DISSERTATION REPORT ON

UNDERSTANDING BUYING
BEHAVOUIR OF FMCG PRODUCTS

Submitted By – Under Guidance of -

Shubham Singh Dr. Shatrughan Yadav
BBA Marketing Assistant Professor
2020 – 2023 School of Business

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STUDENT DECLARATION

I hereby declare that this submission is my own work and that, to the best of my knowledge
and belief, it contains no material previously published or written by another person nor
material which has been accepted for the award of any other degree or diploma of the
university or other institute of higher learning, except where due acknowledgment has been
made in the text .

SHUBHAM SINGH

SAP Id: 500080801

Enrollment Number: R152220059

BBA MARKETING MANAGEMENT

2020 – 2023

School of Business, UPES

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ACKNOWLEDGEMENT

I would like to take this opportunity to offer my heartfelt gratitude and appreciation to
everyone who helped me accomplish this report successfully and supported me throughout
the report. I am grateful for their guidance, constructive feedback, and friendly advice
throughout the project. I am grateful to them for giving their professional insights on several
issues related to the report.

I would like to acknowledge the crucial role of Dr. Shatrughan Yadav Assistant Professor at
School of Business UPES for his constant support and guidance throughout the report. His
encouragement and advice led me to the right path and is greatly appreciated.

I would also like to extend my deepest gratitude to my family and for their unconditional love
and support and their continuous support during the completion of this report.

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TABLE OF CONTENTS –

 EXECUTIVE SUMMARY
 INTRODUCTION
 LITERATURE REVIEW
 OVERVIEW OF FMCG SECTOR
 TYPES OF FMCG
 MARKET SHARE OF FMCG
 INVESTMENT IN FMCG
 EXPANSION OF THE FMGC SECTOR
 NEED OR IMORTANCE OF CONSUMER
 TYPES OF CONSUMERS BEHAVOUIR
 CONSUMER DECISION MAKING PROCESS
 FACTORS INFLUENCING CONSUMER BEHAVOR
 SEGMENTATION, TARGETING and POSITIONING
 TOP 10 FMCG COMPANIES IN INDIA

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 RESEARCH ANALYSIS

 FINDINGS
 LIMITATIONS OF FMCG SECTOR
 FUTURE OUTLOOK OF FMCG SECTOR
 REFERENCES

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EXECUTIVE SUMMARY

The consumer behaviour plays an important role in marketing of

fast moving, consumer goods. This behaviour is affected by
various factors. In the present era of globalisation needs and wants
of consumers changes with time. The fast-moving consumer goods
(FMCG) sector contributes a lot to the growth of India's GDP.
Therefore, it is necessary to identify the changes in consumer
buying behaviour towards FMCG products. The motive of this
paper is to identify the factors affecting consumer buying
behaviour towards FMCG products and finally effecting their
decision-making process. The data for this study has been collected
through questionnaire, personal meetings and data sampling,
findings have been theoretically presented. The paper reveals that
consumer behaviour is largely affected by place, product, price,
promotion, physiological and factors. However, effect of these
factors also differs from product to product.

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INTRODUCTION
Fast-moving consumer goods are products that sell quickly at relatively low
cost. These goods are also called consumer packaged goods. FMCGs have a
short shelf life because of high consumer demand (e.g., soft drinks and
confections) or because they are perishable (e.g., meat, dairy products, and
baked goods). These goods are purchased frequently, are consumed rapidly, are
priced low, and are sold in large quantities. They also have a high turnover
when they're on the shelf at the store. The rural market is one of the best
opportunities for the FMCG sector in India, as there was a time when
companies ignored rural market, they took no interest to produce or sell
products products in rural market in India. As the time has changed companies
have changed their strategies and marketing styles of FMCG products and have
started targeting the rural market as the market is very wide and less
competitive and income level of the rural consumer is increasing, the demand
of FMCG is increasing continuously.

The study of consumer helps firms and organization improve their marketing
strategies by understanding the psychology of consumers, how they think, feel,
reason, and select between different alternatives (e.g., brands, products; the
psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media). The “consumer” includes both personal
consumers and business/industrial/organizational consumers. Fast moving
Consumer Goods (FMCG) goods are popularly named as consumer package
goods. Items in this category include all consumables (other than
groceries/pulses) that people buy at regular intervals.

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The most common in this list are toilet soaps, detergents, shampoos, toothpaste,
shaving products, shoe polish, packaged foodstuff, and household accessories
and extends to certain electronic goods. These items are meant for daily use of
frequent consumption and have a high return. India's FMCG market was valued
at 110 billion U.S. dollars in 2020. Compared to 2012, the market size of fast-
moving consumer goods had tripled. By 2025, the market is expected to grow to
220 billion dollars.

LITERATURE REVIEW

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 FMCG companies are famous for selling their products to the middleclass
households; it implies that rural India is a profitable and potential market for
FMCG producers. Rural consumers incomes are rising and now they are more
willing to buy products which improve their lifestyle. Producers of FMCG have
to craft unique marketing strategies exclusively for rural consumers. In this
process they need to understand the rural consumer buying behaviour which
may differ geographically.

The importance of packaging design as a vehicle for communication for

packaged FMCG products. This research utilized a focus group methodology to
understand consumer behaviour towards such products. The challenge for
researchers is to integrate packaging into an effective purchasing decision
model, by understanding Consumer behaviour towards the packaging of FMCG
products. When consumers search for the process information in-store, the
product's package can contain relevant and useful information for the consumer.
Product packaging forms the end of the 'promotion-chain' and is close in time to
the actual purchase and may therefore play an important role in predicting
consumer outcomes. Packages also deliver brand identification and label
information like usage instructions, contents, and list of ingredients or raw
materials, warnings for use and directives for care of product.

OVERVIEW OF FMCG SECTOR

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One of the main drivers of the Indian economy is the Fast-Moving Consumer
Goods Sector. The household and personal care segment, which makes up half
of the FMCG sector's market share, is the largest in the economy and ranks
fourth overall. FMCG's primary growth drivers are income growth, lifestyle
changes, increased awareness, and easier access.

Additionally, the trend toward sustainable products impacts how consumers

shop. Although the urban sector made up most of the contribution, semi-urban
and rural segments had experienced significant growth over the previous ten
years.

