Industry Studies 1: The Consumer Goods Industry

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Design of the module

Weeks 1: Overview of the industry

Weeks 2: Meeting the needs of people on a global scale Weeks 3: Product design theories and approaches

Weeks 4: Distribution channels and supply chainsWeeks 5: Operations, logistics and the role of technology

Weeks 6: Sustainable consumption and growth modelsWeeks 7: Regulatory and ethical contexts and managing a global reputation

Weeks 8: The role of innovation and changeWeeks 9: Developing and implementing strategies globally Weeks 10: Planning for the future

Assessment: This module will be 100% assessed by coursework of a maximum of 1800 words or equivalent

Structure of each topic

• Lecture presentation10 x 1 hour (face to face)

• Seminar10 x 1 hour (face to face)

• Workshop10 x 1 hour (face to face)

• Topic Review10 review questions per topic

• Assessment100% coursework

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Industry Studies: Consumer Goods Industry

Overview of the industry

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OverviewThe consumer goods industry touches virtually every person on the planet at some stage and encompasses a wide range of industries from consumer electronics all the way to small items that you see in your kitchens. Due to the sheer scale and eclectic nature of the industry defining it can be a complex task.  In this introductory lecture we will uncover the main dynamics of the industry, including its size and scope, and thereafter take an in-depth look at the different sub-sectors that make up this global industry. We will also take a look at the key players in the industry and evaluate their impact commercially and on sustainability of the environment. Finally, we will look at some of the key trends and challenges that the industry faces now and in the future.

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Learning Outcomes

• Determine and describe the dynamics of the consumer goods industry

• Understand and articulate the various sub-industries and key players that make up the CGI

• Critically evaluate the evolution of the CGI as well as its commercial and environmental impact

• Describe the key trends and challenges the industry is currently facing

The Changing Role of the CGI

Globalisation has changed us into a company that

searches the world, not just to sell or to source, but to

find intellectual capital – the world’s best talents and

greatest ideas

Jack Welsh, CEO GE

Let’s stop and consider your relationship with the CGI

Ok so what’s your favourite consumer goods brand?

You have 10 minutes to consider…

Where are all the materials

and resources sourced from?

How are they transported

to the markets in which they are sold?

How are they sold in these

markets?

What is the CGI?

The consumer products industry is very hard to define because of its rather eclectic nature and its close relationship to many

other industries. For our purposes it can be described as enveloping practically every item an individual can

purchase, especially in the areas of toiletries and cosmetics, appliances, electronics, beverages and food, and other generic

household items.

Key Facts:

Total sales of the Top 250 exceeded $3

trillion in 2011

Average Top 250 generated sales of $12.5

billion

Two-thirds of the volume of trade in the

world economy

Sub-dividing the market: DurablesIn economics, a durable good or a hard good is a good that does not quickly wear out, or more specifically, one that yields utility over time rather than being completely consumed in one use. Items like bricks could be considered perfectly durable goods,

because they should theoretically never wear out. Highly durable goods such as refrigerators, cars, or mobile phones

usually continue to be useful for three or more years of use, so durable goods are typically characterized by long periods

between successive purchases. Wikipedia, 2014

Durables: Trending over time

Consider the impact of the recession on the durable goods industry

Sub-dividing the market: Non-DurablesNondurable goods or soft goods (consumables) are the opposite of durable goods. They may be defined either as goods that are immediately consumed in one use or ones that have a lifespan

of less than 3 years.Examples of nondurable goods include fast moving consumer

goods such as cosmetics and cleaning products, food, fuel, beer, cigarettes, medication, office supplies, packaging and containers, paper and paper products, personal products,

rubber, plastics, textiles, clothing, and footwear. Wikipedia, 2014

Non-Durables: A Defensive Stock

Consider why non-durable stocks are a good option during a recession?Source:

BSE, 2014

Performance by Product Type

Source: Deloitte, 2013

CGI By Sector and Sales

Source: Deloitte, 2013

The Largest Players in the CGI

Source: Deloitte, 2013

A Truly Global Industry

Source: Deloitte, 2013

Region Breakdown of CGI Firms

Source: Deloitte, 2013

Where is the CGI investing?

Source: KPMG, 2013

Challenges in the industry

Source: KPMG, 2013

Data and Analytics

Source: KPMG, 2013

Big Data – Greater Predictability

Source: Target, 2013

Omni Channel: Consider the Mobile Consumer

Source: Deloitte, 2013

Big Data – Real Time Marketing (CRM)

View Video: http://www.youtube.com/watch?v=SwLjTXRv-a0

Improving Efficiency and Conditions in the Supply Chain

Growth of RFID Employee Conditions

Source: Telegraph, 2013

Sustainability

Source: Guardian, 2013

Appendix – Sources for illustrations

Slide 8:www.wikipedia.org

Slide 8:Ben & Jerrys, Apple, 212, L’Oreal, IKEA and Unilever Websites

Slide 13:www.rediff.com

Slide 15:www.bettertrades.org

End of presentation

© Pearson College 2013