A SUMMER TRAINING REPORT ON MARKETING STRATEGIES IN BRITANNIA INDUSTRY

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (B.B.A) GURU JAMBHESHWAR UNIVERSITY, HISAR

TRAINING SUPERVISOR MR. J.L. SALUJA REGIONAL MANAGER

SUBMITTED BY:PARINITA MAKKAR ENROLLMENT NO. 05511242134

SESSION: 2005-2008

GURU JAMBHESHWAR UNIVERSITY HISAR

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h e r h e r

h e r

TO WHOM IT MAY CONCERN

This is to certify that Parinita Makkar, Student of BBA III year, Jagannath Institute of Mangement Sciences, Delhi has successful completed her summer 6/5/2007 training to undergone and training her project from title

5/7/2007

Marketing Strategies in Britannia Industries Limited. We wish her all the best for her future.

h e r h e r

h e r

ACKNOWLEDGEMENT

I would like to express my sincere gratitude towards MR. YOGESH GUPTA (H.R. Manager) who has been a constant source of inspiration and for his extensive guidance, cooperation and support. I would like to thanks MR.J.L SALUJA (Regional Manager Britannia) for never ending and valuable guidance. Finally, I wish to express my gratitude to all those who have in one way or other helped me in the successful completion of my project report.

PARINITA MAKKAR

EXECUTIVE SUMMARY
The bread and biscuits constitutes the largest segments of consumer foods in India. Both Biscuits and Bread are items of mass consumption in our Country. Almost 2 million tons of biscuits are produced in India each year and consumption is growing at 10-12 per cent annually. The per capita consumption of biscuits in the country is about 1.52 kg annually. Contrary to popular belief that biscuits are consumed by the middle and high income groups, it is actually the only nutritious and hygienic food product for children, lower income groups and the rural population. Nearly 50 per cent of biscuits produced are consumed in rural areas and 30 per cent by income groups earning below Rs 750 per month. Every 100 gm of glucose biscuits roughly provides 20 per cent of energy, protein and calcium required by an average adult. So as to explore the opportunities in these sectors, a large no. of companies are trying to increase their consumer base in these areas. for this they are offering various promotional schemes in order to make their brand familiar to consumers and to have a Competitive edge. Britannia Industries has made a rapid progress in the variety, quality and quantity of biscuits and baked foods and has become Indias biggest brands and the preeminent food brand of the country. It is equally recognized for its innovative approach to products and marketing. The companys offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented recently launched MARIE GOLD DOUBLES Having succeeded in garnering the trust of almost one-third of India's one billion population and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality.

This project aims at studying the effect of the various Promotional schemes offered by Britannia during the period of May and June on its overall sale of the products offered in Promotions. The total increase in sales percentage was also tracked. The analysis of sale was done for both the months individually and then compared depicting the effectiveness of these promotions during these months. Comparison was also made regarding the total stock dispatched in rural market and Urban markets.

TABLE OF CONTENTS
S.No
1.

Topic INTRODUCTION
About the Industry Range of Product and Services Rules and Regulations

Page. No.
1 1 11 12 23 23 23 23 23 24

2.

RESEARCH METHODOLOGY
Data sources Primary data Secondary data Research objectives Questionnaire design / formation Sample design /sample element / unit Extent Time frame Sampling frame Limitations of research

24 24 24 25 25 26 26 30 36 36 40

3.

COMPANY PROFILE
Strategic clock: Britannia Industries Limited The Origin of Eat Healthy Think Better Five Force Model For Britannia Britannia Supply Chain Major Consumer Promotional Tools S.W.O.T Analysis

49 64

4.

DATA ANALYSIS AND INTERPRETATION

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5. 6. 7. 8.

CONCLUSIONS AND FINDINGS RECOMMENDATION ANNEXURE BIBLIOGRAPHY

86 89 90 93

CHAPTER - I INTRODUCTION

INTRODUCTION
About the Industry
BISCUIT INDUSTRY IN INDIA - AN OVERVIEW Biscuit industry in India in the organized sector produces around 60% of the total production, the balance 40% being contributed by the unorganized bakeries. The industry consists of two large scale manufacturers, around 50 medium scale brands and small scale units ranging up to 2500 units in the country, as at 200001. The unorganized sector is estimated to have approximately 30,000 small & tiny bakeries across the country. The annual turnover of the organized sector of the biscuit manufacturers (as at 2001-02) is Rs. 4,350 crores. In terms of volume biscuit production by the organized segment in 2001-02 is estimated at 1.30 million tonnes. The major Brands of biscuits are - Brittania, Parle Bakeman, Priya Gold,Elite,Cremica, Dukes, Anupam, Horlicks, Craze, Nezone, besides various regional/State brands. Biscuit industry which was till then reserved in the SSI Sector, was unreserved in 1997-98, in accordance with the Govt Policy, based on the recommendations of the Abid Hussain Committee. The annual production of biscuit in the organized sector, continues to be predominantly in the small and medium sale sector before and after dereservation. The annual production was around 7.4 Lakh tonnes in 1997-98 In the next five years, biscuit production witnessed an annual growth of 10% to 12%, up to 1999-00. The annual Growth showed a decline of 3.5% in 2000-01, mainly due to 100% hike in Central Excise Duty (from 9% to 16%). Production in the year 2001-02 increased very marginally by 2.75% where in 2002-03 the growth is around 3%. The Union Budget for 2003-04 granted 50% reduction in the rate of Excise Duty on Biscuit i.e. from 16% to 8%. The Federation's estimate for the current year indicates a growth of approximately 8% to 9%. However the average utilization of installed capacity by biscuit manufacturers in the country has been a dismal 60% over the last decade up to 2001-02. 10

Though dereservation resulted in a few MNCs, i.e. Sara Lee, Kellogs SmithKline Beecham, Heinz etc entering the biscuit industry in India, most of them, with the exception of SmithKline Beecham (Horlicks Biscuits), have ceased production in the country. On the other hand, import of biscuits, specially in the high price segment has started from 1998-99, but however, the quantum of imports has not so far increased alarmingly and has remained at around 3.75% of the consumption of biscuits in the country in the year 2001-02. However, recent imports from china industries cheaper verities of biscuit, needs to be examined with cautions, especially in the context of the price as the low margin based domestic industry, which is operating at 60 % of the total installed capital. Exports of biscuits from India has been to the extent of 5.5% of the total production. Export are expected to grow only in the year 2003-04 and beyond. Biscuit is a hygienically packaged nutritious snack food available at very competitive prices, volumes and different tastes. According to the NCAER Study, biscuit is predominantly consumed by people from the lower strata of society, particularly children in both rural and urban areas with an average monthly income of Rs. 750.00. Biscuit can he broadly categorized into the following segments: (Based on productions of 2000-01) Glucose 44% Marie 13% Cream 10% Crackers 13% Milk 12% Others 8%. In recognition of industry's obligations towards the community, being a part of it, biscuit manufacturers supply biscuits to the social welfare agencies in all States for the benefit of school children, senior citizens and other needy sections of the society. FBMI Members have always responded positively to our appeal as also by the Government, to rush truck loads of biscuits to the people affected by earthquakes, floods, famine etc. Our industry has also participated in supplying 11

biscuits to the people of war ravaged Afghanistan and presently to the Iraqi people, under the aegis of the UN. As regards the consumption pattern is concerned. surveys and estimates by industry from time to time indicate the average consumption scenario in the four Zones have been more or less close to each other, as below: Northern States: 28% Southern States: 24% Western States: 25% Eastern States: 23% Though India is considered as the third largest producer of Biscuits after USA and China, the per capita consumption of biscuits in our country is only 2.1 Kg., compared to more than 10 kg in the USA, UK and West European countries and above 4.25 kg in south cast Asian countries, Le. Singapore, Hong Kong, Thailand, Indonesia etc. China has a per capita consumption of 1.90 kg, while in the case of Japan it is estimated at 7.5 kg. In view of the meager per capita consumption even as penetration of biscuits manufactured by the organised sector, into rural areas in India, has been very good during the last 10 years, as also in the metro and other cities, small towns etc. However, in spite of this, the industry has not been able to utilize about half of their installed capacities. Biscuit is a comparatively low margin food product in the PMCG (Packaged Mass Consumption Goods ) sector. The commodity is also price sensitive, as a consequence of which, even when the Excise Duty was doubled on biscuits in 2000-01 biscuit manufacturers, including the major brands, were not able hike MRPs to the extend of the steep increase in the Duty. Taxation, both Central Excise Duty as also State Sales Tax, other miscellaneous levies i.e. turnover tax, local area tax, mandi taxes, purchase tax, octroi etc etc, has been a major deterrent in the growth of the biscuit industry. The CII Study Report has identified Biscuit as one of the products that should treated as "Merit Good for the purpose of liberal tax policy both by the Centre and States. Besides lack of technology upgradation in manufacturing, packaging etc has also been a factor affecting our industry, along with inadequate financial credit and support particularly for the medium and small scale biscuit units. 12

On the other hand, the Government of India has identified food processing industries as a priority area to be encouraged for growth and development and created the Ministry of Food Processing Industries (which was till then a Dept in the Ministry of Agriculture), headed by an Ministry of State with Independent charge. The Food Processing Ministry has been rendering yeomen service to the industry, of which biscuit manufacturing is an important part. The Ministry, with the objective of enabling food processing Industries to undertake technology upgradation diversification. expansion as also to set up new units has formulated scheme of Grants and Financial Assistance. Please see www.mofpi.nic.in Other areas of concern to industries of food products like Biscuits include multiplicity of food laws and their enforcing agencies in the Central and State Governments with overlapping functions & implementation. At the persistent instance of industry organizations including FBMI the Ministry of FPI took the initiative in evolving an Integrated Food Act, harmonizing the existing multifarious legislations enabling better compliance. The Draft Unifled Food Bill 2002 has been prepared and now awaits approval by the Cabinet and the Parliament, which will fulfill an important need of the industry and pave way for accelerated development and growth. Biscuit manufacturing as well as other bakery products like Bread etc are agro based industries, with the major inputs - wheat flour/atta sugar, milk vanaspati/vegetable oil etc all being agriculture produces. Industries such as Biscuit are also languishing as they are not able to achieve their potentials for higher production, in the absence of the concrete food Processing Industry Policy. FBMI in close coordination with other organizations and apex Chambers, initiated to urge the Govt of India to formulate a comprehensive Policy Document, for smooth growth and harmonious development of the industry. The Food Processing Industry Policy, which has been evolved as a result of various workshops, deliberations and representations by a large cross section of food processing industries, is yet to be finalized. It is hoped that the Ministry of Food Processing Industries, GOI would initiate action for implementation of the Policy expeditiously.

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24. Biscuit Production According to the production figures of members available upto the calendar year 2003, the total production was 625000 tonnes as against 475000 tonnes in the previous year. The production of biscuit for the last 11 years is as under: 1993 - 167750 1995 - 202567 1997 - 362000 1999 - 425000 2001 - 465000 2003 - 625000 Note: the production of members of FBMI consist of 50% (approx) of the total production of biscuit in the organized sector. Sweet or salty. Soft or crunchy. Simple or exotic. Everybody loves munching on biscuits, but do they know how biscuits began? The history of biscuits can be traced back to a recipe created by the Roman chef Apicius, in which "a thick paste of fine wheat flour was boiled and spread out on a plate. When it had dried and hardened it was cut up and then fried until crisp, then served with honey and pepper." The word 'Biscuit' is derived from the Latin words 'Bis' (meaning 'twice') and 'Coctus' (meaning cooked or baked). The word 'Biscotti' is also the generic term for cookies in Italian. Back then, biscuits were unleavened, hard and thin wafers which, because of their low water content, were ideal food to store. As people started to explore the globe, biscuits became the ideal travelling food since they stayed fresh for long periods. The seafaring age, thus, witnessed the boom of biscuits when these were sealed in airtight containers to last for months at a time. Hard track biscuits (earliest version of the biscotti and present-day crackers) were part of the staple diet of English and American sailors for many centuries. In fact, the countries which led this seafaring charge, such as those in Western Europe, are the ones where biscuits are most popular even today. Biscotti is said to have been a favourite of Christopher Columbus who discovered America! 14 1994 - 180526 1996 - 222371 1998 - 400000 2000 - 450000 2002 - 475000

Making good biscuits is quite an art, and history bears testimony to that. During the 17th and 18th Centuries in Europe, baking was a carefully controlled profession, managed through a series of 'guilds' or professional associations. To become a baker, one had to complete years of apprenticeship - working through the ranks of apprentice, journeyman, and finally master baker. Not only this, the amount and quality of biscuits baked were also carefully monitored. The English, Scotch and Dutch immigrants originally brought the first cookies to the United States and they were called teacakes. They were often flavoured with nothing more than the finest butter, sometimes with the addition of a few drops of rose water. Cookies in America were also called by such names as "jumbles", "plunkets" and "cry babies". As technology improved during the Industrial Revolution in the 19th century, the price of sugar and flour dropped. Chemical leavening agents, such as baking soda, became available and a profusion of cookie recipes occurred. This led to the development of manufactured cookies. Interestingly, as time has passed and despite more varieties becoming available, the essential ingredients of biscuits haven't changed - like 'soft' wheat flour (which contains less protein than the flour used to bake bread) sugar, and fats, such as butter and oil. Today, though they are known by different names the world over, people agree on one thing - nothing beats the biscuit! Some interesting facts on the origin of other forms of biscuits: The recipe for oval shaped cookies (that are also known as boudoir biscuits, sponge biscuits, sponge fingers, Naples biscuits and Savoy biscuits) has changed little in 900 years and dates back to the house of Savoy in the 11th century France. Peter the Great of Russia seems to have enjoyed an oval-shaped cookie called "lady fingers" when visiting Louis XV of France. The macaroon - a small round cookie with crisp crust and a soft interior - seems to have originated in an Italian monastery in 1792 during the French Revolution. SPRING-uhr-lee, have been traditional Christmas cookies in Austria and Bavaria for centuries. They are made from a simple egg, flour and sugar dough and are usually rectangular in shape. These cookies are made with a leavening agent called ammonium carbonate and baking ammonia.