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TYPES OF FMCG

FMCG products are typically divided into various types depending on the sector
they are sold in. These consist of the following:

 Food and Beverages

 Personal Care

 HealthCare Goods

 Home Care Commodities

1. Food & Beverages

Due to their short shelf lives and high turnover rates, food and beverage
products typically fall under the FMCG category. Listed below are various
examples of food and beverage products that are usually categorized as
FMCGs-

 Prepared foods like Pasta, Bread, and Potato Chips.

 Food that is ready to eat, such as Crisps or Nut Packets.

 Beverages like Soda Cans, Coffee Cups, and Bottled Water.

2. Personal Care

Shampoo and Toothpaste are examples of personal care items that fall under the
FMCG category because consumers frequently use them, often purchase them
at low prices, and they are not long-lasting. Examples of these are lotions, Hair
Dye, Lipsticks, Cosmetics, Deodorants, Bath Soap, and other dental care items.

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 3. HealthCare Goods

Healthcare products are included in the FMCG category because they are
frequently in high demand, poorly made, and widely dispersed. These consist of
items like Syringes, Bandages, Plasters, etc.

4. Home Care Commodities

Household goods also fall under this category since they are frequently
standardized, low-durability products widely distributed and sold at typically
low unit prices. They include Dusters, Toilet Paper, Bleach, Cleaning Supplies,
and Kitchen Towels.

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MARKET SHARE OF FMCG

An extensive summary of India's FMCG market share is provided below-

 From US$ 110 billion in 2020, the FMCG market in India is projected to

grow at a CAGR of 14.9% to US$ 220 billion by the next couple of years.

 The packaged food market in India is anticipated to grow twofold to US$ 70

billion in the next few years.

 Urban and Rural Areas are becoming more connected to the internet,
increasing the requirement for FMCG India, primarily through e-commerce
sites.

 There is potential for growth due to rising disposable income in rural India
and low levels of market penetration.

 It is anticipated that the e-commerce sector will account for 11% of all
FMCG sales.

 Up to 100% of foreign equity in single-brand retail and 51% in multi-brand

retail investments have been approved.

 With an investment of US$ 1.42 billion, the union government's production-

linked incentive (PLI) scheme offers businesses a significant chance to
increase exports.

 Due to the year-round demand for FMCG products, investments in this

sector draw investors.

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INVESTMENT/ DEVELOPMENTS IN FMCG

The Indian government has permitted 51% of Foreign Direct Investment (FDI) in
multi-brand retail and 100% of FDI in food processing. This would inspire more
product launches while increasing employment, supply chains, and consumer
spending.

From April 2000 - June 2018, the Indian FMCG industry saw a healthy FDI inflow
of US$ 13.63 billion. The following are some recent developments in this industry:

 Patanjali Foods plans to invest millions in several food parks in

Maharashtra, Madhya Pradesh, Assam, and Andhra Pradesh.

 In addition to investing in capacity expansion, Dabur intends to buy

businesses in its home country.

 The RP-Sanjiv Goenka Group established a $1 billion venture capital fund

to invest in FMCG start-ups.

 .Future Consumer Ltd. and Fonterra have announced a joint venture to

produce various dairy products for consumers and restaurants.

 A US chocolate manufacturer intends to invest millions of dollars in India,

its largest rising core audience outside of the United States, over the next
five years.

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EXPANSION OF THE FMGC SECTOR

 The Growth of E-Commerce

The technological revolution affected both urban and rural areas of India. Due
to e-greater commerce's accessibility throughout the nation, whether in rural or
urban areas, there has been a discernible shift in demand. It offers greater
consumer convenience because customers can easily choose and buy the
products of their choice using apps and websites. Moreover, the home delivery
option will deliver the goods to their homes.

 Value Augmentation

The retail sector in rural India and the rise in rural consumption also drive the
FMCG market. As a result, the percentage of its spending in total FMCG is
36%.

The FMCG sector in India expanded thanks to consumer-driven growth and

higher product prices, especially for essential goods. In addition, due to
numerous government initiatives, including hygiene categories, high
agricultural production, reverse migration, and packaged staples, it experienced
double-digit growth and reached 10.6%.

The FMCG sector receives support from various industries, including tobacco,

food and beverage, household and personal care, and others.

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  The Contribution of Technology

A strong emphasis on agility characterizes the FMCG industry, and technology

can give FMCG companies access to this agility. As a result, the FMCG
industry is preparing to use technology to enhance operational effectiveness,
find new opportunities, and manage complex supply chain requirements.
The FMCG industry heavily relies on market research because it enables it to
recognize consumer behaviour and field sales specialists. Enterprises can
improve the performance of their sales operations by utilizing business
intelligence, the cloud, and sophisticated field service management software.

 Further Directions
India's rural market is anticipated to grow by over US$ 220 billion in the next
few years. This is because India's rural consumption has increased, with rising
incomes raising the average person's aspirations.
In addition, the rising proportion of young people in India's population is a
significant factor that will fuel the demand for FMCG products.

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NEED OR IMORTANCE OF CONSUMER

Studying consumer behaviour is important because it helps marketers

understand what influences consumers’ buying decisions.

By understanding how consumers decide on a product, they can fill in the gap in
the market and identify the products that are needed and the products that are
obsolete.

Studying consumer behaviour also helps marketers decide how to present their
products in a way that generates a maximum impact on consumers.
Understanding consumer buying behaviour is the key secret to reaching and
engaging your clients and converting them to purchase from you.

A consumer behaviour analysis should reveal:

 What consumers think and how they feel about various alternatives
(brands, products, etc.).
 What influences consumers to choose between various options.
 Consumers’ behaviour while researching and shopping.
 How consumers’ environment (friends, family, media, etc.) influences
their behaviour.
Consumer behaviour is often influenced by different factors. Marketers should
study consumer purchase patterns and figure out buyer trends.

In most cases, brands influence consumer behavior only with the things they
can control; think about how IKEA seems to compel you to spend more than
what you intended to every time you walk into the store.

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So, what are the factors that influence consumers to say yes? There are three
categories of factors that influence consumer behaviour:

1. Personal factors: an individual’s interests and opinions can be influenced

by demographics (age, gender etc.).
2. Psychological factors: an individual’s response to a marketing message
will depend on their perceptions and attitudes.
3. Social factors: family, friends, education level, social media, income, all
influence consumers’ behaviour.

