An Introspection of Organic Food Value Chain

COMPANY: MENTOR: MORARKA ORGANIC Dr. ALOK KR RAI FOODS PVT. LTD. FMS-BHU

PREPARED BY: NITENDRA SINGH MBA-MKT.

Presentation FlowCompany Profile, Value Chain Analysis, SWOT Analysis Objectives, Research Methodology, Sampling Plan. Business Processes

Data Analysis and Interpretation

Key Findings, Implications, Limitations

Company ProfileMorarka Foundation: established 15 years ago by GDC Ltd. Headed by Sh. Kamal M. Morarka Morarka Organic Foods Pvt. Ltd. was set up 10 yrs. ago to market the Organic produce of farmers.BRAN S own to Earth Back to Basics

PRODUCT LIST

Bulk-Field Crops-Farm Produce

Horticulture Crops & Controlled Climate Produce

Animal Husbandry Products & Livestock

Processed & Specialty Food Products

Non-Food Crops - Products

Value Chain AnalysisValue Chain analysis refers to analysis of the full range of activities which are required to be undertaken to bring the product from conception, to the different phases of production(This involves Physical conversion of the product) and finally to the end consumer.

>

only producer and supplier of organic foods in JAIPUR.

>Cost of Productionthe city

>PresenceSourcing.

of own farmer Base / Strong

>Products are not made readily available in >Demand assessment is not proper >All the procurement is done at one time. >Weak Marketing.

>Own processing and packaging unit. >Well Organized State of Art Lab for qualitytesting and R&D.

>Wide range of high quality certified products.

people.

>A developing segment of Health Conscious >Standard of living is improving. >Large untapped market. >Non-presence of suppliers of Organic food. >Authenticity >Mind Set of people.up of some new concept of food products giving people the required Health and other benefits.

>Coming

Research Objectivesy PRIMARY OBJECTIVE y To seek alternate channels as a medium of promotion and awareness of organic foods. y SECONDARY OBJECTIVES o To know about the satisfaction level of Morarka farmers and the problems faced by them, if any. y To assess the demand of organic foods in Jaipur. y To study the sales model of the company.

Research Methodologyy Population = Farmers [Organic, Conventional]; Consumers; Potential Customers; Hotels; Restaurants/Bakeries

Primary data collection: Face to Face interview with the

Sampling Units Farmers Consumers Potential Customers Hotels Restaurants/Baker ies Retailers Total

Sample Size 25 20 50 20 10 15 140

Key Stake holders in the Chain In depth interviews were conducted to get insight of Future of Organic food in institutions. Market Survey been done for interviewing the individual consumers and filling the Questionnaires.

Secondary data collection:Company documents, observation and internet. ,

The research conducted is exploratory

Supply Chain of the Company

Business ProcessesValue Addition is done in all the Business Processes to provide the end consumer with Pure and Quality Food. Morarka has following major processes: Procurement Processing Quality Control Sales

Procurement

Processing

Quality ControlRESIDUAL TESTING isthe most important one for Organic Food. In this the sample is checked for any kind of pesticides, chemicals present. y Given utmost importance as the company is known for the quality of the products. y At each stage of the supply chain quality of the product to be delivered is kept in compliance with the standards.

SalesDone in two ways: Bulk, Retail International sales of the company is more than the domestic one. Various institutions also buy directly from the company like Surya Mahal, Bake Hut, Indian Spice etc. Talking about Jaipur, Franchise Model of Sales is also adopted.

Farmer [Conventional] Mind Set of Conventional Farmers Produce and Price Perspective

Problems Faced in conventional Farming Amount of chemicals increases day by day, this increases the cost Water consumption increases Price compared to organic produce is less

Problems in Organic Farming-Their Perspective Yield is low for a long time. Problem of authenticity of the produce is there. Few pests, insects does not get removed by Organic methods, so chemicals

become mandatory to be used. Late payment for the product supplied. There is no proper channel of selling the Produce if somebody wants to sell it in the market rather than to the company. There is not much demand of Organic food in the market.

Retailer AnalysisProduct type being sold40% 0% Convention al 60% Both Organic

Inference Wide range of Organic food products is absent, majorly conventional products are being sold.

