SUBMITTED BY (MBA 2nd SEM, (B)

PARTHA PRATIM MAHANTA

SUBMITTED TO

RAHUL PURKAYSTHA

(Faculty Member of Marketing)

PROJECT REPORT ON MIMICRI PRODUCTS AVAILABLE IN BELTOLA

BAZAAR

NORTH EASTERN REGIONAL INSTITUTE OF

MANAGEMENT

1

CONTENTS

TOPICS PAGES

Introduction to FMCG 2

Growth Rate of FMCG in India 3

Mimicry Products 4

Production Process 5

Mimicry Products available in Beltola Bazaar 6-13

Causes of Duplicacy 14-15

Loses and Measures 16

Conclusions 17

2

INTRODUCTION TO 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. Examples include non-durable goods such as soft

drinks, toiletries, and grocery items. Though the absolute profit made on FMCG products is

relatively small, they generally sell in large quantities, so the cumulative profit on such products

can be substantial. The term FMCG refers to those retail goods that are generally replaced or

fully used up over a short period of days, weeks, or months, and within one year. This contrasts

with durable goods or major appliances such as kitchen appliances, which are generally replaced

over a period of several years.

FMCGs have a short shelf life, either as a result of high consumer demand or because the

product deteriorates rapidly. Some FMCGs – such as meat, fruits and vegetables, dairy products

and baked goods – are highly perishable. Other goods such as alcohol, toiletries, pre-packaged

foods, soft drinks and cleaning products have high turnover rates.

The following are the main characteristics of FMCG.

From the consumers' perspective:

o Frequent purchase

o Low involvement (little or no effort to choose the item – products with strong

brand loyalty are exceptions to this rule)

o Low price

From the marketers' angle:

o High volumes

o Low contribution margins

o Extensive distributions networks

o High stock turnover.

3

GROWTH RATE OF FMCG PRODUCT IN INDIA

India’s FMCG sector is the fourth largest sector in the economy and creates employment for

more than three million people in downstream activities. Its principal constituents are Household

Care, Personal Care and Food & Beverages. The total FMCG market is in excess of Rs. 85,000

Crores. It is currently growing at double digit growth rate and is expected to maintain a high

growth rate. FMCG Industry is characterized by a well established distribution network, low

penetration levels, low operating cost, lower per capita consumption and intense competition

between the organized and unorganized segments.

The Rs 85,000-crore Indian FMCG industry is expected to register a healthy growth in the third

quarter of 2008-09 despite the economic downturn. The industry is expected to register a 15%

growth in Q3 2008-09 as compared to the corresponding period last year. Unlike other sectors,

the FMCG industry did not slow down since Q2 2008. the industry is doing pretty well, bucking

the trend. As it is meeting the every-day demands of consumers, it will continue to grow. In the

last two months, input costs have come down and this will reflect in Q3 and Q4 results.

Market share movements indicate that companies such as Marico Ltd and Nestle India Ltd, with

domination in their key categories, have improved their market shares and outperformed peers in

the FMCG sector. This has been also aided by the lack of competition in the respective

categories. Single product leaders such as Colgate Palmolive India Ltd and Britannia Industries

Ltd have also witnessed strength in their respective categories, aided by innovations and strong

distribution. Strong players in the economy segment like Godrej Consumer Products Ltd in soaps

and Dabur in toothpastes have also posted market share improvement, with revived growth in

semi-urban and rural markets.

4

MIMICRY PRODUCTS

Mimicry consumer goods, commonly called counterfeit or imitation products offered for sale.

The spread of counterfeit goods has become global in recent years and the range of goods subject

to infringement has increased significantly. According to estimates by the Counterfeiting

Intelligence Bureau (CIB) of the International Chamber of Commerce (ICC), counterfeit goods

make up 5 to 7% of world trade. A report by the Organization for Economic Co-operation and

Development (OECD) states that up to $200 billion of international trade could have been for

counterfeit and pirated goods in 2005, and around $250 billion in 2007. Other estimates conclude

that a more accurate figure is closer to $600 billion lost, since the OECD estimates do not

include online sales or goods counterfeited and sold within the same country.

