The Fmcg Industry Of Netherland Marketing Essay

The Fmcg Industry Of Netherland merchandiseing EssayThis Global/ Country Study and root is prep bed as the exposei solelyyial fulfillment for Forth Semester of degree syllabus of Masters of Business Administration curriculum of GUJARAT TECHNOLOGICAL UNIVERSITY. The topic of the insure is FMCG Industry in Netherland.Here, the upchuck report on Netherland, we generate head-tried our level best to Collect information from it and prepargon this report as an error free report We assured that exclusively information is swear every effort has been made to offer the near authenticate cast with accuracy.During the whole project decimal point we got a lot of recogniseledge and came to know ab stunned the reality of the mining perseverance of the country. accommodatementThe favored point of a Global Country Project Report requires guidance assist from a number of people. We were fortunate to spend a penny all the support from our faculty, thusly take this opportunity to express our pro implant sense of gratitude to the all those who blanket(a) their whole hearted help and support to us in completing the project study report work on FMCG Industry in Netherland.We samewise express our deep sense of gratitude to Prof. Ramzan Samaa (Guide Faculty), who has helped us to do our project. We as well as thank to other faculty of L J Institute of Management Studies respondents for his worthy help in each 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 elements, configurationmates fri repeals. Lastly, we extend our thanks to all whose name have non been mentioned in successful way carrying out the project report. magnateSr No.ParticularsPage No.1.The FMCG diligence of NetherlandIntroduction72.Upgrades on study mines in North Korea153.The North Korea dig Business ProjectsBetween Korean mining Pr ojectsForeign go with Mining Projects264.The outlook for Inter Korean Mining Corporation345.The Indian Mining Industry- Market Opportunities Entry366.Future Prospects387.Conclusion39Introduction of FMCG IndustryFast-moving consumer matures (FMCG) or consumer packaged goods (CPG) ar harvest-times that ar sell quickly and at relatively pathetic price . Ex amples include non-dur adequate goods such(prenominal) as batty drinks, and grocery items. Though the unequivocal profit made on FMCG ingatherings is relatively pocketable, they ar generally sold in large quantities, and so the cumulative profit on such wares dismiss be substantial.Fast-moving consumer electronics are a type of FMCG and are typically humble determined generic or easily substitutable consumer electronics, including lower end mobile phones, MP3 players, game players, and digital cameras, which have a short engagement life, typically a year or less, and as such are disposable. Cheap FMCG electronics a re often retained even after adja cent failure, as the purchaser rationalizes the decision to not return the goods on the radix that the goods were cheap to begin with, and that the personify of return relative to the low woo of purchase is high. Thus low-quality electronic FMCG goods can be highly economic for the vendors.The term FMCGs refers to those retail goods that are generally re authorityd or skillfuly apply up over a short period of daytimes, weeks, or months, and at bottom one year. This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several(prenominal) years.FMCG have a short shelf life, either as a result of high consumer demand or because the merchandise deteriorates rapidly. Some FMCGs-such as meat, fruits and vegetables, d businessy products, and adust goods-are highly perishable. early(a) goods such as alcohol, toiletries, pre-packaged aliments, soft drinks, and cleaning produ cts have high derangements rates. An excellent example is a advanceds papers-every days newspaper carries different content, making one useless scarcely one day later, necessitating a new purchase every day.The following are the definitive characteristics of FMCGsFrom the consumers perspectiveFrequent purchaseLow involvement (little or no effort to choose the item products with strong brand trueness are exceptions to this rule)Low p sieveFrom the grocery storeers angleHigh volumesLow contri only whenion margins grand distribution networksHigh stock disorderIntroduction of FMCG Industry in NetherlandThe Fast Moving Consumer Goods (FMCG) merchandise place in europium is highly warlike. This securities industry is quite saturated, with thight margins and difficult to predict consumer behavior. The battle to win consumers is forcing companies to give highest precedence to live reduction, risk management and logistics efficiency. Moreover, the recession has changed the b ehaviour of almost all consumers. Instead of impulsive tell onping, price assess pot-offs and extensive search for value are nowadays put uping.In this respect, you can imagine that e-tailing and e-commerce are bonnie to a prominenter extent and more trending topics. Online presence of companies has improved enormously in late years. Every political party which delivers their products to end-consumers has its own webshop. MediaMarkt, the electronica retail twine with a franchise-formula, part of the German METRO Group, was one of the last large retail arrange which hasnt a webshop untill now. Their invisibility on the web was overdue to regional price differences of their products. Up to now, because even the MediaMarkt now forthrighted its webshop. about other examples are the British connection, The Body Shop, which started last November with their webshop in the Netherlands.Its important to take care of reenforcement between online and offline shop, instead of t he other way approximately. On the other hand, companies with a pure online focus, like bol.com and wehkamp.nl, are reaching the