The Fmcg Industry Of Netherland Marketing Essay

The Fmcg Industry Of Netherland Marketing EssayThis Global/ Country Study and Report is prep bed as the disassembleial fulfillment for Forth Semester of grad Program of Masters of Business Administration curriculum of GUJARAT TECHNOLOGICAL UNIVERSITY. The topic of the project is FMCG Industry in Netherland.Here, the project report on Netherland, we expect try our level best to Collect information from it and prep ar this report as an error free report We assured that all information is trusted all(prenominal) effort has been made to offer the most authenticate position with accuracy.During the whole project period we got a lot of know directge and came to know to the highest degree the naive realism of the mining industry of the country.AcknowledgementThe successful completion of a Global Country Project Report requires guidance help from a number of people. We were heaven-sent to have all the support from our faculty, therefore take this opportunity to express our pro set sense of gratitude to the all those who extended their whole hearted help and support to us in completing the project study report work on FMCG Industry in Netherland.We also express our deep sense of gratitude to Prof. Ramzan Samaa (Guide Faculty), who has helped us to do our project. We also thank to other faculty of L J Institute of Management Studies respondents for his valuable help in from each one stage of the project. Because of his co-operation and continuous guidance successful completion of this project study report was made possible.No Acknowledge would suffice for the support of my family members, classmates friends. Lastly, we extend our thanks to all whose name have not been menti unmatchedd in successful way carrying out the project report.IndexSr No.ParticularsPage No.1.The FMCG industry of Netherland submission72.Upgrades on major mines in North Korea153.The North Korea Mining Business ProjectsBetween Korean Mining ProjectsForeign confederacy Mining Projects26 4.The mind- strike out for Inter Korean Mining Corporation345.The Indian Mining Industry- Market Opportunities Entry366.Future Prospects387.Conclusion39Introduction of FMCG IndustryFast-moving consumer goods (FMCG) or consumer packaged goods (CPG) argon products that argon sold quickly and at relatively low cost . Examples include non-durable goods such as squashy drinks, and food market items. Though the absolute earnings made on FMCG products is relatively small, they are generally sold in bouffant quantities, and so the cumulative profit on such products chiffonier be substantial.Fast-moving consumer electronics are a type of FMCG and are typically low m acetary valued generic or easily substitutable consumer electronics, including get end mobile phones, MP3 players, game players, and digital cameras, which have a short usage life, typically a year or less, and as such are disposable. Cheap FMCG electronics are often retained even after immediate failure, as the purchaser rationalizes the decision to not return the goods on the basis that the goods were tatty to begin with, and that the cost of return relative to the low cost of purchase is exalted. Thus low-quality electronic FMCG goods brush aside be highly profitable for the vendors.The term FMCGs refers to those retail goods that are generally replaced or fully used up over a short period of days, weeks, or months, and within one year. This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years.FMCG have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. Some FMCGs-such as meat, fruits and vegetables, dairy farm products, and baked goods-are highly perishable. Other goods such as alcohol, toiletries, pre-packaged fares, diffused drinks, and cleaning products have high perturbations rates. An excellent example is a news papers-every days newspaper carri es different content, making one useless just one day later, necessitating a new purchase every day.The following are the main characteristics of FMCGsFrom the consumers perspectiveFrequent purchaseLow involvement (little or no effort to choose the item products with strong pock loyalty are exceptions to this rule)Low priceFrom the foodstuffers angleHigh volumesLow contri exclusivelyion marginsExtensive distribution networksHigh stock dollar volumeIntroduction of FMCG Industry in NetherlandThe Fast Moving Consumer Goods (FMCG) commercialise in Europe is highly competitive. This market is quite saturated, with thight margins and toilsome to predict consumer behavior. The battle to win consumers is forcing companies to give highest priority to cost reduction, risk management and logistics efficiency. Moreover, the recession has changed the behaviour of almost all