Changing Trends in Retailing and FMCG Industry in India*



Case Code : CLBS019
Publication date : 2004
Subject : Business Strategy
Industry : Retail
Length : 05 Pages
Price : Rs. 50

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Key words:

Penetrative pricing, market penetration, rural advertising, disposable income

* This caselet is intended for use only in class discussions.
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The caselet discusses the emerging trends in the retailing industry. It explains the changing dynamics in the FMCG sector through the late 20th century, which forced the FMCG majors to revamp their product, marketing, distribution formats to meet the changing customer requirements or preferences.


 » The nature and changing dynamics of the Indian retailing business and the reasons behind the evolution of many organized sector players.

 » The need for innovations and customer-centric strategies in the retailing & FMCG businesses.


With the penetration of their products reaching saturation levels in many urban markets, FMCG companies had to turn towards rural areas in order to sustain revenue growth and profitability.

Since the disposable income in the hands of rural people had been increasing in the late-1990s and the early 21st century, it made sense for companies to focus their energies on this segment. Industry observers also felt that HLL was at an advantage compared to most of its competitors – thanks to its consistent, pioneering efforts towards establishing well-entrenched distribution and marketing networks to reach the vast Indian rural masses.

Traditionally, HLL used both wholesalers and retailers to penetrate the rural markets. A fleet of motor vans covered small towns and villages...

Questions for Discussion:

1. Discuss the various measures taken by HLL to increase the awareness and penetration levels of its products in the Indian rural markets.

2. Comment on the marketing structure adopted by HLL to ensure the availability of its products in the rural areas? How far has the distribution strategy contributed to HLL’s growth in rural India?