Date post: | 08-Apr-2018 |
Category: |
Documents |
Upload: | mewa-singh |
View: | 222 times |
Download: | 0 times |
of 34
8/6/2019 Stage 3 Slides
1/34
Project 2015
Final Stage
ndian FMCG INDUSTRY
By: Ravi, Shiv, Namrata, Mewa, Ratnakar and Chetan
8/6/2019 Stage 3 Slides
2/34
8/6/2019 Stage 3 Slides
3/34
Market Segmentation
Geographic
Demographic
Socio Economic
2015
8/6/2019 Stage 3 Slides
4/34
Recap
Detailed industry analysis
Meaning and characteristics of FMCG
Market segments
Rural market
SWOT analysis
Top players
Individual company analysis
2015
8/6/2019 Stage 3 Slides
5/34
ABOUT FMCG
Products that are sold quickly at relatively low cost.
Characterized by:
Low absolute profit, but high cumulative profit
Non-durable
Include essential commodities
Calls for little time on purchase decision
Extremely price sensitive- companies like to stick to
popular prices ofRs 2, 5, 10 etc.
2015
8/6/2019 Stage 3 Slides
6/34
INDIAN FMCG INDUSTRY
Fourth largest sector in the economy and has a market size of US$
17.6 billion.
Predicted to reach to US$ 33.4 billion in 2015 from US $ billion 11.6
in 2003.
Competitiveness lies in easy availability of raw materials, cheaplabour and presence across value chain.
Potential lies in untapped rural India consisting of 70% of countrys
population wherein FMCG penetration is 2% only
Increasing disposable incomeUrban India is almost saturated for segments like household and
personal care where penetration is about 80% and 70% respectively.
2015
8/6/2019 Stage 3 Slides
7/34
11.6
17.6
33.4
0
5
10
15
20
25
30
35
40
2003 2010 2015
FMCG Market Size
($bn)
43%
34%
23%
Market Segments
Food &
Beverages
Personal
Care
Household
2015
8/6/2019 Stage 3 Slides
8/34
Product Mix
HULD
abur Nestle P&GFood
Personal Care
Home Care
Nutrition
Water
Health, Hygiene &
Beauty
Hair Care
Oral Care
Skin Care
Digestives
Fruit Juices
Honey &
Chyawanprash
Glucose
Milk Products and
Nutrition
Beverages
Chocolates andconfectionery
Prepared Dishes and
Cooking Aids
Fabric care
Hair care
Baby care
2015
8/6/2019 Stage 3 Slides
9/34
HULDISTRIBUTION NETWORK
Setting up rural and small town marketing
distribution network.
Establishing new products at difference price points.
2015
8/6/2019 Stage 3 Slides
10/34
P&G DISTRIBUTION NETWORK
Streamlining its distribution network in anexercise code named Operation Golden EyeGetting out of rural market.
Focusing on the class A&B towns.
Moving to a demand based model which
enables to reduce the quantum ofwaste. Reducing the no. of price points atwhich it
offers its products
2015
8/6/2019 Stage 3 Slides
11/34
DABURDISTRIBUTION NETWORK
Following the basic HLLs track i.e. every possible
price point
Reducing the no. of distributors where population of
the town is less than 20,000.
Appointing super-stockist.
Instead of expanding distribution to increased
demand for a product, demand should drivedistribution
Star 2015
8/6/2019 Stage 3 Slides
12/34
8/6/2019 Stage 3 Slides
13/34
Branding Strategy
HUL- Power branding strategy, 35 Power brands
2 umbrella brands Brooke Bond and Lipton
P&G- power brand
NESTLE- sub brand and power brand
DABUR- sub brand
2015
8/6/2019 Stage 3 Slides
14/34
FMCG INDUSTRY-ARURAL JOURNEY
2015
8/6/2019 Stage 3 Slides
15/34
Rural IndiaGaon GaonKi Kahani
Annual size of rural market in FMCG Rs. 50,000 cr.
70% of Indias population is dependent on the rural economy.
Disposable income of the consumer is low.
It has been growing 5 times the pace of the urban market. Accounts for 50% of sales of soaps and detergents.
Penetration of FMCG products, esp tea and soaps has gottendeeper.
Challenges which has to overcome
Challenge of reach To ensure that consumers are aware of and want your brand.
Challenge to communicate the right message.
2015
8/6/2019 Stage 3 Slides
16/34
Key Factor
Reasonable pricing would have to be the key factor
of companies success in rural India. Components of rural distribution and marketing:
Mandis, Haats and Melas, are major components of
rural distribution and marketing.
Key Factors
2015
8/6/2019 Stage 3 Slides
17/34
Mergers and Acquisitions
HUL
Acquired govt. stake in modern foods
Acquired lipton tea and brooke-bond
Acquired ponds cosmetics
DABUR
acquisition of balsara group( oral care)
Acquired fem care pharma Acquired namaste laboratiories
NESTLE
Acquire medical nutrition division
Merger with anglo Swiss condensed milk
P&G
Acquire gillette
Acquisition of Sara lee air care( coffee and food brand)
Merger of wella-AG ( Germany group deals in hair care and cosmetics).
2015
8/6/2019 Stage 3 Slides
18/34
FINANCIALANALYSIS
2015
8/6/2019 Stage 3 Slides
19/34
NESTLE
( in cr.)
2643 2944
3647
4471
5222
309 315 413534 655368 405 450 511 613
0
1000
2000
3000
4000
5000
6000
2005-06 2006-07 2007-08 2008-09 2009-10
sales
profits
total assets
1197513035
14715
17320 18220
1354 15391743 2000 21022362 2796 1527 1987
2583
0
5000
10000
15000
20000
2005 2006 2007 2008-09 2009-10
sales(in crores)
profits
total assets
HUL
(in cr.)