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The inspiration for fortune cookies dates back to the 12th and 13th Centuries, when Chinese soldiers slipped rice paper messages into moon cakes to help coordinate their defence against Mongolian invaders. NutriChoice SugarOut Sounds like yesterday when people commented that healthy foods meant "compromising on the taste." NutriChoice SugarOut is the most novel product range to have been introduced in the market. The product is not just sweet but tastes great, and yet contains no added sugar. This is because NutriChoice SugarOut is sweetened with "Sucralose," derived from sugar, which provides the same sweetness as any other biscuit, without the added calories of sugar. This range is available in 3 delicious variants namely Litetime, Chocolate cream, and Orange cream, targeted towards all health sensitive people. It is also relevant for consumers with sugar related ailments. We are sure that you will be pleasantly delighted with its great taste and equally surprised to know that it has no added sugar. Don't be taken for a ride when you read "Sugar Free" label on many biscuit packs marketed in India or abroad. Even with 100% no-added sugar, wheat-cereals in biscuits have their own natural sugar content. Britannia has chosen to represent these biscuits with "No Added Sugar" claim, as there is no added sugar in the processing of NutriChoice SugarOut. Nutri Choice Digestive Biscuit Nothing can be more difficult than making small efforts in our daily life towards healthy and active living. 24/7 we are engrossed in our busy schedules; skipping meals, missing walks, along with inadequate sleep and frequently eating-out, all take a heavy toll on our health. At least with the new and improved NutriChoice Digestive Biscuit, we have one less thing to worry about. Made with 50% whole-wheat and packed with added fibre (10% of our daily dietary needs), these delightfully tasty biscuits are amongst your healthiest bites of the day. In your next visit to a shop just look out for its Golden-green international carton pack. Try one and you'll know that you've made one smart choice - NutriChoice. 16

Treat Fruit Rollz All kids who have relished the yummy creamy treasures of Britannia Treat in exciting flavors, have yet another reason to celebrate! Britannia Treat launches the amazingly yummy Treat Fruit Rollz!! These tasty soft rolls are filled with real fruits and provide a healthy yet mouth-watering treat to the kids. Fruit Rollz comes in four masti fruit flavours - Juicy Apple, Strawberry Surprise, Tangy Orange and Delicious Dates! Want to know a little secret? They make the best tiffin treats! So during snack time what better than to munch on the delicious and healthy Fruit Rollz and discover the yummy fruit flavor from within the shells. Keeping up with Britannia's platform of 'taste bhi, health bhi', Fruit Rollz is indeed a yummy snacking option for kids, while keeping the Moms assured about the goodness provided by the fruit filling. So go on and treat yourself to the lip-smacking snack! New Britannia Milk Bikis Milk Bikis, the favourite growth partner of Kids, now brings greater value and delight to all with its new product and pack design. Recently re-launched in its existing Southern & Eastern markets, and extended across India, the new Milk Bikis is all set to add excitement and appeal to nutritious food. Whoever said that good food needs to look dull and boring, will just have to take a look at Milk Bikis. With a unique and attractive honeycomb design and an enhanced product experience, the new biscuit prompts the Kids will love it reaction amongst mothers. The milk goodness in the recipe is now enhanced with SMART NUTRIENTS 4 vital vitamins, iron and iodine, proven to aid mental and physical development in growing kids. The premium packaging, besides appealing to kids, also ensures that the biscuits remain fresh and crisp. So, whether its breakfast time or snack time at school, rest assured that kids will look forward to munching these crunchy, milky biscuits which even helps in their development. And yes, adults wont be far behind in reaching out for a pack! Britannia 50-50 Pepper Chakkar The launch of the latest 50-50 variant left everybody guessing "What it eez?" From TV ads, radio, outdoor and in-store display materials to events, a website 17

and SMS and email blasts, traditional and new media were blended synergistically to create excitement and curiosity about the unique taste of the biscuit. The tangy and distinctive pepper flavoured biscuit, that's thin and crispy and more like a snack, caught the imagination of a younger audience craving something to nibble on. The 50-50 Pepper Chakkar launch is truly a case of leveraging the marketing mix to best advantage. Britannia profits up 125 % in Q2; growth momentum continues Mumbai, October 23rd, 2007: Britannia Industries Ltd. (BIL), one of Indias leading food Companies, reported sales of Rs. 6,588 MM for the quarter ended 30th September 2007, reflecting 20% growth over the corresponding quarter last year. Net Profit for the quarter at Rs. 485 MM was more than double for the corresponding quarter last year of Rs 212 MM. For the half year ended 30th September 07, revenue grew 19.6% to Rs. 12,356 MM, while net profit at Rs 846 MM was 64.6% higher than last year. Commenting on the performance, Ms. Vinita Bali, Managing Director, said, We continue to build on the growth momentum of last year. We have added 340 basis points to our margin through higher price realization as well as innovation. The increase in profit has been achieved despite the continuing and unprecedented increase in prices of key commodities like flour, oils & dairy products. During the quarter, the Company launched Treat Choco Gelo, an extension of the Treat franchise with double masti of chocolate & caramel and also introduced a range of premium indulgence cookies under Pure Magic brand. Investment in Advertising and Sales Promotion has been increased by 50% to fuel the innovation led growth.

Range of Product and Services

Products The major products offered by Britannia industries are the following: Biscuits Good day, marie, marie vita , milk bikies , cream treat, little hearts ,nice, cream crackers ,time pass, tiger, tiger mast cream, 50:50, 50:50 maska chaska and many more

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1. Brand Name: GoodDay and Marrie from Britannia are stable and are the most established brand in biscuit segment being equated for biscuits for long time. Now the brand has taken a dent though among the present generation with competitors coming up with more powerful advertising campaigns and offering more variety. 2. Styling & Packaging: Britannia offerings have the innovative designs and packaging as compared to what is offered by the competitors. As it's a variety seeking product the styling and packaging helps in getting more customers. 3. Quality: Britannia name is associated with quality. The offerings from Britannia are of best quality when it comes to taste and hygiene. Under it's mission statement "eat healthy think better"

Rules and Regulations

CENTRAL EXCISE DUTY ON BISCUITS In the Union Budget 2000-01, the Finance Minister who had imposed a 100% increase in the rate of Excise Duty on biscuit from 8% as a part of the rationalisation of CENVAT and introduction of single rate of Duty did not offer any concesison on the Budget for 2001-02. On the other hand the 50% exemption to small packs was withdrawn. During these years and in 2002, the Federation submitted strong representations to the Union Finance Minister seeking relief in the Excise Duty on biscuits, giving biscuit special treatment that it deserves on account of the exceptional nature and sensitivity to price increase. The Federation submitted its Pre- Budget Memorandum for 2002 demanding at least 50% Excise Relief. It is a matter of great satisfaction that the Govt. has, after 3 years, acceded to our demand and grated reduction in Excise Duty (from 16% to 18%) in the Union Budget for 2003-2004. INTEGRATION OF VARIOUS FOOD LAWS The Food Processing Industry have been experiencing the adverse affect of multiplicity of various Acts/ Rules and Regulations for food standards under the Prevention of Food Adulteration Act Standards of Weights & Measures Act, Food Products Order, the Meat Products Order, the Bureau of Indian Standards & MMPO,

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etc. affected the Food & Food Processing Sectors. They need to be modernised & converged. As a consequence of various representations of industry, the Govt. of India has decided to set up a Group of Ministers (GOM) to propose legislation and other changes for preparing a Modem Integrated Food Law and related regulations. The Ministry of State for Food Processing Industries is the Nodal Ministry to coordinate the bill. Our federation submitted its recommendations and suggested to placed before the Group of Ministers, covering the broad frame work required for the food legislation as well as specific issues such as: The main objectives of the new Integrated Food Laws & its structure Methodology of development of Standards Provisions of Labelling Acceptance of a basic list of additives Matters relating to GMP, GHP & HACP Issues related to Codex Procedure for sampling& launching of Prosecutin Grading of violations according to the nature of discrepancy. Recent Changes / Amendments Prevention of Food Adulteration Rules The Ministry of Health & Family Welfare, Govt. of India vide its Notification No. GSR 908 (E) Dt. 20.12.2001 has provided for printing of statutory symbol on all products containing vegetarian ingredients. The notification came into effect from 20 June 2002. As members may be aware the Govt. has earlier amended PFA Rules vide notification No. 245(E) Dt.4.4.2001 provided for statutory printing of the symbols of food packages containing non vegetarian ingredients. This notification has already come into effect from 4 October 2001. Our Federation along with apex organizations such as CII & CIFTI have represented to Hon'ble Union Minister for Health and Family Welfare seeking extension of a minimum period of 6 months for implementation of the notification, particularly on account of hardships in printing vegetarian symbol in advertisements. A delegation from the industry met the Secretary, Ministry of Health and Family Welfare and apprised him of the hardships faced by industry. Further follow up is in hand. Standards of Weight and Measures (PC) Rules 1977 20

The Standing Committee on Food Standards has decided that the following issues be referred to Technical Committees to look into all aspects and to make recommendations to the Standing Committee: (i) Revision of First Schedule as regards tolerance (maximum permissible error.) (ii) Deletion of Rule 11 (a) and the Fourth Schedule for declaration of words "when packed" with net quantity declaration on packages. At our request the representatives of industry have been included in the Technical Committee for each zone. Members of the Technical Committees will be visiting the factories of manufacturers for ascertaining the position regarding industry's plea for not reducing the maximum permissible error in weight. BUREAU OF INDIAN STANDARDS The Meeting of the Bakery Confectionery and Nutritious Supplements Sectional Committee of BIS was held on 1 March 2002. The Draft standards for biscuit were discussed. FBMI submitted its suggestions on various issues including classification of biscuits into 5 categories sweet /semi sweet, crackers, cookies and speciality biscuits. It has also been suggested that separate standards should be evolved for wafers. FBMI has also represented that proposal for Peroxide value should not be included in the standards for biscuits and there should not be any requirement of checking biscuits for micro biological parameters. Supporting data received from members on total plate count, coliform count, E coli and stapylococcus aureus, etc., have already sent to the Bureau of Indian Standards showing that bacteria cannot remain alive at the temperature at which biscuits are baked.

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OFFER OF GRANT FOR FOOD PROCESSING INDUSTRIES The FBMI along with other organizations of industry had requested the Ministry of Food Processing Industries to revise its assistance for promotion of food of processing industry. Accordingly the Ministry has offered grants unto Rs. 25 lakhs or 25% of the Capital cost for setting up / expansion / modernisation of units in all sectors of food processing industries. The Ministry is also presently revising its outline of assistance under the schemes of 10 th Plan. The information has been circulated to members vide No. FB 1nd 7 52 Dt. 1.2.2002. SALES TAX / VAT ON BISCUITS As members are aware, though the Empowered Committee of Finance Ministers fixed the minimum floor rate of Sales Tax on biscuits at 8%, various State Governments are levying Sales Tax on Biscuits in the range of 8% to 16%. The Sales Tax regime is proposed to be replaced with Value Added Tax (VAT) from 1 April 2003. The Federation has already represented that biscuits being a nutritious snack food product predominantly consumed by the consumers from the lower strata of society should be included in the list of goods at the minimum level of VAT. Representations have already been sent to Chief Ministers and other officials concerned in Punjab, Haryana, UP, Karnataka MP and Kerala. Many States such as Himachal Pradesh, Delhi, Arunachal Pradesh, Kerala have however, deferred introduction of VAT. The trading communities in Delhi, Tamil Nadu, etc. have resorted to agitations against levy of VAT. As far as biscuit is concerned, it is learned that VAT @ 12.5% is proposed to be levied by many states. FBMI has therefore, urged States to fix the rate of VAT on biscuits at the minimum level of 4% meant for items of mass consumption.

