MM Project Final

Submitted by: Nikhil Garge Anil (12PGP070) Ankita Kothari (12PGP062) Sumit Agarwal (12PGP099) Abhishek Mukherjee (12PGP056)10/11/2012 IIM Raipur PGP (2012-14) 1

Contents Introduction to Industry, Study of Major Players &

Major Brands SWOT Analysis and BCG Matrix of Major Players Identification of Successes and Failures of The Industry Consumer Behavior and PLC for major players Identification of new products Promotion mix, Product Mix Price and Positioning Competitive Patterns Development of Marketing Plan for any productIIM Raipur PGP (2012-14) 2

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Introduction Annual Production is 20 Lakhs Metric Tonnes and Market of 55,000 crores Biscuit Industry in organized sector produces 65% while unorganized sector

produces 35% of the total production. Rural-Urban penetration growth of Biscuit Urban Market: 75% to 85% Rural Market: 50% to 65%

20% 15% 10% 5% 0%

Growth Rate14%13% 15% 10%

14%

15%

Per Capita Consumption of Biscuits in India is 1.8 kg, as compared to 2.5 kg to 5.5

kg in South East Asian countries and European countries, and 7.5 kg USA. Exports of Biscuit is estimated to around 10% of the annual production Wholesale and Retail marketing in the Biscuit industry is carried out with a network of C & F Agencies (for States and/specific Districts) Dealers / Wholesalers and Retail shops. Main Categories of Biscuits are :Glucose, Marie. Sweet, Salty. Cream, & Milk. Popular Brands of Biscuits in the country are, Britannia, Parle, Priyagold, Anmol, Sunfeast, Biskfarm, Dukes, Cremica, Priya, etc

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Major Players Major Players include Britannia, ITC, Parle Foods, Surya Foods, Kraft. Britannia occupies 33% of the market share. It has products in all the major segments like glucose, cream, snacks, sweet biscuits etcMarket Share

Surya Foods is known for its brand Priya Gold.

It has 4 plants located in Greater Noida, Lucknow and Surat. With a 40% share of the total biscuit market and

17% 3% 3% 11% 33%

Britannia Parle ITC Priya Gold Kraft 40% Others

a 15% share of the total confectionary market in India, Parle has grown to become a multi-million dollar company,. It has over 33, 00,000 distribution outlets

ITC is known for its Sunfeast Biscuits. It has got a market share of 11% volume wise. ITC has diversified from its flagship cigarette business to biscuits. It has 15 differentiated products.10/11/2012 IIM Raipur PGP (2012-14) 5

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SWOT Analysis: ITCStrengths Diversity Huge Market Share in various industries Leveraged its traditional business (Cigarettes) to develop new brands and segments Efficient distribution network Weaknesses ITCs flagship tobacco business and its name carry negative connection of tobacco with poor health and premature death To fund the Biscuit business, ITC is still dependent on its tobacco revenues

ITCOpportunities e-choupal is such an initiative which allows ITC to obtain raw materials from farmers and then blend them for consumers under purposeful brand names. This is going to give ITC a competitive advantage over other competitors. Rising income of consumers. Threats The obvious threat is from competition, both domestic and international. ITCs major income comes from cigarette industry. The over dependence on this industry can prove to be a threat.

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SWOT Analysis : ParleStrengths Strong Brand Recognition Diversified Product Range Extensive Distribution Network Strong insights into market psyche Weaknesses Reliance on retailers for displaying diverse product range Heavy dependence on only one brand Parle G Glucose biscuit

ParleOpportunities Estimated annual growth rate of 20 % Low per capita consumption will increase as income levels rise Increasing demand in market for premium, high margin products Possibility of Glucose biscuits in Mid Day meal schemes by Govt of India Threats Supply side constraints leading to increase in cost of inputs Decline in margins due to continued reliance on low priced products Entry of ITC with strong distribution channel & deep pockets

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SWOT Analysis : BritanniaStrengths Vast distribution network and nationwide sales force remains a high barrier for potential market entrants. Continued expansion of its functional food offerings. Expansions in production capacity Preserves the non seasonal food and makes it available all throughout the year. Weaknesses Industry and technology requires high investment Regular usage of processed food can cause alteration in health Numerous price hikes due to increasing prices of raw materials are detrimental to the companys sales growth Lower pricing power amid rising competitive pressures could place a further drag on its financial performance

