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By RATNA BHUSHAN & SAGAR MALVIYA, ET Bureau | 10 Apr, 2013, 07.08AM IST29 comments | Post a Comment
FMCG biggies such as Cadbury, HUL, ITC, P&G offer big
discounts to push premium products on slowing demand
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FMCG biggies such as Cadbury, HUL,ITC, P&G offer big discounts to pushpremium products on slowing demand
READ MORE ON Varun Berry COO | united states | spokesperson | Shoppers Stop | rush |
NEW DELHI/MUMBAI: FMCG companies
such as Cadbury, Hindustan Unilever, ITC,
Procter & Gamble and Heinz have
launched discounts ranging anywhere
between 10% and 70% on high-value items
in the past two weeks as they try to push
premium products amid slowing demand.
Leading the pack is Cadbury India, whichnow sells a Toblerone 400-gm pack for
250, against 430 earlier, in a promotional
offer that the company says will run for two
weeks at modern stores.
"Brands often undertake strategic
programmes to promote products to
encourage trials and build a stronger
association with consumers," a
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FMCG biggies such as Cadbury, HUL, ITC, P&G offer big discounts to push premium products on... http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/fmcg-biggies-s...
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mainly to mop up more volume growth,
especially in the soaps and detergent category
that have seen sharp deceleration in volume
growth," he adds.
A JPMorgan report dated March 15 said
promotional intensity is increasing across
soaps, shampoos and laundry segments.
"P&G is offering 15% extra for its Rs 3
shampoo sachets. HUL BSE 0.73 % has been
offering price-offs on its premium detergent
brand Surf Excel Matic," it said.
Falling input costs are helping too. Prices of
crude oil and palm oil-key ingredients for
soaps and detergents-have declined 7% and
3%, respectively, month-on-month, helping
P&G, HUL and ITC BSE 0.25 % offer promotional
discounts on some of their brands.
Analysts at Edelweiss Securities suggest that
moderating growth has clouded next two
quarters' volume growth at the country's
largest consumer products maker, Hindustan
Unilever, and hence the promotions.
"Promotional pricing (no cut in MRP) has been
initiated across soap brands in select SKUs
(barring Hamam) in the 12-20% range owing
to cooling palm oil prices," Abneesh Roy of
Edelwiess wrote in a report. "This will l imit
price growth," he added.
Ashutosh Chakradeo, head of buying and
merchandising at HyperCITY Retail promoted
by retail chain Shoppers StopBSE 0.99 %
, saysmarketers have also started aping big retailers' strategy of bundling products to offer
discounts.
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FMCG biggies such as Cadbury, HUL, ITC, P&G offer big discounts to push premium products on... http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/fmcg-biggies-s...
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FMCG bi i h C db HUL ITC P&G ff bi di t t h i d t htt // i ti i di ti / / b i d t / d t /f /f bi i
7/30/2019 FMCG Biggies Such as Cadbury, HUL, ITC, P
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"As retailers, we always bundled products or offer discounts from our side while
companies resorted to lowering of MRP. But now companies have started to club
products together or give price-offs themselves with retailers adding on extra price-
benefits at the store level," Chakradeo said.
READ MORE ON Varun Berry COO | united states | spokesperson | Shoppers Stop | rush |
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NEWEST OLDEST RECOMMENDED (4) MOST DISCUSS ED AG REE DISAGREE LOGG ED IN COMMENTS NEW!
These FMCG companies are not doubt having a fat margin on all these products.
Consumers should not go with such brands, some their purpose is solved with any other
locally available, low cost substitute. These companies are trying to inject fear into the
minds of people telling that locally available products are not good. I have pledged not
using Lays, Soft Drinks & to some extend (mineral water).
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Cadbury in particular has resorted to discounts because for the first time in years it has
started to feel the pinch of Amul's relaunched portfolio of chocolates especially from the
Amul dark chocolate category. Cadbury has had, for a long time, a monopoly in the Indian
chocolate market with no worthwhile competition. Its time ITC also gets into the chocolate
business to take on the competition heads on.
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Companies should fix the right price,Keeping minimum profits,at the initial stage only. This
will help Aam Admi very much, thereby with larger volumes of quick sales such discounts
need not be given. All products should be reasonably priced and should be in reach of
common man.
