SUMMER TRAINING REPORT

TOPIC- HR Practices and Marketing Strategies of

FMCG sector in India.

Submitted by-
Ayushi Yadav
Sherwood College of Management
 ACKNOWLEDGEMENT

It is not possible to complete research work without

the help of others. A number of individuals have
helped me in this endeavor. I shall be failing in my
duty if I do not express my heartiest thanks and
deep sense of gratitude to all those persons who
have helped me in carrying out this research work.

I am also thankful to all the respondents for their

kind cooperation during the study. Moreover, their
support in making me available the desired
information cannot be forgotten.

I am deeply indebted to the various sources of

information from relevant sites from internet and
books which helped us a lot in my study and helped
me to learn a lot. At the last but not least 1 would like
to remember the almighty whose blessings no work
in this world can be completed successfully.
Date: (Ayushi Yadav)
Place:
 INTRODUCTION TO INDIAN FMCG

In today’s competitive environment where the customer has got

tremendous choice for selecting brands, it is a very challenging
task for a marketer to attract new and retain the old customer. To
accomplish this objective the marketer uses different types of
marketing strategies to position their product in the mind
framework of the customer and establish their brand image in the
market.
Marketing strategies are a method of utilizing the marketing mix to
satisfy and attract consumers to make a profit for the
organization. The marketer should find out what the consumers
wish to purchase and how much they are willing to pay. The
company should then decide whether the desired product can be
produced and sold at the price consumer will pay and at a profit to
the company. Modern marketing begins with the customer, not
with production, sales or technological advancements and last
with the customer satisfaction and social well-being. Under
market-driven economy, buyer or customer is the king.

With liberalisation and globalisation the availability of products

and services has increased. The customer has wider choice and
he is demanding more and more benefits and the competition is
increasing in the market place. The core of marketing concept is
that the customer and not the product shall be the axis of
business systems. All business operations revolve around
customer service and satisfaction and many companies are
following customer oriented philosophy to ensure growth in sales,
profits and market share
Fast moving consumer goods are the products which are used by
the consumer frequently and have a small shelf life and are
purchased at a fast rate thus marketer must focus on strategies to
make their customers satisfied which ultimately helps a marketer
to bring in new customers. FMCG are known as low involvement
products as consumer spends less time and energy in buying
these goods.

Now a day’s FMCG goods are purchased from various retail

stores. With the trend of shopping shifting to malls, the store
culture has emerged as a very important tool to attract customers.
Consumers prefer to visit a retail store where they can purchase
variety of products under one roof, not only consumers but
producers also prefer to sell their products through various retail
stores. Earlier the products were sold through local stores or
Kirana stores where the shopkeeper only provides those products
which were asked by the consumer, but the store culture allow
them to have a look at all the various available options which they
can compare and then select the best among the lot.

The word ‘Retail’ is derived from the French word ‘Retailer’

meaning to cut a piece off or to break bulk and involves direct
interface with the Customer. Retailing involves all activities
directly related to the sale of goods and services to the final
Consumer for personal and non business use. Retailer is a
person, agent, Company or organisation engaged in reaching
goods or services to the end-user or ultimate Consumer.
Retail trade may be defined as “A trade, which constitutes of
selling goods to ultimate consumers of a variety of products in
small lots, distribution and he satisfies recurrent needs of
consumers. The retailer operates near residential area and he
sells directly to consumers. He is the relating link between the
company and the consumer. Retailers have personal contacts
with the consumers and can provide valuable information about
changes in consumer wants and preferences to the distributors
and manufacturers.

The Indian retail sector, though dominated through grocery

shops/kirana stores, has been witnessing emergence of corporate
retail chains such as RPG Retail, Pantaloon Retail, Shoppers
stop, Reliance Fresh, Aditya Birla Groups More’, Croma (Tata).
These large-format stores known as organized retail stores
provide a wide range of product and brands at attractive prices
and pleasant shopping experience for family members. The main
objective is to provide the customers with 3 Vs i.e., value, varity
and volume. Apart from Four Ps, service marketing includes three
more Ps i.e., People, Physical evidence and Process. P (place)
includes convenience for shopping, stores interiors and store
location.

In our country organized retailing is the largest employer after

agriculture; it employs about seven per cent of the work-force and
has an overall contribution of 14 % to the national GDP. With a
total population of over 100 crores, organised retailing is still at its
infancy in India. We have the largest network of retail stores but
only about 4 per cent of them are larger than 500 sq. feet. For a
long time, the corner grocery store was the only choice available
to the consumers and this is slowly giving way to international
format of retailing.

Today retailers are confronting a sharp aggressive market and are

discovering it progressively hard to make a differential favorable
position on the premise of item (stock), value, advancement, spot,
individuals and area and as of right now the store itself turn into a
prolific and last open door for business sector separation. Today
customers have numerous shopping decisions, as the product is
accessible effortlessly. Some shop on the web they don't need to
stress over the extend periods of time of operation, stop ‘getting
product from market. So when contrasted with the past with
advancement in innovation retailers occupation have turned out to
be more troublesome.

Retailers need to make an energizing store plan with creative

marketing systems to make individuals come and visit the stores.
Here comes the part of advertiser who makes the store plan.
Advertiser likes to think about their store as theater. The dividers
and floors speak to the stage. The lighting, apparatuses, and
visual interchanges, for example, signs speak to the sets.

Retail locations likewise give organizations an opportunity to pull

in new purchasers to buy their item by utilizing different store
special strategies which make a brand picture for the item.
Because of the quick changes in the worldwide business sector
and the expanded rivalry experienced between FMCG firms,
"Brand Management" has turn out to be more essential. Great
brand administration realizes clear separation between items,
guarantees customer steadfastness and inclinations and may
prompt a more prominent piece of the pie. The term brand has
diverse importance connected to it; a brand can be characterized
as a name, logo, image and personality or a trademark.
A capable brand will improve customer’s attitude strength of the
item relationship of a brand, which is produced by involvement
with the item. Brand name and what a brand remains for are the
centre qualities for most fast moving customer merchandise
(FMCGs). The essential trait of a Fast moving consumer goods
are likewise vital for a FMCG brand to exceed expectations in
light of the fact that the quality of a brand normally give the crucial
strides to separating between a few contenders. Dominant part of
the FMCG brands have recognizable brand identifiers, for
instance Lux soap, cadbury’s bournvita, thumbs up etc.

Branding is linked to a wider concept i.e. overall business strategy

and only when business strategy is defined can the brand values
be developed. The connection between branding and business
strategy also means that branding strategies may need some
alteration as the basis of the business changes. By using various
marketing strategies companies creates a positive brand image
which leads to brand loyalty. Loyalty is won through delivery of
superior customer experience.

The symbolic aspects of branding can also persuade brand

loyalty. Brand loyalty refers to the consumer’s behaviour of time
after time purchase a specific brand over a definite period of time.
This is based on the past behaviour and the brand loyal
consumer’s is expected to purchase a particular brand at present
and in the future, thus to make the experience of customer worth
remembering marketer must provide all possible facilities to
convert a consumer into brand loyal consumer. Brand loyalty is
important for marketers because it helps in retaining customers
and often requires less marketing efforts than to acquire new
ones. It also has positive implications on brand equity.

In today’s competitive world where the customer is having varied

choices in terms of brands, the customer is very choosy in
selecting a specific product or brand. Hence, the marketers have
started using the concept of store promotion to cater the
immediate needs of the customers and make them satisfied.

Marketing professionals and specialist use many tactics to attract

and retain their customers. Sales Promotion strategies can help
create that positive customer image that leads to successful
sales. Sales promotion spending plan covers very nearly 70% of
the aggregate customer deals special spending plan. It is
additionally considered as a brand differentiator by numerous
huge players like Coca-Cola, Pepsi, Heinz and some more. For
some business specialists and scholastics, deals advancement is
viewed as run of the mill promoting strategies that increase the
value of an item with a specific end goal to accomplish particular
advertising objectives.
The main role of offers advancement is to instigate the customers
to settle on a speedy purchasing choice keeping in mind the end
goal to make expands deals. Commonplace sample of offers
advancement is to offer customers to take risk of winning a prize
or offering some additional items with the same cost. Deals
advancement and advertising are between related yet do not
have the comparative reason. It is publicizing which makes a
stage for deals advancement where clients can see the direct
included benefit of purchasing a product. Then again, publicizing
is an impalpable advancement of the product to send the
showcasing message to the customer-base.
Store promotion is a marketing strategy that is formed to bring
people into the store and to purchase specific items highlighted
through store promotion. These promotion strategies most often
come directly from manufacturers, or they may be offered by the
store manager. The reason behind this is to generate additional
revenue due to the extra sales of the products, or even to
encourage a brand switch when presented by the manufacturer.