BritanniaOpportunities A growing health-awareness trend represents a rapidly enlarging opportunity to diversify into healthy functional foods A continued spread of modern retail in India will ease distribution challenges Only 9% of food consumed in India is packaged and branded, thereby creating a large opportunity for growth.10/11/2012 IIM Raipur PGP (2012-14)

Threats Uncertainty and volatility of commodity prices and greater competitiveness can increase the cost of doing business. Increasingly competitive confectionery market as a result of the continued arrival of multinationals Indias inadequate distribution infrastructure reduces sales opportunities for Britannia at present.9

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BCG Matrix: BritanniaBusiness Growth Rate Relative Market Share

Milk treat 50-50 Tiger Little Hearts

Time pass Pure Magic

Marie-gold good day Treat

Nutri Choice

* While developing BCG Matrix for the three major players, the same convention has been followed.10/11/2012 IIM Raipur PGP (2012-14) 12

BCG Matrix: ParleBusiness Growth Rate Relative Market Share

Parle-g

Monaco jeera Parle 20-20 Chox Kreams Gold

Krack Jack Parle Marie Hide and seek

Sixer Must bites Must Stix Jeffs


BCG Matrix: ITCBusiness Growth Rate Relative Market Share

Dark Fantasy choco fills

Milk magic Sunfeast cookies creams

Bourbon

Sunfeast Glucose Snacky Sweet and Salty


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Britannia IndustriesSUCCESSES: One of Indias 100 most trusted brands listed in The Brand trust Report- 2011 published by Trust Research Advisory (TRA). Indias leader in business Market with about 40% share. Tiger, 50-50, Bourbon, Milk Bikis, Good Day are some brands which have become household name.

FAILURES: Expecting Krafts entry into the premium biscuit category, Britannia launched its ambush strategy through Treat-O, a product which resembled Oreo ultimately leading Kraft to press for trademark and copyright issue. After 6 months, Oreo had a 25% share in the chocolate cream segment while Treat-O has a share of 4% and the market share of Bourbon started dipping (7% slip in last quarter).10/11/2012 IIM Raipur PGP (2012-14) 16

ITC LimitedSUCCESSES: Diversification of this public conglomerate from cigarettes to Biscuits. Development of Sunfeast brand (2003) is a huge success story of ITC. In just a decade, the biscuit business has grown to a significant size with over 15 differentiated products under a rapidly growing market share and a solid market standing. Success of various other brands such as Choco Fills, Dark Fantasy (premium category) and huge market share of Sunfeast.

FAILURES: Failure of ITCs biscuit products cant be traced only because ITC has recently entered into this business.10/11/2012 IIM Raipur PGP (2012-14) 17

Parle FoodsSUCCESSES: The major success of Parle Products (Parle-G) lies in its pricing pattern. This phenomenal success has allowed Parle Products to induct comparatively expensive and youth oriented brands like Hide & Seek. Success and proliferation of brands like Monaco, Crack jack which are in the market for long and are tough competitors of the products of same genre by other market leaders (Britannia, ITC etc.). FAILURES: Monaco smartchips which was launched with an aggressive market strategy and was positioned as a healthy snack failed. The same failure in product development or market penetration goes with certain biscuits of Parle Products such as Golden Arcs, Milk Shakti, Feto, Happy Happy etc.10/11/2012 IIM Raipur PGP (2012-14) 18

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Parle-G Cultural Factors Biscuits are consumable products Cultural factors do not affect consumption

Social Factors Kids are influenced by family and the

people around them This habit continues even after they grow up10/11/2012 IIM Raipur PGP (2012-14) 20

Parle-G Personal Factors Age: Consumed by people of all age groups. Occupation: The buying behavior of the consumer is influenced

also by the occupation he or she belongs to. Income: Parle-G is a low-priced, value for money product and hence is consumed by lower n middle class consumers as well Psychological Factors Motivation: The main & the basic motivation which pulls

consumers towards buying Parle-g is simply hunger. Also, since biscuits are perceived as snacks, when a consumer is drinking tea he or she is motivated to buy Parle-G at that time Perception: consumers believe Parle-G to be a good quality product which is cheap too. They also perceive it to be a great snack with tea10/11/2012 IIM Raipur PGP (2012-14) 21