Products in high demand can be manufactured based on the same or similar designs, often

packaged and branded in ways to make them indistinguishable from the original. The counterfeit

goods can then be sold through parallel markets, or even introduced into the licit supply chain.

Without the overheads of the licit products, these counterfeits can be priced extremely

competitively while remaining vastly more profitable. Due to this competitive edge, in some

markets in some parts of the world, counterfeit products are far more common than the originals.

In aggregate, however, product counterfeiting poses a serious global challenge. The branding of

a product provides implicit quality assurance and a legal line of accountability that consumers

have come to take for granted. Without a brand to protect, counterfeiters have no incentive to

produce anything but superficial quality. Where it becomes impossible to distinguish the real

from the counterfeit, poor quality products destroy the reputation of the copied brand, and the

cheaper goods will inevitably dominate. The ultimate threat of counterfeiting has been realized in

some parts of the developing world: the original, high-quality products have been essentially

priced out of the market. Electronic goods are one of the most commonly encountered

counterfeit products, and detection of pharmaceuticals has also been rising. The single most

commonly counterfeited class of goods, however, is apparel: clothing, accessories and shoes.

5

PRODUCTION PROCESS

The production of counterfeit or mimicry products can be as simple as producing alternative

packaging materials using a laser printer or as complicated as the production of the original

product. In general, counterfeit production in China appears to be more sophisticated than in

India. In China, counterfeit drug producers are often chemical companies that are not licensed to

produce pharmaceuticals, or even licensed companies that produce both legitimate and bogus

drugs. In 2008, the Chinese Government shut down 363 fake medicine production facilities.

In India, the manufacturers can be loosely grouped into three categories: unlicensed

manufacturers who operate out of small cottage factories, licensed manufacturers who

secretly make fake drugs alongside their legitimate products, and importers who bring in drugs

or any mimicry FMCG products from China and then fraudulently repackage them.

The small manufacturers operate from the outskirts of major cities. If we only talking about

counterfeit Drugs then, in the past, their products were crude, but the dispersion of printing and

packaging technology has brought credibility within the reach of even the small entrepreneur.

Medications may contain the right active ingredient in dilute amounts, and are distributed

through informal channels to local retailers. Agra is reportedly a major outlet for these drugs.

6

SOME OF THE MIMICRY/DUPLICATE/COUNTERFEIT PRODUCT

AVAILABLE IN BELTOLA BAZAR

1. Name of the Mimicry product : Voroline

2. Original product : Veseline

3. Product type : Petrochemical Product

4. Manufacturing Unit : New Delhi

5. Selling Price : Rs. 5 per unit

6. Distributor Price : 32 unit @ Rs. 95

7. Profit Margin : Rs. 65-75 (60% - 70%) (approx)

8. Distributors : General Supplier

9. Supply Place : Lakhtokia, Fancy-bazaar

10. Customer : Low income person specially person who

earn on daily basis

11. Reason for purchase : 1. Affordable price

2. Lack of adequate knowledge

12. Market Strength : As per retailer, they sold 32 unit within

week.

7

1. Name of the Mimicry product : Rebaxo Sandal

2. Original product : Relaxo Footwear

3. Product type : Footwear

4. Manufacturing Unit : New Delhi, Kolkata, Ludhiana

5. Selling Price : Rs. 60 – 70 per unit

6. Distributor Price : N/A

7. Profit Margin : 40% - 60% (approx)

8. Distributors : Local Wholesaler

9. Supply Place : Kolkata (Direct), Lakhtokia

10. Customer : High to Low income person

11. Reason for purchase : 1. Affordable price

2. Lack of adequate knowledge

3. Use and Throw

4. For the servant

5. Rough use

12. Market Strength : Customer satisfaction is high for this

product as this product is used for normal

use and throw.

