FMCG market swallows the world

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

People working in the retail industry, the phrase "FMCG market" is repeated several times a day. Although many do not fully understand the meaning of this abbreviation. Fast Moving Consumer Goods - fast moving consumer goods. Logically, it should be bread, milk, chewing gum, cigarettes, household goods.

Not everything is so simple: the listed goods are divided into three groups. Only one of them can be designated as a commodity entering the FMCG market - chewing gum and cigarettes. Classical signs of products belonging to this sector:

1. Low price.
2. Producer margin is low.
3. High purchase frequency.
4. Possibility to generate an increase in demand through marketing activities.
5. Short term use.
6. Impulsive buying decision.

It follows that household appliances are not included in the FMCG market. For example, a refrigerator: the purchase decision is made consciously, the choice is made for a long time, the need to purchaseoccurs when the old one is out of order or obsolete. It rarely happens. Bread and milk: each household buys these items daily. But the total volume of purchases of these goods cannot be influenced. If a family consumes one loaf of bread a day, no amount of advertising will force them to eat more. Only quality and price can influence the decision to buy bread from a certain manufacturer, no marketing will save underbaked bread.

The above reveals another sign of a product entering the FMCG market: the consumer does not feel an extreme need for it. In fact, you can do without chewing gum, without cigarettes too. After all, from the moment of birth until the time when the cigarette became a necessity, a person did very well without nicotine.

The fact that these products have a low return on sales forces a manufacturer with experience in the FMCG market to stimulate its increase using two ways:

• to inform the end consumer as widely as possible about the importance and necessity of the product;
• make the product as accessible as possible to the end consumer.

The first is achieved by advertising. It can be explicit advertising: banners, streamers, advertising in the media. Hidden advertising (the main character of the series puts down a pack of cigarettes - a close-up for a split second), custom articles by "independent experts" about the benefits of the product, other ways to influence the consumer's subconscious.

The second occurs in the struggle for space on the retailer's shelf. Here and payment for a place on a shelf in the zone of maximumprobability of purchase (as close as possible to the checkout, at the level of the buyer's eyes). At the same time, trained merchandisers work with the shelf, whose task is to lay out products on the shelf in accordance with corporate standards and planograms. If a product requires refrigeration prior to consumption, the manufacturer will loan a branded refrigerator to the retailer.

Besides, manufacturers constantly hold campaigns to promote their brands, the FMCG market does not like those who rest on their laurels. As soon as the manufacturer of any carbonated water reduces marketing efforts, he immediately loses market share. The neuro-linguistic programming of the sales staff is also being used: a person who once sold a famous brand of sparkling water will never drink the water of a competing company.