consumers. Instead of impulsive shopping, price value trade-offs and extensive search for value are nowadays leading .In this respect, you can imagine that e-tailing and e-commerce are be orgasm more and more trending topics. Online presence of companies has alter enormously in recent years. Every federation which delivers their products to end-consumers has its own webshop. MediaMarkt, the electronica retail train with a franchise-formula, part of the German METRO Group, was one of the last large retail chains which hasnt a webshop untill now. Their invisibility on the web was due to regional price differences of their products. Up to now, because even the MediaMarkt now opened its webshop. Other examples are the British comp each, The Body Shop, which started last November with their webshop in the Netherlands.Its authoritative to take care of reinforcement between online and offline shop, instead of the other way around. On the other hand, companies with a pure online focus, handle bol.com and wehkamp.nl, are reaching the highest turnover levels.A recent research of JP Morgan reveals that t he worldwide growth of e-commerce in 2011 will be 19%. In 2012 this growth will be more than 20%. The online sales in the US and Europe will grow at a stable level, but Asia will emerge as a growing e-commerce market.Regarding e-commerce in Europe, the main importance and presence in this segment is coming from West-Europe. In this are, the market is expect to grow with 11% per year in the coming four years. The turnover from online shopping in Western Europe in 2009 was equal to 68bln. The most universal products to debase online are rule books, event-tickets and clothing.Recent transactions in the e-commerce market support the above statement. In 2007 Sanoma acquired mrticket.nl, an online ticketing agency. In 2010, the Italian company Arnoldo Mondadori Editore acquired Mondolibri, active in the book segment. Recently, Sanoma Digital acquired (a part of) No Search, an internet marketing company, active in the development of several fashion portals equivalent Fashionchick.nl. As mentioned earlier, online fashion is a high growth segment in the e-commerce market. Based on recent transactions in the e-commerce market, the estimated EBITDA multiple for mid-market companies is on average around 6-8 times EBITDA.Despite the worldwide character of the European e-commerce market, only 7% of all European consumers buy their products in webshops in other EU-countries. Probably, this number will rise in coming years. Looking at the Dutch e-commerce market, youll see that the Netherlands are rather active in this online segment, because 71% of all consumers buy products online. An important reason for the growth of the e-commerce market is the trust that consumers have in the security regarding payments. Just 7% of the Dutch population is worried about this financial security. In the Netherlands, since several years an online procure payment system exists, callled iDeal, which means that customers can easily connect with their bank to make safe online payments. This type of payment is an important succes reckon in the e-commerce market.To make headway realise growth in the e-commerce market in the future, it will be important to develop a cross-channel strategy in the coming years. Consumers will buy offline as well as online and mobile commerce is a new channel, which will develop in the near future. In the Netherlands 69% of the consumers buy products via 2 or more different channels, in the US this percentage is even higher, 78%. In general, for the retail sector, branding and customer loyalty are important factors for success. Nowadays, amicable media is used to reinforce branding and to promote several in- broth loyalty programs as well as customer loyalty programs. In the near future, social media could be used as well for sharing online purchasing activities. Recently, wehkamp.nl has invested in social shopping applications in their webshop, so that customers can shop online together with friends, or could start a private shoppin g session.Other key factors, which are important to realise the predicted growth in the future are the focus on expansion in other countries as well as a variety of segments in different webshops. Furthermore, the e-commerce segment is of interest to several private honor clubs. It is expected that this will lead to consolidation in the market, which will lead to larger e-commerce companies and a stronger competitiveness in the market.Figures released by Statistics Netherlands show that retail turnover was some 1 percent higher in August 2012 than in the like month last year. Prices rose by 1.9 percent, while the volume of sales fell by 1 percent.The