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FOOD SAFETY AND QUALITY The Ministry of Health and Family Welfare and the Ministry of Food Processing Industries have formed different Sectoral Groups in ordesr to facilitate formulation of a proper and efficient Food Safety Programme towards implementation of GMP , GHP and HACCP in the food industry, either under law or voluntary. In the Group on Bakery products sector, FBMI has been made the Convenor of the Group with AIBMA, Society of Indian Bakers and Britannia Industries Ltd as members. The meeting of the Sectoral Groups was held on 20 June 2002 at Nirman Bhawan New Delhi. The President, FBMI attended the meeting. Subsequently, FBMI has submitted its objections 1 suggestion to the Ministry of Health, Govt. of India, and the text of which is given in Arnnexure- A. FOOD PROCESSING INDUSTRY POLICY As the members may he aware, the Ministry of Food Processing Industry is presently undertaking the formulation of a comprehensive Food Processing Industry Policy. Our Federation has submitted its views / suggestions for appropriate incorporation in the Policy, the text of which is given in Annexure B TRAINING PROGRAMME IN BISCUIT MANUFACTURE With the objective of imparting Training to the personnel in the biscuit industry as also to prospective entrepreneurs, FBMI in collaboration with its members and other organizations, conducts training programme in Biscuit Manufacture for the last two decades. The XIII Training Programme was organized at CFTRI Mysore on 28 to 30th August 2001. The XIV Training Programme has just concluded at the Resort Country Club, Gurgaon, Haryana, from 25th to 28th March 2003. M/s Britannia Industries Ltd and Parle Products Ltd cosponsored both the Training Programmes.

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FOOD REGULATORY MEASURES AN OVERVIEW During the period underreport, there has been various proposals for changes/amendments in the important Food Law affecting our industry, such as PFA Act/Rules, Standards of Weights & Measures (Packaging Commodities) Act/Rules, etc. Some of the important issues in this area of Food Laws and follow up action by FBMI are given below :Packaged Commodities Rules Standards of W & M Act The Dept of Consumer Affairs (Director of Metrology), Govt. of India, proposed mandatory printing of 1st point price, in addition to MRP, for food products like biscuit etc. Our Federation submitted objections to the said proposals, as there has never been any grievance from consumer forums against the biscuit industry and this would on the one hand add to the cost of packaging/printing and on the other hand would only create confusion for the consumers without any benefit. The proposal has been kept in abeyance. Similarly, our Federation on its own and through apex organizations, effectively pursued and objected to the proposed amendment in the Standards of Weights & Measures (PC) Rules, for making 50% reduction in the present Maximum Permissible Error in weight of biscuit (Tolerance Limit), on the ground that various factors such as atmospheric/environmental changes affect moisture, temperature, and consequently affect the weight of biscuit, at both the manufacturing, marketing/retail levels, and hence the present Tolerance Limit should be maintained. The SubCommittee of the Committee on Food Standards, constituted sub grounds of experts in various Zones/States to review the issue with representatives of industry, to visit biscuit units and recommend their view points on Tolerance Limit, together with another proposed amendment of discontinuing with the proviso of printing When Packed on the packages of biscuit and other food products, which was also objected to by our Federation by representations and meetings in the Sub Committee of the CFS. Expert from our membership participated in this process through CIFTI. At the time of this Report, the issues involved are under consideration/ review by the Committee on Food Standards (CFS). Approval of Additives The list of various additives needed for making Biscuit is required to be approved by the Standing Committee on Weights & Measures. The Committee has held various 24

sittings in this connection. FBMI has represented on he Committee for scrutinizing various additives for which various food processing industries have sought approval. Prevention of Food Adulteration Act / Rules Members reported various instances where the PFA authorities in the States are adopting penal action, even in cases of very minor offences / errors under the PFA Rules. FBMI suggested that such minor errors etc should be compounded, avoiding prosecution, harassment and resultant losses to biscuit units. This issue has also been referred to CIL and CIFTI for further follow up. Introduction of HACCP/GMP/GHP The Govt. of India (Ministry of Health), has formulated proposals to introduce the concepts of Hazard Analysis Control Convention Procedures (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP), as a step towards eventual adoption in the various states in accordance with the International Codex Alumnus, in the context of trade terms and regulatory, measures under the WTO regime. After discussions with FBMI and other organizations, the Dept of Health constituted Sectoral Groups on various categories of food processing industries. The Sectoral Group on Bakery Products consisted of FBMI, as Convener and FBMI and SIB as members. After detailed deliberations, the Federation submitted our comments and suggestions, highlighting the hardships that the biscuit units would face in the event of statutory enforcement of HACCP/GMP/GHP. The Federation suggested that the concepts of HACCP etc should be made voluntary in the first two/three years, keeping in view the ground realities in the bakery sector and due to the fact that the implementation of HACCP/GMP/GHP may be beyond he financial and technical capabilities of majority of the biscuit manufacturers and compulsory introduction of these regulations would adversely impact the viability and may lead to closure of a large number of bakeries in the country. FBMI, after detailed deliberations by the Executive Committee, suggested to the Govt. of India that, in the first instance projects for imparting training to the Managers/Executives and workforce in the bakery industries should be organized so as to create awareness and knowledge on these complex regulatory aspects and educate the personnel in the industry on various aspects of HACCP etc. FBMI has proposed to organize such Training Programs and Workshops, in collaboration with the Dept of Health, Govt. of

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India. Specific project application has since been submitted by FBMI, which is Convener or the Sectoral Group on Bakery Industries a mentioned above Federation is glad to inform members that the government of India has accepted our suggestion and as desired by the Ministry of Health, Govt. of India, a four day Training Programme / Workshop on HACCP/GMP/GHP will be held as per the following programme: Day & Dates Venue Wednesday 28 January to Saturday, 31 January 2004 National Institute of Biology A-32, Institutional Area Sector 62 Noida- 201 302 (GB Nagar, UP) Unified Food Laws Need for As members are aware, the food processing industries, including Biscuit / Bakery segment, are subjected to and administered by a large number of statues i.e. PFA Act / Rules, Weights & Measures Act, Packaged Commodities Rules, MMPO / FPOA orders under Essential Commodities Act / Rules, Agmark, BIS etc. There are much multiplicity of implementing / enforcing Agencies / Departments for watch one of these Acts and Rules, both at Central and State levels. Unfortunately, many a time there are instances of overlapping and even contradictions between such Agencies / Departments. PFA Act / Rules are recipe based, and focus on prosecution / penal action, even for minor / technical errors etc. which are also different in the States. Similarly, in the Standards of Weight & Measures Act and PC Rules, there have been plethoras of amendment, and proposals for more restrictions on the food processing industries including Biscuit and this has resulted in unavoidable hindrances in the development and growth of the industries. It is in this context that our Federation in close coordination with CIFTI, CII, FICCI, PHDCCI urged he Government to evolve a single Integrated Food Law, encompassing the existing legislations mentioned above, with main focus on development and promotion of the Food Processing, Agro Based industries in the country, paving way for creation of large employment generation, consumption of 26

varied types of safe food products of good quality, at reasonable prices benefiting consumers particularly those in the lower and middle segments of the society. Exports and better capacity utilization also need to be encouraged in the proposed Integrated law, which would also result in higher productivity and better revenue for the Central and State Governments. As a result of such concerted efforts and presentations by organizations of industry, including AIMBA the Government constituted the Justice Venkatachalam Committee to review the entire gamut of the existing Food Laws and to recommend the ways ad means and basis for unifying these Acts / Rules and regulations into an Integrated Food Law (Act). After due consideration of all aspects and by inviting suggestions from Govt., Industry and Commerce as well as consumers and other important sections of the community at large, the Committee submitted its report containing detailed suggestions / recommendations on the imperative need for integrating the existing multiple food laws. Accordingly, the Govt. formed a Group of Ministers with the Ministry of Food Processing Industries as the nodal point and this comprehensive exercise has resulted in the Draft Food Bill 2002 presented to the Group of Ministers. The said Draft Food Bill 2002 has been formulated to provide for the production, manufacture, processing and sale of safe and suitable food systematic and scientific development of food industry, introducing new technologies, imparting new inputs of market dynamics, and to create an enabling environment for innovation and value additions, ensuring high degree of objectivity and transparency and to provide for the establishment of a Food Development an Regulatory Authority of India an the Council for Food Standards and for matters connected therewith or incidental thereto. In addition, a Draft Prevention of Food Adulterations (Amendment) Bill, 2002 has also been prepared and disseminated for further deliberations. The relevant excerpts from the preamble of the Draft Food Bill, 2002, along with the Concept Note on the Draft PFA (Amendment) Bill 2002 is given Annexure-C. Our Federation, jointly with other apex industry organizations, is continuing follow up with a view to achieving introduction of the Integrated Food Act. 27

FOOD LAWS A REVIEW OF THE SCENARIO The year under report witnessed controversial development relating to allegations against certain food processing industries such as mineral / drinking water, soft drinks, etc. regarding contents of pesticides, heavy metals, etc, leading to constitution of a Joint Parliamentary Committee (JPC) and issuance of a Draft Notification by the Government of India stipulating permissible contents of pesticides, heavy metals, etc in various food products. FBMI interacted with the Government and with the apex organizations of industry. The Executive Committee discussed these developments in detail, in the context of the manufacturing process involved in the biscuit industry. Weights & Measures Act (PC) Rules The Ministry of Consumer Affairs, Govt. of India initiated action to reduce the existing Maximum Permissible Error (Tolerance Limit) in weight of biscuit, by 50% . The Federation represented against the proposal and actively participated in the SubCommittee constituted by thy Government under the Chairmanship of the Director, Legal Metrology, Ministry of Consumer Affairs. As a result, the proposal to amend tolerance limit has been deferred. Prevention of Food Adulteration Rules The Ministry of Health, Govt. of India issued a Draft Notification on the list of approved additives. The Federation submitted its objections/suggestions and also tendered oral evidence before the Standing Committee. Further follow up action is in hand.

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CHAPTER - II RESEARCH METHODOLOGY

29

RESEARCH METHODOLOGY
Data sources
To determine the appropriate data for research mainly two kinds of data was collected namely primary & secondary data as explained below:

Primary data

Primary data are those, which were collected afresh & for the first time and thus happen to be original in character. However, there are many methods of collecting the primary data; all have not been used for the purpose of this project. The ones that have been used are: Questionnaire Informal Interviews Observation

Secondary data

Secondary data is collected from previous researches and literature to fill in the respective project. The secondary data was collected through:

Text Books Articles Journals Websites Research objectives

The first & foremost step in any research work is to identify the problems or objectives on which the researcher has to work on. There are two types of objectives met in this study, as explained below: MAJOR OBJECTIVE To analyze the existing marketing practices, its effectiveness and recommend measures to improve the marketing practices in the organisation.

30

MINOR OBJECTIVES To study the frequency of marketing, marketing methods and their effects on the trainees and recommend certain measures for improvement. To understand the present practices enforced in respect of marketing at the personnel department and recommend any changes if necessary. To take feedback and analyze the level of satisfaction amongst the customers in respect of marketing activities and suggest alternatives.

Questionnaire design / formation

Questionnaire: - A questionnaire consists of a set of questions presented to respondent for their answers. It can be Closed Ended or Open Ended Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret and Tabulate. Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.

Sample design /sample element / unit

The Company has a total strength of 96 officers and 403 workers. In order to take a reasonable sample size and not to disturb the functioning of the organisation, a sample size of 20% of the total strength of the Company has been taken in order to arrive at the present practices of marketing in the Company. Accordingly, 20 officers and 40 workers have been selected at random from all the departments of the organisation and feedback forms (questionnaire) have been obtained. The data has been analysed in order to arrive at present marketing practices in the organisation.

Extent

Where the survey should be carried out? I have covered entire residential area of Delhi city for the survey

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Time frame

when the survey should be conducted? I conducted my survey for 8weeks from 14 may to 13h July

Sampling frame

The main statistical tools used for the collection and analysis of data in this project are:

Questionnaire Pie Charts Tables Limitations of research

The following are the limitations of the study: The sample size was small and hence the results can have a degree of variation. The response of the employees in giving information was lukewarm. Organizations resistance to share the internal information. Questionnaire is subjected to errors.

