Thursday, September 18, 2008

As an FMCG player you must indeed be available everywhere

IIPM Ranked No. 1 B-School In Global Exposre - Zee...

global business. The other key success mantra that FMCG giants are chanting is the food sector. With an estimate to reach, Rs.1.35 trillion by 2015 (according to Rabo Indian Finance) food is believed to be the golden goose for the FMCG industry. Even FICCI claims that among all segments of FMCG, food is one of the most high potential segments (the other is personal care), which will see a constant growth of over 20% till 2015. So food is emerging as a cash cow for the FMCG players and all are betting big bucks in this sizzling hot market. Players who already have ventured this segment are strengthening their position through having a robust raw material base. Like Nestle, to ensure it’s milk supply base has tied up with Andhra Pradesh-based Heritage Foods India Ltd. In the same league Yakult Danone India, a joint venture between Yakult Honsha and Danone Group is gung ho to have a manufacturing hub in India for their global business.

quest for new frontiers Integrative growth is becoming increasingly important for companies. The major challenge FMCG players today face is rising commodity prices, and gaining control over manufacturing is critical from Reckitt Benckiser’s perspective as well. According to Sethi, one of the key focus areas for the company over the next five years would be “to strengthen its position on the manufacturing side.”

Forward integration is not viewed as an option by the company, as it wants to retain focus on its core competency of brand building and relies largely on its distribution network, which has, so far, worked wonders for Reckitt. States Gautam Suri, Brand Manager, Reckitt Benckiser India Ltd., “Our marketing strategy has always focused around uplifting the brand. That’s the reason for each of our brands, our distribution channel has been totally different. Unlike other FMCGs, we don’t want to promote our company’s name, but rather the products that we offer.”



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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).


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