8

1. Name of the Mimicry product : Jockay

2. Original product : Jockey

3. Product type : Garment Product

4. Manufacturing Unit : Ludhiana

5. Selling Price : Rs. 35 – 55 per unit

6. Distributor Price : N/A

7. Profit Margin : 70% - 80% (approx)

8. Distributors : Local Wholesaler @ Fancy Bazaar

9. Supply Place : Kolkata, Ludhiana

10. Customer : High to Low income person

11. Reason for purchase : 1. Affordable price

2. Lack of adequate knowledge

3. For the servant

12. Market Strength : Customer satisfaction is high for this

product. As per report, more than 80%

of this product (high profit), were sold

in every weekly bazaar.

9

1. Name of the Mimicry product : Abibas

2. Original product : Adidas

3. Product type : Apparels Product

4. Manufacturing Unit : Kolkata

5. Selling Price : Rs. 130 – 170 per unit

6. Distributor Price : N/A

7. Profit Margin : 20% - 30% (approx)

8. Distributors : Local Wholesaler @ Fancy Bazaar

9. Supply Place : Kolkata

10. Customer : High to Low income person

11. Reason for purchase : 1. Affordable price

2. Normal wear

3. Rough Use

4. Seasonal demand

12. Market Strength : Customer satisfaction is high for this

product. As per report, more than 1200

track pants (high profit), were sold

within two weeks.

10

1. Name of the Mimicry product : Super Dent Tooth Paste

2. Original product : Pepsodent Tooth Paste

3. Product type : Tooth Paste industry

4. Manufacturing Unit : Amingaon, Guwahati

5. Selling Price : Rs. 10 per unit

6. Distributor Price : N/A

7. Profit Margin : 35% - 45% (approx)

8. Distributors : Local Wholesaler @ Fancy Bazaar

9. Supply Place : Fancy Bazaar

10. Customer : Low income person

11. Reason for purchase : 1. Affordable price

2. Lack of adequate knowledge

12. Market Strength : Customer satisfaction is moderate for this

product. Demand is not much higher in this

product.

11

1. Name of the Mimicry product : Lipchu & Lovely / Neha & Love

2. Original product : Fair & Lovely / Fair & Handsome

3. Product type : Cosmetic Products

4. Manufacturing Unit : Kolkata

5. Selling Price : Rs. 10 per unit

6. Distributor Price : N/A

7. Profit Margin : 40% - 50% (approx)

8. Distributors : Local Wholesaler @ Fancy Bazar

9. Supply Place : Kolkata, Ludhiana

10. Customer : Medium to Low income person

11. Reason for purchase : 1. Affordable price

2. Lack of adequate knowledge

3. Saloon Business

12. Market Strength : Customer satisfaction is moderate for this

product. Most of this products were

purchased by unorganized saloon business

person.

12

1. Name of the Mimicry product : Fena Detergent Soap

2. Original product : Fena

3. Product type : Detergent Soap

4. Manufacturing Unit : Amingaon, Guwahati

5. Selling Price : Rs. 10 per unit

6. Distributor Price : N/A

7. Profit Margin : 60% - 70% (approx)

8. Distributors : General Supplier

9. Supply Place : N/A

10. Customer : Hotel and Restaurants

Laundry

11. Reason for purchase : 1. Affordable price

2. Lack of adequate knowledge

3. The Hotel and Restaurant Work

4. Laundry use

12. Market Strength : Customer satisfaction is high for this

product. Market demand is more for this

product.