Hide and Seek Cultural Factors Biscuits are consumable products

Cultural factors do not affect consumption

Social factors Reference groups: parle hide & seek is targeted at the

youth The consumers are influenced by their friends and siblings Status: Parle hide & seek is a high priced product So consumers in the higher income groups would prefer to buy the since it would be a matter of higher status10/11/2012 IIM Raipur PGP (2012-14) 22

Hide and Seek Personal factors Age: the advertisements of this product(Starring Hrithik

Roshan) attracts people of age group 18-28 and since it is made of chocolate chips, children are also likely to be major consumers Occupation: Major Consumers for Parle hide & seek are students Income: Since it is a high-priced product the potential consumers for this product are high income earners Psychological factor Motivation: Teenagers and kids are motivated to buy it

because of the choco chips Perception: Consumers perceive this brand as tasty and crispy chocolate not very sugary10/11/2012 IIM Raipur PGP (2012-14) 23

Britannia MarieCultural Factors Biscuits are consumable products Cultural factors do not affect consumption

Social factors Targeted at all the health conscious

consumers Consumers are influenced by their family, friends and siblings10/11/2012 IIM Raipur PGP (2012-14) 24

Britannia Marie Personal factors Age: Calorie and weight conscious woman(18-35) and elderly

population are likely to be major consumers Occupation: Product usually not identified with blue collar workers Income: Income does not influence the purchase of the product. Consumers of all income groups do buy the product Psychological factor Motivation: 'Eat Healthy , Think Better' platform started by

Britannia motivated people to buy Marie biscuits Perception: Consumers perceive this a healthy fibrous biscuit

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Survey Questionnaire

1. Which segment sells more? a. Glucose b. Marie & salty biscuits c. Cream biscuits d. Other biscuits such as arrowroot, digestive biscuits, Hide n Seek biscuits 2.Who purchases each of the following biscuits? (Kids, youngsters, Parents, grandparents) a. Glucose b. Marie & salty biscuits c. Cream biscuits d. Other biscuits such as arrowroot, digestive biscuits, Hide n Seek biscuits 3. What kind of incentives are provided by the company to the retailers for ex: Cash, free items, discounts ? 4. What are the percentage margins offered to retailers by each of the following companies? a. Parle G b. Britannia c. ITC-Sunfeast d. Others please ask him about other products/brands he has 5. Request to shopkeeper for inputs on how to sell more biscuits & how he & the company can make more profits ?

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Place of survey Kirana stores Super Markets

The survey was carried out in several localities of Hyderabad and Kolkata.

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ObservationsThere was a clear difference in the selling patternsQ.Nos 1 2 3 4 510/11/2012

Kirana Stores Glucose , Marie Biscuits Parents ITC-Discounts + Free Packs Net avg margin 6-8% Bulk OrdersIIM Raipur PGP (2012-14)

Super Markets Cream, Oats, Digestive biscuits Kids, Youngsters, GrandParents No Proper Incentive Net avg margin 3-4% Customer Requirement28

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Britannia Industries Market Introduction stage: Tiger Banana, Nutri

Choice Sugar Out, Treat Fruit Rollz, New Britannia Milk Bikis, Britannia Nutri Choice cookies, Jim Jam Growth stage: Nutri Choice Thins, Honey & Oats Marie, Time Pass, Pure Magic, Little Hearts, Nice Time, Bourbon Maturity stage: 50-50, Good Day, Milk Bikis Saturation and Decline stage: NA10/11/2012 IIM Raipur PGP (2012-14) 30

ITC Limited Market Introduction stage: Sunfeast Milky

Magic, Sunfeast Dream Cream, Sunfeast Snacky, Sunfeast Nice, Sunfeast Sweet n Salt, Dark Fantasy, Choco Fills, Sunfeast Dream Cream Growth stage: Sunfeast Marie Light Maturity stage: Sunfeast Glucose

Saturation and Decline stage: NA

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Parle Foods Market Introduction stage: 20-20 cookies, Nimkin, Golden Arcs, Actifit Digestive marie, Festo, Happy Happy, Magix, Coconut Cookies, Milk Shakti Growth stage: Parle Marie, Hide n Seek, Top Maturity stage: Parle-G, Monaco, Krack Jack Saturation and Decline stage: NA

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Britannia IndustriesName of Brand Tiger Banana NutriChoice SugarOut Banana Flavors Available in packs of Price (Rs.) 2, 4, 10 Remarks TIGER - TIGER BANANA - power packed with IRON ZOR & and with the delightful taste of banana; also accessible to all. NutriChoice SugarOut is sweetened with "Sucralose," derived from sugar, which provides the same sweetness as any other biscuit, without the added calories of sugar. healthy yet mouth-watering treat to the kids Milk biscuit enhanced with nutrients 4 vital vitamins, iron and iodine Diabetic friendly biscuit (first time in India)