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CHAPTER III COMPANY PROFILE

33

COMPANY PROFILE
Strategic clock: Britannia Industries Limited
The story of one of India's favorite brands reads almost like a fairy tale. Once upon a time, in 1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today. By 1910, with the advent of electricity, Britannia mechanised its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. Britannia's business was flourishing. But, more importantly, Britannia was acquiring a reputation for quality and value. As a result, during the tragic World War II, the Government reposed its trust in Britannia by contracting it to supply large quantities of "service biscuits" to the armed forces. As time moved on, the biscuit market continued to grow and Britannia grew along with it. In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry's who till now distributed Britannia biscuits in India. In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indian-ness of the firm. The following year, Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL).Four years later in 1983, it crossed the Rs. 100 crore revenue mark. On the operations front, the company was making equally dynamic strides. In 1992, it celebrated its Platinum Jubilee. The Wadia Group acquired a stake in the company and became an equal partner with Groupe Danone in Britannia. The subsequent year saw sales cross a landmark 100,000 tones of biscuits or 1 billion packs of100g. In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products market. In 1999, the "Britannia Khao, World Cup Jao" promotion further fortified the affinity consumers had with 'Brand Britannia'. Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country. It was equally recognised for its innovative approach to products and marketing: the Lagaan Match was voted India's most successful promotional activity of the year 2001 while the delicious 34

Britannia 50-50 Maska-Chaska became India's most successful product launch. In 2002, Britannia's New Business Division formed a joint venture with Fonterra, the world's second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global rated Britannia 'One amongst the Top 200 Small Companies of the World', and The Economic Times pegged Britannia India's 2nd Most Trusted Brand. Today, more than a century after those tentative first steps, Britannia's fairy tale is not only going strong but blazing new standards, and that miniscule initial investment has grown by leaps and bounds to crores of rupees in wealth for Britannia's shareholders. The company's offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the trust of almost one-third of India's one billion population and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality. And millions of consumers will savour the results, happily ever after. Mission:

To make every Third Indian a Britannia Consumer. The Indian population today is over 1 billion. Of these, economic data suggests that one third can afford products in the price range that we operate i.e. Re. 1 in case of Tiger Tikki to Rs. 120/- in case of the 1kg Milkman Dairy Whitner. The company has to constantly endeavor to capture the entire market of this target population. The key to success is once again through very high levels of commitment to the roles and the goals of the organization. The company needs to constantly strive to excite the consumer through whatever they do Vision:

To Dominate the Food and Beverage Industry and Triple Turnover and Operating Income. The vision states that the company not only needs to lead but to dominate the industry. This implies that the company needs to be the preferred choice of the consumer in every product category that it operates in. The preference of 35

consumers will come through excellent products and excellent service to the trade and to the end consumer Values : The Britannia values are those guidelines that help the company to add value to the life of the consumer. Horizontal Empowerment Business Efficiency for Healthy Laddering Energize your Body and Mind.

Business Structure :

This figure describes the Britannias overall Business structure in all the four major regions of the Country. This describes how the four zones are connected to each other.

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37

The Origin of Eat Healthy Think Better:

Britannia -the 'biscuit' leader with a history-has withstood the tests of time. Part of the reason for its success has been its ability to resonate with the changes in consumer needs-needs that have varied significantly across its 100+ year epoch. With consumer democracy reaching new levels, the one common thread to emerge in recent times has been the shift in lifestyles and a corresponding awareness of health. People are increasingly becoming conscious of dietary care and its correlation to wellness and matching the new pace to their lives with improved nutritional and dietary habits. This new awareness has seen consumers seeking foods that complement their lifestyles while offering convenience, variety and economy, over and above health and nutrition. Britannia saw the writing on the wall. Its "Swasth Khao Tan Man Jagao" (Eat Healthy, Think Better) re-position directly addressed this new trend by promising the new generation a healthy and nutritious alternative - that was also delightful and tasty.

Thus, the new logo was born, encapsulating the core essence of Britannia healthy, nutritious, optimistic - and combining it with a delightful product range to offer variety and choice to consumers.

38

F&B Specials
In India per capita consumption of biscuits is estimated at a low 1.5 kg, reflecting the huge potential for growth of the industry. Over 900 million Indians buy and eat biscuits with varying frequency in any year. The penetration of branded product in this segment is quite significant, and is valued at Rs 2,500-3,000 crore. None of the other wheat-based segments is as developed as the biscuits industry. The biscuit segment has developed with large markets of mass consumption covering over 90% of the overall potential market. The Indian biscuits' market is estimated to be 1.1 million tonnes per annum and valued at over Rs 50 billion. The unorganised sector accounts for over 50% of the market. The market has been growing at a CAGR of 6-7% pa. The present biscuits-bakery sector in India looks like a battlefront. The battle being led by stalwarts like Britannia and Parle with close competition from other companies like ITC, Nutrine, HLL Kissan, Kwality and even international brands like Kellogs, Nestle, Sara Lee and United Biscuits.

There are two entrenched players in the biscuits market - Parle and Britannia have 85% of the market share. Britannia is undoubtedly the leader with brands like Tiger, Little Hearts and Milk Bikis. Britannia's Tiger brand is selling largely in the rural areas which actually constitute 56% of the biscuit market. But in the Glucose segment Parle G is the market leader. Also players like HLL and ITC have huge presence in the market. HLL Bistix (biscuit sticks that can be dipped into flavours like strawberry and chocolate) is indeed an innovation and lowpriced biscuits. The industry can also be divided brand wise into popular varieties such as ParleG and Tiger, medium varieties such as Milk Bikis and Super Milk, and premium varieties such as Good Day and Monaco. The popular varieties account for close to 40 per cent of the total volumes. If the Marie category is also included in the sweet biscuits category, it will easily account for close to 80% of the industry's total volumes of 7,75,000 tonnes. The segment can be further divided into the sweet and savoury. The savoury segment includes salt biscuits, and the salt and sweet variety accounts for the 39

rest. According to ACNielsen and ORG-MARG market research in 2003, the strength of the Britannia brand is demonstrated by the fact that it stands far above all in this fiercely competitive market, with over 46 per cent market share. Launched in 1997, Tiger became the largest selling Britannia biscuit brand in just 4 months of launch. It crossed the Rs1 billion sales mark in its very first year. Parle enjoys a 40% share of the total biscuit market. The Parle biscuit brands, such as Parle-G, Monaco and Krackjack enjoy a strong imagery and appeal amongst consumers. A comparative test study done on 12 popular brands of glucose biscuits by an NGO, Voluntary Organisation in Interest of Consumer Education (Voice), has thrown many surprises with Kellogg's and Priya Gold ranking a poor 10th and ninth while Horlicks and relatively lesser known Anmol capturing the top two slots respectively. According to Herfindahl Index for the biscuit market, the index value is about 2,500. For the bread business, in which Britannia and Hindustan Lever are the major players, the value would be above 5,000. These values contain important pointers. They indicate that the competition in the branded biscuits segment is relatively intense, reflecting the fact that the Indian branded biscuits industry has a long history. In the branded breads business, it indicates a lower intensity of competition (in terms of the presence of organised sector players). However, the values change dramatically if the unorganised sector which accounts for 50% of the total biscuits market is taken into account. Since the marketshare of the smaller players are widely dispersed and do not add to the index value, the Herfindahl for the entire industry is close to 1,200 indicating intense competition. According to another study, 'Parle G', which claimed to have 8% proteins, actually has just 6.8% of it while Kellogg's had only 6.2% against the claimed 7.4%. Only claims of 'Britannia Tiger' matched the actual content. Only 'Parle G' declared the iron content of the biscuit. Other than 'Cremica', 'Priya Gold' and 'Britannia Tiger', none of the brands carries the ISI mark. In India, there is a huge unorganised sector. Biscuits market on an average grew at 8% per annum in the last five years. The rural penetration of the branded biscuits segment is also significant. Towns with populations of less than a lakh contribute significantly to the industry's turnover, with some estimates placing it at 40%. However, rural markets largely consume lower-priced varieties, and it is 40

here that branded biscuits meet with stiff competition from the unorganised sector. In contrast to biscuits, the size of the organised sector for breads is quite small. It consists of Modern Foods and Britannia, which do not account for even 10% of the industry's total volumes. Significantly, Modern Foods was recently taken over by Hindustan Lever. This is expected to provide a fillip to the organised sector's expansion into the unorganised sector's domain. Being a perishable product, the bread industry faces numerous challenges. The lack of a modern well-developed retail network to address these challenges come with the distribution of a perishable product. It is this factor that gives local units that produce on a small-scale a distinct advantage - evidently accounting for a predominant share of the total industry, especially in the rural markets. The unorganised sector in the biscuits segment does exert pressure on the pricing policies of the organised players. But only up to a point since the penetration of brands in this business even in the rural areas is fairly significant. Therefore, the value for only the branded business segment is more indicative of the industry's competitive pressures. The same holds good for the bread segment also. While changes in market shares would only indicate how a company has fared relative to the industry, the changes in the overall competitive intensity can be readily reckoned by computing the Herfindahl Index. A decline of this value to below 2,000 in the biscuit segment would indicate that the existing players are not only losing market share, but that their pricing power is also receding. And, if the value remains constant even with the entry of several players that would indicate that the hold of the existing players has not slackened at all. The duty structure still favours the unorganised sector. Except for select lowpriced varieties, the excise duty on biscuits is a hefty 16%. However, bowing to pressure from the Federation of Biscuit Manufacturers of India, 50% of the excise was exempted for biscuits with a maximum retail price of Rs 5 for a weight not exceeding 100 grams. This effectively reinstated the status quo for low-priced biscuits such as Parle-G and Tiger. Overall, it has maintained the potential for price differentials between low-priced branded biscuits and unbranded biscuits. At the same time, the differential between low-priced varieties and high-priced varieties appears set to widen. 41

The toughest competition for estabilished players is coming from the unorganised market. This market is indeed interesting to study.

Strategy quotient for B1L:

Cost leadership: It is a cost leader in its industry except in cheese and glucose biscuits where it lags behind Amul and Parle respectively. The company has undertaken modernization program in order to improve productivity. To focus resources, rationalization of brands and packs has been undertaken and the existing brands have been clustered into more cost efficient portfolio through a process of brand concentration. Economies of scale: BIL is adding capacity at regular intervals depending upon the economic environment It has the advantage of being able to source raw materials and even packaging at cheap rates because of large scale of operations.

Britannia is a star BCG as shown below: HIGH

* BIL

MARKET GROWTH RATE

RELATIVE MARKET SHARE HIGH The BCG growth-share matrix shows that Britannia is a STAR BCG, being a LOW market leader in a high growth market

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FIVE FORCE MODEL FOR BRITANNIA

COMPETITORS FORCE

(Major MNCs likely to diversify and get into related business of Britannia

SUPPLIERS FORCE (Very large number less of bargaining power

BRITANNIA PARLE BAKEMANS REGIONAL

BUYERS FORCES

(more quality suppliers, so conscious and price sensitive

SUBSTITUTES FORCES

Household snacks Bakery biscuits Fast food

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BRITANNIA SUPPLY CHAIN

Supply chain Describes a longer channel stretching from Raw materials to components to final Products that are carried to final Buyers. Britannia Supply Chain include Authorized wholesaler, Superstockists, RPDs, UPDs and Retailers. The Raw Materials are converted into finished goods in the Production Units or Factories. From factories the finished goods are then sent to 44

the Regional Depots or the Mother Depots. From here the stock reaches the Warehouse for distribution to the Authorized Wholesaler. From Warehouse or Depots the Stock either reaches the Superstockists or the Authorized Wholesalers. From Superstockists the stock goes to either UPDs or RPDs from where it finally reaches to the markets of Rural India. The Authorized Wholesaler buy goods from Company and from them the Stock goes to the Retailers. Retailers sell Company Products to the End Consumers. The Sale of the Stock from Depots to Authorized Wholesaler constitute Primary Sale while the Sale of the Stock from Authorized Wholesaler to Wholesaler constitute Secondary Sale. Different rural markets have different set of Superstockists (SS) which further have RPDs (Rural preferred Dealers) and UPDs (Urban preferred Dealers) under them. These UPDs are the dealers of very small regions only which are considered rural only and are not completely urban.

Sales Promotion
Sales promotion, a key ingredient in marketing campaigns, consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade." In marketing, sales promotion is one of the four aspects of promotion. (The other three parts of the promotional mix are advertising, personal selling, and publicity/public relations.) Sales promotions are non-personal promotional efforts that are designed to have an immediate impact on sales. Sales promotion is media and non-media marketing communications employed for a predetermined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include: coupons discounts and sales contests point of purchase displays rebates free samples (in the case of food items) 45

 gifts and incentive items free travel, such as free flights Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers). Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions.

Purpose of sales promotion.

Sales-promotion tools vary in their specific objectives. A free sample stimulates consumer trial, whereas a free management-advisory service aims at cementing a long-term relationship with a retailer. Sellers use incentive type promotions is to attract new triers, to reward loyal customers, and to increase the repurchase rates of occasional users. Sales promotions often attract brand switchers, who are primarily looking for low price, good value, or premi-urns. Sales promotions are unlikely to turn them into loyal users. Sales promotions used in markets of high brand similarity produce a high sales response in the short run but tittle permanent gain in market share. In markets of high brand dissimilarity, sales promotions can alter market shares permanently.

