FMCG Customer Segmentation

Project Overview

This project analyzes customer segmentation strategies in the Indian FMCG sector using Tata Consumer Products Ltd. (TCPL) as a case study.

The analysis explores how consumer behavior, income levels, and lifestyle patterns influence product positioning and marketing strategy.

The study applies structured segmentation frameworks including STP (Segmentation, Targeting, Positioning), VALS (Values and Lifestyles), and RFM (Recency, Frequency, Monetary) to understand how FMCG companies target different consumer segments.

Business Problem

FMCG companies operate in highly diverse markets where consumers differ across income levels, lifestyles, and purchasing behavior.

Effective segmentation helps companies:

• Target the right customer groups
• Design relevant product offerings
• Improve brand positioning
• Increase customer loyalty and retention

This project explores how segmentation frameworks can be used to analyze consumer behavior and strategic product positioning.

Segmentation Models Applied

This study applies three widely used marketing and analytics frameworks:

STP Model
Segmentation, Targeting, and Positioning used to understand how FMCG brands identify and target specific consumer groups.

VALS Model
Values and Lifestyles segmentation used to analyze psychographic consumer behavior and lifestyle-driven purchasing patterns.

RFM Analysis
Recency, Frequency, and Monetary analysis used to evaluate customer loyalty and repeat purchase behavior.

Key Insights

• Higher FMCG spending is observed in households with monthly consumption expenditure above ₹15,000.

• Rural consumers demonstrate stronger brand loyalty and higher price sensitivity.

• Urban consumers show increasing demand for premium and health-oriented FMCG products.

• Psychographic segmentation highlights growing demand for wellness-focused products such as millet-based foods.