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TYPES OF CONSUMERS BEHAVOUIR
There are four main types of consumer behaviour:

1. Complex buying behaviour

This type of behaviour is encountered when consumers are buying an

expensive, infrequently bought product. They are highly involved in the
purchase process and consumers’ research before committing to a high-value
investment. Imagine buying a house or a car; these are an example of a complex
buying behaviour.

2. Dissonance-reducing buying behaviour

The consumer is highly involved in the purchase process but has difficulties
determining the differences between brands. ‘Dissonance’ can occur when the
consumer worries that they will regret their choice.

Imagine you are buying a lawnmower. You will choose one based on price and
convenience, but after the purchase, you will seek confirmation that you’ve
made the right choice.

3.Habitual buying behaviour

Habitual purchases are characterized by the consumer having very little

involvement in the product or brand category. Imagine grocery shopping: you
go to the store and buy your preferred type of bread. You are exhibiting a
habitual pattern, not strong brand loyalty.

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4. Variety-seeking behaviour

In this situation, a consumer purchases a different product not because they

weren’t satisfied with the previous one, but because they seek variety. Like
when you are trying out new shower gel scents.

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CONSUMER DECISION MAKING PROCESS

1. Problem recognition

The first step of the consumer decision-making process is recognizing the need
for a service or product. Need recognition, whether prompted internally or
externally, results in the same response: a want. Once consumers recognize a
want, they need to gather information to understand how they can fulfill that
want, which leads to step two.

But how can you influence consumers at this stage? Since internal stimulus
comes from within and includes basic impulses like hunger or a change in
lifestyle, focus your sales and marketing efforts on external stimulus. 

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Develop a comprehensive brand campaign to build brand awareness and
recognition––you want consumers to know you and trust you. Most importantly,
you want them to feel like they have a problem only you can solve.

Example: Winter is coming. This customer has several light jackets, but she’ll
need a heavy-duty winter coat if she’s going to survive the snow and lower
temperatures.

2. Information search

When researching their options, consumers again rely on internal and external
factors, as well as past interactions with a product or brand, both positive and
negative. In the information stage, they may browse through options at a
physical location or consult online resources, such as Google or customer
reviews.
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Your job as a brand is to give the potential customer access to the information
they want, with the hopes that they decide to purchase your product or service.
Create a funnel and plan out the types of content that people will need. Present
yourself as a trustworthy source of knowledge and information. 

Another important strategy is word of mouth—since consumers trust each other

more than they do businesses, make sure to include consumer-generated
content, like customer reviews or video testimonials, on your website.

Example: The customer searches “women’s winter coats” on Google to see

what options are out there. When she sees someone with a cute coat, she asks
them where they bought it and what they think of that brand.

3. Alternatives evaluation

At this point in the consumer decision-making process, prospective buyers have

developed criteria for what they want in a product. Now they weigh their
prospective choices against comparable alternatives.

Alternatives may present themselves in the form of lower prices, additional

product benefits, product availability, or something as personal as color or style
options. Your marketing material should be geared towards convincing
consumers that your product is superior to other alternatives. Be ready
to overcome objections—e.g., in sales calls, know your competitors so you can
answer questions and compare benefits.

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Example: The customer compares a few brands that she likes. She knows that
she wants a brightly colored coat that will complement the rest of her wardrobe,
and though she would rather spend less money, she also wants to find a coat
made from sustainable materials.

4. Purchase decision

This is the moment the consumer has been waiting for: the purchase. Once they
have gathered all the facts, including feedback from previous customers,
consumers should arrive at a logical conclusion on the product or service to
purchase.

If you’ve done your job correctly, the consumer will recognize that your
product is the best option and decide to purchase it.

Example: The customer finds a pink winter coat that’s on sale for 20% off.
After confirming that the brand uses sustainable materials and asking friends for
their feedback, she orders the coat online.

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5. Post-purchase evaluation

This part of the consumer decision-making process involves reflection from

both the consumer and the seller. As a seller, you should try to gauge the
following:

 Did the purchase meet the need the consumer identified?

 Is the customer happy with the purchase?

 How can you continue to engage with this customer?

Remember, it’s your job to ensure your customer continues to have a positive
experience with your product. Post-purchase engagement could include follow-
up emails, discount coupons, and newsletters to entice the customer to make an
additional purchase. You want to gain life-long customers, and in an age where
anyone can leave an online review, it’s more important than ever to keep
customers happy.

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FACTORS INFLUENCING CONSUMER
BEHAVOUIR

1. Psychological Factors

Human psychology is a major determinant of consumer behavior. These factors

are difficult to measure but are powerful enough to influence a buying decision.

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Motivation
When a person is motivated enough, it influences the buying behavior of the person. A
person has many needs such as social needs, basic needs, security needs, esteem needs, and
self-actualization needs. Out of all these needs, the basic needs and security needs take a
position above all other needs. Hence basic needs and security needs have the power to
motivate a consumer to buy products and services.

Perception
Consumer perception is a major factor that influences consumer behavior. Customer
perception is a process where a customer collects information about a product and interprets
the information to make a meaningful image of a particular product.
When a customer sees advertisements, promotions, customer reviews, social media feedback,
etc. relating to a product, they develop an impression about the product. Hence consumer
perception becomes a great influence on the buying decision of consumers. 
Learning
When a person buys a product, he/she gets to learn something more about the
product. Learning comes over a period through experience. A consumer’s learning
depends on skills and knowledge. While skill can be gained through practice,
knowledge can be acquired only through experience.
Learning can be either conditional or cognitive. In conditional learning the
consumer is exposed to a situation repeatedly, thereby making a consumer to
develop a response towards it.
Whereas in cognitive learning, the consumer will apply his knowledge and skills to
find satisfaction and a solution from the product that he buys.

Attitudes and Beliefs

Consumers have certain attitudes and beliefs which influence the buying decisions
of a consumer. Based on this attitude, the consumer behaves in a particular way
towards a product. This attitude plays a significant role in defining the brand image

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of a product. Hence, marketers try hard to understand the attitude of a consumer to
design their marketing campaigns.

