MACRO AND MICRO ANALYSIS OF

FMCG INDUSTRY
(Cadbury and Dabur)
 Table Of Contents

Page NO.
1) Meaning of Environment 3

2) Importance of understanding 4
environment

3) Industry Overview 5

4) Macro factors affecting the 6-7

industry
5) Cadbury overview 8

6) Micro and macro factors 8-15

affecting Cadbury

7) Dabur overview 16

8)Macro and Micro factors 16-18

affecting Dabur

9) Conclusion 19
 Marketing Environment
Marketing environment is something which comprises of both the
internal as well as the external factors which have an effect on the
operations of the business. Marketing environment comprises of all
such factors which in some or the other ways affect the overall
activities and functioning of the organisation. Marketing factors
Internal factors are those set of factors on which the company has
control over. These factors mainly occur within the premises of the
organization. The internal factors include factors like, policies of the
company, customer relationship, budgets, and labour within the
organization.
Microenvironment:
Microenvironment includes all such factors which to some or the
other extent are controllable by the firm or the organization.
Microenvironment includes all such factors which are closely
associated with the workings of the organization in a major way.
Factors such as suppliers, retailers, distributors, shareholders,
competitors, government, consumers, etc. are included under the
microenvironment.
Macro environment:
Factors that cannot be controlled by the organization in any way are
included under the macro environment. These are those factors that
exist outside the organization. Factors that cannot be controlled by
the organization include political factors, economic factors, social
factors, technological factors and legal factors. The macro factors
are popularly known as PESTLE framework.
Importance of understanding the Environment

The first and foremost step that a business entity is required to do

before even beginning its operations is have a clear understanding
of the business environment it is going to function in. It is so
because the marketing environment affects the functioning of the
business in a big way and having an understanding of the marketing
environment can be beneficial for the organisation. Understanding of
the environment is beneficial in:
1) The best strategies can be developed under the light of analysing
of various happenings around the business.
2) Having an understanding of the environment will help out the
organizations in the planning procedures. The organisations can
plan out their things according to the prevailing market environment
if they know about the environment well.
3) By understanding the market environment, the organizations can
assess the exact needs and wants of the customers. Various factors
like economic and technological factors may have an effect on the
changing preferences of the customers, but a better understanding
of the marketing environment can come in handy.
4) Understanding of the business environment can help the
organizations in figuring out about the set of their competitors in the
market.
5) Understanding of the marketing environment will help the
organisation to understand the various market trends, analyse the
various opportunities available and keep a regular and constant
check on the threats.
 FMCG INDUSTRY

Fast Moving Consumer Goods is the 4th largest expanding industry

in the Indian Economy. FMCG industry contributes maximum to the
GDP of India. FMCG Industry basically deals with the packaging,
distribution and production of the consumer oriented products’.
FMCG goods are those set of goods which are manufactured for the
purpose of fast selling and an effective set of price is also attached
with the same. These goods are consumes by the consumers at
regular intervals. FMCG goods include detergents, beverages,
chocolates’, household goods, and many more items. Household
and personal care item amounts to more than 50% of the total sales
of FMC products. The market is expected to reach US$1.1 trillion by
the end of 2020 from US$840 million in 2017. The urban sector
contributes maximum to the FMCG industry by contributing 55% of
the overall FMCG industry and the rural sector contributing the rest.
But as the time passes by the rural sector too won’t be lacking
behind in terms of contribution to the overall sales. In fact we talk
about the last few years, the rural sector has contributed more to the
FMCG sector than the urban sector.
Macro Environment Factors Affecting FMCG Industry
With the advancements of technology and with the passage of time,
there has been a constant change in the lifestyles and as well as in
changing needs and demands of the consumer. Although, FMCG
sector is one of the growing sectors in the country and which
contributes the most to the GDP of the country, yet it faces certain
factors that can affect the industry overall. With the world facing
shortage of food and water and the ever growing population with the
ever changing lifestyles and needs of the customers, it becomes
very difficult for any industry to survive in the market unless it plans
out the strategies, have a proper understanding of the marketing
environment, understanding the viewpoints of the customers. In
order to understand everything mentioned it is very important to
analyse the factors which affect the organisation and which the
organisation need to keep a watch on for further growth.