These strategies help to drive traffic in the store, to remove too

much stock, or to generate additional revenues when sales are
slumping. It also helps in building the brand image and creates
customers intention to buy a specific product or brand. According
to an article in economic times several ecommerce companies
are opening physical stores to give clients a touch and-feel
experience of items and emerge in the disorder of the inexorably
overwhelmed online retail space. Flipkart, Zivame, Pepperfry,
FirstCry and Lenskart have begun logged off experience zones to
separate their offerings from their online adversaries and to build
their validity.

FirstCry.com, an online children wear organization, decreased its

showcasing spending plan by 25% subsequent to opening 135
physical stores. Flipkart, the biggest Indian ecommerce
organization, has taken off 20 disconnected from the net stores
crosswise over 10 urban communities and would like to extend to
100 experience zones by March.
 ABOUT FMCG SECTOR

Fast Moving Consumer Goods (FMCG) are also well-known as

consumer packaged goods (CPG) are products that are sold
rapidly and usually consumed at a habitual basis, as divergent to
durable goods such as kitchen appliances that are replaced less
frequently. The FMCG industry mainly includes the production,
distribution and marketing operations of consumer packaged
goods. Fast moving consumer goods are consumed by the
consumers for their own use and purchased repeatedly.

Consumers procure these products on regular intervals in small

quantity. The price of such products per unit is low. The
consumption of such products is very high due to the consumer’s
necessity for Fast Moving Consumer Goods. FMCGs usually refer
to as non-durable products which are consumed in a short span
of time, and are often consumed daily Indian population is a huge
population over 120 crore. A separate sector called FMCG sector
is well established in India.

India has always been a country with a big part of world

population, be it the 1950’s or the twenty first century. Taking that
into consideration, the FMCG market potential has always been
very big in India. However, from the 1950’s to the 1980’s
investments in the FMCG sector were very less due to stumpy
purchasing power and the government’s unconditional support to
the small-scale sector. FMCG sector is the fourth largest sector in
the economy with a total market size in excess of Rs 60,000
crore.
The giant players in this sector include Sara Lee, Nestle, Unilever,
Coca-Cola, Carlsberg, General Mills, Procter & Gamble, Pepsi,
Reckitt Benckiser, Kleenex, Mars and many more. In recent
years, the fast moving consumer goods sector (FMCG) has
encountered increased use of marketing strategies all over the
world. This sector is characterized by products which have low
unit value, require frequent purchases and consumer behaviour
reflecting a lesser amount of loyalty, impulse buying, and less
involvement on the part of a consumer. Every day, every minute,
from the start to the end of the day, we are bounded by products
which make our life easier in a lot of ways. And this is achievable
due to the dedication and effort of FMCG companies. Examples
of FMCG products comprise toiletries, soap, cosmetics, oral
hygiene, detergents, packaged food products, soft drinks, shaving
products, candy and chocolate bars, etc. This industry essentially
comprises Consumer Non Durable products which are required to
fulfil the everyday need of the population. A customer generally
spends least amount of effort to procure them. Based on the
prime factor behind consumers buying, FMCG’s can be divided
into three classes:

Figure 1.1: Types of Fast Moving Consumer Goods

Staples Goods - Goods that consumer purchases on a regular
basis. For example toilet soap, detergent, sauce, toothpaste,
biscuits etc.

Impulse Goods- Goods which are purchased with any planning

or searching. These good are usually purchased due to external
stimulus. For example soft drink, potato chips which are displaced
in the stores because shoppers may not have thought of buying
until spotting them.

Emergency Goods- Emergency Goods are those goods which

are purchased when the need for that particular product arises.
For example the requirement of seasonal products such as
umbrella required at the time of monsoon or sweaters in winters
 FMCG SECTOR IN INDIA

India is one amongst the fastest developing economies in the

world and its population and territory are big also. Population is
nearly 120 crore and territory is from J and K to Kerala, from
Assam to Gujarat is very wide. The industries are of different
types and markets are of different types and can be segmented
as urban, sub- urban and rural markets. The rural market is very
wide and still it is difficult to cover. Nearly 70 percent of Indian
population is living in rural areas. There is a great opportunity for
companies in Indian markets including FMCG sector for the
companies in Indian markets. Up to 1991 Indian economy was a
protected economy and in this year due to liberalization a good
number of MNCs have entered in India market and mainly in
FMCG sector also.

With a population of 1.28 billion, India is one amongst the largest

economies in the world in terms of purchasing power and growing
consumer expenditure, next to China. The Indian FMCG industry,
with an approximate market size of 2 trillion is the fourth largest
sector in India. In the last few years, the FMCG sector has grown-
up at an average of 11% a year; in the span of five years, annual
growth has increased at a compounded rate of 17.3%.

There is tough competition from local and foreign companies in

Indian markets. They have started producing products like skin
care, toothpaste, toiletries, fast food, chocolates, cosmetics and
many other products. The FMCG sector is flooded by companies
from India and abroad. In future the intensity of competition would
increase further. The situation in Indian economy is very
favourable for foreign companies. The major factors attracting
them are availability of raw materials, low labour cost, market
potential for consumption and more disposable income of Indian
customers. More over the GDP in Indian economy is increasing
every year so per capita income increasing and there is scope for
further development. At present large and small companies are
operating in Indian FMCG sector. Fast moving consumer goods
comprise of a large part of consumers’ income in all countries.
The fast moving consumer goods sector is an important
contributor to India’s GDP. The Indian FMCG sector is extremely
fragmented with almost half the market covered by unbranded,
unpackaged home made products. The FMCG sector is the fourth
largest constituent of Indian economy with a market size of about
Rs. 130,000 crore. India’s FMCG sector is the fourth largest
sector in the economy and provide employment to more than
three million people in downstream activities

The fast moving consumer goods market is expected to increase

at a compound annual growth rate of 14.7 per cent to touch US$
110.4 billion in the period 2012-2020 according to India brand
equity foundation. FMCG sector is the most competitive and
growing sector as customers require these products on regular
basis and their demand for FMCG products keeps on increasing,
thus the companies need to promote their products so that they
appear different and better from the competitor’s product. Indian
companies have their vicinity over the quality chain of FMCG
segment, right from the supply of crude materials to bundled
merchandise in the nourishment preparing part. For instance,
Amul supplies milk and dairy items like cheese, butter, etc.

Classification of Fast Moving Consumer Goods

FMCG product categories consist of food and dairy products,

pharmaceuticals, consumer electronics, packaged food products,
household products, drinks and others. On the other hand some
common FMCG’s include coffee, tea, detergents, tobacco and
cigarettes, soaps and others. Fast moving consumer goods will
get to be Rs 400,000-crore industry by 2020. A Booz and
Company study discovers the patterns that will shape its future.
Another report by Booz and Company for the Confederation of
Indian Industry (CII), called FMCG Roadmap to 2020: The Game
Changers, defines the key development drivers for the Indian
quick moving shopper merchandise (FMCG) industry in the
previous ten years and distinguishes the huge patterns and
considers that will affect its future. It has been evaluated that
FMCG segment saw powerful year-on-year development of
around 11 for each penny in the most recent decade, very nearly
tripling in size from Rs 47,000 crore in 2000-01 to Rs 130,000
crore now (it represents 2.2 for every penny of the nation's GDP).

Development was significantly quicker in the previous five years

— just about 17 for each penny every year since 2005. It
recognizes strong GDP development, opening up of rustic
markets, expanded wage in country ranges, developing
urbanization alongside advancing customer ways of life and
purchasing practices as the key drivers of this development. It has
been evaluated that the FMCG business will develop no less than
12 for each penny every year to wind up Rs 400,000 crore in size
by 2020.
Furthermore, if a percentage of the components play out
positively, say, GDP grows somewhat speedier, the legislature
evacuates bottlenecks, for example, the merchandise and
benefits charge, foundation ventures get, there is more productive
spending on government endowment et cetera, development can
be essentially higher.
It could be as high as 17 for each penny, prompting a general
industry size of Rs 620,000 crore by 2020.
Abhishek Malhotra (2010) told that the Indian GDP per capita is
low however numerous Indian purchaser fragments which
constitute rather vast outright numbers are either near or have as
of now come to the tipping purpose of fast development.
The segment is balanced for fast development throughout the
following 10 years, and by 2020, the industry is required to be
bigger, more dependable and more tuned to its clients. Taking into
account research on industry advancements in different markets
and talks with industry specialists and experts, Booz and
Company has recognized some essential patterns that will
change the substance of the business throughout the following 10
years.