2. Social Factors
Humans are social beings, and they live around many people who influence their buying
behavior. Humans try to imitate other humans and also wish to be socially accepted in the
society. Hence their buying behavior is influenced by other people around them. These
factors are considered as social factors. Some of the social factors are:

Family
Family plays a significant role in shaping the buying behavior of a person. A person develops
preferences from his childhood by watching family buy products and continues to buy the
same products even when they grow up.
Reference Groups
A reference group is a group of people with whom a person associates himself. Generally, all
the people in the reference group have common buying behavior and influence each other.
Roles and status
A person is influenced by the role that he holds in the society. If a person is in a high
position, his buying behavior will be influenced largely by his status. A person who is a Chief
Executive Officer in a company will buy according to his status while a staff or an employee
of the same company will have different buying pattern. 

3. Cultural factors
A group of people is associated with a set of values and ideologies that belong to a particular
community. When a person comes from a particular community, his/her behavior is highly
influenced by the culture relating to that particular community. Some of the cultural factors
are:

Culture
Cultural Factors have a strong influence on consumer buying behavior.  Cultural Factors
include the basic values, needs, wants, preferences, perceptions, and behaviors that are

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observed and learned by a consumer from their near family members and other important
people around them.

Subculture
Within a cultural group, there exists many subcultures. These subcultural groups share the
same set of beliefs and values. Subcultures can consist of people from different religion,
caste, geographies and nationalities. These subcultures by itself form a customer segment.
Social Class
Each society across the globe has the form of social class. The social class is not just
determined by the income, but also other factors such as the occupation, family background,
education and residence location. Social class is important to predict the consumer behavior.

4. Personal Factors
Factors that are personal to the consumers influence their buying behavior. These personal
factors differ from person to person, thereby producing different perceptions and consumer
behavior.
Some of the personal factors are:
Age
Age is a major factor that influences buying behavior. The buying choices of youth differ
from that of middle-aged people. Elderly people have a totally different buying behavior.
Teenagers will be more interested in buying colorful clothes and beauty products. Middle-
aged are focused on house, property and vehicle for the family.
Income
Income has the ability to influence the buying behavior of a person. Higher income gives
higher purchasing power to consumers. When a consumer has higher disposable income, it
gives more opportunity for the consumer to spend on luxurious products. Whereas low-
income or middle-income group consumers spend most of their income on basic needs such
as groceries and clothes.
.

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Occupation
Occupation of a consumer influences the buying behavior. A person tends to buy things that
are appropriate to this/her profession. For example, a doctor would buy clothes according to
this profession while a professor will have different buying pattern.

Lifestyle
Lifestyle is an attitude, and a way in which an individual stay in the society. The buying
behavior is highly influenced by the lifestyle of a consumer. For example when a consumer
leads a healthy lifestyle, then the products he buys will relate to healthy alternatives to junk
food.

5. Economic Factors
The consumer buying habits and decisions greatly depend on the economic
situation of a country or a market. When a nation is prosperous, the economy is
strong, which leads to the greater money supply in the market and higher
purchasing power for consumers. When consumers experience a positive economic
environment, they are more confident to spend on buying products.
Whereas a weak economy reflects a struggling market that is impacted by unemployment and
lower purchasing power.
Economic factors bear a significant influence on the buying decision of a consumer. Some of
the important economic factors are:

Personal Income
When a person has a higher disposable income, the purchasing power increases
simultaneously. Disposable income refers to the money that is left after spending towards the
basic needs of a person.
When there is an increase in disposable income, it leads to higher expenditure on various
items. But when the disposable income reduces, parallelly the spending on multiple items
also reduced.
Family Income
Family income is the total income from all the members of a family. When more people are
earning in the family, there is more income available for shopping basic needs and luxuries.

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Higher family income influences the people in the family to buy more. When there is a
surplus income available for the family, the tendency is to buy more luxury items which
otherwise a
person might not have been able to buy.

Consumer Credit
When a consumer is offered easy credit to purchase goods, it promotes higher spending.
Sellers are making it easy for the consumers to avail credit in the form of credit cards, easy
installments, bank loans, hire purchase, and many such other credit options. When there is
higher credit available to consumers, the purchase of comfort and luxury items increases.

Liquid Assets 
Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid assets
are those assets, which can be converted into cash very easily. Cash in hand, bank savings
and securities are some examples of liquid assets. When a consumer has higher liquid assets,
it gives him more confidence to buy luxury goods.

Savings
A consumer is highly influenced by the amount of savings he/she wishes to set aside from his
income. If a consumer decided to save more, then his expenditure on buying reduces.
Whereas if a consumer is interested in saving more, then most of his income will go towards
buying products.

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SEGMENTATION, TARGETING and
POSITIONING

STP marketing model (Segmentation, Targeting, Positioning) is a familiar strategic

approach in modern marketing. It is one of the most commonly applied marketing
models in practice, with marketing leaders crediting it for efficient, streamlined
communications practice.

STP marketing focuses on commercial effectiveness, selecting the most valuable

segments for a business and then developing a marketing mix and product
positioning strategy for each segment.

As Martech continues to develop, so do opportunities for segmentation, targeting,

and positioning. So whether you're brand new to STP or a seasoned veteran, it can
be useful to take stock and double-check you're utilizing every chance you get to
reach, interact with, convert and engage customers.

The STP marketing model

The STP model is useful when creating marketing communications plans since it
helps marketers to prioritize propositions and then develop and deliver
personalized and relevant messages to engage with different audiences. The three-
step funnel consists of market segmentation, market targeting, and product
positioning.

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Within your research-based market segmentation phase, you are aiming to identify
a basis for the segmentation of your target customers and determine important
characteristics to differentiate each market segment.

When creating your targeting and positioning strategy, you must evaluate the
potential and commercial attractiveness of each segment, and then develop detailed
product positioning for each selected segment, including a tailored marketing mix
based on your knowledge of that segment.

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STP marketing as a planning tool

Segmentation, targeting, and positioning is an audience-focused rather than

product-focused approach to marketing communications which helps deliver more
relevant messages to commercially appealing audiences.

STP is a critical strategy and planning tool, featured in our RACE Growth System.
Our RACE Growth System supports marketers, managers, and business owners to
create a 90-day marketing plan across each stage of their marketing funnel.

