FMCG PRODUCTS IN CIS COUNTRIES

IIPM-AHMEDABAD

NAME
JAY PATEL

IIPM-AHMEDABAD

INTRODUCTION
CIS stands for Commonwealth Independent States which comprises 15 counties. Russia has about 70% of manufacturing among all the countries. Objective:- On mutual recognition of certificates in respect of Goods which are subject to mandatory for certification. Inter trading is the prime objective. Russia is the 12th largest economy in the world by nominal value today and the seventh largest by purchasing power parity .

IIPM-AHMEDABAD

Who are CIS Countries?

http://cde.mtuci.ru/distance/cis_countries_map.htm

IIPM-AHMEDABAD

FMCG Products in CIS Countries

Fast Moving Consumer goods are sold quickly and relatively low cost. FMCG sector is a huge growth market. PEPSICO is growing at Double digit sales growth rate in CIS countries.

http://www.webclamor.com/increased-consumption-but-low-profit-for-fmcg-sector/

IIPM-AHMEDABAD

Structure of Consumption of selected products in 2010

3% 20% DAIRY PRODUCTS SOFT DRINKS PASTA,KETCHUP,BOUILLON CUBES SNACKS FAT PRODUCTS 9% PERSONAL CARE MEAT PRODUCTS 2% 29% 8% 9%

5% 9% 5%

HOT DRINKS
CONFECTIONERY FROZEN FOOD

1%

WASHING PRODUCTS

IIPM-AHMEDABAD

Product of ALLOYS Company

IIPM-AHMEDABAD

Market Research
Major Tea Importers of World (US$ in Millon)
Japan Pakistan US UK Russia 205 214 216 309 309

2010 sales of Tea by Russia(in Tonnes)

Other Tea Specialty Tea Green Tea Black Tea Tea 381 2060 21338 146741 171286

Tonnes
Tea
Black Tea Green Tea Fruit/herbal Tea Other Tea

Forecast of Tea Volumes by Sub-sectors: 2007-2012 2007 2008 2009 2010 2011
161441
141450 17,420 2237 334

2012
177255
149892 23,638 3317 409

164962
143382 18,814 2415 351

168206
145098 20,131 2611 367

171286
146741 21,338 2825 381

174318
148351 22,512 2060 395

www.aginskyconsulting.com Page

IIPM-AHMEDABAD

Market Research
Comparison of the Russian and Indian tea markets
Categories Market size in terms of retail value (in millions of US$) Market size in terms of retail volume (in millions of kg) Growth rate in terms of retail value (2006-07) Growth rate in terms of retail volume (2006-07) Per capita consumption (per kg) India 876.4 226.04 3.50% 2.60% 0.7 Russia 3,266 161.44 12% 2.30% 1.3

Average retail price (in US$ per kg)

Growth rate in retail price (2006-07)

$3.90
0.90%

$20.20
9.50%

www.aginskyconsulting.com Page

IIPM-AHMEDABAD

Marketing Research

Taste & Preferences

Companys Vision & Mission Wealth & Profit

Normal

5cs Analysis

Resources Handler & Sponcerers

Orimi Trade Ahmad Tea Fabrika Unilever SNG

Competitors

IIPM-AHMEDABAD

10

PEST Analysis
Rules & Regulation are strict for Trading the products other than CIS Countries CIS Countries have a good Growth Rate highest tea consumers in the world

Political

Economical

Social
CSR Trends in CIS Companies CRM is not favorable in CSR Companies

Technological
Change in Technology is fast SC is well develop

IIPM-AHMEDABAD

11

4Ps Analysis
Tea- Product Beverage segment Quality conscious Market not Price infected market

Product

Price

Place
Russia Ukrain

Promotion
Scope for Promotions are wide

IIPM-AHMEDABAD

12

SWOT ANALYSIS
Strengths
- Scale - Home Market Good Condition - Technological Pioneers - Focus on Discounts, Quality

Weaknesses
- International presence & Profit - Low Penetration in EU -Lack of international experience

Opportunities
- Growing as super distributers - Product Diversification - New Markets( Russia, US) - E- commerce

Threats

- To large To manage
- Inter nationalization Cost - Union opposition - Not present in large communities

IIPM-AHMEDABAD

13

Market Research
Competitors Analysis
The top five players in the Russian tea market, namely
Orimi Trade Ahmad Tea Fabrika Unilever SNG Mai Kompanva Akbar bros Ltd. They contributed to more than 50% of the total sales in 2010.
IIPM-AHMEDABAD 14

SCM Analysis
SCM system Analysis ( In $)
Particulars Cost(E) Revenue Marketing Import duty Shipping Charges Middlemen expenses Trade Promotion Profit 0.37
www.aginskyconsulting.com Page

Auction Export Local sale to retailer Sale to Russian Distributor sale to russian retailer 1.25 1.62 1.25 2.45 0.25 1.25 2.9 0.5 1 0.01 1 0.25 0.95 1.15
IIPM-AHMEDABAD

1.25 7

1.25 10.5

1 0.01 1 0.5 6.74

15

3.49

Market Research
Factor Affecting Purchase of Tea
3.5 3 2.5 2 1.5 1 0.5 0 Brand, 3.1125 price, 2.7 quality, 3.075

packaging, 1.087
Advertisement, 0.35

3
IIPM-AHMEDABAD

6
16

Market Segmentation
First Preference to
Russian Market

Than on other Countries like

Ukraine Market Kazakhstan Belarus Azerbaijan

IIPM-AHMEDABAD

17

Target Market
Russian Market
Russia is the largest market for tea in the world, both in terms of all tea varieties, as well as for just black tea. Per capita consumption of tea in Russia was 1.3kg compared to the average global per capita consumption of tea, which was 0.3 kg. Retail prices for tea in Russia are relatively high and growing. growing demand for premium specialty and healthy tea varieties

IIPM-AHMEDABAD

18

Strategy of Alloys in CIS

Product
First Preference to
Normal Tea

Than on other tea like

Black Tea Green Tea Fruit / herbal Tea Other Tea

IIPM-AHMEDABAD

19

Strategy of Alloys in CIS

Price
We use price penetration backed by cost plus price approach In which a manufacturer sets a relatively low price for a product in the introductory stage of its life cycle with the intention of building market share than slowly and gradually by way of innovation

IIPM-AHMEDABAD

20

Strategy of Alloys in CIS

Place
First Preference to
Hotel Industry & cafeterias (one tea Hotel is equal to 200 homes)

Than on other like

Individual Customer Corporate Offices Tea shops

IIPM-AHMEDABAD

21

Strategy of Alloys in CIS

Promotion
Events Advertisements Personal Selling Free Sample Pack Shelf space Promotion( By way sponsors) E- Advertising

IIPM-AHMEDABAD

22

CONCLUSION
Positive macroeconomic including

trends

in

Russia,

a rising GDP low inflation an uptick in consumer spending attractive operating environment Good consumer products market structure that allows for healthy, sustainable margins.

Zindagi promises the Supreme quality Tea. Zindagi will be a great success if it is launched.
IIPM-AHMEDABAD 23

IIPM-AHMEDABAD

24