IMPACT OF THE FMCG SECTOR IN INDIA

The fast-moving consumer goods sector is an important contributor to India’s GDP and
it is the fourth largest sector of the Indian economy. Products in this sector are meant for
repeated consumption and they usually yield a high return. The most familiar in the list
are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish,
packaged foodstuff, and extends to some electronic goods. The
Indian FMCG sector which is the fourth biggest sector in the India contributing to a
market size of `2 trillion with rural India contributing to one third of the sector’s revenues.
FMCG companies have to incur a lot of money in heavy advertising,
marketing,packaging and distribution. The pricing of the finished product also depends
on thecost of raw material used in production. The growth of the sector has been driven
by both the rural and urban markets. India is one of the most attractive markets for
foreign FMCG players due to easy accessibility of imported raw materials and cheap
labour.
For years now, food items have been the most extensively distributed FMCG products
in the country. But the scenario is changing. Indians are more likely to find more of
personal care products in comparison to food in a shop these days which is the result
of consumer goods companies pushing the distribution of an entire collection of their
products in the hand of wary consumer. Latest data from market research firm Nielsen
reveals that on the list of the top five FMCG product categories, only one food
product i.e. biscuits finds place. The category with the maximum penetration is
shampoos at 79%, followed closely by biscuits at 78%.

The FMCG market is estimated to treble from its current situation in the future.
Penetration level as well as per capita consumption of most product categories like
jams, toothpaste, skin care and shampoo in our country is low, indicating the untapped
market potential. The growing population in our country, predominantly the middle
class, present an opportunity to makers of branded products to switch consumers to
branded products.
Distribution of categories has undergone a remarkable transformation in the past 15
years. According to D Shivakumar, chairman and CEO, PepsiCo India FMCG is
available in 8.8 million outlets and shampoo is available in 80% of those outlets.
He also added that "Skin creams have managed to get to the top 10 distributed
products and packaged tea, which was earlier the most distributed product, is now out
of the top 10 list. Data suggests that most of this evolution is due to the shifting of
consumption pattern of consumer’s preference to branded products from non-branded
products.
For instance, in utensil cleaners and edible oils incursion has amplified to 36% from
33% and 21% to 17% from 2012 to 2014, respectively. "Earlier, people would visit at
shops with bottles to buy mustard oil. That's changing with rising affluence levels and
lower packaging costs. In coming future, more unbranded to branded consumption in
non-mature categories such as, hair oils and hair conditioners will be seen," says Vijay
Udasi, executive director, Nielsen India.

The discoveries likewise uncover a drop in infiltration levels of cleansers cakes and
banishes from 60% in 2012 to 59% in 2014 as more purchasers movement to clothes
washers to do their clothing. Additionally, skin creams have likewise seen a drop of
2% because of changes in purchaser conduct. "The portions inside of the skin creams
class have likewise changed. More individuals are purchasing developing items like
face washes, hostile to maturing and under-eye creams," says Udasi official chief,
Nielsen India.

For HUL, next step now is to make its brands available utilizing pack sizes and value
focuses customized to win the nation over. "We have possessed the capacity to keep
up our authority position in a following so as to develop business sector a business
sector improvement approach. A standout amongst the best endeavors on this front
has been the Dove 'twin sachet', which offers a cleanser and conditioner together at a
Rs 5 value point to impel trials," says Srirup Mitra, classification head - Hair Care,
HUL.

However, the predominance of non-nourishment classifications on the top could

change. There are dismal signs. Take the salty snacks classification for occasion.
Entrance has ascended from 58% to 64%. Indeed, even a classification like noodles,
which has still not broken into the main ten rundown, has seen an increment in
infiltration from 38% to 42%. "The following level of development exists in marked
nourishments," says Udasi. "There is a development of new sustenance classes in
bread spreads, including nutty spread and other flavours also. As opulence levels rise,
country shoppers will spend more on basic supply things and nourishment."
The Indian FMCG sector stands as the fourth largest sector in the economy with a
market size of US$13.1 billion. The sector has well established distribution networks,
and also has intense competition between the organised and unorganised sector.
FMCG sector in our country has a tough and competitive MNC existence across the
entire value chain. It has been predicted that the FMCG market will reach to US$ 33.4
billion in 2015 from US $ billion 11.6 in 2003.

The markets which have high potential and give brand makers the opportunity to
influence the customers to purchase branded products are the middle class and the
rural segments. In India most of the product categories like jams, toothpaste, skin
care, shampoos, etc which have low per capita consumption as well as low
penetration level, but the potential for growth is huge have a lot of demand. The Indian
Economy is rolling forward by leaps and limits, keeping pace with swift
urbanization, rising literacy levels, and growing per capita income.

The giant firms and small-time companies in FMGC sector are raising higher and
growing up fast. In a study conducted by AC Nielsen, 62 out of 100 brands belong to
MNCs, and the remaining by Indian companies. Fifteen companies own these 62
brands, and 27 of these belong to Hindustan Lever. Pepsi stands at number three and
next to it is Thums Up. Britannia occupies the fifth place, followed by Colgate (6),
Nirma (7), Coca-Cola (8) and Parle (9).
Despite the fact that FMCG development has been abating for quite a while, sliding
by 8.1% from 2010 to 2013, Nielsen predicts that India's FMCG industry will develop
from $37 billion in 2013 to $49 billion in 2016. Appropriation development and
advancements around sachet offerings will assume real parts in fuelling development,
which had backed off in the most recent couple of years. While the ascent of e-trade is
by and large distinctly viewed, a few new models may develop throughout the
following couple of years.

Government Policies and Regulatory Framework:

The various policies Government of India's and its regulatory frameworks such as
reduction of license rules and sanction of more than 50 per cent foreign direct
investment in multi-brand retail and 100 per cent in single-brand retail sector are
several reason of growth in this sector. The government has also made some changes
the Sugarcane Control Order, 1966, and replaced the Statutory Minimum Price of
sugarcane with Fair and Remunerative Price and the State Advised Price (SAP).
Goods and Service Tax (GST): GST, which has filled the place of multiple indirect
taxes levied on FMCG sector with a uniform, simplified and single-pint taxation
system, is likely to be implemented soon (the benefits are likely to come in by the end
of FY’14). The rate of GST on services is likely to be 16% and on goods is proposed
to be 20%. A swift move to the proposed GST may reduce prices, bolstering
consumption for FMCG products. Some Government Policies and Regulatory
Framework are mentioned below:

Food Security Bill: The food security Bill has been approved recently
in 2013 in the Union Cabinet. According to the Bill, 5Kg of food grains per
person per month will be made available at reduced prices from State
Governments under the targeted public distribution system. With increased
demand, the agriculture sector would have a boost and this could lead to
more investments in recovering agriculture productivity and making it more
competitive.

FDI in retail: The choice of Government of India allow 51% FDI in

multi brand retail and 100% FDI in single brand retail responds well
towards the outlook of the FMCG sector in India. The decision has bolster
employment, and supply chains, apart from giving great visibility for
FMCG brands in retail markets, bolstering consumer spending, and
encouraged a lot of product launches. FDI of 100% under the automatic
direction is authorized in the food processing sector, which is taken as a
priority sector.
FMCG sector amounted to 1.9% of the nation’s total FDI inflows in April
2000- September 2012. FDI inflows into India from April 2000 to April
2013 in the food processing sector was `9,000.33 crore, accounting for
0.96% of overall FDI inflows where as that of soaps, cosmetics and
toiletries was `3,115.54 crore in, accounting for 0.32%. The food
processing sector had total FDI inflows of `6,198 crore during April 2009
to December 2012.

Relaxation of license rules: Industrial licenses are not necessary for

almost all food and agro-processing products, certain items which require
licence are beer, potable alcohol and wines, cane sugar, and hydrogenated
animal fats and oils as well as items reserved for exclusive manufacturing
in the small-scale sector

New launches and product extension by FMCG companies to

boost growth and market share:

New product launches, innovation and product expansion are many of the few
factors which motivate a FMCG company for increasing their profitability to a
greater extent. As Indian customers prefer purchasing global brands and their
aspirations and desires are always focused on products of global companies,
their desire to consume products is also increasing.
Strong demand for already existing FMCG products is motivating more FMCG
companies to extend their brand umbrella and enlarge their product range as
well, strengthen the Indian FMCG space. Moreover to achieve higher market
share and maintain long-term growth, most of the FMCG companies are going
for brand extension strategy. Various gigantic industrial players have introduced
new and innovative products and ideas during FY’13. For instance,

The FMCG sector has flourish a lot in recent years, with market showing signs of broad
revival. The retail market in our country is very competitive in comparison to other
sectors. There are no legal restrictions on entry, and no discrimination against foreign
companies. Prices in retail sector differentiate considerably for a market operating on a
very less profit margin.
However, these differences in price are likely to originate from cost differences. Any
single retailer may not seem to create a leading place in the retail market. However, the
significant markets in the retail sector should be described locally rather than at national
level. These things are likely to have a positive impression on product diversity and the
quality of products/services offered by retail stores.
Conventional wholesalers are the in all probability washouts, in light of the fact that vast
retailers tend to purchase specifically from suppliers. The change of the retail market is
prone to have a durable effect on wholesale exchange and the dispersion of FMCGs
also.
Logistics organizations that give an extensive variety of correlative administrations will
play an undeniably more imperative part in the circulation of FMCGs. Piece of the pie
developments show that organizations, for example, Marico Ltd and Nestle India Ltd,
with command in their key classifications, have enhanced their pieces of the pie and
beat
companions in the FMCG area.