Litetime, Chocolate cream, and Orange cream

Treat Fruit Rollz New Britannia Milk Bikis

Juicy Apple, Strawberry Surprise, Tangy Orange and Delicious Dates Milk

Britannia Oat, Ragi Nutri Choice cookies10/11/2012 IIM Raipur PGP (2012-14)

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ITC LimitedName of Brand Sunfeast Milky Milk Magic Sunfeast Dream Cream Flavors Remarks nutritious crisp and crunchy biscuits

Choco vanilla, strawberry vanilla, orange cream, butterscotch cream Classic Salted, Chilli Flakes Coconut

Tasty cream biscuits targeting kids

Sunfeast Snacky Sunfeast Nice

Light and crispy biscuit crisp coconut biscuits showered with sugar crystals

Sunfeast Sweet n SaltSunfeast Choco Fills10/11/2012

Sweet and salty

Thin and crisp biscuits with a taste of salt and sweetnessTasty Chocolate cream biscuits

Choco Cream


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Parle FoodsName of Brand 20-20 cookies Nimkin Golden Arcs Actifit Digestive marie Festo Flavors Butter, Cashew Available in Remarks packs of Price (Rs.) 5, 10 and 18; 5, Targeting the cricket craziness of the country 10 and 20 (Cashew)

Crispy, zingy, salted 5 and 10 crackers Orange and Pineapple 10 and 20 Digestive Marie 5, 15 and 25

Juicy orange and pineapple jelly wrapped in a chewy cake roll. Mostly targeting kids. Biscuit packed with more fibre than normal Marie biscuits and less fat. Targeting health conscious people and a competitor of other digestive marie available in the market. Cream Biscuit

Orange, Choco, Elaichi, 5 and 10 Pineapple and Mango

Happy Happy Cookies topped with 5 and 10 delicious choco-chips Magix Coconut Cookies Milk Shakti10/11/2012

Cocoa, Cashew Coconut biscuits Both milk and honey

6 and 10 10 5 and 10


Health biscuit Parle Products had no coconut biscuits previously. Brand Ambassador M S Dhoni. Competitor of Milk Bikis by Britannia.36

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Promotion Mix Sales Promotion Advertising PR

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Sales promotionParle Every year it holds day fairs at branded venues where games and fun events are organized for the employees of Parle and their families where Parle products are giveaway prizes.

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Advertising Parle Hide & Seek: Tasty itna ki dil aa jaye

http://www.youtube.com/watch?v=areJFQQfizI10/11/2012 IIM Raipur PGP (2012-14) 40

Hide n Seek banks on temptation Brand ambassador Hrithik Roshan Communication based on the platform of temptation Its tagline Tasty Itna Ki Dil Aa Jaye attempts to

communicate the idea that Hide n Seek could be the starting point of a romance This gave a different twist to the idea of enjoyment, from the earlier TVC which featured Hrithik on the dancefloor

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Oreo :"Twist, lick, dunk" ritual

http://www.youtube.com/watch?v=HGCZRMb904810/11/2012 IIM Raipur PGP (2012-14) 42

Oreo banks on creating memorable moments Projected Oreo as more than just a biscuit. The Twist, Lick and Dunk ritual which is an integral

part of the brand has brought fun filled moments of bonding to countless families across the globe. In todays world, the simple freedom of childhood is increasingly being compromised, and carefree, innocent, and slowed-down family moments are rare. This marketing campaign gives families an opportunity to spend more time together creating memorable moments10/11/2012 IIM Raipur PGP (2012-14) 43

ITC Sunfeast Dark Fantasy: A feast for the senses?

