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CONSUMER & INDUSTRIAL MARKETS - KPMG Report. CONSUMER MARKETS. Witnessing rapid change,offer new opportunities and challenges. attributed to a.dramatic shifts in buying behavior, b. growing urbanization, c. emergence of the service sector, d. changing trends/lifestyle,
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CONSUMER MARKETS Witnessing rapid change,offer new opportunities and challenges. attributed to a.dramatic shifts in buying behavior, b. growing urbanization, c. emergence of the service sector, d. changing trends/lifestyle, e. increasing power of the retailer
CONSUMER MARKETS Consumer market broadly classified into: • Consumer products • Food and beverages • Retail
CONSUMER MARKETS • CONSUMER PRODUCTS Salient features Intense competition, shifting customer loyalties, aggressive marketing and the presence of global players. Current Situation Companies are realigning their activities towards meeting specific customer needs, Radically changing business models Exploring new ways of collaboration-buyers & sellers. Adherence to WTO norms, exerting further pressure on local industries, forcing them to either enter into alliances and be competitive or exit M & A and marketing tie-ups impact companies and businesses.
CONSUMER MARKETS SUB SEGMENTS IN THE SECTOR CONSUMER PRODUCTS: • Air conditioners • Apparels • Bicycles • Consumer electronics • Consumer durables • Domestic electrical appliances • Cosmetics and toiletries • Fast Moving Consumer Goods (FMCG) • Furniture • Gems and jewellery [NCAER data]
CONSUMER MARKETS FOOD AND BEVERAGES Exceptional growth opportunities Increased consumer awareness Changing lifestyles and perceptions. Brand loyalty and positioning significant Adherences to international safety standards and certification –e.g.US FDA acceptable norm.
CONSUMER MARKETS SUB SEGMENTS IN THE SECTOR: • Bakery and milling products • Beer and alcohol • Beverages • Cocoa products and confectionery • Dairy products • Distilleries • Frozen foods • Meat and poultry • Packaged foods / snack foods
CONSUMER MARKETS RETAIL SEGMENT Increasing influence of western culture & media on Indian Household radically altered lifestyles & spending patterns giving rise to new business opportunities. Increased sophistication resulted in big retail chains Characterized by low margins and high growth. Companies need to be dynamic and respond to the ever-changing trends in consumer lifestyle and behaviour. Need to focus on providing VFM & generate loyalty for repeat purchase.
CONSUMER MARKETS SUB SEGMENTS IN THE SECTOR: • Convenience stores • Department stores • Food chain outlets • Mail order / catalogue services • Specialty stores • Supermarkets • Franchises
INDUSTRIAL MARKETS Companies with traditional competitive models are experiencing diminishing returns, & scale benefits can not be taken for granted. Companies must go beyond obvious in order to find new sources of profitable growth & maintain their competitive edge.
INDUSTRIAL MARKETS The industrial markets can broadly be classified into: • Chemical & pharmaceutical • Energy and natural resources • Industrial and automotive
INDUSTRIAL MARKETS CHEMICAL & PHARMACEUTICAL The chemical industry is characterized by sluggish growth and relatively low international and local demand in the traditional areas of bulk / commodity chemical products. These are typically large volume commodity products produced in capital intensive plants, sold to industrial and processing customers and distinguished by a very high degree of price. The pharmaceutical industry is poised for substantial growth with large-scale consolidation being the hallmark of companies in this sector. Companies globally are either merging to form mega companies with unmatched product portfolios or else entering into strategic and marketing tie ups With others in the same or even different product categories.
INDUSTRIAL MARKETS ENERGY AND NATURAL RESOURCES A rapidly increasing population, and growing urbanisation has put immense pressure on energy and natural resources in India as traditional sources of energy such as fossil fuel reserves are rapidly depleting. Alternatives to traditional fossil fuels are vital to help the country avert an impending energy crisis. Natural gas is a growing alternative to coal and all out efforts should be made to harness this valuable resource and set up infrastructure for the supply and distribution of natural gas as a substitute to coal. Increasing pollution in large urban metros has also resulted in demand for alternatives like CNG and ultra low sulphur diesel with low particulate emission to ensure relatively low emission as per internationally accepted norms.
INDUSTRIAL MARKETS SUB SEGMENTS IN THE SECTOR: • Crude oil and natural gas • Coal and lignite • Forestry and timber • Oil and gas • Precious metals
INDUSTRIAL MARKETS INDUSTRIAL AND AUTOMOTIVE SECTOR The industrial sector is characterized by relatively low investment demand and overcapacity. It is inextricably linked to the infrastructure projects being set up in the country. As a result the fortunes of companies in this sector are directly linked to the general state of economy, with a less than modest rate of economic growth resulting in a downward spiral in growth and profitability.