So, while STP sits within the planning activities, the benefits of effective
segmentation, targeting and positioning can be felt across the types of customers
you reach, interact with, convert, and engage.

SEGMENTATION

Segmentation is the first step in STP marketing. This involves categorising your
customer base into different segments. Market segmentation helps you divide
your customers into groups that have similar needs, likes, dislikes or purchasing
habits so that you can create different marketing messages for different groups.
Methods for segmenting audiences include:

Demographic segmentation

Companies may segment their customers based on demographics, such as age,

gender and education level. This helps them divide their consumer market into
smaller categories. Companies can better understand their markets by focusing
on those smaller segments. This can help them allocate their resources more
efficiently. Marketers can study how different demographic groups react to
different products and services and develop and update their marketing
strategies accordingly.

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Psychographic segmentation

Psychographic segmentation seeks to create customer segments based on

consumers' perceptions, opinions and activities. As a marketing strategy,
psychographic segmentation allows you to understand how much value a
product or service is offering to your different consumer groups. By
incorporating different functionalities into the product, they can attract a wider
audience and expand their customer base.

Geographic segmentation

Using geographic segmentation, you can segment your customers into different
groups or categories based on their location. This type of market segmentation
not only considers the physical location of customers but factors such as
climate, population, clothing and food habits. This method helps companies
identify how trends and patterns impact the market's demand for a product.
Geographical segmentation can also provide useful insights for creating more
effective marketing strategies and positioning your brand effectively.

Segmentation based on lifestyle.

The concept of this segmentation refers to dividing an overall market into

segments according to lifestyle factors, such as buying preferences, hobbies,
social life, community involvement and wellness. A lifestyle segmentation
approach can benefit companies because it enables them to take into account the
lifestyles of their customers when developing products and in their marketing
strategies. Businesses can use this strategy to connect with their customers and
create customised products for them.

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Behavioural segmentation

Behavioural segmentation is the categorisation of target markets based on

behavioural patterns, which involve grouping customers by monitoring how
they interact with a business. Companies may also survey customers to learn
what they think about a product or service. A variety of factors can influence
consumer behaviours, including their level of education, marital status, race or
employment status.

Value segmentation

Businesses can also segment the market based on their customers' spending
patterns. For instance, marketers can consider the frequency with which
customers make purchases and the amount they spend. This helps them create
different types of products for different customer groups.

TARGETING

Targeting is the second step in STP marketing. The main objective of this step
is to review the different customer groups you previously formed and choose
the ones that you think are more valuable for your business. Then you can focus
on a particular customer group for a marketing campaign. A host of factors can
strongly influence your targeting decisions. When Here are a few important
factors to consider when deciding which customer segment to target:

 Size: Consider the size and future growth potential of each segment.

 Profitability: Identify customer segments that are likely to spend the most
on your product or service and estimate the lifetime value of each

36
 customer segment. The lifetime value (LTV) estimates how much
revenue a customer generates for a company over a time.
 Reachability: Make sure the marketing efforts reflect the needs of each
segment. For each segment, consider customer acquisition costs (CACs),
where higher CACs mean lower profitability.

POSITIONING

The positioning process involves developing a unique, personalised marketing

plan based on customer data. An organisation's positioning statement is
important in helping customers identify with its brand, product or service.
Providing products or services as a solution to a consumer's problems can help
fulfil their needs. Using this strategy can lead to a boost in sales because
consumers may find targeted advertisements more appealing in comparison to
advertisements meant for the general audience. Businesses can use the
following approaches when positioning a product:

 Symbolic positioning: Focus is on developing a brand image that fosters a

feeling of belonging and helps improve the self-identity of your
customers.
 Functional positioning: Make sure your advertisement focuses on a
critical customer problem and provides a solution to that problem.
 Experiential positioning: Focus is on re-branding and repositioning to
change the way people perceive a product.

TOP 10 FMCG COMPANIES IN INDIA

37
1. Hindustan Unilever Ltd

Hindustan Unilever Limited is India’s largest fastmoving consumer goods (FMCG) company

with a Historical presence in India of over 80 years. It is the largest in the list of top 5 FMCG
companies in India.

Nine Out of ten Indian households use one or more of HUL Brands. Divisions – Home Care,
Beauty & Personal Care and Foods and Refreshment – includes a portfolio of brands that
serve consumers across the length and breadth of India.

 Revenue: Rs 40,511 Cr

 Employees: 5,645

 Market Cap:  451,666 Cr.

 Dividend Yield: 1.05 %

 ROE: 81.95 %

 Sales Growth (3Yrs): 6.89 %

 Promoter holding: 67.18 %

 Debt to equity: 0.01
With over 40 brands across 12 distinct categories including Fabric Wash, Household Care,
Purifiers, Personal Wash, Skin Care, Hair Care, Colour Cosmetics, Oral Care, Deodorants,
Beverages, Ice Cream & Frozen Desserts and Foods, the Company is part of the daily life of
millions of consumers.

The Brand portfolio includes leading brands such as Surf Excel, Rin, Wheel, Sunlight, Vim,
Pureit, Lux, Lifebuoy, Dove, Fair & Lovely, Pond’s, Vaseline, Clinic Plus, Sunsilk,
Indulekha, Lakmé, Pepsodent, Closeup, Axe, Brooke Bond, BRU, Kwality Wall’s, Knorr and
Kissan.HUL is one of the top fmcg brands in India.

2. ITC Ltd

38
Established in 1910, ITC Limited is a diversified conglomerate with businesses spanning Fast
Moving Consumer Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded
Apparel, Education & Stationery Products, Incense Sticks and Safety Matches; Hotels,
Paperboards, and Packaging, Agri-Business and Information Technology. ITC is among the
top fmcg brands in India.

 Revenue: Rs 51,321 Cr

 Employees:

 Market Cap:  320,094 Cr.

 ROE: 22.69 %

 Sales Growth (3Yrs): 7.25 %

 Promoter holding: 0.00 %

 Debt to equity: 0.00

 Price to book value: 5.47

3. Nestle India Ltd

Nestlé is the world’s largest food and beverage company. The company has more than 2000
brands ranging from global icons to local favorites and are present in 191 countries around
the world. After more than a century-old association with the country, today, NESTLÉ India
has a presence across India with 8 manufacturing facilities and 4 branch offices. It is the third
Largest in Top FMCG Companies in India

 Revenue: 12,117 Cr

 Employees:

 Market Cap:  139,532 Cr.