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Dark Fantasy: Indulgence with a twist Sunfeast's premium range of biscuits Dark Fantasy ad

showcases the extraordinary quality of the ingredients and bring alive the idea of taking a bite and "escaping into an extraordinary experience Showcase the sheer quality of the product on offer. Idea to portray that you can lose yourself in the delightful taste of it Commercial captures the "mmm" moment -- when one enjoys the taste of something delicious -- by portraying a complete engagement of the senses. Communicate the richness of the unmatched biscuit ingredients (for instance, the chocolate in the biscuits being originally from Ghana), and communicate its premium positioning.IIM Raipur PGP (2012-14) 45

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Public Relation (PR)Britannia Nutrition Foundation A non-profit institution, dedicated to activities and programs delivery quality, affordable and accessible food to children who suffers malnutrition Britannia with Naandi and Gain supply fortified Tiger biscuits (rich in Iron) to supplement the MidDay Meal program in schools

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Parle In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero, Shaktimaan that went on to become a huge success. In the year 2002, a national level promo - `Parle-G Mera Sapna Sach Hoga' was run for a period of 6 months. The promo was all about fulfilling the dreams of children. Parle Saraswati Vandana, one of its initiatives, is an inter-school contest based on the Saraswati Puja celebrations. Since it started in 2002 it has seen a tremendous increase in participating each year, with entries coming from schools of West Bengal.10/11/2012 IIM Raipur PGP (2012-14) 47

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Britannia

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ITC Limited Sunfeast

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Parle

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Mass Consumption Products Low priced, plain vanilla products

Available at price points as low as 2 INR Price was not changed Net weight of package was reduced to

account for increase in raw material prices Britannias Tiger is available in packs priced at Rs.2, 4 and 10 Tiger Banana biscuits (new product) are also available in pouches of Rs.2 and 410/11/2012 IIM Raipur PGP (2012-14) 53

Light & Digestive biscuits Marie biscuits as the name suggests

Salty biscuits are positioned similarly Positioned as a product to be consumed by family together

Refined, mid-high income product Parle Nimkin positioned as an accompaniment for tea

Minimum price point for the products in this segment is at Rs 5 & is also available in packs priced at Rs.2510/11/2012 IIM Raipur PGP (2012-14) 54

Textures & Creams Brands seek to leverage unique properties Brands PODs include taste, texture, flavour

Priced for mid-high income consumers Some products appeal to the long tail of demand through products such as Dark Chocolates &

strong cocoa based cream Parle Hide n Seek positioned as a youth oriented brand, recently launched as Easy to Carry penetration pack of Rs 4 per 25g ITC Dark Fantasy Chocofills priced at Rs.30 for 84 g pack10/11/2012 IIM Raipur PGP (2012-14) 55

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Competing BrandsGlucoseBritannia Tiger Sunfeast Glucose Parle G

Marie & SaltyMarie Gold, Time Pass

CreamCream Treat, Bourbon

Marie Light, Sweet & SaltParle Marie, Monaco

Milky Magic, Dark FantasyKreams, Festo

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Basic information about the ProductProduct Name Genre of the Product Choco Vista Premium Chocolate Cream

Target Market SegmentInitial Locations Launch

Upper and Upper Middle Income Class

for All the metropolitans such as Delhi, Mumbai, Chennai, Kolkata etc.

Current Market value for Rs. 3600 Crore Premium Cream Biscuit in India

Expected Market Growth 12% (Tentative) Rate

Market Share of Major Players in the Premium Cream CategoryAfter the introduction of

Krafts Oreo, the relative market shares of other companies have decline considerably.Kraft has achieved 31%

market share in this category very soon. Britannias share has declined from 75% to 45% in just 6 months.

Pricing Strategy, Competitive Pattern and PositioningParle Hide n Seek ITC Sunfeast Dark Fantasy Choco Fills Britannia Treat Britannia Bourbon Kraft/ Cadburry Oreo Rs. 15 for 100 gms Rs. 30 for 84 gms Rs. 15 for 75 gms Rs. 10 for 70 gms Rs. 20 for 167 gms Rs. 345 for 500 gms

Considering the price of other popular brands, it is recommended to keep the price of Choco Vista as Rs. 30 per 100 gms. Our target is the upper middle and upper income group of the society, hence it will be possible to get hold of the consumers of the above mentioned products. Positioning of this product will be the premium choco cream

Promotion MixAdvertisements Pre Launch: Campaigning in shopping malls, multiplex, big restaurants, corporate off sites. Post Launch: Preparing and promotion of advertisements clearly indicating Choco Vista as a family product specifically targeting upper and upper middle class income group. Maintenance Marketing: Producing a family TV soap opera, frequent ads in Print media and visual media.

PR Interview of Marketing Head who will basically compare Choco Vista with Oreo and other brands. Promotion of CSR activities as that of Britannia, Parle etc.

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MM Project Final