The macro factors of the FMCG industry are:

1) Economic Factors:
The current economy is in a state of recession. The slowdown can
be seen in almost all the sectors of the country including that of the
FMCG products as well. Due to the slowdown and recession, the
country is facing unemployment and due to which the purchasing
power of the people also had reduced. Due to reduction in the
purchasing power of the people they now refrain themselves from
buying expensive items and the FMCG industry are forced to reduce
the price of its products to make it sell in the market. The industry
has to properly analyse the economic slowdown and make
strategies accordingly which would benefit the organization in the
long run.
2) Political factors:
Government of our country has implemented certain legislations to
comply with. The government provide opportunities to various SMEs
to invest in the business to help them grow. It becomes the
responsibility of the organizations to ensure all the rules and
regulations as stated by the government are followed by the
company.
3) Technological Factors:
With the increase in the advancement of technologies, the
organisations and companies are ensuring that the use of
technology should be at the maximum level, as the people prefer
more technological advancements. Organisations are using methods
like e-commerce to make the shopping experience of the
consumer’s hustle free and comfortable.
With the ever changing technologies in the market, it becomes very
important for all the industries and the companies to keep a close
eye on these changes so that the industries can adapt to these
changes and would get eventually benefitted from the same.
4) Macro-environmental opportunities:
Most of the rural segments of the country are still lest untouched by
the FMCG sector; it shall grab this opportunity with full hands and
should working on the expansion of the FMCG market.
 Cadbury
Cadbury was first established in the year 1824, in Birmingham by
Jon Cadbury. Cadbury is a British multinational confectionery
company which is owned by Mondelez International since 2010.
Cadbury can be stated as the second largest confectionery brand
only lacking behind Mars. The headquarters of Cadbury is located in
Uxbridge, west London and all its operations take place in more than
50 countries all over the world. Cadburys most famous and sold
items include Dairy Milk chocolate, the other one being the Crème
Egg and Roses selection box, and many other confectionery
products as well.
Cadbury India has appointed current youth heartthrob Actor Kartik
Aryan as the brand ambassador in order to attract the youth of the
country. Along with providing the tastiest confectionaries to the
consumers, Cadbury ensures taste as well as health of the
consumers shall also be taken into consideration, for that purpose
Cadbury has launched 30% less sugar chocolates. This scheme is
being considered as the most significant innovation in brand`s
history in India.

Micro environment factors affecting Cadbury:

As stated above micro factors include all such factors over which the
company has some control. The factors are closely related with the
functioning of the business. Factors like suppliers, distributors,
government, consumers, retailers, competitors, shareholders, etc.
are included in the micro factors affecting the functioning of the
business organization.
Microenvironment: SWOT Analysis
SWOT Analysis enables the managers to focus clearly on the
various factors that have effect on the overall working and
functioning of the business. SWOT analysis covers both the aspect
of external and internal environment of the industry. SWOT analysis
ensures that the firms develop various strategies that captures what
the firm does best in seizing the various opportunities that are
available for growth also at the same time describing the strategies
as used by the industry to avoid the external threats that might
negatively affect the firm`s overall revenue generation and as well as
the profit earned by the industry. The SWOT analysis of Cadbury is:
Strengths:

 Cadbury is the second most popular chocolate provider in the

world which is internationally acclaimed.
 Cadbury is a very popular and a prominent confectionery brand
at present.
 The various distribution and production strategies used by
Cadbury are well known and are very effective in nature, hence
it being such a popular brand.
 Cadbury provides quality assured products to its customers.
 The most popular product of Cadbury is the dairy milk
chocolate; it is the most sold chocolate in India, hence
contributing the most to the overall sales of Cadbury.
 Cadbury has adjusted itself to the entire customs taking place
all across the globe with the ever changing marketing
conditions.
 Cadbury is a front runner in terms of transformation; its recent
innovation being the introduction of 30% sugar less chocolate.
It has strong competence in manufacturing.
 Cadbury is one of the leading brands in confectionaries,
because it has a deep understanding of customers’ needs and
 wants; it exactly knows what the customers are looking and
what time.
 In terms of innovation, Cadbury targets the Indian festivals and
accordingly brings out customised chocolate box depending
upon the various festivals. In Raksha bandhan it brings out
different box of chocolate and in case of Diwali different box.
 With 9.9% of the global market share, Cadbury is the second
largest confectionary in the world.

Weaknesses:

 The competitors of Cadbury e.g. Nestle have a very diverse

product portfolio, whereas Cadbury mostly depends upon the
sales of its confectioneries and the beverage market, on the
other hand its competitors gain profit from the other sectors of
the industry as well.
 Although a leading brand in the confectionery yet Cadbury
doesn’t have great international exposure unlike its
competitors; it has a strong base majorly in the United
Kingdom, Europe only. Cadbury is still in its budding phase in
America; there is some time before it gets accustomed to the
market conditions of America.
Threats:

 "There has been a constant increase in the demand for cost

environment, particularly for energy, packaging, sugar,
transport and Global supply chain in low cost locations. This
increase in the demand affects the environment in a big way.
 There is always a cut throat competition going on between the
various competing brands in order to emerge the best out of the
lot. This competition has led to aggressive promotion and
 alteration of price by its competitors- there is a constant price
war going on in the market at all times possible.
 Due to people going after the lip smacking confectionaries
many social concerns have come in the picture like that of
increase in the level of obese people and consumers obsession
with the calorie count. Nutritional value and health of the
customers are often compromised in view of tastes.
Opportunities:

 The opportunities in the industry can be seen in the large and

wider countries as well as the newer and untouched areas
which include both the developing as well as the developed
countries; including the likes of the developed countries like
China, Russia, India and other Asian countries where the
population is on a rise, the income of consumer is on a rise so
the purchasing power of customers has also increased
resulting in the increasing demand for confectionary products.
 The confectionery market is mostly a characteristic of various
acquisitions and mergers as seen in the recent past of the
market. There are always opportunities always in the market in
terms of acquisitions by which the company can increase its
shares.
 The key survival in the fast moving consumer goods (FMCG)
market is a constant increase in its efficiency and reduction or
price alteration. Cadbury`s fuel growth and cost efficiency
programmes tend to bring huge cost savings in the company,
Cadbury focuses on the movement of production to countries
with comparatively lower costs, where the required set of raw
materials and labour cost is cheaper, the internal costs so
incurred are less the company makes use of the supply chain
efficiently, global sourcing and procurement, Cadbury carries
 out a well thought of actions and plans in terms of investment in
Research and development.
 Innovation can be termed as one of the most important and key
drivers when it comes to being the front runners in the market.
In order to stay at the top whilst taking into consideration health
factors of the people, healthier snacks with low calories needs
to be introduced. There should be more sugar- free products in
the Cadbury`s premium indulgence treats like its center filled
chewing gum varieties. There is a constant rise in the demand
for low- fat, natural and organic confectionary.

Porter`s Five Forces Analysis:

Supplier Power:
Cadbury has a wide list of suppliers who have a contract with
the company and that are able to support their on-going
production operation. There is a cut throat competition going on
in the market at present, for the procurement of various raw
materials including the likes of nuts or special ingredients but
still Cadbury has enough set of materials with it to satisfy their
production requirements. Cadbury has always put emphasis on
building a strong relationship with the supplier and in any
crunch situation this strong relationship always comes in handy.

Barriers in Entry:
Cadbury is at the moment a very popular and a known brand; it
can easily earn the trust of the countries and the various
investors. The only and the main obstruction that have a
negative affect on the production of Cadbury is to position itself
appropriately and thus gathering the necessary requirements in
order to ensure smooth entry and running of the factory and
keeping a constant check on the foreign policy and laws that
might affect the functioning of the company.

Power of buyer:
The demands for chocolates have declined because of the
people`s increased awareness towards health. The price of the
products is no longer subjected to increasing number of
competitors in the market that offers the similar type product at
a much ,lower cost might be the cause of the customer loyalty
alteration.

Rivalries:
There are many competitors in the business who are planning
to take over the supremacy of the company that been kept for
years. The difference in the choice of the customers depends
on their taste and preferences. And in the recent past,
companies like Nestle in the market are continuously
developing their new ideas making it harder to compete.

Threats for substitutes:

There is not much of competition which comes from its other
competitors, because Cadbury is a very well established brand
name in the market created by the company. The huge level of
equity, the brand name of Cadbury is transformed into three
different classes that make more effectiveness in the market.

Macro Factors Affecting Cadbury:

Political factors:
The company has a strong edge over its other competitors
because of its long existence in the market, and is one of the
oldest brands in the confectionery business. Having this
advantage the company is able to manage and adjust to
various rules and norms of different countries. Another
advantage is the experience of its senior management which
enables the new foreign country to also welcome the
company`s existence in their market because of its good
competence in the market.

Economic Factors:
Without a doubt Cadbury is contributing in a large quantity in
United Kingdom as well as in the economies of other foreign
countries where it operates. The number of sweet tooth’s in the
world is very high which ranges from all sections of the society;
the company has a label to its name as the best choice
available in the market for sweet loving consumers. Although
the sweet lovers are in great number yet it can be seen that
there is an economic downturn. This economic downturn is a
contradicting factor that is affecting all confectionery
companies. The government of our country has laid down GST
rates ranging from 18-28% on the confectionery items. These
rates of GST are not in the control Cadbury.