highest turnover levels.A juvenile research of JP Morgan reveals that the worldwide result 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 emergence e-commerce foodstuff.Regarding e-commerce in Europe, the main importance and presence in this member is access from West-Europe. In this are, the market is expected to grow with 11% per year in the coming four years. The turnover from online shopping in westward Europe in 2009 was equal to 68bln. The most popular products to demoralize online are books, event-tickets and clothing. new-fashioned transactions in the e-commerce market support the above statement. In 2007 Sanoma acquired mrticket.nl, an online ticketing agency. In 2010, the Italian comp some(prenominal) Arnoldo Mond adori Editore acquired Mondolibri, active in the book segment. Recently, Sanoma Digital acquired (a part of) No Search, an internet marketing company, active in the bafflement of several fashion portals like 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 world(prenominal) character of the European e-commerce market, solitary(prenominal) 7% of all European consumers acquire their products in webshops in other EU-countries. Probably, this number will rise in coming years. Looking at the Dutch e-commerce market, youll happen upon that the Netherlands are kinda active in this online segment, because 71% of all consumers vitiate products online. An important causality for the growth of the e-commerce market is the trust that consumers have in the security regarding fees. estimable 7% of the Dutch population is worried about this financial security. In the Netherlands, since several years an online secure 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 factor in the e-commerce market.To further realise growth in the e-commerce market in the time to come, 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 close to future. In the Netherlands 69% of the consumers buy products via 2 or more different channels, in the US this pctage is even higher, 78%. In general, for the retail sector, branding and customer loyalty are important factors for success. Nowadays, social media is used to reinforce branding and to promote several in-store loyalty programs as well as customer loyalty programs. In the near future, social media could be used as well for sharing online buying 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 shopping 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 equity clubs. It is expected that this will lead to consolidation in the market, which will lead to larger e-commerce companies and a stronger fighting in the market.Figures released by Statistics Netherlands show that retail turnover was nearly 1 percent higher in August 2012 than in the very(prenominal) month last year. Prices rose by 1.9 percent, while the volume of sales swing by 1 percent.The favourable shopping-day pattern had a positive printing 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- aliment shops was nearly 5 percent lower. The reduction in turnover in the first eight months of 2012 is now just under 4 percent. The largest drop in turnover was reported by shops selling home 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 proverb turnover increase.For shops selling intellectual nourishment, 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. overthrow for mail order companies and internet retailers rose by 9 percent, for petrol stations it grew by nearly 4 percent.FMCG compa nies/ sell stores in NetherlandHEMA (originally an acronym for Hollandsche Eenheidsprijzen Maatschappij capital of The Netherlands, Dutch modular Prices Company Amsterdam) is a Dutch snub 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 luxuriousness department store De Bijenkorf. Originally, as a price-point retailer at thrill posts 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/commons/thumb/a/a d/HEMA_interieur.JPG/220px-HEMA_interieur.JPGhttp//bits.wikimedia.org/static-1.21wmf12/skins/common/images/magnify-clip.pngSince the 1990s, HEMA has also grow into neighboring countries.HEMA branches by country per 2011Netherlands 445Belgium 88Germany 10 (in 2013)Luxembourg 4 (in 2013)France 16 (in 2013)De BijenkorfDe Bijenkorf (literally, the beehive) is a chain of high-end department 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 narrate and ribbons and employing a staff of four, the stock expanded gradually. After the death of Goudsmit in 1889, Goudsmits widow expanded the business with the help of a cousin, Arthur Isaac, and her son Alfred, at long last purchasin g 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 vanguard Zocher, and construction of a new store commenced beside it.http//upload.wikimedia.org/wikipedia/commons/thumb/d/d3/Lahayebijenkorf19.JPG/120px-Lahayebijenkorf19.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 whole 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 Netherlands, founded in 1740 by Mozes Samuels who sold his company to his trey sons in 1794. Metz Co. has the right to disclose the Dutch royal coat of arms with the legend By regal 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 primed(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 roof was built in the 1930s and designed by Dutch artist Gerrit T. Rietveld. Metz Co celebrated its 250th anniversar y in 1990 by initiation its own fragrance. The roof 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 nates of 300 zillion.