Supply Chain and Its Integration with Marketing in Fmcg

Topics: Marketing, Supply chain management, Supply chain Pages: 31 (9767 words) Published: June 25, 2013
Supply Chain and its Integration with Marketing in FMCG|



FMCG Industry in India2
Growth Drivers4
Demand-side Drivers5
Supply Side Drivers5
Systemic Drivers for Sectoral Growth6
Types of Distribution Channels8
Challenges and solutions in FMCG Distribution Networks10
Value Chain De-Verticalization to handle the huge distribution network requirements10
How De-verticalization unfolds to reduce barriers of entry10
Intermediary reduction for reducing supply chain costs10
Driving channel width for increasing sales10
Increasing visibility of secondary sales through web connectivity with redistributors11
Differentiating by using the internet as a distribution channel11
Analysis Of HUL’S Distribution Network11
Stages of Evolution:11
Present Day Distribution Network:12
Traditional Retail Distribution Network of HUL12
Distribution Network in Urban Areas:12
Rural Distribution Network:13
Issues in the Distribution Network14
Solving the Five Biggest Supply Chain Challenges14
Integrating Marketing with Supply Chain:16
Strategic Integration Framework17
Corporate Level integration17
Strategic customer integration18
Strategic supplier integration19
Marketing and supply pipeline strategy integration19
Data on Trent – A brief on Trent’s Supply Chain Management FMCG Industry in India

The Indian FMCG sector is estimated at US$ 25 billion1 (Rs. 120,000 crores), including tobacco. It has grown consistently over the last 3-4 years, including the last 12 months of economic slowdown. Unlike developed markets, which are dominated by a handful of large players, India’s FMCG sector is fragmented and a substantial part of the market comprises of unbranded and unpackaged products. In the last 2-3 years, it has overcome a slow growth slump to grow at between 12% - 15%, and is expected to grow at a CAGR of around 12% over the next few years to reach a size of US$ 43 billion (Rs. 206,000 crores) by 2013 and US$ 74 billion (Rs. 355,000 crores) by 2018. It is a sector with a relatively less discretionary demand and therefore tends to be relatively stable in the long term, though consumers do up or down trade with economic fluctuations. At times of economic slowdown as at present, for instance, consumers may be cutting down on durable and other capital expenditure but cannot avoid spends on daily necessities and sometimes even be more willing to splurge in the form of little indulgences on the FMCG products. Having stated that, a large number of FMCG products, especially those for mid and mass markets, are price elastic (for a given price reduction, consumption increases by more than the percentage of price reduction) Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged goods. Items in this category include all consumables (other than groceries/pulses) people buy at regular intervals. The most common in the 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 of frequent consumption and have a high return. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterised by a well-established distribution network, intense competition between the organised and unorganised segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration...
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