This has been additionally helped by the absence of

rivalry in the individual classes. Single item pioneers, for example, Palmolive India Ltd
and Britannia Industries Ltd have likewise seen quality in their separate classes, helped
by developments and solid circulation. Solid players in the economy fragment like Godrej
Consumer Products Ltd in cleansers and Dabur in toothpastes have additionally posted
piece of the pie change, with restored development in semi-urban and rustic markets.
Indian purchasers were a touch progressive somewhat because of lesser extra cash and
incompletely because of less aggressive and more mixture of items.
FMCG industry in India began to shape during the last 50-odd years. The FMCG area is a
foundation of the Indian economy, touching each part of human life. India's Rs 460-
billion FMCG business sector remains profoundly divided with generally a large portion
of the business sector being commanded by unbranded, unpackaged, home-made items.
This presents a huge open door for advertisers of marked items to change over shoppers
to purchase marked items. FMCGs commonly require a wide circulation organize and are
sold straightforwardly to the buyers.
FMCG sector in the Indian rural market is one of the most booming sectors in Indian
economy. The villages of India account for 12.2% of the world's population. The farm
sector has been one of the significant sectors which boosted the rural economy resulting
in the elevated consumption of FMCG products. The consumers in both rural and urban
sectors can afford high-priced branded products nowadays with the high disposable
income.
 MARKET STRATEGIES

Marketing strategies serve as the elementary reinforcement of marketing plans formed to

fill market needs and reach overall objectives of the company. Plans and objectives are
generally tested for measurable results. Commonly, marketing strategies are formed for a
period of 12 months, with a deliberate plan detailing specific actions to be accomplished
in the same year. Time period included by the marketing plan vary by company, by
industry, and by nation, however, time spans are getting shorter as the speed of change in
the business environment increases. Marketing strategies are dynamic and
communicative. A most important objective of any marketing strategy for the various
product categories is to motivate consumers to repurchase the brand because of liking or
association with the brand. Purchase intention is the implied promise to one’s self to
purchase the product over again whenever one makes next trip to the store. It has a substantial
importance because the companies want to increase the percentage of a
specific product sold in the market for the purpose to increase their profit. The intention
of consumers to repurchase a specific product can be promoted by the marketer through
various marketing strategies used in stores such as attractive product display, cash
discount, floor advertisement, in store television etc.
All marketing strategies are formed on the basis of segmentation, targeting and
positioning. A company discovers different needs and groups in a selected market, targets
those needs and groups that it can satisfy in a superior way and then positions its product
so that the targeted audience identifies the company’s distinctive offering and image
(Kotler, 2003).

Marketing has two distinct meanings according to Doyle (1998). The first and most
important is a philosophy for the whole business. It defines the primary goal of everyone
in the organization as meeting the needs of customers. The second meaning of
marketing
is a distinct set of activities and tasks, which constitute marketing planning and
decisionmaking.
These marketing decisions and plans centre on market segmentation, target
marketing, market positioning and market planning. Figure 1.3 describes the main steps
of marketing strategy.

Market Segmentation:
A market includes customers with related needs. But customers in a market are never
homogeneous. They differ in the benefits wanted. The amount they are willing or able
to pay for, the media they see and the quantities they buy. (Doyle. 1998). Very few
products or services can satisfy all customers in a market. Not all customers want or
are prepared to pay for the same things. To implement the marketing concept and
successfully satisfy customer needs, different product and service assistance must be
made to the varied customer groups that typically comprise a market.
The technique used to get a hold of the diverse nature of markets is called market
segmentation, defined as: “The identification of individuals or organizations with
similar characteristics that have considerable implications for the determination of
marketing strategy” said by (Jobber. 1998). A market segment is a customer group
within the market that has special characteristics for the determination of a marketing
strategy, Doyle (1998). According to Jobber (1998), the objective is to identify groups
of individual with related requirements so that they can be served effectively while
being of sufficient size for the products or services to be supplied efficiently. Usually
in consumer markets, it is not possible to create a marketing mix that satisfies every
individual’s requirements exactly. Market segmentation, by grouping together
customers with similar needs, provides a commercial viable method of serving these
customers.

Bases for segmentation:

Market division parcels a given business segment into distinctive sorts of sections
which engage a business to better concentrate on its things to the vital customers.
The diverse sorts of division variables, profilers, are expressive quantifiable
customer properties, for instance, industry, geographic region, nationality, age and
pay. At the point when all is said in done these variables are correlative to each
other. Kotler (2003) has exhibited a need-based administering procedure, where
customer are amassed into sections in light of related needs and points of interest
required by customer in fulfilling his particular use need. For each needs—based
segment, a determination of which demographics, lifestyles or use practices make
the section specific and identifiable is made.

Finding the need:

The issue with this need or favourable position division is that. To dismember
these pieces and confer to them, the promoter needs to know who these people
are: their profiles or customer properties. To find the needs of customers in a
given business area, it is required to endeavour promoting examination. This will
frequently consolidate easygoing gatherings and focus social occasions to
recognize what focal points customers search for and the level of differentiations
among them in their longings in the key step. The accompanying step will usually
be dealing with a formal survey to an extensive example of customers to quantify
these refinements in necessities.
The issue with this need or point of interest division is that. To analyze these
pieces and grant to them, the publicist needs to know who these people are: their
profiles or customer properties. To find the needs of customers in a given business
division, it is required to endeavour promoting examination. This will frequently
consolidate easygoing gatherings and focus get-togethers to recognize what
favourable circumstances customers search for and the level of differentiations
among them in their wishes in the key step. The accompanying step will usually
be dealing with a formal survey to a far reaching example of customers to quantify
these qualifications in necessities

Consumer market segmentation:

The various segments based on Consumer market are given by Kotler (2003). The
four major segmentation variables for consumer markets are listed below:
• Geographic
- Region of the country
- Urban or rural area

• Demographic
- Ace, sex, family size
- lncome, occupation
- Religion, race, nationality

• Psychographic
- Social class
- Lifestyle type
- Personality type

• Behavioral
-Product usage: light, medium, heavy user
- Brand loyalty: none, medium, high
- Type of user: occasions

Organizational market segmentation:

The process of segmentation in industrial and other organizational markets is

analogous to that employed in consumer markets. First management have to
segment the market by benefits sought, then they have to describe the characteristics of
these customers. (Doyle, 1998). The organizational market can
be segmented on several factors broadly classified into two major categories:
macro segmentation and micro segmentation, (Jobber. 1998).

Macro segmentation
 Organizational size
 Type of industry
 Geographic location

Micro segmentation
 Choice criteria
 Decision making unit structure
 Decision-making process
 Buy class
 Purchasing organization
 Organizational innovativeness

Target marketing:

Once the organization has identified its market-segment opportunities, it has to decide
how many and which ones to target. (Kotler, 2003). Target marketing puts end market
segmentation. This is the choice of selecting a specific segment to provide them the
product or service in which the company is dealing and is a key element in marketing
strategy. The organization needs to evaluate segments and decide which ones to serve.
(Jobber, 1998). Marketers segment the market in order to target one or more of these
segment with tailored, specialized offerings.

A marketing strategy is selecting and describing one or more target markets that a
company's product or service will identify for business opportunities. A target market is a
defined group most likely to buy a company's products or services. This group
usually has similar product needs, such as college students who usually have an
appetite for affordable cars, technology products, dorm room goods, etc. Once a target
market is identified by a company, a target market strategy needs to be created in
order to decide on how to promote, communicate and reach the group. There are three
ways that a firm can identify target markets.

Evaluating segments:
While evaluating different market segments the firm must look at two factors that
are the segments overall attractiveness and the company’s objectives and
resources. Various segments have characteristics that make it generally attractive,
such as size, growth, profitability, scale economies, and low risk. Investigating in
the segment make sense given the firm’s objectives, competences and resources.
Some attractive segments may not mesh with the company’s long rim objectives.
(Kotler, 2003).

