Fast Moving Consumer Product Term Papers

Contents

1. Introduction

2. Fast moving consumer goods (FMCG)

3. The supply chain and B2B marketing
4. PEST-Environment
4.1. Political / legal influences on B2B and B2C markets
4.2. Economic influences on B2B and B2C markets
4.3. Social influences on B2B and B2C markets
4.4. Technological influences on B2B and B2C markets

5. The marketing mix
5.1. Pricing strategies
5.2. Promotion
5.3. Place
5.4. Product policy
5.4.1. Branding strategies
5.4.2. Goods on B2B and B2C markets along the FMCG value chain
5.4.3. Packaging

6. Competition on B2B and B2C markets
6.1. Competition on B2B markets (SCHWARTAU example)
6.2. Competition on B2C markets (SCHWARTAU example)

7. Conclusion

Bibliography

Appendices

1. Introduction

This work identifies, analyses and evaluates major differences along the supply chain between business-to-business (B2B) marketing and consumer marketing (B2C) in terms of companies involved in the production and trade of fast moving consumer goods (FMCG). This work focuses on the marketing-mix concept, external aspects of marketing and examines aspects concerning the competitive environment.

This work mainly focuses on marketing activities along the supply chain of the brand SCHWARTAU. SCHWARTAU is a brand of food products (marmalade) by the company SCHWARTAUER WERKE GmbH. The company is located in Bad Schwartau, Germany and sells its products all over Europe with focus on Germany and mainly other Western European countries.

2. Fast moving consumer goods (FMCG)

FMCG is the term commonly used for products that are sold in high volume. FMCG are frequently purchased by customers. Examples would be food, hygiene products or cleaning supplies (http://www.inventoryops.com/dictionary.htm).

In terms of B2B marketing, marketing activities concerning FMCG would be mostly industrial marketing. An overview over industrial marketing and investment goods marketing as areas within B2B marketing is provided in the appendix (Figure 1).

3. The supply chain and B2B marketing

In order to carry out a comparative analysis it is important to determine where in the supply chain B2B marketing ends and B2C marketing begins. The simplest approach would define B2C marketing as all activities accomplished by the organisation selling goods or services to the consumer. A more sophisticated approach would make the separation earlier. When the product is already manufactured marketing activities would be defined as B2C marketing. Along the supply chain of FMCG B2B and B2C markets would be as follows:

illustration not visible in this excerpt

B2B

illustration not visible in this excerpt

B2C

Wright 2003 p. 2

Especially looking at supply chain management, which has experienced a renaissance during the previous years (Piontek 2003 p. 3), this separation appears more appropriate. A collaborative planning, forecasting and replenishment CPFR is more and more adopted along the B2C part of the supply chain. Therefore it is appropriate to regard manufacturers’, wholesalers’ and retailers’ marketing activities as an entity.

4. PEST-Environment

The external business environment on B2B markets differs from the environmental conditions on B2C markets in terms of FMCG. This chapter highlights major differences regarding the PEST factors. Furthermore a brief overview of SCHWARTAUER WERKE’s main country of operations (Germany) is provided in the appendix (Figure 4).

4.1. Political / legal influences on B2B and B2C markets

As SCHWARTAUER WERKE operates on the European market legal constraints along the supply chain are distinctive. On the B2C market consumer protection is very important. Legislation in European Union emphasises the consumers’ protection; especially when food is sold. On B2B markets legislation generally treats both sides of the contracts equally.

4.2 Economic influences on B2B and B2C markets

On B2C markets consumers’ purchasing power is an important determinant of success. A reduction of the consumers’ disposable income could encourage buyers of SCHWARTAU products to switch to no-frills products. As the demand on B2B markets in a derived one changes in consumer behaviour also affect the B2B market. But further determinants are currency issues, inflation, interest rates etc.

4.3. Social influences on B2B and B2C markets

Generally culture in areas SCHWARTAUER WERKE is operating in can be defined as a low context culture. But inter-organisational (inter-personal) behaviour between B2B and B2C is different regarding the decision making process of buying. FMCG are often bought spontaneously by consumers whereas in B2B relationships often Decision Making Units (DMU) are acting that encompass a variety of roles (Figure 5). A DMU is the entity of all organisational members that influence the process of purchasing (Huettner et al. 1994 p. 391). Hence the social interaction in B2B marketing is more complex.

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DEFINITION of 'Fast-Moving Consumer Goods (FMCG) '

These are consumer goods products that sell quickly at relatively low cost – items such as milk, gum, fruit and vegetables, toilet paper, soda, beer and over-the-counter drugs like aspirin.

BREAKING DOWN 'Fast-Moving Consumer Goods (FMCG) '

Nearly everyone in the developed and developing world uses fast-moving consumer goods (FMCC) every day. They are the small-scale consumer purchases we make at the produce stand, grocery store, supermarket and warehouse outlet. FMCG have short shelf lives, so, while the profit margin on individual FMGG sales is low, the volume of sales makes up for it. The market for $3.99 orange juice is a lot larger than the market for $399 juicing machines.

The FMCG marketplace is huge and includes some of the largest companies in the world – Dole Foods Co., The Coca-Cola Co. (KO) Unilever (UL), General Mills, Inc. (GIS). As investments, FMCG stocks are a generally low-growth, but safe bets with predictable margins, stable returns and regular dividends.

FMCG accounts for more than half of all consumer spending, but they tend to be low-involvement purchases. Consumers are more likely to show off a durable good such as a new car or beautifully designed smartphone, than wax poetic about a new energy drink they picked up for $2.50 at the convenience store.

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