46

MAJOR CONSUMER PROMOTIONAL TOOLS

Samples: Offer of a free amount of a product or service delivered door to door, sent in the mail, picked up in a store, attached to another product, or featured in an advertising offer. Coupons: Certificates entitling the bearer to a stated saving on the purchase of a specific product: mailed, enclosed in other products or attached to them, or inserted in magazine and newspaper ads. Cash Refund Offers (rebates): Provide a price reduction after purchase rather than at the retail shop: consumer sends a specified "proof of purchase" to the manufacturer who "refunds* part of the purchase price by mail. Price Packs (cents-off deals): Offers to consumers of savings off the regular price of a product, flagged on the label or package. A reducedprice pack is a single package sold at a reduced price (such as two for the price of one). A banded pack is two related products banded together (such as a toothbrush and toothpaste). Premiums (gifts): Merchandise offered at a relatively low cost or free as an incentive to purchase a particular product. A with-pock premium accompanies the product inside or on the package. A free m-tht-mail premium is mailed to consumers who send in a proof of purchase, such as a box top or UPC code. A self-liquidating premium is sold below its normal retail price to consumers who request it. Frequency Programs: Programs providing rewards related to the consumer's frequency and intensity in purchasing the company's products or services. Prizes (contests, sweepstakes, games): Prizes are offers of the chance to win cash, trips, or merchandise as a result of purchasing something. A contest calls for consumers to submit an entry to be examined by a panel of judges who will select the best entries. A sweepstake asks consumers to submit their names in a drawing. A game presents consumers with something every time they buy-bingo numbers, missing ietterS-which might help them win a prize. 47

 Patronage Awards: Values in cash or in other forms that are proportional to patronage of a certain vendor or group of vendors. Free Trials: Inviting prospective purchasers to try the product without cost in the hope that they will buy. Product Warranties: Explicit or implicit promises by sellers that the product will perform as specified or that the seller will fix it or refund the customer's money during a specified period. Tie-in Promotions: Two or more brands or companies team up on coupons, refunds, and contests to increase pulling power. Cross-Promotions: Using one brand to advertise another noncompeting brand. Point-of-Purchase (POP) Displays and Demonstrations: POP displays and demonstrations take place at the point-of-purchase or sale.

MAJOR TRADE PROMOTIONAL TOOLS

Trade allowances: short term incentive offered to induce a retailer to stock up on a product. Dealer loader: An incentive given to induce a retailer to purchase and display a product. Trade contest: A contest to reward retailers that sell the most product. Marketing programs: dealer employees are trained in selling the product.

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Sales Promotion Strategies

There are three types of sales promotion strategies: Push, Pull, or a combination of the two. A push strategy involves convincing trade intermediary channel members to "push" the product through the distribution channels to the ultimate consumer via promotions and personal selling efforts. The company promotes the product through a reseller who in turn promotes it to yet another reseller or the final consumer. Trade-promotion objectives are to persuade retailers or wholesalers to carry a brand, give a brand shelf space, promote a brand in advertising, and/or push a brand to final consumers. Typical tactics employed in push strategy are: allowances, buy-back guarantees, free trials, contests, specialty advertising items, discounts, displays, and premiums.

A pull strategy attempts to get consumers to "pull" the product from the manufacturer through the marketing channel. The company focuses its marketing communications efforts on consumers in the hope that it stimulates interest and demand for the product at the end-user level. This strategy is often employed if distributors are reluctant to carry a product because it gets as many consumers as possible to go to retail outlets and request the product, thus pulling it through the channel. Consumer-promotion objectives are to entice consumers to try a new product, lure customers away from competitors products, get consumers to "load up" on a mature product, hold & reward loyal customers, and build consumer relationships. Typical tactics employed in pull strategy are: samples, coupons, cash refunds and rebates, premiums, advertising specialties, loyalty programs/patronage rewards, contests, sweepstakes, games, and point-ofpurchase (POP) displays. 49

Sales Promotion Strategies used by BIL

The role of promotions for BIL is especially important in this highly fragmented and competitive market. Today, the company prides itself on communication that is innovative, yet constantly able to strike a chord in the consumers hearts and minds. Britannias promotion have virtually redefined consumer expectations from this category. To reach out to the consumers, BIL has been using both PUSH and PULL STRATEGIES i.e. implementing Trade Promotions using Push Strategy and COMSUMER PROMOTIONAL OFFERS using Pull Strategy. This shows they are using combination of two. In Push Strategies company is promoting their products through retailers to the consumers by providing various kinds of incentives to them. In Pull Strategies they are attracting more and more number of consumers or pulling large number of consumers by giving gifts and incentive items to them. In this Sale Promotion, BIL has successfully implemented both its PULL as well as PUSH strategies. Through these Promotion they have increased their total Sales thereby increasing their consumer base and also they have increased their total number of UPDs and RPDs . So to implement the above two Promotional strategies they have employed two schemes i.e. six Promotional offers for consumers and a Sales contest called MERA RPD MAHAAN for both UPDs and RPDs in the months of May and June in regions of Uttar Pradesh and Rajasthan. In this way company is getting the benefits of both the schemes. Basically company have used the stratagies to enhance the sale of newly launched products.

PAST PROMOTIONS IN BRITANNIA

To reach out to the Indian consumer, Britannia has successfully leveraged India's two prime passions - cricket and movies. Britannia addressed these platforms in a manner true to its unique innovative style. It capitalized on every Indian's dream to watch a cricket World Cup match and created the 'Britannia Khao, World Cup Jao' contest in 1999. It based itself on instant gratification. The entire consumer needed to do was buy packs of Britannia biscuits, scratch a lucky card and win an all-expenses paid trip to England to watch a World Cup match. This promotion was so successful that it set a 50

trend that has got every company scrambling for tickets to take their consumers for the World Cup. This promotion was repeated successfully in 2002/03 with the destination of choice being South Africa. Taking the success further was the promotion of 'Britannia Khao, Cricketer Ban Jao' that was fuelled by the need of every Indian to be a part of the passion called cricket. Britannia followed it up with another unique promotion, a vehicle that dealt with India's other passion - movies. A promotion called 'Britannia Lagaan Match' that revolved around a movie called Lagaan was based on a cricket match. This promotion gave the consumer a chance to interact with the film stars and also get to play cricket with them. The match had over 40,000 spectators and made the headlines of leading newspapers and news channels. Britannia promotions have proved to the marketing world that promotions per se need not be only tactical but could also be strategic - used as a tool to further brand equity.

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Consumer Promotional offers

What is a consumer promotional offer ? To promote products to consumer, company devises some scheme like discount on MRP, giving freebies with product etc. How Consumer promotional offer products differ from normal product without offer ? The product is marketed under some scheme. The packaging is different from normal product. The freebies procurement & logistics planning is additional activity. The production centers may be different from regular production centers. The distribution strategy may be different from regular one. Britannia Industries Ltd. Planned to launch six promotional offers in the month of May and June 2006. Complexities involved were promotional offers limited to some region of our country and rest of country was on normal product.The promotional offers were limited to Uttar Pradesh and Rajasthan. Objectives : To deliver right SKU & Gift item to right place in right time. To achieve internal customer satisfaction level to 95%. And to increase the consumer base for newly launched product. Marketing Department decides to run promotional offers on brands with following objectives. To penetrate market with greater share of business. To leverage Britannia brand by having association with some other known brand. To counterattack competitors strategy. The consumer promotional offers are based on the principle of elasticity of demand. 52

Following consumer promotional offers were conceptualized for May and June 2006.
SAP CODE SKU DESCRIPTION PROMOTIONAL OFFER REGION UTTAR PRADESH 91340 50:50 150G 60 FP CBB FREE PC 50G Free PEPPER CHECKER 75G RAJASTHAN UTTAR PRADESH 91344 TIGER KESAR KULFI 100G 96PP CBB 'CHTK' Free ONE SPINNER RAJASTHAN UTTAR PRADESH 91345 TIGER ROSE MILK 100G 96PP CBB 'CHTK' Free ONE SPINNER RAJASTHAN UTTAR PRADESH 91346 TIGER ORANGE CREAM 100G 96 PP CBB 'CHTK' Free ONE SPINNER RAJASTHAN UTTAR PRADESH 91347 TIGER ELAICHI CREAM 100G 96PP CBB 'CHTK' Free ONE SPINNER RAJASTHAN UTTAR PRADESH 91350 TIMEPASS CLASSIC S.150G 54 PP (F)PC 50G Free PEPPER CHECKER 75G RAJASTHAN

53

Executing promotional offers

The activities considered so far was implementation of promotional offers constitutes tracking the weekly sales of the promos in UTTAR PRADESH and
RAJASTHAN

UTTAR PRADESH is divided into three regions i.e. Eastern UP Western UP Central UP

After tracking the weeks sales, as per the target, I used to make calls to respective Territory Sales Incharge regarding the sales in their given region and also asking problems they are facing,if any, regarding the stock availibity. Then making calls to respective RPDs and UPDs to get their daily sales. Checking the RPDs and Upds if they are billed or not for particular SKU. Setting the Superstockists Contribution as per the regions population under that Superstockist. Also to calculate the total sale per week and then calculating the Rural sale and Urban Sale for each SKU in each region that is Eastern UP, Western UP,Central UP and Rajasthan After that if any of the RPD or UPD does not reach their target then ask them to do that, otherwise they would no more be in the list since they not making any profit for the company. Finally calculating the monthly sales report which constitutes total sale of all the SKUs, rural sale percentage and Urban sale Percentage with overall percentage of all the four regions

PROMOTION IN RURAL MARKET

MERA RPD MAHAN CONTEST Mera RPD Mahan contest was a dealer incentive contest which was designed for the dealers of the Rural market. This contest was designed to motivate the RPDs 54

and UPDs to reach their Sales target of 35,000 and 50,000 respectively. This contest was held in the month of May and June. The details of this contest are as follows: Period Scope Criteria May- Jun'06 RPDs in all SURE Territories Sales target achievement for the incentive period Targets for the period to be set by the SO/ ASM in consultation with the RSM Minimum swing of 40% in May and June'06 MA sales over Jan-Mar'06 MA sales To qualify the RPD must have minimum current sales of Rs.30000 PM or the Target sales should be a minimum of Rs.30000 PM. Mechanics 1 Top RPD to be selected as the "Mera RPD Mahaan" per RPD PSM PJP. This RPD to get a gift article worth Rs. 3000/- (Nokia Mobile Phone Proposed All other RPDs to get a gift article worth Rs. 500/- or cash if preferred

55

Eligibility At least four bills in month Achieve Targets i.e. 40% over monthly average Last billing by 26th of every month Executing Mera RPD Mahan Contest Weekly Sales of RPDs and UPDs were tracked for both the months of May and June. The no. of RPDs and UPDs has been tracked for the month of April and then their total no. in the months of May and June has been tracked and the total Percentage increased in their number due to this contest has been analysed. Those RPDs and UPDs which have not met their Sales target in the first month of the Contest i.e. in the Month of May were called and were asked for their failure to reach the Sales target and were asked to reach the target in the second month of the Promotion. The total sale in all the four regions were calculated for the month of April, May and June and were compared.