Targeting strategies:
Targeting evaluates the attractiveness of the segments and chooses the target
market. Targeting is the process of selecting targets and matching the suitable
response to them on the source of operational needs, capabilities and limitations.
HUL targets different types of customers with different products requirements.
For motivated customers, it offers Lifebuoy and Breeze, it offers Hammam and
Lux variants for aspiring customers and for prosperous customers, it has Pears,
Dove and superior range of Lux. In case of detergents, it offers Wheel for striving
customers, Rin for wannabe customer and Surf Excel for affluent customers.
Having evaluated various segments the organization should consider different
target marketing strategies. (Kotler. 2003). Among several strategies, Doyle
(1998) and Jobber (1998) agrees about the following different strategies:

Undifferentiated marketing:

The company decides to develop a single marketing mix for the whole market.
This absence of segmentation is called undifferentiated marketing. (Jobber, 1998).
Here the firm ignores actual or potential differences among segments and targets
one offer to the entire market. (Doyle. 1998) Occasionally, a market will show no
strong differences in customer characteristics that have implication for marketing
strategy. Alternatively the cost in developing a separate marketing mix for
separate segments may offset the prospective gains of fulfilling customer needs
more exactly. Unfortunately this strategy can occur by default. For example,
companies who lack a marketing orientation may practice undifferentiated
marketing through lack of customer knowledge.
Differentiated marketing:
When marketing segmentation reveals several potential targets, specific marketing
mixes can be developed to appeal to all or some of the segments. This is called
differentiated marketing (Jobber, 1998). As with undifferentiated marketers,
differentiators seek to compete across the majority of’ the market, hut here they do
so with different offers. They develop different products and marketing programs
for each segment of the market (Doyle, 1998).

Focused marketing:
The recognizable proof of a few portions in a business sector does not infer that an
organization ought to serve every one of them. At the point when an organization
adds to a solitary promoting blend went for one target market (specialty) it is
rehearsing centered showcasing (Jobber, 1998). The organization does not expect
to contend in most of the business sector yet rather has practical experience in one
portion, or a little number of fragments.

Customised Marketing:
A customised marketing is a sort of promotion technique whereby a publicist tries
to redo the message to the one of kind needs of a particular client or particular
subset of clients. Custom promoting is generally focused toward a high total assets
specialty. In a few markets the necessities of individual clients are special and
their acquiring force adequate to make planning a different advertising blend for
each of the client needs.' (Jobber 2010).

A sort of promoting technique whereby a publicist tries to redo the message to the
one of kind needs of a particular client or particular subset of clients. Custom
promoting is generally focused toward a high total assets specialty. In a few
markets the necessities of individual clients are special and their acquiring force
adequate to make planning a different advertising blend for each of the client
needs.' (Jobber 2010).

Market positioning:

Once market segmentation and target market selection is done the next step in
developing an effective marketing strategy is to evidently position a product or
service offering in the market place (Jobber, 1998). It has been shown how a business
can offer superior value by strategies that can add value or reduce costs. The third way
to enhance its competitiveness is through positioning itself more effectively. Position
strategy is the choice of target market segments which determines where the business
competes and the choice of differential advantage which dictates how it competes
(Doyle, 1998), Jobber (1998) agrees when telling us that positioning is the choice of:
• Target market: where we want to compete
• Differential advantage: It includes how we wish to compete
Kotler (2003) defines positioning as, “The act of designing the company’s offering
and image to occupy a distinctive place in the mind of the target market.”

Marketing strategies helps in forming the very best marketing programs for the
business. Without strategies, the risk of becoming unfocused in the marketing efforts
is always there. To grow and increase customer base marketing strategies ought to be
integrated into the marketing plan (which in turn should be area of the business plan).
By integrating strategies to your overall company plans, company can better achieve
business objectives.

Types of Marketing Strategies:

Types of marketing strategies are categorized as the follows:
Image strategy: The idea in the consumer’s mind of a brand's total
personality, image is developed over time through advertising campaign
which has a constant theme, and is authenticated through the consumers'
direct experience. In addition to raising the perception of the proficiency of
a brand, this strategy also enhances the fame of the brand. For example, a
star or a famous athlete can be a suitable representer; a celebrity can let
customers notice the brand he or she uses. Dabour has created a brand
image and a enormous product following by associating mega-names like
super star Amitabh Bachchan, Rani Mukhurjee, Vivek Oberoi, and Mandira
Bedi. Dabur has invested Rs. 150 crore just on the advertising of it product
Real Fruit Juice and Real Active. Till this date the company has been
successful in its mission as the people now are aware about the brand and
remember its products by name.

Promotion strategy: It is a mix of all the promotional activities

such as, an advertising campaign, increased PR activity, a campaign
offering free-sample, free gifts or trading stamps, arranging demonstrations
or exhibitions, setting up various road shows with attractive prizes, price
reductions on temporary basis, door-to-door calling, telemarketing, and
other methods such as sending personal letters to the company. Every brandneeds a
detailed marketing communication or promotion

For example, a sports brand related activity, or a campaign or contest based

on a brand in which customers can participate in or watch. It can help
people to gain more information about a brand and the sale of the related
product. Promotion strategy is also an activity designed to boost the sales of
a product or service. Britannia gives gift items bowls, boxs etc with its
product Good day biscuits. Dabur foods usually provide customers with
some special offers during festival seasons like free trips, free gifts etc.

Media marketing strategy: It refers to the use of appropriate

media mix to achieve optimum results from an advertising campaign. Other
than just letting customers get the main idea of a brand, different ways of
exposure can be used to make people aware of the appearance of the brand
which may peak their curiosity. As for the people who already know the
brand, they may be provided with further opportunities to understand more
about the brand. This strategy also enhances the purchase intention of firsttime
consumers, as well as repurchases ones, allowing customers to clearly
know the information of a brand and its related products. This can be done
by updating the brand’s latest news via advertisements, the internet, and
even mass media.

Multiple choices strategy: Multiple choices marketing strategy is

the practice of businesses interacting with their customers using various
communication channels, meeting customers on the platforms that they
prefer to use. It means to integrate with the spirit of a brand, aiming for the
personal tastes and the various needs of the consumers, and then to publish
a brand series to meet those needs.

Brand slogan: A branding slogan is a small combination of words

or a petite phrase that a business uses to make its company and products
stick in consumer’s memories. An effective branding slogan not only sticks
in a consumer’s mind, but also adjures a mood and forms a bond with the
consumer. Branding slogans are used in both advertising and promotional
materials used by a business. Having a slogan with the spirit of a brand in it
can stimulate the consumers, causing them to have different feelings, as if sensing the
enthusiasm of a brand, and thus giving them confidence in the
product. For example, the very popular slogan “Daag Acche hain” which
Unilever used for its product surf. Cadbury Dairy Milk’s, “kuch meetha ho
jaye”.

Integrate the marketing channels: Integrated Marketing

Communication strategy refer to the combination of various marketing
tools such as advertising, marketing online, activities done to maintain
public relation, direct marketing, sales campaigns to promote various
brands so that alike message reaches a large number of customers.
Effective integration of various brand communication tools helps in
promotion of products and services efficiently. IMC coordinates all the
promotional activities by using the same quality of service and identical
environmental design, this strategy lets consumers experience the exact
same service wherever they are.

Store Promotion Techniques: Store promotions influence a

store’s operations and performance to great extent. The fewer Store
promotions are planned in any given year, the less accustomed the staffs is
to such events, which is a negative stressor that also has a large impact on
customer relations. In addition, often these special promotions have a short
span and the revenue generated from various strategies is very high. In
other words, the correct use of store promotion can help the retailer to
increase its sale which result in increased profit for the store also the
customers will be satisfied and happy while leave the store.

Marketing Strategy Process:

Marketing Strategy is a procedure of arranging, creating and actualizing moves
to get an aggressive edge in your picked specialty. This procedure is important to
plot and rearrange an immediate guide of the organization's destinations and how
to accomplish them. An organization needing to secure a sure share of the
business sector, ought to guarantee they plainly recognize their central goal,
study the business circumstance, characterize particular targets and create,
execute and assess an arrangement to ensure they can give their clients the items
they require, when they require them.
The focal target of any organization will be consumer loyalty so they may rule
the business sector and get to be pioneers in their industry and along these lines
giving considerable business fulfilment. So as to do that, three periods of
showcasing system must be culminated to make get a kick out of their clients
and beat out the opposition. Having a solid advertising methodology process set
up guarantees that you're showcasing exercises stay adjusted to your business
objectives, expanding the business come back from your promoting endeavours
The above figure shows the process for developing and aligning marketing
strategy. These are the steps a company should follow to create and execute a
winning marketing strategy.

Understand Your Customer:

Develop a clear picture of the target customer through market research and
analysis. Understand their pain points and the benefits of your solution.
Creating set parameters to study and analyse the customer needs and wants, it
is equally important to consider their demographics. These steps will help in
creating the right and more effective solution for our customer.