InferenceInterest to keep Morarka products is high due to its authenticity and wide range.

Challenges faced while buying organic foods20% 60% 20% Lack of supply less variety Both

Factors affecting buying of organic foods20% 40% 40% Unawaren ess High price Both

Inf r ncThere is lack f s liers f r r a ic f i the city. Retailers illi t keep Or a ic f pr cts t fi f ll ra e of the sa e.

Inf r ncAcc to retailer perspective, a areness is seen as ajor factor stopping the c stomers from buying Organic food. High price is yet another factor.

InterpretationDemand is highly important in pitching Retailers to keep Organic Products. Another problem is lack of Supply of Organic food products and less players of it in the market. Awareness level of customers and Price is to be considered while making strategies to pitch Retailers for Keeping Organic food products. Customer

Potential Customer AnalysisOrganic food/farming awareness40% 60% yes no 20% 30%

Source of information20% 30% Magazine Internet ietician Nieghbour

InferenceOrganic food awareness is there but respondents don t know about the brands of Organic foods. They don t have in depth knowledge about it.

InferenceUse of mass media for the publicity of Organic foods is majorly absent. Word of Mouth has been an important source of information about Organic foods.

Place of purchase20% 50% 30% Local grocery epartmt 20% store Super market

Who purchases food in the family10% 50% 20% serva t Lady of the housepare ts

InferencePeople in Jaipur prefer to buy grocery items from local stores. Though Departmental stores and are becoming popular.

InferenceIt is majorly the Lady of the House who purchases Grocery items. She is the main decision maker

Motivates to buy organic foodHealth 25% 50% 25% Taste factorQ ality

Type of organic food prefer to buy20% 10% 40% Veg & Fr its P lses

30%

InferenceHealth is the major factor on which respondents count on for choosing a food item.

InferenceVegetables and fruits section caters the maximum attention of the respondents.

InterpretationAwareness level of Organic food is satisfactory but not up to the mark among potential customers. Challenges expected to be Faced:High Price Availability Awareness

Current Customer AnalysisSource of information abt Morarka30% 35% relative 35% Morarka employee Friend

Inf r nc Self motivation has played an important role in making the respondents as orarka customers.

Inf r nc Mouth publicity has played a major role. Mr. Rakesh, sales manager of Morarka has played a significant role in spreading a areness about Morarka.

Interpretationy Overall satisfaction level was high. y Few problems in some of the products. y Problems in Packaging were also there Name of the Product is not clear. Price is also not visible. Small packing of Products is not available y Could become a Helping hand in spreading awareness about Morarka.

InferenceHigh satisfaction level. Few problems regarding the delivery of goods is observed as the outlet is far off. Problems in some products like Mirchi [colour, taste not so good], Dhania Powder [very thin] were also noticed.

Hotel AnalysisInterest to introduce organic menu20% yes 80% no

Awareness abt Morarka45% 55% yes no

InferenceAlmost all the Hotels want to have Organic menu except the one which are theme based or are not at all interested in Organic Food.

InferenceAwareness about Morarka as a Supplier of Organic Food is high but full range of products is not known to respondents. Also there is less awareness about the certification of the products.

Willingness to try Morarka products30% 70% yes no

InferenceThere is interest in trying Morarka products after they get to know about all the products and their prices. Price is playing imp. role while making decision for buying Morarka products.

InferenceQuality, cost, and authenticity are expected from Morarka as a supplier of Organic food.

Interpretation High interest level to introduce Morarka Organic Food products. Challenges expected to be Faced: High Price Authenticity

Areas to be Played on: Jaipur is a Tourist Place. Morarka is the only supplier of Organic food in Jaipur. It has Quality products

Bakery/Restaurant Analysisawareness abt organic foods20 yes 80 no

awareness abt morarka40 60 yes no

InferenceInterest in introducing Organic Food menu is high. Also, there are some restaurants which already have Organic food menu.

InferenceAwareness about Morarka is very low among the respondents. This calls in for the strategies to increase the awareness level of respondents about Morarka as a company of Organic food.

willingness to try morarka products30% 70% yes no

expectations from morarka10% 20% 20% 50% quality authenticity competitive cost timely delivery

InferenceMorarka has wide range of quality products so, respondents are interested to try them. Price and quality has played an important role in the decision making of trying the products.