favourable shopping-day pattern had a positive effect on turnover in August this year. After correction for this effect, turnover is nearly 2 percent lower, and the volume is around 4 percent lower.Compared with August 2011, turnover in non-food shops was nearly 5 percent lower. The decrease in turnover in the first eight months of 2 012 is now just under 4 percent. The largest drop in turnover was reported by shops selling scale furnishings their turnover was 13 percent down on August last year. Textile supermarkets and clothes shops, too, experienced large decreases in turnover. Chemists were the only shops that saw turnover increase.For shops selling food, drink and tobacco turnover rose by 7 percent. After adjustment for the effects of shopping-days, however, this drops to only 2 percent. Prices in these shops rose by 1.5 percent, while the increase in volume was limited.Turnover for mail order companies and internet retailers rose by 9 percent, for petrol stations it grew by nearly 4 percent.FMCG companies/Retail stores in NetherlandHEMA (originally an acronym for Hollandsche Eenheidsprijzen Maatschappij Amsterdam, Dutch Standard Prices Company Amsterdam) is a Dutch discount retail chain that started life as a dimestore. It was part of the Maxeda company until June 2007, when it was bought by Lion Capital LLP. The chain is characterized by relative low pricing of generic housewares, which are mostly made by and for the chain itself, often combined with original design.The first HEMA opened in Amsterdam on 4 November 1926, set up by the Jewish owners of the luxury subdivision store De Bijenkorf. Originally, as a price-point retailer at prime locations in town centers, goods were sold using standard prices (hence its name), with everything having a Standard price of 10, 25 or 50 cents, and later also 75 and 100 cents. The relative economic boom in the Netherlands in the period 1900-1930 benefited HEMA.Brancheshttp//upload.wikimedia.org/wikipedia/ mutuals/thumb/a/ad/HEMA_interieur.JPG/220px-HEMA_interieur.JPGhttp//bits.wikimedia.org/static-1.21wmf12/skins/common/images/magnify-clip.pngSince the 1990s, HEMA has also expanded into neighboring countries.HEMA branches by country per 2011Netherlands 445Belgium 88Germany 10 (in 2013)Luxembourg 4 (in 2013)France 16 (in 2013)De BijenkorfDe Bij enkorf (literally, the beehive) is a chain of high-end part stores in the Netherlands with its flagship store on Dam Square, Amsterdam. It was founded by Simon Philip Goudsmit (1845-1889).De Bijenkorf flagship store on Dam Square in AmsterdamDe Bijenkorf was founded in 1870 by Simon Philip Goudsmit (1845-1889), starting as a small haberdashery shop at 132 Nieuwendijk, one of Amsterdams oldest streets. Initially limited to yarn and ribbons and employing a staff of four, the stock expanded gradually. After the oddment of Goudsmit in 1889, Goudsmits widow expanded the business with the help of a cousin, Arthur Isaac, and her son Alfred, eventually purchasing adjacent buildings. In 1909, these connecting shops were replaced by a new building.That same year, a temporary building was erected on the site of the demolished Beurs caravan Zocher, and construction of a new store commenced beside it.http//upload.wikimedia.org/wikipedia/commons/thumb/d/d3/Lahayebijenkorf19.JPG/120px-Lahayebij enkorf19.JPGhttp//bits.wikimedia.org/static-1.21wmf12/skins/common/images/magnify-clip.pngDe Bijenkorf in The HagueRotterdam store, 1930-1940A third store opened in Rotterdam in 1930, designed by Willem Dudok. 700,000 people attended the ceremony. The store was heavily damaged in the Rotterdam Blitz of 1940. The intact part of the store remained open to business until 1957, but was cleared in 1960 to build the Rotterdam Metro. A new store was designed by Hungarian-American architect Marcel Breuer (1902-1981).As of 2012, de Bijenkorf has 12 stores nationwide. The oldest and largest branches, situated in Amsterdam, The Hague and Rotterdam have retail space ranging between 15,000 and 21,000 square meters. Smaller stores (7,500-10,000 m of retail space) can be found in Amstelveen, Arnhem, Eindhoven, Enschede, Utrecht and Maastricht. The branches in Breda, Den Bosch and Groningen specialize in fashion (3,000 m retail space).Metz CoMetz Co is a department store in Amsterdam, The Netherl ands, founded in 1740 by Mozes Samuels who sold his company to his common chord sons in 1794. Metz Co. has the right to display the Dutch royal coat of arms with the legend By Royal Warrant Purveyor to the Royal Household since 1815. To celebrate its 150th anniversary in 1890 the store moved to a new location on the Leidsestraat, where the company is still set(p). One of the first designers was Paul Bromberg (1893-1949), he became famous as a author and promotor of Decorative Arts and Interior Design. The distinctive cupola on the stores cap was built in the 1930s and designed by Dutch artist Gerrit T. Rietveld. Metz Co celebrated its 250th anniversary in 1990 by launching its own fragrance. The jacket of the store doubles as an exclusive location for wedding ceremonies.Introduction of FMCG industry in IndiaIndia is one of the largest emerging markets, with a population of over one cardinal. