IBPS Clerk Prelims 2011 Paper

DIRECTIONS (Q. 86-95) : Read the following passage to answerthe given questions based on it. Some words/phrases are printedin bold to help you locate them while answering some of thequestions.
Organized retail has fuelled new growth categories-like liquidhand wash, breakfast cereals and pet foods in the consumer goodsindustry, accounting for almost 50% of their sales, said data frommarket search firm Nielsen. The figures showed some of thesenew categories got more than 40% of their business from modernretail outlets. The data also suggests how products in thesecategories reach the neighbourhood Kirana stores after they haveestablished themselves in modern trade.
While grocers continue to be an important channel, for thenew and evolving categories we saw an increased presence ofhigh-end products in modern trade. For example, premium productsin laundry detergents, dishwashing, car air fresheners and surfacecare increased in availability through this format as these productsare aimed at affluent consumers who are more likely to shop insupermarket / hypermarket outlets and who are willing to paymore for specialized products.
Some other categories that have grown exceptionally andnow account for bulk of the sales from modern retail are frozenand ready-to-eat foods, pet food, diapers, pre-and post-washproducts, hair conditioners, and high-end shaving products.besides others. “With the evolution of modern trade, our growthin this channel has been healthy as it is for several other categories.Modern retail is an important part of our business” said managingdirector, Kellogg India.
What modern retail offers to companies experimenting withnew categories is the chance to educate customers which wasnot the case with a general trade store. “Category creation andmarket development starts with modern trade but as moreconsumers start consuming this category, they penetrate intoother channels,” said president, food & FMCG category, FutureGroup - the country’s largest retailer which operates stores likeBig Bazaar.
But a point to note here is that modern retailers themselvespush their own private brands in these very categories and canemerge as a big threat for the consumers goods and foodscompanies.
For instance, Big Bazaar’s private label Clean Mate is hugelypopular and sells more than a brand like Harpic in its own stores.“So there is a certain amount of conflict and competition that willplay out over the next few years which the FMCG companies willhave to watch out for,” said, KPMG’s executive director (retail).
In the past there have been instances of retailers boycottingproducts from big FMCG players on the issue of margins; but asmodern retail becomes increasingly significant for pushing newcategories, experts say we could see more partnerships beingforged between retailers and FMCG companies. “Marketdevelopment for new categories takes time so brand wars forleadership and consumer franchise will be fought on the modernretail platform. A new brand can overnight compete withestablished companies by tying up with few retailers in thesecategories,” President of Future Group added.