SWOT ANALYSIS
STRENGTHS High brand equity; consumers and dealers of mass market brand regards Britannia as a Company, which delivers quality products

Britannia possesses an extensive and powerful distribution system Britannia possesses a dedicated and highly experienced sales staff Strong base in monitoring and controlling the market Distributors of Britannia are dedicated, experienced and have a strong hold over the market

WEAKNESSES
The Company takes a lot of time in handling the UCA claims of the authorized wholesalers; this !eads to demotivation Warehousing norms are not followed, which accounts for high breakage 56

The semi-sweet category accounts for the maximum turnover in the mass marketthe Tiger Anytime being a member of this category is perceived as a tow quality product; this may liquidate Britannia's brand equity in the mass market

Britannia has positioned it's Tiger range on health and taste, but my findings show that health consciousness in the mass market is low, which means that the brand is under-positioned, since the market doesn't consider "health1 as an important benefit in biscuits

Britannia's strength is in mid, premium mid super-premium category; this market is approaching a saturation point

Britannia's mass market is not segmented properly; Britannia cannot afford to go all out in the mass market, the best strategy would be to concentrate on these segments of the mass market, which will account for volume sales and require minimum investment

Performance-based incentive to motivate the sates staff is not existing in the Company

Yearly incentives don't motivate the dealers of mass market brands OPPORTUNITIES

Mass market is growing with established preference for biscuits Growing middle class in India can provide more opportunities for Britannia's pillar brands

Credit given to dealers will help Britannia in expanding the width of reach, by which the company will have a volume advantage

Taste plays an important role in mass market which can take care of price sensitivity to some extent

There is low differentiation in the mass market brands There is a fairly good market for a high count salty cracker variety and a cream cracker variety in the mass market THREATS

De-reservation of the biscuit industry may attract foreign players who initially will try to attack the premium segment, which is already established for Britannia

A characteristic feature of premium market consumer is that this segment is not 57

brand loyal; therefore there is a chance of the consumers to shift to other brands in the near/distant future Too much concentration in the mass market may affect the companies market in this established segment Mass-market venture may account for this cannibalization A large number of competitors each having respective bold in different markets of the company's pillar brands will account for high contribution/orrir

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COMPETITIVE ANALYSIS:
Britannia is the leader in the biscuit industry and is, therefore, the main competitor is Parle. Intense competition exists between Parle and Britannia, manifesting itself in the form of heavy advertising and new product launches. Parle has alleged in the past that Britannia has copied its biscuit brands, namely Monaco, Parle G and Krackjack and come up with similar products- Snax, Tiger and Fifty-Fifty respectively. With its bold Mission Statement - "Every third Indian must be a Britannia consumer by the year 2003", Britannia undertook major brand repositioning efforts and launched major marketing campaign with a new Corporate Identity, "Eat Healthy, Think Better", Positioning the company's products as a source for healthy food. This is an important Strategy for promoting consumption of snack foods, which many families do not associate with nutrition. Biscuits under the umbrella brand Nutri, positioned on the nutrition platform have been launched recently.. Britannia followed this brand repositioning with heavy advertising, heavy promotions (such as the famous 1999 promotion campaign - "Britannia khao World cup jao") and entry into new markets under this new-found corporate identity. Britannia also aims for the top spot in the dairy products industry and to that end they have entered into a JV with New Zealand based Fontera Group. * Britannia's target segment spans across all geographic regions and age levels, and the company would also like it to span across all income groups. In actual implementation, constraints such as the distribution network have not permitted the company to make inroads in the rural segment and Britannia has had only a moderate success in grabbing share from the unorganized sector. However, Britannia has been expanding its distribution reach and plans to double its network in the rural markets. Retail reach is expected to increase from the current 0.4mn outlets to 0.8mn retail outlets in the next two years. Britannia has the definite advantage of size. It has SBUs encompassing a whole range of products i.e. biscuits, bread, cakes, dairy products etc. The sheer scale of business that Britannia manages and the returns achieved gives Britannia the scope for large scale brand promotion which Parle and Priyagold cannot replicate.

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Britannia's target segment is getting more knowledgeable, fashionable and busy every day. Yet, a substantial part of the market remains price conscious. Britannia, seeing the opportunity emerging from the changes in consumer lifestyle, has followed aggressive marketing tactics focusing on both appeal and attractiveness of packaged biscuits. In order to target the mass market, Britannia has also launched lower end biscuits and small, low-priced packages. The corporate Britannia brand has also been perceived as a premium biscuit brand in spite of the company's efforts to reposition it for the mass market and thereby achieve volumes and penetration. With attractive packaging, low pricing, and heavy advertising, Britannia has achieved tremendous success in a short span of time with the Tiger brand (Its answer to Parle-G). Tiger Cashew and Tiger Glucose cumulatively achieved an estimated annual sale of close to Rs1.5bn and has garnered 20-25% market share in the glucose biscuit segment. Though the Tiger brand is extremely popular in the mass market, the association of this product with the corporate brand name is low. There haven't been other success stories for Britannia in the mass market, and the brand is largely perceived as a premium packaged 'biscuits brand. Britannia also concentrated on its core biscuit brands such as Marie, Thin Arrowroot, and Milk Bikis - which were facing competition from similarly-branded alternatives. To stay ahead of the pack, Britannia differentiated its brands by not only bringing them under the 'eat healthy, think better1 banner, but also gave them clearly defined positioning. Milk Bikis Funland was made in animal shapes. Marie was rechristened Marie Gold, and positioned as a tea-time biscuit. Young customers have been targeted with trendier products like Little Hearts, Pure Magic and Chekkers. The packaging too was changed, with biscuits being launched in small sachets at low prices. Tiger Tikis, for instance, were priced at Re 1 to the mass market. Parle on the other hand, has been unable to establish its presence in the premium segment. 60

The other players in the fray include Bakeman's who have a market share of 10%, mainly with a larger share of the cream biscuit segment SmithKline Consumer has close to 8% market share with its Horlicks and Boost brands. Other players like Nutriene (now acquired by Sara Lee), Kwality etc have about 3-4% market shares each Biscuits Pvt Ltd, a Bangalore based company has been expanding its presence to other parts of the country, and has now been acquired by Britannia. few years have been marked by the entry of multinationals like SmithKline Consumer, Kellogg's, Sara Lee, Heinz, Excelsia (Nestle) and United Biscuits. These MNCs do pose a direct threat to Britannia as they have mainly positioned their

brands in the Health or Premium segments of the market. There are other domestic players like Bakeman's and Priyagold in the mass segment. Parle enjoys a 40% share of the total biscuit market and a 15% share of the total confectionery market, in India. The Parle Biscuit brands, such as, Parle-G, Monaco and Krackjack enjoy a strong imagery and appeal amongst consumers The extensive distribution network is a major strength for Parle Products. Parle biscuits & sweets are available to consumers, even in the most remote places and in the smallest of villages with a population of just 500. Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or indirectly. With its bold Statement - "HAK SE MANGO", PRIYAGOLD undertook majorbrand repositioning efforts and launched a major marketing campaign with a new Corporate Identity, priyagold followed this brand repositioning with heavy advertising, heavy promotions(such as recently launched ad campaign "KHAO AUR KHELO"A free coupon scheme has been able to create a new image.) Priyagold is following LOW PRICE POLICY through which it has been able to tap unorganized biscuit market and has become major threat to leading Market players like parle and Britannia The ITC has also entered the bakery business and launched there product under brand SUNFEAST the brand has been positioned as enriched with

61

nutritional values. They have promoting by using it as a tool for social responsibility

2. Market Analysis Size & Distribution,

The Indian biscuit market is the largest in the world, with demand of over 1.2 million tones per annum, worth US$. 1.13 billion in market value, and growing by more than 6% following de-reservation from small-scale status in 1997. Biscuits represent the largest segment of the bakery industry: close to 55% of its volume and 80% of its value. The important product categories are: Glucose, the lowest end of the spectrum (42%), Milk biscuits 14%; Marie14%, Cream 9%, Crackers 12%, and others represent the remaining 9% of the market. Regionally, the North has the highest share of the market (34%), followed by the South (24%), West (22%) and the East 20% Players
The important organized sector players are: Britannia Industries (now a Groupe Danone joint venture) having 50% of organized sector share Parle Biscuits, the second largest player in India, having 20% of organized sector share Surya food and Agro Limited- PriyaGold, a strong regional player in the East and north India. Bakeman Products, a regional player, strong in the North. Ampro Biscuits, a regional player in the South. Britannia Industries Limited, present for more than 40 years, is the oldest player in India's biscuit and bakery, products market. With a 50% share in the organized market, it had revenues df US$ 240million, of 'which biscuits accounted for close to US$ 163mn in 1999. It offers a wide range of products, including several international brands of its collaborator, the Danone Group, covers all product segments, and has a national network of more than 14000 distributors and 0.4 million retailers. However, the premium segment provides a substantial 66% share of its volumes. The other prominent players are focused in specific regions, with the exception of Parle Biscuits (based at Mumbai), which is Britannia's closest competitor. New players considering the market include international giants like Sara Lee, Unilever, Nestle (which bought over Osein Foods, Israel which has a joint venture in India), United Biscuits, General Biscuits and Arnotts.

External Trade
62

Biscuit imports were opened up in 1999, after which several products came into the market from a variety of origins: Sri Lanka, UAE, Malaysia and Indonesia at the lower end, and Europe (Denmark, UK) and USA at the higher end. However, given the high import tariffs, retail prices of such products have been much higher than even the most premium Indian products; as a result, they are sold only in select outlets in major cities, and usually positioned for the festival season, in which it is customary for Indian businesses to send gifts along with greetings.

3. Analysis of 3Ps
Marketing decisions generally fall into following four controllable categories: Product Price Place Promotion Though marketing mix covers product planning, pricing, personal selling, advertising, distribution channels, branding, packaging, servicing etc the report will be concentrating on product , price mix and promotions Products The major products offered by Britannia industries are the following: Biscuits Good day, marie, marie vita , milk bikies , cream treat, little hearts ,nice, cream crackers ,time pass, tiger, tiger mast cream, 50:50, 50:50 maska chaska and many more 1. Brand Name: GoodDay and Marrie from Britannia are stable and are the most established brand in biscuit segment being equated for biscuits for long time. Now the brand has taken a dent though among the present generation with competitors coming up with more powerful advertising campaigns and offering more variety. 2. Styling & Packaging: Britannia offerings have the innovative designs and packaging as compared to what is offered by the competitors. As it's a variety seeking product the styling and packaging helps in getting more customers.

63

3. Quality: Britannia name is associated with quality. The offerings from Britannia are of best quality when it comes to taste and hygiene. Under it's mission statement "eat healthy think better" Pricing 1. Pricing Strategy: The category shows an elastic demand. High-Demand and pricing from competitor are the governing criteria in determining the price. As the target market is masses. The prices of its products are comparatively higher than its competitor Parle and Priyagold. 2. Bundling: Britannia has taken lead in providing more attractive price sensitive options but Parle products offering come in many volume packages 3. Discounts: Volume discounts, wholesale pricing margins offerings and almost same throughout the organized biscuit sector. But Priyagold gives bit higher margin rates 4. Promotional Pricing: Promotional pricing campaign was done when Britannia wanted to get hold of cream treat segment. Promotions Since the World Cup Cricket match in 1999, the biscuit major has been launching aggressive television campaigns featuring leading cricket stars like Sourav Ganguly and Rahul Dravid in a bid to promote its various brands. BIL has zeroed in on Sachin Tendulkar to endorse its entire product range, Inform ad industry sources. It built a new corporate identity and adopted a colourful and identifiable logo with a new base line - 'Eat Healthy, Think better.1

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4. Analysis of 4Cs (extended 5C analysis)

Company 1. Product Line: Britannia industries ltd Mainly operates in bakery and dairy product segment. 2. Image in market: Market leader in the organized biscuit industry and the name Britannia is used synonymously for biscuits in urban and semi rural markets. Britannia name symbolizes quality, health and taste. 3. Technology and experience: Established in 1918, the company has succeeded by adhering to high quality and improvising from time to time. The products are manufactured under most hygienic conditions. Each factory has state of art machinery with automatic printing and packaging facilities. Collaborators 1. Distributors: Britannia has nearly huge network of distributors wholesalers, catering over 4 lakh retail outlets directly or indirectly. A two hundred strong dedicated field force services these wholesalers & retailers 2. Suppliers; Tie-up with large number of suppliers for raw material like good quality milk, sugar, cocoa etc. 3. Alliances: Britannia industries entered into joint venture with Groupe Danone, the 3rd largest food processing company in the world. Danone is actively supporting Britannia through its technological expertise in new product development.

Customers 1. The market size of the biscuit industry is estimated to be around 3000 crore. Today the organized sector is eating into the share of unorganized sector with former growing at rate of 14% pa and laterat around 8% pa. The organized sector 65

produces around 5 lakh tones pa and unorganized sector produces around 7 lakh tones pa. "Britannia 2. The biscuit market is primarily divided into two segments i.e. Most popular this is targeted at the lower end of the Marie gold Specialty products which are targeted at the premium segment consisting of premium assorted cookies and Danish cookies 3. Benefits the consumer is seeking in this type of particular product is quality, taste and Hygiene, these are the intangible benefits. Tangible benefits which spectrum and products has a market share of 40%.

generates 80% of the company's revenue, the leader being Good day and

customer seeks can be good quality packaging, ingredients and nutritional value on the packaging. These can be attributed as the main factors for Good day's success. 4. As it is low involvement product with significant differences between brands the main motivation behind purchase is the desire for variety. The consumer behavior is of variety-seeking type. Britannia has large variety to offer besides this Britannia has been working hard to provide new products to its customers like double cream 5. Decision making unit or decision-maker in case of this particular product is individual. 6. Retail channel for the Britannia products are usually corner-shops, general stores, super markets etc. The distribution network is good with the reach in rural areas also.

