FMCG (Fast Moving Consumer Goods) industry is one of the faster growing segments of the market. This segment touches every aspect of human life. The market dynamics of the segment are changing very frequently. Even in the harsh economic conditions of Bangladesh the FMCG market continues to grow at a satisfactory rate of over 9%. With such rapid growth FMCG marketers need to analyze selling performances of each product line in a professional manner. They should also check the supermarket shelves to analyze in details of secondary sales statistics of their products & the competitors’ products to understand the real world market dynamics.
Bangladesh is a very populated country, which is the eighth largest in the world. This large number of population of the country makes the FMCG segment more potential. The top FMCG companies are characterized by their ability to produce the items that are in highest demand by consumers and, at the same time, develop loyalty and trust towards their brands.What are Consumer Goods?
Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, over-the-counter drugs, toys, processed foods and many other consumables. The term was coined by Neil H. Borden in 'The Concept of the Marketing Mix' in 1965. … ref. Wikipedia
FMCGs generally have a short shelf life. Some FMCGs, such as meat, fruits and vegetables, dairy products, and baked goods, are highly perishable. Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks, and cleaning products have high turnover rates.
As contribution margin (CM) of FMCG products is relatively small, they are generally sold in large quantities to make substantial cumulative profit. FMCG is probably the most classic case of low margin and high volume business.
One of the characteristics that define any type of product as a true FMCG is the fact that it is non-durable. This leads to a continual cycle of consumption that makes it feasible to mass produce the goods. Pre-packaged foods are a good example of this characteristic. The food is purchased then consumed. When the food is gone, consumers return to a retail outlet to purchase more units of the pre-packaged food.Characteristics of FMCG products
From the consumers' perspective: Frequent purchase, Low involvement (little or no effort to choose the item), and Low price
From the marketers' angle: High volumes, Low contribution margins, Extensive distribution networks, and High stock turnover
Consumers play a crucial role in the FMCG sector as the price band of each FMCG product is fixed depending largely on the consumer class which the particular company is targeting.SWOT Analysis of FMCG sectorStrengths
Low operational costs
Presence of established distribution networks in both urban and rural areas
Presence of well-known brands in FMCG sectorWeaknesses
Lower scope of investing in technology and achieving economies of scale, especially in small sectors
Low exports levels
Me-too products illegally mimic the labels of the established brands. These products narrow the scope of FMCG products in rural and semi-urban market.Opportunities
Untapped rural market
Rising income levels, i.e. increase in purchasing power of consumers
Large domestic market
High consumer goods spendingThreats
Removal of import restrictions resulting in replacing of domestic brandsMarketing Management of FMCG Products
FMCG organizations must go through answers of the following questions for better marketing management
How to adopt brand management strategies?
How to train up salespeople and improve their sales revenue?
How to set advertising expenses?
How to analyze the competitors’ information in a short time?
How to do the sales forecast and planning in an efficient manner?
How to track sales & marketing data in real time and generate flexible sales reports as different stakeholders require?
How to analyze consumer brand preferences?
How to establish positive company & brand images to the consumers?
Brand Managers / Marketing Managers of FMCG companies require facing the challenges of finding and analyzing answers of the above questions for formulating winning strategies for their brands.
The FMCG products of a company will find better development opportunities, if the findings of the above questions are addressed properly as an input in its strategic decision making.