Analyze the Market:

Some crucial market research should allow a company to find market data
such as total available market, market growth; new trends in market, etc.
proper and structured analyses plan will help in better positioning of our
marketing strategy. Various different market reach tools are available in this
technological world to study and analyse the exact data, a proper sample size
should be made for the study to be done on accurate basis. Geographical as
well as demographic study of the whole market should also be done along
with the future development scope and upcoming projects by the government
in that market area should also be explored.

Analyze the Competition:

A marketer must ask himself what other choices your target customers have to
solve their pain point. Research and assess the strengths and weaknesses of
each. A better study on competition marketing strategy will give us an upper
edge in understanding and designing our strategy complete SWOT analysis
will be very beneficial in this step even considering scope of new entrants in
this existing pool of business. These studies also act as a differentiating factor
in designing your own strategy.

Research Distribution Channels:

The choice to select the best way to deliver your product or service to the
targeted customers is one of the difficult task. This will impact your sales
strategy and your financials, as well as your marketing mix. Distribution
channel act as medium through which we can deliver our product or services
to end users, research can be done on finding out the best suitable and
effective medium of distribution among the various options available in
current market. Time is a crucial factor in finalizing the channel as products
reaching at the right time place an important role in overall planning strategy
for this complete lead time and inventory management planning need to be
done thoroughly.

Define Marketing Mix:

Marketing involves a number of activities. In the first place, an association
may choose its objective gathering of clients to be served. When the objective
gathering is chosen, the item is to be put in the business sector by giving the
proper item, value, circulation and limited time endeavours. These are to be
joined or blended in a proper extent in order to accomplish the promoting
objective. Such blend of item, value, dissemination and limited time
endeavours is known as 'Showcasing Mix'.
As indicated by Philip Kotler "Showcasing Mix is the arrangement of
controllable variables that the firm can use to impact the purchaser's reaction".
The controllable variables in this setting allude to the 4 'P's [product, value,
place (dispersion) and promotion]. Every firm endeavours to develop such an
arrangement of 4'P's, which can make most elevated amount of buyer
fulfilment and in the meantime meet its authoritative targets.
Hence, this blend is gathered remembering the needs of target clients, and it
shifts starting with one association then onto the next relying on its accessible
assets and showcasing goals. Give us a chance to now have a brief thought
regarding the four segments of showcasing blend
Product : Product refers to the various goods and services offered by the
organisation to the customers. A pair of shoes, a packet of biscuit, a lipstick,
all are products. All these are bought on the grounds that they fulfill one or a
greater amount of our needs. We are paying not for the unmistakable item but
rather for the advantage it will give. Thus, in straightforward words, item can
be depicted as a heap of advantages which an advertiser offers to the buyer at
a cost. While purchasing a couple of shoes, we are really purchasing solace for
our feet, while purchasing a lipstick we are really paying for excellence in
light of the fact that lipstick is liable to make us look great. Item can likewise
take the type of an administration like an air travel, telecom, and so forth.
Accordingly, the term item alludes to products and administrations offered by
the association available to be purchased.

Price: Price is the amount that is charged for a product or service offered by
the company. It is the second most important constituent in the marketing mix.
Fixing the price of the product is a tough job as it must be viable of the
company and should also be reasonable from the point of view of customers.
Many factors like demand for a product in the market, total cost involved,
consumer’s ability to pay the amount charged for the product, prices charged
by competitors for similar products in the market, government restrictions on
various products etc. have to be kept in mind while fixing the price. In fact,
pricing is a very essential decision area as it has its impact on demand for the
product and also on the profitability of the organization.

Place: Goods are produced to be sold to the final consumers. They must be
made available to the consumers at a place where they can conveniently
purchase the product offered. Woollens are manufactured on a large scale in
Ludhiana and you purchase them at a store from the nearby market at your
place anywhere in India. So, it is necessary that the product is available at
shops in your town. This process includes a chain of individuals and
institutions like distributors, wholesalers and retailers who comprise of firm’s
distribution network which is also known as channel of distribution. The
organisation must decide whether to sell directly to the retailer or through the
distributors/wholesaler etc. The organisation can even decide to sell it directly
to consumers.

Promotion: In the event that the item is fabricated remembering the customer
needs, is rightly estimated and made accessible at outlets helpful to them yet
the shopper is not made mindful about its value, highlights, accessibility and
so on, its advertising exertion may not be fruitful. Consequently advancement
is a critical element of advertising blend as it alludes to a procedure of
illuminating, convincing and affecting a customer to settle on decision of the
item to be purchased. Advancement is done through method for individualoffering,
publicizing, reputation and deals advancement.

Marketing Strategies in building Brand Image of FMCG:

After analysing the essential characterises of FMCG’s and their markets, these are the
various growth strategies followed by FMCG companies. Generally the success of an
FMCG depends greatly on its marketing strategies. Typically a marketer purses a wide
range of marketing activity in order to increase the demand of its product. For instance
when the prices are competitive the company uses an extensive channel of distribution
design a mix of promotional activity to attract more customers. Thus there can be a lotof
strategies which a FMCG company any adopt, some of them are listed below:

Multibrand strategy: A company often nurtures a number of brands in

same category. There are various motives for using a umbrella of all its brand.
The main objective behind this strategy is to cover a wide market share by
including a lot of segments so as to crater the entire market.
For example the strategy adopted by Hindustan lever they have introduced
many brands in the personal wash and detergents category so that no segment is
left untouched. It has dove in the ultra premium segment, hamam for the
economy segment and brands like liril, lux and le sancy for the intervening
segments. In the detergents market also, surf itself is available in different formssurf
ultra, surf easywash, apart from the generic product. It has the surf range in
the premium segment, and wheel for the economy segment. It has thus covered
itself against any form of attack and captured market shares in every possible
segment.Nestle has also done something similar to their range of chocolates. It has
barone, milkybar in the popular segment which cost for Rs. 10 each for popular
categories and then it has chocolates like kitkat and kitkat senses which are
slightly more expensive than the plain milk chocolates. Munch was positioned as
a snack-food. In this way, they are covering wide Varity or usages of chocolates.
Another reason to adopt multiple brand strategy is to protect its major brand by
setting up flanked brands. Sometimes the company inherits different brand
names in the process of acquiring other companies and each brand name in the
process of acquiring other companies and each brand name has a loyal
following. An example of this strategy in the Indian context would be that of
coco cola which acquired Thums up, prior to its entry into the market. Today
they have a portfolio of soft drinks, each with a substantial market share.

Product flanking: it refers to the introduction of different combinations of

product prices, to crater several market segments as possible for the company. It
is basically offering a similar product to tap diverse market opportunities with altered
prices and quantities. The introduction of oil and shampoos in small
sachet has made them affordable to the lower segment of consumers who
previously could not afford to spend anywhere between Rs. 30 and Rs. 40 for a
standard bottle of a good shampoo. Although the sachets were initially launched
to guard the main brand, surprisingly they become a big success among new and
small quantity users.

Brand extension: Marketers like to have a loyal consumer base so that

those particular brands enjoy high brand equity in the market. In such cases,
companies make brand extensions with the expectation that the expansions will
have the capacity to ride on the equity of the successful brands, and that the new
brand will stand in its own right in the course of time. However, at times, the
idea does not work and the result is that the strong preference for the original
brand itself gets diluted in the bargain. If this strategy works, it has been of
tremendous value leading to the formation of a number of umbrella brands in a
variety of products. Brand extension strategy offers a number of advantages.
A well respected brand name gives the product instant recognition and easier
acknowledgment. It empowers the organization to enter new item classifications
all the more effectively. A classic example of this is Colgate and its brand
extensions. Today this brand has a number of extensions like Colgate toothpaste,
Colgate toothbrushes, Colgate toothpowder, Colgate whitening product and
Colgate mouthwash. All these brands have been positioned at different
segments. Dettol soap is a successful brand extension. There is very little use on
its publicizing. It gets overflow advantage from the advertisements of its parent
“Dettol antiseptic liquid”.

Building product lines: Many companies add related new product lines
to give the consumer the entire product he/she would like to buy under one
umbrella. Britannia and Ponds has done precisely this.– The latter company
added related products in the product range so as to offer company added related
products so as to offer their customers a one stop shop for their daily
requirement they could possible need, ranging from Cold cream, Toilet soap,
Shampoo, Tooth paste, Moisturising lotion, Talc to Face wash.
Britannia has embraced a comparable procedure. It has presented various types
of bread rolls and supported nourishment in the previous couple of years. By
including various flavours in every product offering the organization has
developed in this industry. By building related lines is Britannia is today the
market leader in the biscuits and related backed food products industry.