 ROE: 45.30 %

 Sales Growth (3Yrs): 11.37 %

 Promoter holding: 62.76 %

39
  Debt to equity: 0.01

 Price to book value: 34.93

NESTLÉ India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by
its manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in
1989; Samalkha (Haryana), in 1992; Ponda and Bicholim (Goa), in 1995 and 1997,
respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestlé India set up its 8th
manufacturing facility at Tahliwal (Himachal Pradesh).

The 4 Branch Offices located at Delhi, Mumbai, Chennai, and Kolkata help facilitate the
sales and marketing activities. The NESTLÉ India’s Head Office is in Gurgaon, Haryana.
Nestle is among the best Fmcg brands in India.

4. Britannia Industries Ltd

Britannia Industries is one of India’s leading Top FMCG Companies with a 100-year legacy.
The company is among the most trusted food brands and manufactures India’s favorite
brands like Good Day, Tiger, NutriChoice, Milk Bikis and Marie Gold which are household
names in India. Britannia’s product portfolio includes Biscuits, Bread, Cakes, Rusk, and
Dairy products including Cheese, Beverages, Milk, and Yoghurt.

 Revenue: 11,211 Cr

 Employees:

 Market Cap:  75,893 Cr.

 ROE: 30.25 %

 Sales Growth (3Yrs): 9.60 %

 Promoter holding: 50.66 %

 Debt to equity: 0.04

 Price to book value: 17.84

40
Britannia is a brand which many generations of Indians have grown up with and our brands
are cherished and loved in India and the world over. Britannia products are available across
the country in close to 5 million retail outlets and reach over 50% of Indian homes.

The company’s Dairy business contributes close to 5 percent of revenue and Britannia dairy
products directly reach 100,000 outlets. It is in fourth in the list of top 5 FMCG companies in
India.

5. Godrej Consumer Products Ltd

Godrej Consumer Products is a leading emerging markets company. As part of the over 122-
year young Godrej Group. Godrej Consumer Products Ltd enjoys the patronage of 1.15
billion consumers globally, across different businesses. It is fifth in the list of top 5 FMCG
companies in India.

In line with the 3 by 3 approach to international expansion at Godrej Consumer Products,

building a presence in three emerging markets (Asia, Africa, and Latin America) across three
categories (home care, personal care, and hair care). The Company is Among the Top FMCG
Companies in India

 Revenue: 10,156 Cr

 Market Cap:  75,089 Cr.

 ROE: 31.55 %

 Sales Growth (3Yrs): 6.98 %

 Promoter holding: 63.24 %

 Debt to equity: 0.34

 Price to book value: 9.90

Rank among the largest household insecticide and hair care players in emerging markets. In
household insecticides, the leader in India and Indonesia and are expanding footprint in

41
Africa. Ranked number two in soaps in India, the number one player in air fresheners in India
and Indonesia, and a leader in wet tissues in Indonesia.

6. Patanjali Ayurved Limited

Patanjali Ayurved Limited was established in 2006 with a thought of rural and urban
development. The company is not merely an organization but a thought of creating a healthy
society through Yog and Ayurved.

 Revenue: 9,022 Cr
The Company recognize farmers as main assets. They provide herbal and organic products on
contract farming. The company takes various initiatives for farmers to raise their income and
provide surety towards sale of their produce.

Farmers are provided with all sorts of technical-aid and necessary information about efficient
farming. The company manufacturing units process consumables like food items, medicines
etc. These are made available to consumers through a wide network of Authorized Patanjali
Stores and retails shops.

7. Dabur India Ltd

The world’s largest and leading Ayurvedic and Natural Health Care company with 135 years
of rich heritage and experience. It is sixth in the list of top 10 FMCG companies in India
2019.

Business is divided into three Strategic Business Units, i.e., Consumer Care Business, Foods
Business, and International Business. Consumer Care Business covers interests in Health
Care and Home & Personal Care. Dabur is 7th in the list of top fmcg brands in India.

 Revenue: 8,813 Cr

 Employees: 7500

 Market Cap:  83,697 Cr.

 ROE: 26.41 %

42
  Sales Growth (3Yrs): 2.67 %

 Promoter holding: 67.88 %

 Debt to equity: 0.11

 Price to book value: 13.61

One of the most trusted and well-known Ayurvedic brands in the world. Dabur has a strong
presence across the globe with its products reaching consumers created a unique product
portfolio, based on natural ingredients. Products enjoy good market shares in categories such
as Hair Oils, Hair Creams, Hair Gels, Shampoos, Dental Care and Skin Care.

8. Marico Ltd

Marico Limited is one of Top FMCG Companies in India in the beauty and wellness sector. It
is seventh in the list of top 10 FMCG companies in India 2019.

Over the last 25 Years, Marico has established itself as a leading consumer goods company
with a product portfolio spanning across Haircare, Skincare, Edible oils, healthy foods, Male
Grooming and fabric care. Brands such as Parachute, saffola, Hair& Care, Nihar Naturals,
true roots, Livon, Set Wet, Coco Soul, kaya Youth.

 Revenue: 7,465 Cr

 Employees: 1600

 Market Cap:  47,842 Cr.

 ROE: 39.67 %

 Sales Growth (3Yrs): 6.82 %

 Promoter holding: 59.60 %

 Debt to equity: 0.10

 Price to book value: 13.54

43
9. Varun Beverages Ltd

Second largest franchisee in the world (outside US) of carbonated soft drinks (“CSDs”) and
non-carbonated beverages (“NCBs”) sold under trademarks owned by PepsiCo and a key
player in the beverage industry. It is 8th in the list of top 10 FMCG companies in India 2020

PepsiCo CSD brands sold by Varun Beverages include Pepsi, Diet Pepsi, Seven-Up, Mirinda
Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Evervess Soda,
Duke’s Soda and Sting.

 Revenue: 6,695 Cr

 Market Cap:  21,408 Cr.