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 300 million.FMCG companies operate in a highly competitive and fast-changing environment. In order to stay ahead, they need to regularly renew their product portfolio to suit the ever changing needs and preferences of their customers. ValueNotes has punish in-depth research in many segments of the FMCG industry and can help you keep your finger on the pulse of your existing consumers identify new markets for your products track the activities of your competitors and observe industry trends.India a large consumer goods spender An average Indian spends around 40 per cent of his in jazz on grocery and 8 per cent on face-to-face care products. The large shareof fast moving consumer goods (FMCG) in total individual spending along with the large population base is another factor that makes India one of the largest FMCG markets.FMCG Category and productsHousehold Care Fabric wash (laundry soaps and syntheticdetergents) household cleaners (dish/utensilclea ners, floor cleaners, toilet cleaners, airfresheners, insecticides and mosquito repellents,metal round out and furniture polish).Food and Health beverages soft drinks staples/cerealsBeverages bakery products (biscuits, bread, cakes) snackfood chocolates ice cream tea coffee softdrinks processed fruits, vegetables dairyproducts bottled body of water branded flour brandedrice branded sugar juices etc.Personal Care Oral care, hair care, skin care, ain wash(soaps) cosmetics and toiletries deodorantsPerfumes maidenlike hygiene paper products.INDIA COMPETITIVENESS AND COMPARISON WITH THE WORLDMARKETSMaterials availabilityIndia has a diverse agro-climatic condition due to which there existsa wide-ranging and large novel material base suitable for foodprocessing industries. India is the largest producer of livestock, milk,sugarcane, coconut, spices and cashew and is the second largestproducer of rice, wheat and fruits vegetables.India also has an ample supply of caustic pa and soda a sh, the fondmaterials in the production of soaps and detergents Indiaproduced 1.6 million tonnes of caustic soda in 2003-04. TataChemicals, one of the largest producers of synthetic soda ash in theworld is located in India. The availability of these sore materials givesIndia the locational emolument.Cost competitivenessLabour cost comparisonSource DIPP.Apart from the advantage in terms of ample raw material availability,existence of low-cost labour force also works in favour of India.Labour cost in India is amongst the lowest in Asian countries. Easyraw material availability and low labour costs have resulted in a lowercost of production. Many multi-nationals have set up large low costproduction bases in India to outsource for domestic as well asexport markets.Leveraging the cost advantageGlobal major, Unilever, sources a major portion of its productrequirements from its Indian subsidiary, HLL. In 2003-04, Unileveroutsourced around US$ 218 million of home and personal carealong with food products to leverage on the cost arbitrageOpportunities with the West.To take another case, Procter Gamble (PG) outsourced themanufacture of Vicks Vaporub to contract manufacturers inHyderabad, India. This enables PG to continue exporting VicksVaporub to Australia, Japan and other Asian countries, but atmore competitive rates, whilst maintaining its high quality and costefficiency.Presence across value chainIndian firms also have a presence across the entire value chain of theFMCG industry from supply of raw material to final processed andpackaged goods, both in the personal care products and in the foodprocessing sector. For instance, Indian firm Amuls product portfolioincludes supply of milk as well as the supply of processed dairyproducts like cheese and butter. This makes the firms located in Indiamore cost competitive.FAST MOVING CONSUMER GOODS POLICYIndia has enacted policies aimed at attaining internationalcompetitiveness through lifting of the quantitative restric tions, trim back excise duties, automatic foreign investment and food lawsresulting in an environment that fosters growth. 