13

1. Name of the Mimicry product : Kay Kicks

2. Original product : Kurkure

3. Product type : Chips

4. Manufacturing Unit : Abhoyapuri, Assam

5. Selling Price : Rs. 5 per unit

6. Distributor Price : N/A

7. Profit Margin : 10% - 15% (approx)

8. Distributors : General Suppliers

9. Supply Place : N/A

10. Customer : School going Children

11. Reason for purchase : 1. Affordable price

2. Lack of adequate knowledge

12. Market Strength : Low demand for this product.

14

CAUSES OF DUPLICACY

1. Lengthy supply chains : A supply chain is the network of organizations involved

with the manufacture and distribution of a product from raw material providers to retail

outlets. The efficiency of a supply chain directly affects the cost of production, and therefore

the profit any member of the chain can make. An effective supply chain moves all products

from company to company quickly and inexpensively. It minimizes each organization's

expenses and improves its earnings. A dependable chain provides security to each

organization, making it easier for them to make accurate business projections. The supply

chain of FMCG product is so lengthy. As this result, the counterfeit products are produced in

a large scale to enjoy the market benefit, by reaching the market in a shorter period of time.

2. Profit margins : As the counterfeit products reaching the market at a very short

period of time, the producer or marketer of these products enjoys the full opportunity of these

products into the market. The statistical data says that, 10-60% profits are earned by the

producer by marketing the counterfeiting products. The high profit margin attracts more of

the producer to this counterfeiting product market.

3. Easy to fake : Another reason of duplicacy of the product is the easy of

producing the fake product at a very low cost. Many of the products of FMCG, does not go

through the standardization process. Due to which it is easy for the producer to produce fake

product, as similar as the original product.

4. Huge gap in demand & supply : There is a huge gap between demand and supply

of the FMCG products. The FMCG products are those which turnover is so quick. As the

producer of the products are unable to utilization of the market demand with their limited

production process, which created a huge gap between the demand and supply. This will lead

to production of counterfeiting products.

15

5. Desire for getting good brands at a less cost : Some reputed brands like NIKE,

ADIDAS, JOCKEY, etc have their good marketing position that is positions in the mind of

the target buyers as delivering some central benefits. This position creates the desire for

getting good brands at less cost. This will lead the counterfeiting of the products.

6. Lesser value than the original : The counterfeiting or mimcri products are found in

a very low cost. As the “Production Concept” defines that, consumer will prefer products that

are available and inexpensive. The counterfeiting products are lesser value than the original

products. It will increase the demand of the counterfeiting product into the market. The

counterfeiting products are strictly based on the Production Concept of Marketing.

16

LOSES DUE TO COUNTERFEITING PRODUCTS

On an average music industry looses Rs. 600crores.

2009-10 sees the music industry loosing a record Rs763crores.

Brands like ADDIDAS, NIKE, lost a massive 17% revenue loss due to duplicity.

61% of computer software and 40% of music sold are pirated.

Rs 10,000 cr revenue is lost to the fakes industry annually.

Mobile companies loosing a 7% revenue due to cheap chinese handsets in the market.

Sales of Vicks Action 500 fell by 5 per cent in a few months.

(Source: Internet)

MEASURES TO COUNTER DUPLICATE PRODUCTS

Putting up 3-d holograms on the products.

Printing bar codes across the products (chips covers, pet bottles,etc).

Stringent laws on the piracy & copying.

Frequent raids by the police on all the illegal activities (making of the fake products).

More promotion campaigns that lay emphasis on genuine products.

(Source: Internet)

17

CONCLUSION

From our survey we came to know that, most of the products are sold in the market (Beltola

Bazaar) are the FMCG products, such as Cosmetic goods, Footwear, Bags, and Apparels etc.

which of are producing in Kolkata, Delhi and Guwahati. Most of these products are delivered or

distributing from the local wholesaler of Fancy Bazaar and some part of other regions.

In our survey we found the following results:

Most of the counterfeiting products are producing from Kolkata or Delhi

Local wholesaler at fancy bazaar, lokhra and general suppliers are the distributors of

these products.

The distributors or suppliers directly approach to the retailer to supply the products.

Average profit margin is of 20 – 80 % in most of these products.

More than 500 units of mimicry products are available in the market.

The seller even does not that they selling the mimcri products.

Mostly group of lower income persons are the customers of these products.

“Business of Mimicry Products is a profitable business”- Seller.