TOPIC: Industry Analysis of FMCG industry with

specific reference to Dabur India Ltd.

Name of the Guide: Name: Rajeev Kumar

Mr.Atul Kumar Enrolment No. : A3110114021
Programme: BFIA ( 5th
semester)
Batch: 2014-2017
Introduction
Fast moving consumer goods or consumer packaged goods.
Retails goods that are generally used or replaced in short period of time i.e. a day,
a week, a month ,& within one year.
They are sold quickly and at relatively low cost.
FMCG have a short shelf life, either as a result of high consumer demand or
because the product deteriorates rapidly.
FMCG is a classic case of low margin and high volume business.
Characteristics:
From marketer's view From consumers view
Frequent purchase High volumes
Low involvement Lowcontribution margins
Low price Extensivedistribution networks
Short shelf life Highstock turnover
Must use for daily consumption
Rationale for choosing FMCG sector
FMCG is the fastest and biggest growing sector.
The success of an FMCG depends greatly on its marketing strategy .
This sector is important for any person in various ways:
i. It serves various aspects of human life i.e. necessity, comfort,luxury
ii. It should change with changing demands and needs of people and time as well.
iii. It should consider that this is easily in reach of every income level of individual .
. This sector affects the daily life of any individual, thus, this sector has to be
analysed timely for any change that may occur.
. This sector helps in knowing taxes on food and other important daily products and
further plan our consumption, expenses , saving etc
PESTEL Analysis
It is a tool to understand the environment in which business operates, & the
opportunities & threats that lie within it.
P- political factors
E- economic factors
S- socio-cultural factors
T- technological factors
E- environment factors
L- legal factors
 Political Factors
Government intervenes : Government support the industry to expand & to export
it's products & to grow.
Infrastructure issues: performance of FMCG is very much depended on
government spending on agricultural infrastructure, power, and transportation
infrastructure.
Tax structure: complicated tax structure, high indirect tax, lack of uniformity and
changing tax policies.
 Economic Factors
Consumer focus : they are continuously focussing on analysing the consumer
needs &develop products to fulfil there needs. This is the main reason for the
growth of Dabur company.
Living standard : Rise in the living standard of people have increased their
production level, & produce high quality & variety of products.
Inflation rate : Inflation means the rise in the value of all the product in the
economy, if inflation rate is higher the cost of products will be higher & if
inflation rate is lower the cost of product will be lower.
 Socio-cultural Factors
Demographics : Demographics is the study of human population in the economy.
It helps the organization to divide the markets in different segments to target a
large of customers.
Distribution of income : This shows that how income is distributed in the
economy. It directly affect the purchasing power of the buyers.
Law affect social behaviour : Different laws are made by the government to safe
guard the rights of consumers. For example- Consumer protection act, this law
indicates that a consumer can file a case against a seller if he finds that he is
cheated.
 Technological Factors
Advancement in technology : Focus on growing there core brands across
categories, reaching out to new geographies, within and outside India, and
improve operational efficiencies by leveraging technology.
Automation : Change in technology will leads to automation, this means that with
new technology labour required is less as machines are automatic.
Research & development : This department plays a vital role in the development
of the organization. As this department always do research that what are the
demand of the markets & how to make advancements so the organization can
survive in the competitive world.
 Environment Factors
Environmental protection : Responsible company to protect Ecological system &
use Eco-friendly products.
Environmental regulations: various regulations have been declared by government
to safe guard the environment.
 Legal Factors
Government replaced various indirect taxes imposed on FMCG with a more direct
approach i.e. GST. This will help in lowering prices as all the taxes imposed
increases the cost of production and producer passes it on to customers.
Employment law: Employment law provides equal opportunities to every citizen
to work &earn his livelihood. It provides equal opportunities to every citizen.
Implications of Budget 2016
Rise in personal income tax exemption limit by
Rs.50,000 that is, from Rs.2 lakh to Rs 2.5 lakh in the
case of individual taxpayer,below the age of 60 years.
It is a positive thing for FMCG as it will leave more
disposable income in the hands of customers.
The exemption in custom duty on raw material of soap (
crude glycerine, fatty acid, crude palm stearin etc. )
Reduction in basic custom duty for refrigerated
containers from 10% to 5% and excise duty from 12.5%
to 6% will be an add on advantage to cold chain
players.