100 per cent exportoriented units can be set up by government approval and use offoreign brand names is now freely permitted.TRENDS AND PLAYERSThe Indian FMCG sector is the fourth largest sector in the providenceand creates employment for three million people in downstreamactivities. Within the FMCG sector, the Indian food processingindustry represented 6.3 per cent of GDP and accounted for 13 percent of the countrys exports in 2003-04.A distinct feature of the FMCG industry is the presence of mostglobal players through their subsidiaries (HLL, PG, Nestle), whichensures new product launches in the Indian market from theparents portfolio.Critical operating rules in Indian FMCG sector Heavy launch costs on new products on launchadvertisements, free samples and product promotions. majority of the product classes require very low investmentin fixed assets Existenc e of contract manufacturing Marketing assumes a significant place in the brand buildingprocess Extensive distribution networks and logistics are key toachieving a high level of penetration in both the urbanand rural markets Factors like low entry barriers in terms of low capitalinvestment, fiscal incentives from government and low brandawareness in rural areas have led to the mushrooming ofthe unorganised sector Providing good price points is the key to successTHE TOP 10 COMPANIES IN FMCG SECTORS. NO.Companies1.Hindustan Unilever Ltd.2.ITC (Indian Tobacco Company)3.Nestl India4.GCMMF (AMUL)5.Dabur India6.Asian Paints (India)7.Cadbury India8.Britannia Industries9.Procter Gamble hygiene and Health Care10.Marico IndustriesMarket SummaryApproximately 80 percent of the Dutch food retail outlets are full service supermarkets, operating on floor space between 500 and 1,500 square meters located downtown and in residentialareas. The remaining 20 percent includes superstores located in ind ustrial parks, whatchamacallum stores near human traffic and department stores. In Belgium, full service supermarkets, like Colruyt and AD Delhaize, account for an estimated 75 percent of the market. The share of superstores and convenience stores in Belgium is higher than in the Netherlands, an estimated 25%. In Luxembourg, full service supermarkets like Cactus, Alvo and Match dominate the market as well. In all three markets, independent food retail stores are increasingly leaving thescene. On-going consolidation in the retail market, changing consumer demands and shrinking margins seem to drive this trend.The top 3 biggest retailers in the Netherlands, Albert Heijn, C1000, and Jumbo 1 , have a market share of 56 percent. The market for discounters like Aldi and Lidl has stabilized around 15%. Also discounters like Bas van der Heijden, Dirk van den Heijden and Digros were able to maintain their share of the market. In Belgium, the leading 3 retailers have 75 percent of the market . The market share of the discounters in Belgium is about 40% where Colruyt saw its market share growing at the expense of Aldi and Lidl. Recent market share figures for Luxembourg were not available when writing the report. plug-in 1 Market Shares of Leading Food Retailers in 2010NetherlandsBelgiumLuxembourgCompany NameMarket ShareCompany NameMarket shareCompany NameNo. of StoresAlbert Heijn31.1%Carrefour29.0%Delhaize30C100014.9%Delhaize25.0%Cactus18Jumbo9.9%Colruyt23.5%Match14Aldi8.5%Aldi12.5%Alvo11Plus6.1%Lidl4.0%Smatch8Lidl5.5%Louis Delhaize3.0%Cora2Other23.8%Other3.0%Auchan1Total100.0%Total100.0%Higher Prices For Food ProductsThe turnover of the Benelux food retail industry in 2009 was an estimated 52.7 billion (31.1 billion in the Netherlands, 21.1 billion in Belgium and 0.5 billion in Luxembourg). For 2010 turnover is expected to increase by 1.5%. Reasons for this moderate growthExpected moderate increase of the unemployment rateLimited economic growthConsumers visualise to spend more food euros at retail than foodserviceDue to the current economic situation the growth of value-added products has decreased at the expense of more elementary products.Table 2 Turnover Benelux food retail, past 5 years20052006200720082009 44.1 billion 45.7 billion 47.7 billion 50.5 billion 52,7 billionThe trend of higher prices for raw materials and therefore consumer products, as discussed in the previous Food Retail report, seems to have stopped. Benelux consumer prices rank among the cheapest within the EU-27.Changing Consumer NeedsIn addition to the fact that Benelux consumers are shedding retailer-loyalty, they shop at different times and locations. During lunch breaks, people buy their lunch and often the ingredients for that evenings meal. Small convenience stores, like AH To Go and Delhaize shop n go are opened at locations near heavy traffic like train stations, schools, and shopping malls to satisfy these consumers needs.The traditionalistic neighborhood grocer y stores are either going out of business, are