66

7. Consumer usually gets information from the 'word of mouth; media is another source of information in this era of information technology. Strong brand loyalty built over the years comes handy when it comes to word of mouth. 8. Buying process is difficult to classify it is impulsive at times as well as carefully planned. The non-availability though leads to consumer buying a competitor product. 9. The biscuits in Indian context can be described as one of the most frequently purchased products with no affect from seasonal factors, though quantity purchased is not very large at a given point of time. 10. Trends- the consumer has become more demanding with the changing times. With plethora of information available he is the one who is on top. Also variety offerings from competitors have led to Britannia introduce new variants as those varieties were eating its customer base.
Competitors

1. Actual competitor is Parle, which is emerging as the dominant player in the biscuit industry. Already it is market leader by sales volume as its major target is mass segment. The major potential competitor is Surya food and agro (Priyagold) which has mopped up substantial share in the market by offering products at 1520% less than those offered by Britannia and Parle . Also there is threat from the foreign players who are eyeing this lucrative world's second largest market. 2. Direct competition is from the manufacturers of the cookies which as of now is dominated by unorganized sector. Indirect competition is from the products
such as cakes, muffins, chips, and wafers etc. as these are substitutes for the light snacks. 3. The positioning in the market by competitors as Britannia is of the one offering more variety i.e. customer intimacy as there is high responsiveness in meeting customer needs. With today's consumer needing more variety Britannia has positioned itself well by offering quality variety. 67

4. Parle is the closest competitor with 30% market share, which has continuously increased in last 2 years Parle is maintaining its share at around 40% volume vise though it has come down from the time when it was sort of monopoly in organized sector. 5. Parle biggest strength lies in different segmentation of its offering i.e. mass, premium and snacks market. Weakness can be attributed to not as good packaging and attractive packaging options as Britannia Climate (Context) 1. Political & regulatory environment - With advent of globalization and India becoming member under GATT, WTO the Indian market is open for foreign players like Sara lee (already have Indian presence by acquiring biscuit unit of nutrine), George weston, Nabisco etc. The competition is going to increase and Britannia will have to increase its stable to offer more varieties to satisfy consumer's palette. 2. Economic environment - Biscuit sales volume being so high because its purchased across masses as well as classes and the purchase cost being low. The economic environment won't affect the industry much other than substantial increase in raw material cost which will have to passed on to the consumers. 3. Social/cultural environment - The trend being seeking more adventure and variety compared to when people were just satisfied with plane glucose biscuits. They have more choice to make these days. 4. Technological environment - Technology has helped in better quality control, mass production and hence low costs which has resulted in increasing demand.

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CHAPTER IV DATA ANALYSIS AND INTERPRETATION

69

DATA ANALYSIS AND INTERPRETATION

The Sale of 6 SKUs in 4 Regions namely Western UP, Eastern UP, Central UP and Rajasthan was analyzed for a Period of three months from April to June. In April, there were no Promotions on these SKUs while in the Month of May and June these SKUs were offered with Promotions. The total Sale of these SKUs without Promotion i.e. in the month of April was compared with the total Sale of these SKUs with Promotions in the month of May and June. The total Percentage increase in Sales from April to May and then subsequently from May to June was analyzed. The Effect of these Promotions on the total Sales was calculated. These promotions are launched especially for the rural marketsand therefore their effectiveness is to be tested in the rural market only. These has been introduced to increase the sale of these biscuits in rural market. The RPDs and the UPDs of each and every Superstockist was tracked. It was tracked that whether the RPDs have meet their sales target of 35,000 and UPDs of 50,000 or not. If they have not met their targets by when are they going to meet their targets and what is the reason they have not yet met their sales target. Thereafter the monthly reports of April, May and June were compared and the Percentage increase in Sale was calculated. For all the three months the Overall Sale as well as the RPD and UPD Sale was Calculated for all the four Regions. In Addition to this the the total Percentage of Stock reaching the Rural market and the Urban market was also calculated. At each and every step the Percentage increase in Sale of euery region was calculated.

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The Analysis and Finding of this Projects are as follows: SALES ANALYSIS OF CONSUMER PROMOTION TOTAL SALES (in Ttonnes) MATERIAL 91340 50:50 150G 91344 TIGER KESAR KULFI 100G 91345 TIGER ROSE MILK 100G 91346 TIGER ORANGE CREAM 100G 91347 TIGER ELAICHI CREAM 100G 91350 TIMEPASS CLASSIC S.150G
WESTERN UP
TOTAL SALE(in Tonnes) 50 40 30 20 10 0
91340 50:50 150G 91344 TIGER KESAR KULFI 100G 91345 TIGER ROSE MILK 100G 91346 TIGER ORANGE CREAM 100G 91347 TIGER ELAICHI CREAM 100G 91350 TIMEPASS CLASSIC S.150G

APRIL 10 1 2 10 1 1

MAY 13 3 3 15 1 3

JUNE 44 4 7 22 7 5

44 APRIL MAY 7 1 1 1 JUNE 3 5

22 10 13 4 1 3 2 3 7 10 15

It is clearly depicted from the above Graph that there has been a tremendous increase in total Sales of all the SKUs from April to June due to the Promotional Schemes offered with these SKUs during this Period. The maximum swing in the total Sale was observed for 50:50 150gm which is about 44 tonnes in June as compared to only 10 tonnes in April.Also in this region, there has been a noticeable increase in the total Sale of the Tiger Orange Cream 100 gm. The sale was increased from 10 tonnes in April to 22 tonnes in June. The Percentage increase in the total Sale of this SKU from April to June was 120%. The Total Sale of all the rest of the SKUs has also increased Marginally during this time Period.

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TOTAL SALES (in Tonnes) MATERIAL 91340 50:50 150G 91344 TIGER KESAR KULFI 100G 91345 TIGER ROSE MILK 100G 91346 TIGER ORANGE CREAM 100G 91347 TIGER ELAICHI CREAM 100G 91350 TIMEPASS CLASSIC S.150G APRIL 35 1 1 61 2 3 MAY 56 1 0 62 4 7 JUNE 109 7 6 70 8 27

EASTERN UP
TOTAL SALES(in Tonnes) 120 100 80 60 40 20 0
91 340 50:50 1 50G

109

56 35 11 7 1 0 6

70 6162 27 8 2 4
91 346 TIGER ORANGE CREAM 1 00G 91 347 TIGER ELAICHI CREAM 1 00G

APRIL MAY JUNE

37
91 350 TIM EPASS CLASSIC S.1 50G

91 344 TIGER KESAR KULFI 1 00G

91 345 TIGER ROSE M ILK 1 00G

It is clearly seen from the bar Diagram that in this region, the maximum Percentage increase in total Sales was for 50:50 150gm and Timepass Classics 150gm. There has been a tremendous increase (212% for 50:50 150gm and 800% for Timepass Classics 150 gm)in sale for these SKUs due to promotional Schemes offered with these SKUs. 72

There has been a Marginal increase in the Sale of rest of the SKUs.

TOTAL SALES (in Tonnes) MATERIAL 91340 50:50 150G 91344 TIGER KESAR KULFI 100G 91345 TIGER ROSE MILK 100G 91346 TIGER ORANGE CREAM 100G 91347 TIGER ELAICHI CREAM 100G 91350 TIMEPASS CLASSIC S.150G APRIL 8 6 4 13 3 3 MAY 12 8 5 14 4 4 JUNE 88 6 6 18 9 27

CENTRAL UP
TOTAL SALES(in Tonnes)
100 90 80 70 60 50 40 30 20 10 0
91 340 50:50 1 50G 91 344 TIGER KESAR KULFI 1 00G 91 345 TIGER ROSE MILK 1 00G 91 346 TIGER ORANGE CREAM 1 00G 91 347 TIGER ELAICHI CREAM 1 00G 91 350 TIMEPASS CLASSIC S.1 50G

88

APRIL MAY JUNE

27 8

12

8 6

13 14 4

18 3

In this region also, the Maximum increase in Percentage total Sales was Observed for 50:50 150 gm and Timepass Classics 150 gm. The Percentage increase in Total Sales of 50:50 150 gm from April to June due to Promotions was 1000% and for Timepass Classics 150 gm was 800%. An unusual trend in increase in sale was Observed in case of Tiger Kesar Kulfi 100 gm. There has been a increase in sale of this SKU from April to May but there has been a Drop in the Sale from May to June. This is because of the non availability of this SKU in this Region.

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TOTAL SALES (in Tonnes) MATERIAL 91340 50:50 150G 91344 TIGER KESAR KULFI 100G 91345 TIGER ROSE MILK 100G 91346 TIGER ORANGE CREAM 100G 91347 TIGER ELAICHI CREAM 100G 91350 TIMEPASS CLASSIC S.150G APRIL 36 8 7 16 6 2 MAY 41 10 7 13 7 13 JUNE 70 11 13 32 4 19

RAJASTHAN
TOTAL SALE(in Tonnes) 80 70 60 50 40 30 20 10 0
91 340 50:50 1 50G 91 344 TIGER KESAR KULFI 1 00G 91 345 TIGER ROSE M ILK 1 00G 91 346 TIGER ORANGE CREAM 1 00G 91 347 TIGER ELAICHI CREAM 1 00G 91 350 TIM EP ASS CLASSIC S.1 50G

70

36

41
32 11 8 10 13 16 19

APRIL MAY JUNE

6 7 4

7 7

13

13
2

As it can be seen in the above chart sale of 50:50 due to promotion shoot up like anything in month of June that is a increase of around 89%. Also other SKUs like TIGER ORANGE and TIGER ELAICHI showed a decreasing trend due to unavaibility of stock of the given product. Hence it is concluded that there is a marginal growth in the sales in this region.

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PERCENTAGE RURAL AND URBAN SALE

Month APRIL MAY JUNE %Rural Sale 7 10 13 % Urban Sale 93 90 87

Western UP
100 90 80 70 60 50 40 30 20 10 0 93 90 87

Percentage

%Rural Sale % Urban Sale

7 APRIL

10

13

MAY

JUNE

This graph clearly depicts that there has been a constant increase in the Percentage Rural Sale from April to May and subsequently from May to June. This promotion has helped BIL to expand its Consumer base in Rural Market. Although the percentage increase of Sales in Rural Markets was very less but this is due to the fact that the markets in this region were very small and also the Rural Percentage Contribution is very less as compared to Urban contribution. %Rural Month APRIL MAY JUNE Sale 48 50 51 % Urban Sale 52 50 49

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Eastern UP
53 52 51 Percentage 50 49 48 47 46 APRIL MAY JUNE 48 50 50 49 %Rural Sale % Urban Sale 52 51

In this region also the Percentage Rural Sale has increased from April to June. There has been an increase of about 3% in Rural Sale from April to June. In the month of May the Rural and Urban Sales were equal with each being 50%. And in the Month of June more Sales were made in the Rural market as compared to Urban Markets. Due to this promotion there has been increase in the Rural Sale. This is the only Region in which Rural Sales has Exceed the Urban Sales in the month of June.

%Rural Month APRIL MAY JUNE Sale 24 17 15

% Urban Sale 76 83 75

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Central UP
90 80 70 Percentage 60 50 40 30 20 10 0 APRIL MAY JUNE 24 17 15 %Rural Sale % Urban Sale 76 83 75

In Central UP these Promotions were not able to increase the Percentage Rural Sale. In all the three months, the Percentage Urban Sales was more than the Percentage Rural Sale. The Percentage Rural Sale has Constantly declined from April to June. Although the total sale of these SKUs in this region has increased but due to allocation Problem more sale was made in the Urban Markets.

%Rural Month APRIL MAY JUNE Sale 30 41 42

% Urban Sale 70 59 58

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Rajasthan
80 70 60 Percentage 50 40 30 20 10 0 APRIL MAY JUNE 30 41 70 59 42 58 %Rural Sale % Urban Sale

It is clearly depicted from the graph above that from April to June there has been an increase in the Percentage Rural Sale. The Percentage rural Sale has increased by about 12% from April to June. This promotion has successfully increased the Rural Sales in this Region for all the SKUs.

PERCENTAGE RURAL SALE AND URBAN SALE SKU WISE IN MONTH MAY
Material 91340 50:50 91344 TIGER KESAR KULFI 91345 TIGER ROSE MILK 91346 TIGER ORANGE 91347 TIGER ELAICHI 91350 TIMEPASS CLASSIC %Rural Sale 0.70 13.7 12.5 20.1 0 0 78 % Urban Sale 99.30 86.30 87.50 79.90 100.00 100.00

WESTERN UP
120 PERCENTAGE 100 80 60 40 20 0
91 340 50:50 91 344 TIGER KESAR KULFI 91 345 TIGER ROSE M ILK 91 346 TIGER ORANGE

99.30 86.30 87.50 79.90

100.00

100.00 %Rural Sale % Urban

13.7 0.7

12.5

20.1 0
91 347 TIGER ELAICHI

0
91 350 TIM EPASS CLASSIC

In the given region the main aim of promotion is to reach the sale upto 16.8% as per Superstockists contribution in this area. Some of the SKUs like TIGER ROSE and TIGER KESAR KULFI have tried to and SKU TIGER ORANGE have been able to reach above the target level.And there has beeen an increase in the percentage rural sale in the month may as compared to April, Also there is hardly any sale in rest of the SKUs in the first month of promotion. The total sale as per Target happened in Urban markets only, despite the fact that these promotion were designed to capture rural market.