New product development: given the extreme rivalry in many items

today, organizations that neglect to grow new items are presenting themselves to
awesome danger. Their current items are defenceless against changing purchaser
needs and taste, new advances, abbreviated item life cycle and expanded
household and remote rivalry. The nourishment classification has likewise seen
developments like softies in frozen yogurts, chapattis by HUL, prepared to eat
rice by HUL and pizzas by both GCMMF and Godrej Pillsbury.
An organization can include new items through the devoting so as to secure of
different organizations or one's own particular endeavors on new item
improvement. With the assistance of new items an organization can enter a
developing business sector surprisingly, and supplement its current product
offerings. New item could likewise mean expansion to product offering or to
supplement the association's current product offering like Probiotic Ice Cream.
Innovations in core products: in the FMCG business, the life of a
product is short. Marketers, therefore continually try to introduce new brand to
offer something new and meet the changing aspirations of the customer. A
consumer is also open to try out new options and, on the other hand, brand loyal
segment is persuaded to upgrade their choice. Hence it is prudent for a marketer
to innovate from time to time both by technological expertise and/or based on
the consumer’s feedback. Such innovations are tried around the core product of a
company.
For example Colgate redefined its toothpaste by selling Colgate gel. One of the
greatest changes to hit the FMCG business was the "sachet" bug. In the most
recent 3 years, cleanser organizations, cleanser organizations, hair oil
organizations, scone organizations, chocolate organizations and a large group of
others, have presented items in littler bundle sizes, at lower cost focuses. This is
the single enormous development to reach new clients and grow piece of the pie
for worth included items in urban India, and for general FMCG items like
cleansers, cleansers and oral consideration in country India.

.Long term outlook: Many companies adopt a long term outlook towards
growth in FMCG market. In this process short term loss might be absorbed for
the long term prospects of the company. The example of this can be the strategy
used by kelloggs in India. The idea of cornflakes for breakfast advanced by
kelloggs is completely American in nature. A nation like India, which is socially
so not the same as America, couldn't acknowledge the kelloggs offer. However
kelloggs with its long term outlook took years before finally breaking even.
Today it is the market leader in the breakfast cereals market, and controls and
covers the whole market single handed.

Extending the PLC: During a product’s life, an FMCG company may

have to reformulate its marketing strategy because economic conditions change
competitors make new assaults and the product encounters new type of buyers
and new requirements. Organizations and their advertising experts watch out for
the life cycle of an item. As such, when an organization discharges another item,
they do as such realizing that the item will experience a sure life cycle.
As that life cycle nears an end, the organization must choose what to do: resign
the item by and large or develop the life spin of the item through various
systems. Among these methodologies are new ways to deal with bundling and
highlighting the item, diverse evaluating procedures for the item, re-marking
strategies for the item, and extending the business sector for the item to a group
of people abroad.

Expanding market by usage: A company usually expands the market

for its brand in two ways. That is, either to expand the quantity of clients or by
empowering more utilization per admission. The use rate of the purchasers can
be expanded in various ways. For example, it might attempt to instruct or induce
clients to utilize the item all the more every now and again. Illustration Monaco
bread rolls were at first situated as the "ideal salted" scones. To expand the
events for use, it pitched itself as fantastic plain, awesome with fixings

Company can try to induce users to consume more of the product on each
occasion. Say a shampoo marketer might convince the user that the shampoo is
more effective with two rises rather than one or the company may try to invent
new product uses and induce consumers to use the product in more varied ways.
Fevicole and M-seal was both industrial product till they decided to enter the
consumer market.

Wide distribution network: A very straightforward method for

expanding a FMCG organization's piece of the pie is by adding to a solid
dissemination system, ideally as far as more area. Once the reach of the product
has been extended, it is likely to gain in market share because of its deep
penetration. An extensive distribution system can be developed in due course;
then again the organization might gain another organization which has an
extensive distribution network. As Brooke bond, Hindustan unilever have
developed a good distribution network. This stands as the prime reason behind
their market leadership in business.
Organizations are progressively utilizing retail channels other than the
customary merchants to help deals and target new purchasers. The quickest
developing conventional exchange divert in India today is physicists. This
advancement is conceivably imperative for FMCG brands on the grounds that
physicists ordinarily offer more show territory, draw in an alternate profile of
customer than conventional merchants, and add believability to the items sold.
Organizations like Hindustan Unilever, Procter and Gamble, Dabur – the
Ayurvedic maker, and restorative and social insurance maker Emami have long
sold OTC tablets, diapers, ladylike cleanliness and other important items through
the scientist channel. The distinction today is that offers of excellence items and
premium beautifying agents are moving from neighbourhood food merchants to
scientific experts. Physicists are driving offers of premium creams,

Monitoring the pulse of the consumers: Companies spend

considerable effort to find out what’s, where’s, when’s and how’s of their
consumers. They figure out all sorts of things about them that the consumers are
not at all alert of. Big companies normally conduct market research to find out
more about their consumers and step by step instructions to fulfil their
requirements and needs in a superior way. It helps them to monitor the pulse of
their buyers so that they are able to identify and anticipate the needs of the
consumers and be able to satisfy them in a better manner than the competitors.

Advertising and media coverage: Promotion is required to construct

mindfulness around a FMCG or brand which is accessible in the business sector
yet relatively few individuals may think about it. Instructive publicizing figures
vigorously in the spearheading phase of an item class, where the goal is to
fabricate essential interest. Enticing publicizing gets to be essential in the
focused stage, where the organization's goal is to fabricate a specific interest for
a specific brand. Most promoting falls into this class. For example Pantene
shampoo attempts to persuade consumers that it delivers more benefits than any
other brand of shampoo. Marketers try to establish the superiority of its brand
through specific comparison with one or more brands in its product class.
Reminder advertising is very common with established products. Expensive
colour ads in magazines do not have the objectives of informing or persuading
buyers. Perhaps it tries to remind people to purchase the product. The basic idea
about growth through advertising by a company is to increase market share
through more share of mind as more information about the company and its
product will induce the viewer at time of actual demand.

Sales promotion: Sales promotion offers a direct incentive to buy more in

the short term. They are designed to stimulate quicker and greater purchase of
particular products by consumers or the trade. However, a few points have to be
kept in mind. They yield faster and more assessable responses in sales than advertising
does. They mainly attract the deal prone consumers who switch
brands as deals become available.
Loyal buyers normally do not change their brand a result of competitive
promotion. For example lays attract customers by offering those trips abroad or
Colgate asking the consumers to use their product and get a chance to meet the
super stars such as actors or models. The promotional strategy of buy one and
get one free on may FMCG products persuade customers to buy the product.

REVIEW OF LITERATURE
REVIEW OF LITERATURE
During this time of globalization, normal customers today are exceptionally requesting
with regards to the format and feel of any foundation they visit. They need to be pulled in
and spurred to enter a shop or slow down and at that point of choice having rests the
effect between a prospect and a deal for retailers. Effective retailing organizations
dependably wish to make an unmistakable and reliable picture in the clients mind.
Advertiser can make that positive client picture that prompts effective deals.
Advertiser in this way has turned into a basic part of retailing and retailers are
progressively looking toward making a novel situation that is tastefully satisfying and
additionally being financially savvy. Here, technology comes into play with its
capabilities to attract as well as provide information on consumer behavioral patterns.
Also in modern retailing, attaining leadership and building a store image in the
customer’s mind requires a great deal of skill and planning. A Store brand has to break
through the clutter and make an impression in the minds of customer’s to ultimately
change the synchronized entity of the store that’s in the customer’s mind into a specific
image. Image is the outlook of a store and the series of mental picture and feelings it
evokes in the beholder. Image is the foundation of all retailing efforts.
Studies indicate that a retailer has less than eight seconds to grab the attention of a
momentary customer. Marketing strategies makes it possible by grabbing the customer’s
attention and making a positive impression in those precious few seconds as he is aware
of the rules of perception. The researcher would like to clear the Rules of perception
Every potential purchase starts with a first impression.
The initial contact with the customer will determine
i) How long he will stay
ii) His inclination to buy
iii) Created a positive or negative feeling towards the shop/brand.
Store promotion has become an integral part of marketing strategies used by marketer in
creating brand image of fast moving consumer goods. It devours an exceptionally huge part of
the special costs of advertisers. With the expansion in number of store outlets and
the recurrence of clients visit to stores the significance of store advancement has
expanded. Chiefs are presently depending vigorously on store advancement on the
grounds that its effect on deals is more straightforward, quick, and quantifiable when
contrasted with other special procedures. The dynamic nature of store promotion has
inspired many researchers to turn their attention to study the various issues related to this
element of promotion mix. Numerous studies have been directed on the arranging, usage
and assessment part of offers advancement around the world. These studies are reviewed
and presented briefly below:

Bogart (1985), has carried out a study on “Understanding consumers attitude

towards advertisement for brand building”. This study incorporates diverse sorts of
conventional and web based media and the elements which are adding to buyers'
observation towards promotions are excitement, aggravation, instruction, respectability
and demography. As indicated by this study, by comprehension buyer demeanor towards
promoting, originator and advertiser can figure better procedures for their publicizing
battle. Promoting in both conventional media and the online networking is either barely
noticeable by the gathering of people or is seen to have little esteem.
Kahn, E. Barbara and Loouise, A. Therse (1990) through their study "Effect of
Retraction of Price Promotions on Brand Choice Behavior for Variety-Seeking and
Last Purchase Loyal Consumers" investigated how in-store price promotions affect
market share after the promotional offers have been retracted. They find that the effects of
promotion are contingent on both the choice pattern of subjects- whether or not subjects
switch among brands- and the ubiquity of promotions in a product category. If only one
brand is being promoted and subjects are generally loyal to the last brand purchased,
brand choice probability declines from pre-promotion levels once the promotion is
withdrawn. However if subjects tend to switch among brands in the absence of
promotion, or several brands are being promoted, this decline is mitigated and/or does not
occur.
Grover, Rajiv and Srinivasan, V. (1992) presented their study on"Evaluating the
Multiple Effect of Retail Promotion on Brand Loyal and Brand Switching
Segments". They found that the market can be characterised by brand loyal segment and
switching segments; promotional variable have significant effects on segment market
shares, the effect being different across segments; store share is related significantly to
promotional attractiveness of a store; the overall promotional attractiveness of the product
category has significant current and lagged effect on category volume and the lagged
effects resulting from consumer purchase acceleration and stock-up last longer for brand
loyal segments than for switching segments.
Guptha, Sunil and Lee, G. Cooper (1992) examined "Discounting of Discounts and
Promotion Thresholds" in which buyer's reaction to retailer's value advancement was
examined. Their study demonstrates that purchasers "rebate" the cost rebates. It likewise
recommends that the marking down of rebates and changes in buy expectation relies on
upon the markdown level, store picture and whether the item publicized is a name mark
or store brand.The study also investigated the existence of promotion thresholds.
They used experimental data and an econometric methodology to gather empirical
evidence that consumers do not change their intention to buy unless the promotional
discount is above a threshold level. This threshold level differs for name brand to store
brand. Specifically they found that the threshold for a name brand is lower than that for
store brand. In other words stores can attract consumers by offering a small discount
while a large discount is needed for similar effect for store brand. The study also indicates
the existence of promotion saturation point above which effect of discounting on changes
in consumer purchase intention is minimal. These results confirm consumers shaped
response to promotions.
A study by Hoch et al. (1994), on ‘EDLP, HiLo and Margin Arithmetic’, reasons that
a concentrated store limited time action permits the retailer to keep up or expand its
turnover by accomplishing a higher infiltration rate in the business sector region. So also
it additionally serves to build the recurrence of visits and normal sum spent in the store by
the buyer. Besides, store-level advancements help to strengthen a low-value situating, a
key to execution. While the utilization of a "Regular Low Pñce" method is another
approach to accomplish such a situating, it has been demonstrated that such a
methodology prompts an increment in deals to the detriment of considerable misfortune
in benefit.
Lea- Greenwood, Gaynor (1998) in their study on “Visual merchandising: a
negelected area in UK fashion marketing?” According to him visual merchandising
was resistant with still from the television, cinema and magazine advertising campaign
inside window and internal displays, thus supporting the product which is to be sold.
Store personnel were completely briefed on the product features shown in the campaign
and, that for the company, the achievement was "calculable" by sales of the product and a
more "positive" view of the brand, according to the top management. The seller’s actual
and only role in this process is to ensure that there were enough products available to
support the demand that would be created. Layouts of the store reflects the products that
are to be featured. All salesperson at store level were educated not only of what was to be
featured but also where, e.g. television and region, and when, e.g. in the break of a
popular soap. This ensured a cohesive campaign with integrated effort and clear
objectives.
Tyreman, David; Walton, Keith (1998) writes about Theme-oriented displays and a
conducive shopping environment in the article “Visual merchandising ups sales”. He
states that Visual merchandising the art of dressing merchandise display areas with
theme-oriented props--creates a mood for buying. Even though shoppers live in a selfservice
world, surveys show service is still of prime importance.
People want their senses to be indulged-to feel good about what they are buying, where
they are buying it and how they are going to feel about consuming it. It is a retailer's
responsibility to deliver to the customer these "feelings" when they are shopping. And a
conducive shopping environment sets the tone for the customer's psychological frame of
mind for the process of sale to effectively take place.
If a gentlemen's suit store changed its decor to high-tech video monitors, blasting techno
music and employed sales people with bleached blond hair, tattoos and nose piercings, it
would have misunderstood its customer, and the store's normal customer would feel
alienated. However, if the same theme is applied to a hip jeans store whose main
customers are stylish teenagers one would be stimulating business as it conveys the
customer "I understand you."
Wood, Van R; Darling, John R; Siders, Mark (1999) in the article “Consumer desire
to buy and use products in international markets; How to capture it, how to sustain it” the
writers had mentioned about the important element of customers loyalty.
According to them in today's competitive markets, where consumers have significant
options, marketing resource expenditure strategy must be backed by the answer to some
essential questions, namely - who are the customers?, what are their needs and wants?,
and most importantly, what do they think of the organization's products, and marketing
efforts? Often tagged as "relationship or customer sensitivity analyses" they have become
important for organizations' long-term achievement because it overheads five times more
to acquire a new customer than to keep a current one (Buzzell and Gale, 1987).
Relationship analyses hub on wellsprings of upper hand that depend on an association's
putting forth that separate it from rivals according to shoppers. The key, once more, is
that separation favorable circumstances come just from items and showcasing hones that
are important to target clients. The goal is to comprehend the drivers of consumer loyalty
and dependability that are identified with client affinity to purchase and utilize particular
items.
Smith, F. Michael and Sinha, Indrajit (2000) examined “The Impact of Price and
Extra Product Promotions on Store Preference”, over four store item classifications
controlling independently for the impact of two class based directing elements viz. item
stock-up attributes and value level. Results demonstrated that a larger part of purchasers
favored blended advancements; sort of advancements does impact store inclination (with
cost and volume advancements having the best impact). Customers for the most part
favored value advancement for higher evaluated item classifications and they favored
volume advancements for lower estimated classes.
Yalch, Richard F.& Spangenberg, Eric R. (2000) in their study on “The Effects of
Music in a Retail Setting on Real and Perceived Shopping Times” has linked
shopping behaviour to environmental factors through changes in emotional states.
Analyses revealed that individuals reported themselves as shopping longer when exposed
to familiar music but in fact the customers kept shopping for longer hours when expose to
unfamiliar music. Shorter actual shopping times in the familiar music condition were
related to enlarged provocation. Longer saw shopping times in the recognizable music
condition seem identified with unmeasured psychological variables. Albeit passionate
states influenced item assessments, these impacts were not specifically identified with the
music controls.
The results of this study bolster the conviction that shopping time is influenced by a retail
ecological component like store music. People who had a decision as to the term of their
shopping background shopped longer when listening to less well known music contrasted
and more natural music. This distinction seemed inferable from contrasts in passionate
reactions to the two sorts of music. People reported being less stirred while listening to
the new music contrasted and the natural music. Once the impact of excitement on
shopping times was viewed as, different responses to music commonality (either
measured or unmeasured) did not affect real shopping times.
The impacts of commonplace and new music were altogether different when seen instead
of real shopping times were considered. At the point when aggregate shopping time was
controlled, people reported looking for a more drawn out time when they had been
presented to the less well known ambient sounds contrasted and the commonplace frontal
area music. This impact was not intervened by the passionate reaction measures,
recommending that it may reflect psychological as opposed to enthusiastic responses.
Karen A. Machleit, Sevgin A. Eroglu & Susan Powell Mantel (2000), has done a study
on “Perceived Retail Crowding and Shopping Satisfaction: What Modifies This
Relationship?” which has revealed that an increase in perceived crowding in a retail
store created from either human or structural density can decrease the level of satisfaction
that shoppers have with the store. Overall, the results indicate that the effect of retail
crowding on shopping satisfaction is not a simple, direct one.
A crowded store may or may not result in decreased satisfaction; this effect depends on a
number of different individual and situational factors. The results of two field studies
indicate that although emotions partially mediate the crowding– satisfaction relationship,
the decrease in shopping satisfaction due to crowding is mediated by expectations of and
tolerance for crowding.

OBJECTIVES AND HYPOTHESIS