taken over or are changing their product portfolio. They are expanding the grocery line of fresh and convenient prepared-foods with tailor-made sandwiches, filled tortillas and drinks to satisfy the consumers need for food for now. The ready-to-cook segment is also expanding.Awareness of Health and Well-BeingConsumers are becoming more aware of and are more concerned about the effects food has on their health and well-being. There is a trend to a healthy lifestyle in Western countries. The following US industries have all benefitted from this trend nuts (like pistachios, almonds, walnuts, etc.), fruits (like cranberries, pomegranates, berries, etc.), seafood (like salmon, halibut,etc.). Consumers are more cautious about foodborne illnesses.Consumers are smell for and finding more information on this topic the media, including the Internet, TV and magazines, respond to this desire and feed into it. Food processors and retailers play a crucial role as well, as they develop and market food products (like juices from POMwonderfull, Healthy People, etc.) to create, anticipate and meet consumers needs.Climate Change Carbon Footprint LabelingLast year the European military mission conducted a survey on mandatory Carbon Footprint Labeling (CFL). Popular support for CFLl by country, varied between 47% to 90% of all 27,000 Europeans that were interviewed. lxx percent of the respondents in Belgium and Luxemburg were supportive of a mandatory label whereas this was only supported by half of the Dutch interviewees. The latter, on the other hand, were after the Finnish the most likely (28%) to prefer a voluntary labeling system.After the December 2009 U.N. Climate Change Conference in Copenhagen, the discussion on CFL got a new boost. Belgian federal Minister of Climate and Energy, Mr. Paul Magnette, stated that in addition to the price, the CO2 emission should also be mentioned on each product. This way, consumers become aware and see to what extent the products they buy influence global warming.Carbon Footprint Labeling is not (yet) an issue in the Netherlands. The government hasnt come out with a statement or position on CFL. It seems that all the individual stakeholders are waiting for the other to make the first move.Within the EU-27, the U.K. and Sweden are taking a leading role in CFL. For more information on Sweden, see GAIN Report SW9016. The overall labeling requirements for the Benelux can be found in the following GAIN Reports NL9020 and GAIN BE9004.Advantages and Challenges of the Benelux Food Retail MarketAdvantagesChallengesSector Strengths Market OpportunitiesSector Weaknesses and CompetitiveThreatsExpected slight recovery of the sparing in theEU import regulation and tariffs. EUBenelux is a promising prospect (expeciallyenlargement has given and will givecompared to some other EU economies) for thepreferential access to products fromretail industry.new member countries.Affluent, o pen minded and curious consumers createDiscounters are the fastest growingopportunities for new products.segment in the Benelux retail marketmargins continue to be under pressure.The region has an excellent infrastructure whichCompetition is growing from non-foodoffers great opportunities.retail players like IKEA, HEMA, VD andBijenkorf as they enter the foodmarket.Greater demand for healthy food products not or notThe industry is highly consolidated andsuffiently available on the topical anaesthetic EU market e.g.therefore has a strong negotiatingseafood, tree nuts, (exotic) fruit, vegetables, juices,position and good contacts.Road Map For Market EntryEntry Strategy achiever in introducing your product in the Benelux market depends mainly on knowledge of the market and building personal contact with knowledgeable and established importers. Prior to any export, invest in research that analyzes the Benelux food culture (concepts, flavor, price, requirements). Once the product has bee n chosen, be aware of fierce competition. There are tariff and non-tariff trade barriers that can complicate exporting to the Benelux. An importer knows the market, the trade barriers and the required documentation. The Office of Agricultural Affairs (OAA) offers guidelines on business practices and import regulations. For a complete overview of offered reports, see Section V of this report.Market StructureSupermarkets and SuperstoresThe vast majority of supermarkets and superstores buy foreign (specialty) products via specialized importers. This is especially the case for retail-ready consumer-oriented products like sauces, beverages and snack products. Convenience stores operate, in general, on a much smaller scale and therefore buy smaller quantities through wholesalers. Department stores work either