InferenceQuality is the major factor to be played on by Morarka for selling making the respondents as its customers. important thing expected from Morarka.

Interpretation High interest level to introduce Morarka Organic Food products. Challenges expected to be Faced could be: Quality Authenticity

Areas to be Played on: There are few restaurants which serve Organic Food but facing

problem in getting the Organic Products. Morarka is only supplier of Organic food in Jaipur. It has Quality products

Findings

Raw material is taken from all over the country depending upon the quality. At JAIPUR all the processing and quality testing is done. Timely payment to farmers is important and company is lacking on this part. Customer is price sensitive. Poor awareness of the product as well as of the company. Lack of proper supply. Low demand due to unawareness. Lack of decentralisation . No sales force. Poor marketing of the products.

PRO UCT MORARKA means Organic and is promoted as Pure. It is a product of good quality and lab tested. Procurement is done at various places of the country depending on the quality of the produce. Packaging of the product is satisfactory with some minor problems. Quality testing of the product is done at each point of the value chain.

PRICE ORGANIC food market is a price sensitive market. Price of MORARKA products is a bit higher than the conventional food products available in the market. Who will purchase the product at higher rate when the consumers doubt the product s authenticity.

PROMOTION Buying Behavior of the customers is mainly influenced by the Lady of the house. So they are to be targeted Right positioning needs to be done in a aggressive way to make Down to Earth a GENERIC BRAND. Majorly mouth to mouth publicity is there, which needs to be further developed.

PLACE No presence of intermediaries is there in the distribution channel. Selling of the products is done in three ways: through retailers through Franchise direct Selling Availability of the product is not proper in the market.

IMPLICATIONSy INTERNAL ENVIRONMENT Stream lining of Marketing and Sales Process is highly required. Decentralization of the processes should be there. This would motivate the employees to work more efficiently. Training Modules has to be set for the Field Officers.It is recommended to appoint a separate Distribution Manager. To ensure streamline flow of the goods in the market. To assess the demand of Organic products in the Market. To assess the preference of the end consumer.

PRICE and PACKAGING: It was observed that the current

SALES STRATEGY: Planning for the Sales Team

customers are facing problems in the combination of price and packing. Huge difference in the price of a big and small packing. Proportional increase in the product price with the packing needs to be there. Packing has to be changed in a way to increase clarity and visibility of product name and price Combo packs could be introduced.

evelopment of Sales Team Training of Sales Team

PROMOTIONAL STRATEGY: Promotion will be done preferably in the evening time.

Canopies at various malls, Joggers Parks, Fitness Centres. Occasions like Melas and Celebrations There could be Food Stalls during occasions like Navratra time. Stalls could also be put at various fests in different colleges. Arranging of Organic Day/Organic Mela quarterly could be done. For this tie ups with different hotels could be done. Print media promotion could also be used. Door to door Promotion has to be increased. Posters, Product Detailers could be used at various clinics and Hospitals. Promotion could be done at supermarkets, Kirana stores by: Provision of Point of Touch and pamphlets at the stores. Small packing could be put in the bulk purchases of the potential customers at various retail stores. Small Banner could be Placed outside the house of current customers[major ones] saying I USE ORGANIC-MORARKA products. Internet is yet another way to promote.

COMMUNICATION STRATEGY:about Organic Food is the base of this Business. Awareness of Organic Food, its benefits etc is very low among the customers. Every benefit is to be played on to have a good communication strategy Knowledge

DISTRIBUTION NETWORK: Availability

of the products is

important. It is proposed to set up retail shop in the city at an appropriate location like M.I. Road, JLN Road. This shop is to be opened with a Big promotional campaign. Even a small restaurant can be opened in G.T. Bazaar, as it caters potential customers. Products could be put there for sales also. Moreover, a small counter could be taken outside Mc Donalds.

GO AHEAD..

GO ORGANIC..

LIMITATIONS1. 2. 3. Survey is limited to jaipur only( exception farmers) Few improper responses due to lack of awareness about organic foods. The chances of misinterpretation by consumers can not be ruled out.