2015
8/6/2019 Stage 3 Slides
20/34
DABUR:
( in cr.)
1757 20802396
28343417
214 282 333 391501624 670 749
1060 1129
0
1000
2000
3000
4000
2005-06 2006-07 2007-08 2008-09 2009-10
Sales
profits
total assets
P&G
(YEAR ENDING IN JUNE)
( in cr.)
597 553
652
773
913
13990 131
179 180273 291
351445
0
200
400
600
800
1000
2005-06 2006-07 2007-08 2008-09 2009-10
Sales
profits
total assets
2015
8/6/2019 Stage 3 Slides
21/34
Key Financial Ratios
8/6/2019 Stage 3 Slides
22/34
Nestle India(in Rs. Cr.)
150.33
163.97 160.29
98.90
112.83 112.68
43.4049.09
60.29
10.02 11.39 11.61
42.92
55.39
67.94
0
20
40
60
80
100
120
140
160
180
Dec'07 Dec'08 Dec'09
ROCE (%)
RONW (%)
ROA
ITR
EPS
SOURCE: moneycontrol.com
8/6/2019 Stage 3 Slides
23/34
Hindustan Unilever(in Rs. Cr.)
138.72
118.59106.78
122.97 121.34
85.25
6.61 9.4511.848.20 9.26
8.998.12 11.47 10.09
0
20
40
60
80
100
120
140
160
Dec.'07 Mar' 09 Mar' 10
ROCE (%)
RONW (%)
ROA
ITR
EPS
SOURCE: moneycontrol.co
8/6/2019 Stage 3 Slides
24/34
Dabur India
(in Rs. Cr.)
67.51
47.98
61.6261.58
51.20
58.04
5.95 8.43 8.6
12.5210.94 11.31
3.67 4.32 4.99
0
10
20
30
40
50
60
70
80
Mar' 08 Mar' 09 Mar' 10
ROCE (%)
RONW (%)
ROA
ITR
EPS
SOURCE: moneycontrol.com
8/6/2019 Stage 3 Slides
25/34
Procter & Gamble(in Rs. Cr.)
52.86 51.6044.05
37.9140.64
33.62
106.79
135.56
164.70
16.88 17.7921.28
40.48
55.10 55.38
0
20
40
60
80
100
120
140
160
180
June' 08 June' 09 June' 10
ROCE (%)RONW (%)
ROA
ITR
EPS
SOURCE: moneycontrol.co
8/6/2019 Stage 3 Slides
26/34
On the basis of key financial Ratios
ROCE- Nestle 150.33
RONW- HUL 122.97
ROA- P&G 106.79
ITR- P&G 16.88
EPS- Nestle 42.92
8/6/2019 Stage 3 Slides
27/34
Selection of a Potential Star
8/6/2019 Stage 3 Slides
28/34
Net Profit margin ratio
(profit as a % 0f sales)
Total asset turnover ratio
(sales as a ratio of total
assets)
Return on equity
( PAT as a % of owners
equity)
YEAR
&
NAME
2007-
08
2008-
09
2009-10 2007-
08
2008-
09
2009-
10
2007-
08
2008-
09
2009-
10
NESTL
E 11.3 12 12.5 7.2:1 8.7:1 8.5:1 98 112 113
HUL 11.8 11.54 11.53 9.6:1 8.7:1 7:1 121 121 81.3
DABU
R
13.8 13.8 14.7 3.2:1 2.7:1 3:1 27 24 27
P&G 20 23 19.7 1.9:1 1.7:1 37 40
RATIO ANALYSIS2015
8/6/2019 Stage 3 Slides
29/34
FUTURE SCENARIO
HULEntered the noodles market and giving tough competition to
NESTLE MAGGI
About to enterRs100 crore pasta market through its KNORR
subsidiary.Project SHAKTI, Project SAMRUDHDHI
DABUR
Re-branding ofREAL JUICE
Launched retail subsidiary- H&B STORES in DelhiOfficial partner for IPL team KINGS XI PUNJAB
Launched Vitamin and Health suplement- NUTRIGO
2015
8/6/2019 Stage 3 Slides
30/34
NESTLE
Setting up a R&D center in India which will be a part of its global
network of 29 R&D centers.
Building capacity in India by spending Rs 650 crores in capital
investments in the last 3 years
Launched Nutrition Awareness Programme.
P&G
Connect and Develop model
Contd
2015
8/6/2019 Stage 3 Slides
31/34
Key success factor of P&G
70% spent on TV advertisement.
Refund offer to consumer on home products.
Improving affordability to a large no. of consumers
Project Peace: Environment Education Programme Opened Gujarat Earthquake Relief centres in partnership with SSP.
Project Shiksha: Secure your childs Future.
2015
8/6/2019 Stage 3 Slides
32/34
Key success factor of HUL
Availability near the consumer through a wide distribution
network.
Continued efforts in reducing the brand cost.
Winning relationships with customers.
Project Shakti a unique opportunity in accessing r ural
consumers.
Developed advanced marketing mix modelling techniques.
Good Turnover, Good Profits and strong cash delivery during
recession.
2015
8/6/2019 Stage 3 Slides
33/34
Key success factor ofDabur
Knowledge base and Modern Science
Over 10 Research Areas
Production of Ayurvedic medicines
Leadership in health care
Maintaining global standards
Ranked as Indias Most CustomerResponsive FMCG Company
(2010-11)
2015
8/6/2019 Stage 3 Slides
34/34
THANK
YOU