 ROE: 15.74 %

 Sales Growth (3Yrs): 14.58 %

 Promoter holding: 68.43 %

 Debt to equity: 1.30

 Price to book value: 8.56

In addition, the company has been granted the franchise for the Ole brand of PepsiCo
products in Sri Lanka. VBL has 30 manufacturing plants in India. The company has a sales of
Rs 6,695 Cr.

10. GlaxoSmithKline Consumer Healthcare Ltd

GSK Consumer Healthcare Ltd is an associate of GlaxoSmithKline plc. of U.K, one of the
world’s largest consumers healthcare companies. one of the world’s leading over the counter
(OTC) medicines company.

The company holds the number one position in OTC medicines across 36 markets and is
market leaders in specialist oral care. The company has a sales of Rs 4869 Cr. It is ninth in
the list of top 10 FMCG companies in India 2020.

44
  Revenue: 4,942 Cr

 Market Cap:  37,727 Cr.

 ROE: 25.92 %

 Sales Growth (3Yrs): 4.95 %

 Promoter holding: 72.46 %

 Debt to equity: 0.00

 Price to book value: 9.06

Globally The company operates in more than 150 markets and has around 110,000
employees. Its products treat a wide range of conditions such as asthma, infections, heart
disease, diabetes, and skin diseases and have the largest Vaccines business in the world,
distributing approximately 850 million doses to 170 countries in 2014. GSK has more than 80
manufacturing sites globally and has R&D into two major hubs, in Stevenage, UK, and in
Philadelphia, US.

45
RESEARCH ANALYSIS
Data collection method:
Primary Data: Data collected through administered questionnaire and personal
meetings with people, aimed to gather information about varies branded
products.
Secondary Data: Data collected through books, newspaper, magazines, journals,
internet etc.
The questions that I have prepared and their options that I given to people
to choose with whom I did survey are from their point of view according to
them which product they like to use and why, and moreover these brands
product acquire most of the market share in their segment.
Here I present my research analysis, I did while preparing this report, I
have collected this data from college students, employed people (both men
and women), housewife and businesspeople. Through asking questions and
personal meetings with them I have collected this information I am going to
represent.

SAMPLE UNIT and SIZE:

1. College students 30 %

2. Employed People 40 %

3. Housewife 10 %

4. Senior Citizen 20%

46
 20

30

10

40

College students Emplyed people Housewife Senior citizen

Sample Region: To do this research I have selected city Dehradun capital of

Uttarakhand as my area of study.
I have chosen Kandoli and Bhidholi as my area of research. In these area I can
easily meet employed people (both men and women), housewife, senior citizen ,
college students .

And the questionnaire are as follows:

 Q1 Monthly Income?

47
 3%
7%

15%
up to 10000
10000 to 15000
15000 to 20000
above 20000

75%

 Q2 Which format do you make purchase?

48
 1%
18%

kirana store
departmental store
49%
convient shops
medical shops

31%

 Q3 State the reason for purchasing from your preferred store?

24%
29%
discount
variety
ambience
12% service

35%

 Q4 Which soap you prefer to use?

49
 24%
33%
Lux
Dettol
Santoor
Dove
14%

29%

 Q5 Which shampoo do you prefer to use?

15%
30%
head& shoulder
dove
20%
I' oreal
garneir

35%

Q6 Which Deodorants you prefer to use?

50
 20%
30%
fogg
nivea
wild stone
The man company
23%

27%

Q7 Which tea brand you prefer to use?

10%

33%
Tata Tea
Wah Taj
Brooke bond
38% Taj Mahal

19%

Q8 Which toothpaste do you prefer to use?

51
 14%

41% colgate
18% closeup
pepsodent
oral-B

27%

Q9 Which detergent powder you prefer to use?

15%

33%
surf excel
rin
tide
28% wheel

25%

Q10 Which spice you prefer to use in cooking?

52
 5%
7%

39% MDH
Everest
MTR Masala
Badshah Masala

49%

Q11 Which brands milk do you prefer to use?

4%
11%

amul
19% mother dairy
kawality
avin
67%

Q12 Which salt do you prefer to use?

53
 1%
3%
4%

Tata salt
catch salt
aashirvaad
saffola

91%

Q13 Which Ice- cream brand do you prefer ?

9%

36%
23% vadilal
kwality walls
amul
mother dairy

32%

Q14 Which coffee you prefer to use?

54
 11%

32%
nestle
Bru
30% nescafe
others

27%

Q15 Which lotion you prefer to use for your skin?

13%

35%
nivea
vaseline
25%
ponds
glow and lovely

28%

Q16 Which hair oil do you prefer to use?

55
 14%

36%
parachute
bajaj almods
27% dabur amla
wow hair oil

23%

Q17 From how many years you been using these products?

17%

last 6 moths
6- 12 months
1 - 2 yrs
more than 2 yrs

83%

Q18 Would you prefer to change if another brand give you promotional
schemes?

56
 POLL

27%

YES
NO

73%

Q19 Reason for your change?

14% 7%

cost
satisfaction
quality
33% 46% seasonal change

57
Q20 Does advertisement play an important role in changing you buying
behaviour?
YES – 82 %
NO - 18%
If yes, then which media influences you most :

21%

41% television
social media
10% magazines
word of mouth

28%

FINDINGS

58
Through this research I can easily conclude that Hindustan Unilever limited.
holds major share of FMCG market. It holds major share in soaps, detergent,
shampoo, coffee, and ice cream category. HUL’s products are mainly in demand
because they provide these products in different packs. They consider the fact
that rural consumers do not have thar much of money to be spent on these
products. So, they prefer buying smaller packs or medium packs. However,
large packs are being bought by few consumers, who are from a well – off
families .

In case of purchasing these products from shops we have seen in graph that
most of the people purchase their products from Kirana store and departmental
store this is because of variety of the products available in these stores and the
ambience departmental stores provide while customers are buying their
products. Mostly the families purchase from their convenient shops, and while
they regularly making a purchase from their respective stores a relation is build
between buyer and seller, salesman often give them discount.

We can see that Tata is leading brand in tea and salt segment. Nestle and
Nescafe holds major share in coffee segment, Everest masala is the leading
brand followed by the MDH masala in spice segment and Amul is the leader in
the milk industry. These brands are holding majority share in the market from
past many decades this is because they have created a Brand Loyalty from
customers and developed their taste that consumers are not ready to change very
easily. Moreover, these companies supply their products in various packs.