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 executed 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 monitor industry trends.India a large consumer goods spender An average Indian spends around 40 per cent of his income on grocery and 8 per cent on indivi dual(prenominal) care products. The large contendof fast moving consumer goods (FMCG) in broad(a) individual spending along with the large population base is other factor that makes India one of the largest FMCG markets.FMCG Category and productsHousehold business Fabric break (laundry soaps and syntheticdetergents) household cleaners (dish/utensilcleaners, appall cleaners, toilet cleaners, airfresheners, insecticides and mosquito repellents,metal polish and furniture polish).Food and health beverages soft drinks staples/cerealsBeverages bakeshop products (biscuits, bread, cakes) snackfood chocolates ice cream tea coffee softdrinks processed fruits, vegetables dairyproducts bottled water branded flour brandedrice branded sugar juices etc.Personal Care Oral care, vibrissa care, skin care, personal wash(soaps) cosmetics and toiletries deodorantsPerfumes feminine hygiene paper products.INDIA battle AND COMPARISON WITH THE WORLDMARKETSMaterials availabilityIndia has a diverse a gro-climatic condition due to which there existsa wide-ranging and large raw 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 add up of caustic tonic and soda ash, the rawmaterials 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 raw materials givesIndia the locational advantage.Cost combatLabour equal 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 final in Asian countries. Easyraw material availability and low labour costs have resulted in a lowercost of production. Many m ulti-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 bridge 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. carriage across value chainIndian inviolables also have a presence across the entire value chain of theFMCG industry from tote up of raw material to final processed andpackaged goods, two 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 restrictions,reduced excise duties, automatic foreign investment and food lawsresulting in an environment that fosters growth. 100 per cent export point units can be set up by government flattery and use offoreign brand names is now freely permitted.TRENDS AND PLAYERSThe Indian FMCG sector is the fourth largest sector in the economyand 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 thro ugh their subsidiaries (HLL, PG, Nestle), whichensures new product dischargees 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 Existence 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 brandknowingness 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 celestial sphereS. NO.Companies1.Hindustan Unilever Ltd.2.ITC (Indian Tobacco Company)3.Nestl India4.GCMMF (AMUL)5.Dabur India6.Asian Paints (Indi a)7.Cadbury India8.Britannia Industries9.Procter Gamble Hygiene and Health Care10.Marico IndustriesMarket SummaryApproximately 80 percent of the Dutch food retail outlets are full moon 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 industrial parks, convenience 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 gather 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 bet to drive this trend.The top 3 b iggest 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 development at the expense of Aldi and Lidl. Recent market share figures for Luxembourg were not available when writing the report.Table 1 Market Shares of Leading Food Retailers in 2010NetherlandsBelgiumLuxembourgCompany realizeMarket 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 F or 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 rate special economic growthConsumers plan to spend more food euros at retail than foodserviceDue to the current economic situation the growth of value-added products has decrease at the expense of more basic 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 thereof consumer products, as discussed in the previous Food Retail report, markms to have stopped. Benelux consumer prices rank among the cheapest in spite of appearance the EU-27.Changing Consumer NeedsIn addition to the fact that Benelux consumers are throw away 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 suffer these consumers needs.The traditional neighborhood grocery 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, fill up 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. on that point is a trend to a healthier lifestyle in Western countries. The following US industries have all benefitted from this trend nut s (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 looking for and finding more information on this topic the media, including the Internet, TV and magazines, respond to this desire and forage 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. humour Change Carbon Footprint LabelingLast year the European focussing conducted a survey on compulsory Carbon Footprint Labeling (CFL). commonplace support for CFLl by country, varied between 47% to 90% of all 27,000 Europeans that were interviewed. Seventy 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 t he 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 curate of Climate and Energy, Mr. Paul Magnette, stated that in addition to the price, the CO2 dismissal 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 winning 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 retrieval of the economy 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, open 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 local EU market e.g.therefore has a strong negotiatingseafood, tree nuts, (exotic) fruit, vegetables, juices,pos ition and good contacts. highroad Map For Market EntryEntry StrategySuccess 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 been 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 untaught 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 p roducts like sauces, beverages and snack products. widget stores operate, in general, on a much smaller scale and therefore buy smaller quantities through wholesalers. Department stores work either