs 1000 cr
• Exceeded market cap of Rs 5000 cr
• Split of shares from Rs 2 to Re 1 per share

2011 :
• Conceived setting up of its first overseas manufacturing unit in Bangladesh.

2012 :
• Signed 4 Olympians & 1 cricketer as brand endorsers for a single brand, Fast Relief
• Started production at Bangladesh manufacturing unit

2013 :
• Bonus Issue; exceeded market capitalisation of Rs. 10,000 cr
Brand Chosen
About Fair & Handsome
Pioneer brand from the house of Emami.
In 2005, the company forayed into the men’s fairness category, which was a first for any FMCG company in India at that time.
Created Fair and Handsome, a marketing history in the category of men’s fairness creams.
Today it is the largest brand in the Men’s Fairness category and second largest in overall fairness category in India.
The launch of Fair and Handsome was based on researches
Did business of Rs 30 crores in the very first year.
Roped in the Bollywood Badshah Shah Rukh Khan as the brand ambassador in 2007
Even after competitors launched similar products in the market, Fair and Handsome continued to rule the market in the Men’s Fairness Cream category.
Opportunity Identification
It has been observed that males are becoming more sensitive towards skin care products especially product related to fair skin.

Due to unavailability, men started using women’s fairness creams like fair & lovely fairness cream etc.

A Fairness creams for men was completely unexplored opportunity due to following reasons:-

Closer to reality, male Skin was more exposed to sun’s UV rays, five times more exposed to pollution, twice more exposed to stress and considerably more abused by usage of shaving blade than women’s skin.

Indian men spent more time on grooming than ever before as compared to women.

There was an increasing incidence of the fact that active earners linked presentability with the career success: the high earning 21-40 age group across men accounted for 71 per cent of customers visiting kaya Skin Care Clinic.

Created the category of fairness creams for men. Hence, first mover’s advantage.
Endorsed by Indian movie stars, hence enhanced nationwide recall.
The product is available in sizes of 9ml, 30ml and 60ml, customized. for various pockets.
Good availability and distribution owing to parent company.
TVCs and print ads help brand boost visibility.
The brand has a limited market share compared to international leaders.
Allegations of false results of using fairness creams hurts brand image.
Largest player in the men’s fairness cream category, can leverage on that.
Growing interest in personal grooming amongst Indian men.
The growing Indian economy and the growth in disposable income have led to strong demand for fairness creams.
A lot of competition emerging in the segment with all the major players targeting men.
These brands face the issue of the reluctance of men to be seen using a cream because cosmetics traditionally is viewed as a category meant for females.
STP Analysis
Age 18-35
Gender Male
World’s No. 1 fairness cream for men
Comparison of Men's Fairness Cream
Market Expansion Strategy
After capturing a sizable market and goodwill of the urban consumer market, Emami planned to cover remote villages.

The company tied up with P&T department for distribution of its products through almost 5000 post offices across Maharashtra and had planned to reach out all the 1.05 lakh post offices across India.

Emami also planned to use ITC e-choupal outlets in UP and MP, and also used army’s canteens to enhance the distribution of its product.
Comparison of Fairness Cream Brands
Advertising & Promotion
Emami is market leader in men’s fairness cream segment with a market share of 61.3 %.

Company has recently launched ‘ zyada’ campaign with a new packing and positioning.

Company has spent INR 450 Mn for the advertisement of Fair and Handsome in FY 2013, which is 16% of the total advertisement spend and 24% of the Fair and Handsome sales.

Controversy Find it's Way
Controversy surrounded on advertisements shown on TB by HLL as early as in 2000.

A commercial that showed a talented but dark girl winning a singing competition after using a certain fairness product

A recent Fair and Handsome ad showed SRK telling the viewers that he became a superstar because he wanted more out of life and the cream helped him in realizing his dream

An online petition urging ShahRukh Khan Emami to stop advertising fairness products garnered 7000+ signatures in first few days itself

Labelled “unfair” and “discriminatory” advertising

However, not an attack on brands or brand ambassadors, but on the toxic belief that only fair skin is beautiful

A critical misinterpretation of one of the ads was: Sons, not daughters, are natural bread winners. A girl can only land a good job if she displays and improves her physical attributes.
Setback by a report by AIIMS, New Delhi, which declared that “no externally applied cream can change colour”.
It substantiated it’s report with valid medical reasons.
Hinted clearly that “claims of fairness creams are nonsensical propositions”.
The then I&B minister instigated the National Congress for Women (NCW) for not raising it’s voice against commercials which projected women in a bad light
Now also targeting men in rural area
Age Group of 15-35
Gender Male
Low & Lower middle class
Conscious about their looks.
By communicating message that fairness leads to:
Segments its customer based on their requirement, related to fairness and skin care.
Along with MORE fairness solution, it also offer,
MORE skin moisturizing,
MORE dark spot reduction,
MORE sun protection,
And MORE sweat control.
4 P's of Fair & Handsome
Fair & Handsome Cream
Penetrating pricing strategy
Penetrating in rural market through project 'swadesh'.
TV & Print
The product is available in sizes of 9gms, 15gms, 30gms and 60gms
Company has recently launched ‘ zyada’ campaign with a new packing and positioning.
Bollywood Baadshah Shahrukh Khan is the Brand Ambassador.
Available at 40 lakh outlets across India through 3000 distributors.
Product Portfolio

Fair & Handsome is the market leader.
9gms- Rs 8
15gms- Rs 20
30gms- Rs 54
60gms- Rs 100
Growing interest in personal grooming amongst Indian men
Group Members
Maaz Shaikh 229
Shoeb Shaikh 230
Arshan Shaikh 231
Manish Sharma 232
Rakesh Shukla 233
Devashish Singh 234
Presented to Prof. Deepa Rohit
1999 :
• Launch of Sona Chandi Chyawanprash

2005 :
• Launch of Fair and Handsome, the first fairness cream for men
• Public issue of 50 lac shares, listed with NSE

• Introduced Health Care Division
• Merged JB Marketing

2008 :
• Successful Zandu Pharmaceuticals acquisition at Rs 730 cr

• Demerged Zandu fmcg into Emami
• Raised Rs 310 cr through QIP
Full transcript