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fsdfsa Agree (1)
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Some people will not touch these fake foods even if they are offered free. Agree (2)
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i think the price of the 200gm toblerone has been mis-stated... Otherwise makes no sense,
u wud buy 2 200gm bars instead of a 400gm bar and it would still be cheaper...
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Its consumer's time....!!! Agree (0)
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TO ENCOURAGE SALES Agree (1)
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Really I was thinking to stop sales. How did u become a Col. Agree (1)
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>>>SHARMA ALLU CHOR TEHKEDAR >>BLACK LISTED U >>
NOW FOUND JOB HERE AS CHAPRASI
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SHARMA ALLU CHOR TEHKEDAR >>BLACK LISTED U >> NOWFOUND JOB HERE AS CHAPRASI
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thanx Lamba, we'd NEVER have guessed! you're so clever! you're so
smart!
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apsolutely good move on part of the palyers. they gain achieve the economies of scale by
prpducing and selling more and more at the lower cost which in turn could up to their
profitablity irrespective of the fact that the market growth has shunned from past few
months. more ever this could be also a good startegy for retaining the customers and
keeping a place in theri minds of their brands.
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Less profiteering ,higher volumes. Agree (0)
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It is a good short term solution to gain new set of customers. However, in the long run all
depends on the purchasing power of people, which in turn is dependent on economy. One
can not expect a common man to purcahse a choclate worth Rs 430. The price should bewithin the reach of common man & then only customers will remain loyal, otherwise they
will purchase products only when discounts are offered.
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i think such type of discount not to pick up the market as much as thinking rather the
market will be more little in its variance as in a result ultimately no better result comes in
retailing of FMCG as its customers all the time to like better quality no inclination to lower
price including discount, so what is need is to concentrate into how to improve our product
quality and also to continue such process until their goodwill could be purchased in the
market
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i think such type of discount not to pick up the market as much as thinking rather the
market will be more little in its variance as in a result ultimately no better result comes in
retailing of FMCG as its customers all the time to like better quality no inclination to lower
price including discount, so what is need is to concentrate into how to improve our product
quality and also to continue such process until their goodwill could be purchased in the
market
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Big profits on premium products.. discounts no big deal..certainly a way to raise MRP so
that the comsumersdo not feel the punch suddenly..On the other hand, the economy has
certainly slowed down and the tend is visible in all product categories..
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i think they are struggling to increase volumes. And, with slowdown consumer spending is Agree (4)
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coming down. Considering inventory and to push topline, such decisions are taken. Once
things return to normal, they will jack up the prices again. Best decision is to use these
products minimally and save. Do not get attaracted with such discounts. The money you
will save can be easily earned by making an FD for sometime.
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Let us not get fooled by these discounts. This is the actual value and inspite of this they
are still making profits. Having worked in the food industry, I am aware and know what is
the production cost and profits involved. No FMCG and that too foreign companies have
love towards India to give such huge discounts. Also I have seen the cost of the products
shown above and they are not actually so heavily priced. These companies want to take
India for a ride by saying we are bringing premium brands to India.
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Yes you're right,i have worked for 1.5 yrs in an FMCG company and the
margins they have on each product is quite high,especially when you
express it as a percentage.The volumes of these products are
enormous,and HUL/ITC/whatever will still reap profits after offeringthese 'cosmetic discounts'
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with more than 1000% margins what is big deal if they offer 20-70% off. Even after offering
so much discount they are minting money by getting higher, quicker turnover. Nice
Marketing strategies ....
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Alarming situation.......Consumer spending power is decreasing and this will spell trouble
for the economy..........
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90% of consumer products can be reduced in price by half only if mamools and bribes paid
to the scumbag politicians and their goons are eliminated..why should soap or toothpaste
cost more than in the usa (after conversion)??stuff made with cheaper labour and local
materials???
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Consumer is the KING. Agree (0)Disagree (0)
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CONSUMER IS A CUSTOMER >>CUSTOMER MEANS > DIE WITH AGONY>>CUST IS KING GOOD IN BOOKS
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Clearly a shows that Indian economy has slowed down considerably and the cost of things
have gone out of the reach of common man, hence consumption has slowed leading to
price cut. Industry should reduce the MRP's as temperory cuts are not going to help the
common man.
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