(small, medium, large) considering the buying capacity of consumers.

In case of toothpaste, we can see Colgate and Close-up holds the major share in
the market. Consumers are very concerned about their health so if any products

59
suit them, they stick to it and do not prefer to change. As these products are
available in various packs so each category consumers can use it accordingly.

In case of hair oils Parachute and Bajaj almond holds major share in the market
as its products have reached all the places even the rural market so it’s a known
brand and creates a goodwill for the organization.

Now according to research, I have done, results I got from my questionnaire

states that majority of the people using their FMCG products from past 1-2
years or more. Moreover, these consumers would change their taste only if the
other substitute product meets their requirement i.e., new product provides them
the same level of satisfaction or more and the quality of the product must be
better than the old one. The cost of the product also must be reasonable so that
every category consumer can purchase it, if the cost of the product is high and
provides the same level of satisfaction compared to the old one that consumer
was using, consumer will not purchase it.

Consumer’s buying decision also gets influence by advertisement such as adv.

in television and social media platforms affects the customers i.e., influence
their purchasing decision. Word of mouth is one of the free advertisements for
companies and has both positive and negative impact on companies, affects the
society at large.

LIMITATIONS OF THE FMCG SECTOR

60
Below are a few of the most intriguing challenges and trends in the FMCG Sector:

1.Difficulty in Data Management

As the capacity to gather, store, and process data increases exponentially, a data explosion is
underway. The FMCG industry already had weekly consumer sales, brand tracking,
consumer panels, shopper data from helpful and well-paid retailers, and, depending on which
data/analytics organization you speak to, another few hundred metrics. However, 95%
unfortunately of the data produced and sold to eager analysts and marketers is useless.

The more intelligent businesses will purchase only the necessary information (managing
information costs), identify the proper connections to consumer behaviour, and use that
information wisely to create products, regulate trade, and interact with customers.

2.Media Platforms

Nowadays, information travels quickly. A tweet, FB post, or YouTube video can become
famous overnight. A company can no longer sell a product in a less developed market that
was unsellable in a developed market because of safety concerns because regulations have
not kept up.

While consumer information is easily accessible through a Google search, rules will take
some time to catch up. There will be no place to hide and rapid information dissemination.
Smarter brands will use cutting-edge strategies to effectively use this to reach a global
audience while minimizing brand communication costs.

3.Purchasing Groceries Online

Despite having a small base, this is expanding quickly in most developed markets. Although
most of the larger brick-and-mortar stores now provide online shopping and delivery, more
niche online stores with limited product selections and higher prices will start to appear.

In addition, brands that expand by releasing a new flavour or fragrance every three months
will struggle as some of these small-range online retailers develop because managing
categories and ranges will become easier but brutal for brand owners. 

61
4.Appeal to All Age Groups

How would a supermarket's product selection change if everyone who shopped there was
over 50? Fresh foods, fish (salmon), whole grain products, high-end sweets, and a long aisle
of health supplements are all present. This group will value food quality more highly because
they have more money.

For brands, the dilemma will be to appeal to this ageing demographic while still being
relevant enough to draw in younger customers.

5.Conservation and Atmosphere

Companies that can show sustainability throughout their entire ecosystem will have higher
consumer bonding scores. However, because consumers increasingly view conservation as a
given rather than a luxry that only a select few can afford, the capacity to charge a premium
to encompass increased costs will remain constrained.

The Tesla of the FMCG industry has yet to be developed using discoveries and technological
advancements.

FUTURE OUTLOOK OF THE FMCG SECTOR

62
Over the past twenty years, the FMCG industry in India has undergone a
remarkable transformation. By 2025, the FMCG market is expected to reach nearly
$220 billion, with a growth rate of 14.7%.

Here are a few elements that will be crucial for the expansion of the FMCG sector
–

1.Technological Transformation

Since the COVID-19 pandemic broke out, consumers have adapted to and used
technology much more quickly. As a result, 80% of consumers will perceive a
seamless transition from analogue to digital in the coming years.

People in rural areas will benefit even more from rising smartphone and internet
usage as it makes it simpler to access various e-commerce websites for online
shopping.

2.Creation of Brand Communities

Modern consumers quickly access other customers who have purchased the same
product. As a result, businesses are developing marketing plans to create brand
communities among consumers who share similar social, political, and cultural
traits and are interested in their products.

Private and well-known brands in the FMCG sector have benefited from making
the interaction a little more personal in the past year, and it is anticipated that they
will continue to do so.

63
3.Acceptance of the D2C Model

Even larger brands have been enticed by the profit margin associated with direct
selling to consumers to establish a direct sales channel on various digital
marketplaces and even open standalone websites and stores.

Most brands have started delivering their products right to customers' doorsteps to
take advantage of the trend of the online marketplace. As a result, consumer
demand has increased 88% yearly, according to brands with specific websites for
consumer sales. As a result, the D2C business model is well-liked and will become
more critical.

4.Doorway for Investments

A sudden influx of capital has entered the sector due to new government
regulations regarding investments in FMCG companies in India and accepting
foreign-directed investments.

Government incentives and FDI funds have strengthened the FMCG sector, which
has also helped FMCG brands gain high visibility across well-established retail
markets and build a more reliable supply chain. Additionally, the industry has
significantly benefited from efforts to raise disposable income in the hands of
ordinary people, particularly those from rural areas.

In the future, it is anticipated that the government will make more attractive
investments and developments to encourage the FMCG sector's growth further.

64
REFERENCES

 https://www.academia.edu/16974679/consumer_behaviour_towards_fmcg_products

 https://www.slideshare.net/baischetan/chetan-bais-study-on-marketing-mix-of-fmcg

 https://www.investopedia.com/terms/f/fastmoving-consumer-goods-
fmcg.asp#:~:text=Fast%2Dmoving%20consumer%20goods%20are,products%2C
%20and%20baked%20goods

 https://www.studysmarter.co.uk/explanations/marketing/customer-driven-marketing-
strategy/market-segmentation-targeting-and-positioning/

 https://groww.in/blog/fmcg-sector

 https://indiancompanies.in/indias-top-fmcg-companies/

 https://www.academia.edu/16974679/consumer_behaviour_towards_fmcg_products

65