A STUDY ON FMCG’S PERSONAL CARE PRODUCTS IN COIMBATORE CITY

Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products that
are sold quickly and at relatively low cost. Though the profit margin made on FMCG products is
relatively small (more so for retailers than the producers/suppliers), they are generally sold in
large quantities; thus, the cumulative profit on such products can be substantial. FMCG is
probably the most classic case of low margin and high volume business.

Introduction to Fast Moving Consumer Products (FMCG)

The Indian FMCG sector is the fourth largest sector in the economy with an estimated size of
Rs.1,300 billion. The sector has seen tremendous average annual growth of about 11% per
annum over the last decade. In India, the scenario is quite different in comparison to developed
nations where the market is dominated by few large players, whereas FMCG market in India is
highly competitive and a significant part of the market includes unorganized players selling
unbranded and unpackaged products.

Approximately 12-13 million retail stores exist across India, the large percentage of which
around 9 million are kirana stores. India FMCG sectors’ comprises of few significant
characteristics like well connected distribution network, high level of competition between the
organized and unorganized FMCG players, and low operational cost. In India, FMCG companies
have privilege of having easy availability of raw materials, cheaper labour costs and presence
across the entire value chain gives India a competitive advantage. Products which have a swift
turnover and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG
items are those which generally get replaced within a year. Examples of FMCG commonly
include the range of daily consumed items such as toiletries, soap, detergents, cosmetics, oral
care products, shaving products, packaged food products and digestives as well as other non-
durables such as bulbs, batteries, paper products, glassware and plastic goods. FMCG may also
include pharmaceuticals, consumer electronics, etc.

Indian population is spreading and becoming wealthy day by day, particularly the middle
class and the rural segments, offers immense opportunity which is left untapped to FMCG
players. Growth effect will be seen from product customization in the matured product
categories like skin care, processed and packaged food, mouth wash etc. In India, many MNCs
have made their presence through their subsidiaries (HUL, Reckitt Benckiser, P&G) and the
companies launches innovative products from their parent’s portfolio in the market regularly to
ensure the steady growth. India is a agriculture based economy and has a varied agro-climatic
condition which offers extended raw material base suitable for many FMCG sub sections like
food processingfood processing industries etc.
 India is one among those countries which has the highest production of livestock, milk,
spices, sugarcane, cashew, and coconut and has the second highest production of wheat, rice,
vegetables and fruits. Similarly, India has an abundant supply of caustic soda and soda ash, the
major raw materials required to manufacture soaps and detergents, which helps companies
manufacturing soaps and detergents to grow and prosper. The easy accessibility and availability
of these raw materials gives India an additional edge over other countries.

TOP TEN COMPANIES OF FMCG PRODUCTS IN INDIA

 Hindustan Unilever Limited (HUL) ...

MAJOR SEGMENTS OF THE FMCG INDUSTRY:

Household Care:

The detergents segment is experiencing healthy annual growth rate of 10 to 11 per cent during
the past five years. The detergent market is equally dominated by the local and unorganized
players which shares decent percentage of the total volume. In urban areas, people give
preference to detergents in place of bars. Household care segment is featured by intense
competition and high level of penetration. With rapid urbanization and increasing disposable
income, introduction of the concept of small packets and sachets, the household care products
demand is growing fast. In washing powder segment, HUL is the leader with ~38 per cent of
market share. Other leading players are Proctor & Gamble, Nirma and Henkel.

Food and Beverages:

This segment comprises of the food processing industry- packaged foods, health beverage
industry- bread and biscuits, chocolates & confectionery, Packed Mineral Water and ice creams.
The three largest consumed categories of packaged foods are packed tea, biscuits and soft
drinks. Tea market dominates the Indian hot beverage market. Unorganized players enjoy the
major share of tea market. Leading players of organized tea market are HUL and Tata Tea.
Major players in food segment are HUL, Amul, Dabur, Nestle, ITC and Godrej.