Social Factors:
A majority section of the society take sweets after their meals
so the overall impact of the confectionery business on the
society is really very great. Many of the individuals can enjoy
the happiness that sweets bring inside the house. But due to
several health issues and all the awareness campaigns, people
prefer to reduce the intake of sweets and chocolates. Many
health issues including obesity, stomach infections and dental
problems are caused by eating the various confectionery items,
so people have started to lessen down the intake of the
confectionery items thereby resulting in the reduction of the
sakes of the products. When it comes to valuing people,
Cadbury highly recognises the rights of the workforce and has
been valuing their ideas. Providing hygienic and excellent work
conditions for its workforce has been the top priority of the
company from the beginning.

Technological Factors:
Cadbury has always been a company which recognises the
traditional crafting of chocolates, but also it lays emphasis on
the importance and presence of technology in the line of
production and in the industry. Talking about the production line
of Cadbury, it has incorporated into various types of machinery
that makes its production a cost efficient procedure. Apart from
cost- effective measure the advancement of technology also
ensures better and improved set of items are produced in the
company.
 DABUR
Dabur India Ltd. is one of India`s largest seller in terms of ayurvedic,
medicine and in the natural products manufactures. Earlier Dabur
was into Pharma business as well but it demerged itself in the year
2003 and made a separate company with the name Dabur India Ltd.
The most diverse section of Dabur is its Health care division
comprising of over 260 products for the treatment of range of
ailments and body conditions, from cold to chronic paralysis.
Dabur is the fourth largest Fast Moving Consumer Goods company
in India with Consolidated Revenues of INR 7,800 crores and Market
Capitalization of over INR 46,600 Crore building on a legacy of over
130 years, Dabur is today`s one of the most trusted name and the
world`s largest Ayurvedic medicine & related products manufacturer
and natural health care company.

Micro Factors of Dabur:

The company was established in the year 1884: 125 years of Trust
& Excellence. It is among the top 4 FMCG companies in the country
at the present moment. World`s largest in Ayurveda and natural
health care. Dabur has strong brand equity and is a household
name. The most famous product of Dabur is Vatika. Hajmola, Real &
Dabur are ranked as India`s most admired brands. It has a wide
range of distribution networks covering 2.8 million retailers across
the country.
Presence of 17 world class manufacturing plants catering to needs
of diverse markets. Strong overseas presence, with 18%
contribution to consolidated suppliers over 300 diverse products in
the FMCG, Healthcare and Ayurveda segments. Dabur has a huge
global network of suppliers and vendors. Purchasing roughly 7,000
items with an annual procurement bill of over Rs. 500 crore.
The various competitors of Dabur are Hindustan Unilever Limited
(HUL), Himalaya, Colgate, Godrej Consumer, P &G, Gillette India,
etc.

Macro Factors of Dabur:

Demographic:
Dabur India`s Ltd.’s manufacturing activities that span across
various consumer products which are carried out in 17 factories
spread all across the borders of India. Dabur has always been in the
front when it came to popularizing alternative way of life, marketing
its products in more than 60 countries all across the World. Natural
forces at Dabur: Environment and nature is the lifeline of their
business.
The main focus of Dabur is on:

 Conservation of Energy.
 Technology absorption.
 Health, safety and environment.
Cultural Factors:
Since a very long time Dabur has mastered the art of producing and
providing the best Ayurvedic solutions and products present,
blending the traditional knowledge gained throughout with that of
scientific approach. Dabur aims at redefining the present ayurvedic
market and health care with the help of advertisements.
Environmental Factors:
Dabur ensures that proper care shall be given to ensure that the
pollution of the country in not put at stake when it came to
production of its products. Proper waste disposable systems shall be
installed to take care of all the wastes generated from the factories.
Since Dabur basically deals with natural products, its main
responsibility is the proper utilisation of the resources various other
factors affecting the business of Dabur are:

 The everyday changing taxation policy of the government.

 Changing production policies of the company at regular basis
might be difficult to get accustomed to.
 Undue intervention of the government into the workings of the
company.
 Technological advancements have led to the change in
lifestyles of the people.
 Effects of education on the population, e.g. The use of tooth
pasted shampoos was less in India, Niche markets invested in
Dabur by targeting the Oral care and Hair care.
 Some products of Dabur faced obsolesce as well.
 CONCLUSION
The conclusion that can be stated after the completion of this project
is that how the internal and external factors contribute to the overall
functioning of the businesses.
It can be concluded that in order to sustain in the market and create
and retain a strong customer base the company should carefully
examine and analyse the various factors affecting it. After the
examination of such contributing factors the company should then
work upon each of the factors. The company should be able to grab
all the market opportunities that comes down its way, the company
shall carefully examine its competitor’s works and make strategies
for the threats in its way. The industry shall work internally to
increase its strengths and reduce its weaknesses. Apart from this
the company shall also lay emphasis on building a strong customer
relationship and work for the overall improvement of the environment
because the presence of these markets impacts the overall
conditions of the country.