Personal Care:

India’s personal care industry is composed of hair care, bath products, skin care and cosmetics,
and oral care. The sector is driven by rising income, rapid urbanization, and celebrity
promotions. This industry accounts for 22% of the country’s fast-moving consumer goods
(FMCG), which is the term for Consumer Packaged Goods in India. Foreign direct investment in
this sector totaled $691 million in 2014. Hair care is a main category of this industry. A study by
Nielsen, a market research firm, determined that shampoo is the most popular FMCG product
in India.

The $818 million shampoo segment is dominated by Hindustan Unilever Ltd., owned by U.K.-
based Unilever. Its most popular brands are Sunsilk, Clear, and Clinic Plus. Hair oil is another
important product, valued at $1.3 billion annually. India-based Marico's Parachute and Dabur
are leaders in the production of branded coconut hair oil. Estimated at $1 billion, the soap and
bath category is significant. Soap is a prevalent product found in more than 90% of Indian
households. The most common brands include Godrej’s Cinthol, Reckitt Benckiser’s Dettol,
Wipro’s Santoor, and Unilever’s Lux, Dove, Hamam, and Lifebuoy. For men, shaving cream and
razors are important personal care items. Procter & Gamble’s Gillette is the most popular
shaving cream and razor brand in India. Within the cosmetics category, India’s most prevalent
products are skin creams, lotions, whitening creams, and makeup. Hindustan Unilever has three
brands that are popular among Indian women—Fair & Lovely, Lakmé, and Ponds. Fair & Lovely
was the world’s first skin lightening cream and is the company’s leading skin care brand.
Colgate Palmolive’s Charmis moisturizer is also prominent. The majority of the demand for
cosmetics comes from working men and women. L’Oreal Paris develops both skin care and
cosmetic products for India. New York-based Revlon expanded further to smaller cities in India,
generating $40 million in revenues in 2014. The organic skin care category grows at over 20
percent annually and is expected to total $157 million in 2020, according to Azafran Innovacion,
an organic skincare group. Large Indian organic skin care companies include Himalaya Herbals
and Biotique. Both specialize in Ayurveda-based products. The oral care category is the smallest
category; less than half of Indian consumers utilize western-style products such as toothpaste.
Colgate Palmolive dominates more than half of this industry and was named India’s most
trusted brand four years in a row by a brand equity survey. Hindustan Unilever is another
significant player with toothpaste brands Pepsodent and Close up.
BRAND LOYALTY OF FMCGS PERSONAL CARE PRODUCTS

‘You learn that creating customer loyalty is neither strategic nor tactic; rather, it is the ultimate
objective and meaning of brand equity. Brand loyalty is brand equity’. -Daryl Travis Now, what
constitutes brand loyalty? According to Bloemer and Kasper, brand loyalty implies that
consumers bind themselves to products or services as a result of a deep-seated commitment.
To exemplify this point, they rendered a distinction between repeat purchases and actual brand
loyalty. In their published research, they assert that a repeat purchase behavior ‘is the actual
re-buying of a brand’ whereas loyalty includes ‘antecedents’ or a reason/fact occurring before
the behavior. Bloemer and Kasper further delineate brand loyalty into ‘spurious’ and ‘true’
loyalty. Spurious loyalty exhibits the following attributes:

a. Biased
b. Behavioral response
c. Expressed over time
d. By some decision-making unit, with respect to one or more alternate brands, and
e. A function of inertia True brand loyalty includes the above, but replaces inertia with a
psychological process resulting in brand commitment.

Next, let's turn to various definitions proposed by different authors and thinkers to get a
better insight towards the term brand loyalty. Brand loyalty is a topic of much concern to all
marketers Every company seeks to have a steady group of unwavering customers for its
product or service. Because research suggests that an increase in market share is related to
improved brand loyalty, marketers are understandably concerned with this element. Thus,
brands that seek to improve their market positions have to be successful both in getting
brand users and in increasing their loyalty.

LOYALTY PYRAMID:
Factors Influencing Consumer Behavior:
There are numerous factors influencing consumer behavior towards FMCG personal care
product. The impact of factors on consumer behavior is checked by using principal component
factor analysis. The factors are categorized and tabulated consequently and presented in Table