Material 91340 50:50 91344 TIGER KESAR KULFI 91345 TIGER ROSE MILK 91346 TIGER ORANGE 91347 TIGER ELAICHI 91350 TIMEPASS CLASSIC

%Rural Sale 50 60 0 57 42.1 32.3

% Urban Sale 50 40 0 43 57.9 67.7

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EASTERN UP
80 70 PERCENTAGE 60 50 40 30 20 10 0
91 340 50:50 91 344 TIGER KESAR KULFI

67.7 60 50 50 40 57 43 57.9 42.1 32.3 %Rural Sale % Urban

0 0
91 345 TIGER ROSE M ILK 91 346 TIGER ORANGE 91 347 TIGER ELAICHI 91 350 TIM EPASS CLASSIC

The affect of promotion is clearly seen in the Eastern UP. The target rural sale according to superstockists contribution should be 61%. Only TIGER KESER KULFI and TIGER ORANGE are close to the target whose Rural Sales Percentage are 60% and 57% respectively. For all the rest of the SKUs the Percentage Rural Sale is very less than the targeted in this month. The SKU named TIGER ROSE MILK does not show any sale neither Rural nor Urban in this region. This is due to non availability of this SKU in this region during the month of May. aterial 91340 50:50 91344 TIGER KESAR KULFI 91345 TIGER ROSE MILK 91346 TIGER ORANGE 91347 TIGER ELAICHI 91350 TIMEPASS CLASSIC %Rural Sale 6.7 18.5 5.4 28.7 16.3 20 % Urban Sale 93.3 81.5 94.6 71.3 83.7 80

80

CENTRAL UP
100 90 80 70 60 50 40 30 20 10 0 93.3 81.5 71.3 94.6 83.7 80

PERCENTAGE

%Rural Sale 28.7 18.5 6.7

91 340 50:50 91 344 TIGER KESAR KULFI

% Urban 16.3 20

5.4
91 345 TIGER ROSE M ILK 91 346 TIGER ORANGE 91 347 TIGER ELAICHI 91 350 TIM EPASS CLASSIC

The target rural percentage sale should be at least 34% according

to

Superstockists contribution in this area. TIGER ROSE MILK has done the least sale among all the SKUs. There should be slight increase in sales of TIGER ORANGE i.e. up to 5% so as to reach the targeted rural sale Percentage. None of the SKUs has reached the targeted Sales Percentage in the month of May. Material 91340 50:50 91344 TIGER KESAR KULFI 91345 TIGER ROSE MILK 91346 TIGER ORANGE 91347 TIGER ELAICHI 91350 TIMEPASS CLASSIC %Rural Sale 38.3 50 50 40 28.3 43.6 % Urban Sale 61.7 50 50 60 71.7 56.4

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RAJASTHAN
80 PERCENTAGE 70 60 50 40 30 20 10 0
91 340 50:50 91 344 TIGER KESAR KULFI 91 345 TIGER ROSE M ILK 91 346 TIGER ORANGE 91 347 TIGER ELAICHI 91 350 TIM EPASS CLASSIC

71.7 61.7 50 50 38.3 50 50 40 28.3 60 56.4 43.6 %Rural Sale % Urban

The target rural percentage sale should be at least 48% according to Superstockists contribution in this area. TIGER KESAR KULFI and TIGER ROSE MILK has reached their target Rural Sale Percentage. Rest all the SKUs are below the target sale Percentage. TIGER ORANGE and TIMEPASS CLASSIC are close to the targeted Sale and need slightly more efforts to reach to the targeted Percentage in the next month.

PERCENTAGE RURAL AND URBAN SALE SKU WISE IN MONTH JUNE

%Rural Sale 10 10 6 12 17 45 % Urban Sale 90 90 94 88 83 55

Material 91340 50:50 91344 TIGER KESAR KULFI 91345 TIGER ROSE MILK 91346 TIGER ORANGE 91347 TIGER ELAICHI 91350 TIMEPASS CLASSIC

82

WESTERN UP
100 PERCENTAGE 80 60 40 20 0 10
91 340 50:50

90

90

94

88

83 55 45 %Rural Sale % Urban

10
91 344 TIGER KESAR KULFI

6
91 345 TIGER ROSE M ILK

12
91 346 TIGER ORANGE

17

91 347 TIGER ELAICHI

91 350 TIM EPASS CLASSIC

The target rural percentage sale should be atleast 16.8% according to Superstockists exceptionally contribution good in this SKUs area.Only i.e. TIMEPASS (12.3%) is and doing TIGER but rest 50:50

Cream(Aggregate 14.6%) are less than the target percentage. % Urban Sale 53 40 29 40 50 54

Material 91340 50:50 91344 TIGER KESAR KULFI 91345 TIGER ROSE MILK 91346 TIGER ORANGE 91347 TIGER ELAICHI 91350 TIMEPASS CLASSIC

%Rural Sale 47 60 71 60 50 46

83

E AS TE R N U P
80 70 60 50 40 30 20 10 0 71 53 47 60 40 29 60 5050 40 54 46

PERCENTAGE

% R ural S ale % U rban

9 13 4 0 50 :50

9 13 4 4 9 13 4 5 9 13 4 6 9 13 4 7 9 13 50 T IG E R T IG E R T IG E R T IG E R T IM E P A S S K E S A R R O S E M ILKO R A N G E E LA IC HI C LA S S IC K U LF I

The target rural percentage sale should be atleast 61% according to Superstockists contribution in this area. SKUs 50:50 and 60% which has reched its required level TIMEPASS have not reached the target level and TIGER CREAM overall rural sale percentage is

SALES

ANALYSIS

OF

MERA

RPD

MAHAAN

CONTEST
NUMBER OF MONTHS April May June RPDs 47 52 66 UPDs 57 57 69

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WESTERN UP
80 70 60 50 40 30 20 10 0 69

66 57 47 52 57

NUM BER

RPDs UPDs

April

May

June

In this region the total no both RPDs (Regional preferred Dealers) and UPDs (Urban Preferred Dealers) has increased from May to June. The increase in the no. of RPDs was more prominent as compared to the increase in no. UPDs. The no. of RPDs has increased by 22 from April to June which clearly indicate more hold of BIL in the Rural market. Also 12 UPDs has increased in this region from April to June.

NUMBER OF MONTHS April May June RPDs 261 287 303 UPDs 64 64 66

85

Eastern UP
350 300 250 NUMBER 200 150 100 50 0 April May June 64 64 66 RPDs UPDs 261 287

303

It is clearly depicted from the above graph that for this region the no. of RPDs is much greater than the total no. of UPDs in all the three months since this area has a large Percentage of Rural market. There has been a tremendous increase in the no. of RPDs from April to June. A total of 42 RPDs has increased for this region during this period. The no. of UPDs was almost constant for all these three months.

PERCENTAGE RPDS ABOVE Rs. 35,000

MONTHS April May June

% RPDs above 35000 62 35 43.9

86

WESTERN UP
70 60 PERCENTAGE 50 40 30 20 10 0 April May June 35 43.9 April May June 62

In Western UP the Percentage RPDs above 35,000 has decreased from April to May and then there was a slight increase in their Percentage from May to June. The Percentage RPDs above 35000 has decreased from April to May due to non availability of stock in the rural areas of this region. Also due to allocation problem maximum stock was dispatched in the urban market due to which RPDs above 35000 has decreased from April to May. From May to June the percentage has increased since the RPDs has made their best efforts to reach their sale target of 35000 also during this time period the problem of allocation was not that prominent.

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MONTHS April May June

% RPDs above 35000 42 43 44.6

EASTERN UP
45 44.5 PERCENTAGE 44 43.5 43 42.5 42 41.5 41 40.5 April May June 42 43 April May June 44.6

It is clearly depicted from the above graph that the Percentage RPDs above 35000 has increased from 42% in April to 44.6% in June. In this region there was no allocation as well as stock Problems due to which more no. of RPDs were able to meet their Sale target of 35000.In the month of June 44.6% of the total RPDs has met their Sales target. MONTHS April May June % RPDs above 35000 8 10 18.4

88

CENTRAL UP
20 18 16 PERCENTAGE 14 12 10 8 6 4 2 0 April May June 8 10 April May June 18.4

In this region the Percentage of RPDs which has reached their Sales target in the month of June was only 10% which is very less. Most of the RPDs were not able to reach their Sale target of 35000 due to non availability of stock in the Rural areas of this region. Also the Rural markets in this region are very small and therefore could not easily cater the sale of 35000.

MONTHS April May June

% RPDs above 35000 14 31 31

89

RAJASTHAN
35 30 PERCENTAGE 25 20 15 10 5 0 April May June 14 April May June 31 31

In this region, in the month of May and June only 30% of the total RPDs were able to meet their Sale target of 35000. As compared to April the Percentage of RPDS in the month of May and June has increased by 17%. Very less no of RPDs were able to meet their sales target due to non availability of stock in most of the rural areas in Rajasthan.

90

CHAPTER V CONCLUSIONS AND FINDINGS

91

CONCLUSIONS AND FINDINGS

Sales Promotional Offers helps the company to increase the over sales of the product under promotion because consumers tend to buy in ample amount due to small duration of the promotion and feel value for their money. But through these promotional schemes company earns less margin. It also helps in widening their consumer base i.e. it attracts new triers. It creates the brand awareness among the consumers about the newly launched product like Tiger cream. Products which are less popular among the consumers like Pepper Checker are also get Promoted. It helps to increase the repurchase rate of the occasional buyers Since the promotions were designed for rural market and rural market contributes to 70% of the total market hence attracting more consumers. And turn them to loyal users It enhances brand image Since attractive promotion attracts consumers hence retailers push products under promotion rather than competitors products of same kind. Sales promotion also attracts brand switchers who are primarily looking for low price good value of premiums.

92

Learnings through Trade Promotions:

to persuade the RPDs and UPDs to carry the brand because they are more concentrated in making sales of the given company product so as to get maximum incentives. to persuade the RPDs and UPDs to carry more units than the normal amount as they have to reach the target sale under Mera RPD Mahaan Scheme. to induce RPDs and UPDs to promote the brand by featuring, display, and price reductions so as to attract more consumers. to stimulate RPDs and UPDs and their sales clerks to push the product than competitors products otherwise they wont be able to reach their sales target. Also Attract more RPDs and UPDs to take participate in the contest because of the incentives.

PROBLEMS
Stock out: o It was observed that most of the Promotional SKUs were out of stock at most of the depots during the Promotional Period which has effected the total sales of these SKUs in these four regions tremendously. Non availability of Freebies: o It was observed that sometime during the Promotional Period the Freebies which has to be given with the main Product were not available. Due to their unavailability the Promotion for that Particular SKU was not carried for that Period of Promotion. Allocation Problem:

93

The allocation was the most prominent problem during this

Promotion. The stocks were not allocated in the Rural and Urban markets according to their Percentage area contribution. In some areas the stock was supplied more which was not in accordance with the Percentage area contribution of that region while in some very less stock was supplied as compared to their Percentage area contribution. Due to this most of the time major part of the stock was dispatched in the Urban markets which has seriously affected the Rural sales. Dispatch Problem: o There was no proper schedule for dispatching & receiving of orders generated. Generally the Stocks are Dispatched late by about a week from the depots due to which the stock reaches late to the wholesalers and during that week the wholesalers face the problem of non availability and are left with very less or no stock to sell. Poor sale promotion skills: o According to observations, sale was not promoted skillfully in most of the Regions. The retailers in these regions have not taken appropriate efforts so as to promote the promotional products skillfully.

94

CHAPTER VI RECOMMENDATION

95

RECOMMENDATION
As already discussed above, there are certain issues and flaws associated with Sales Promotion, so in order to implement it effectively and efficiently we would like to suggest certain recommendations to the company:

Production department should make efforts to make available all of the product varieties in the depot norm wise. So that each and every variety should be available according to the generated order so as to meet the stock out problem. I recommend strong coordination between production and the sales department. So that a proper production forecast for each variety can be maintained by the production department. Proper allocation of the stock from the depot according to the Superstockists contribution so that neither there is excess stock in one region nor stock outs in other. I also recommend to increase average number of lines so that all the SKUs are available in the market. Apart from setting overall target for all the SKUs, there should also be individual SKU wise target so that RPDs and UPDs are able to make sales of unfamiliar products also. To increase the sales margin the price value of the main brand should be relatively higher i.e. around thrice of the Freebie for example instead of Rs10 pack of 50:50 150G Freebie Pepper Checker should be given with Rs15 pack of 50:50. There should be a system from where different distributors can see the stock position of company and as well of other distributors. It will help the distributor in a way that if some distributors who wants the same. Contests like MERA RPD MAHAAN should be held every quarter.

96

CHAPTER - VII ANNEXURE

97

ANNEXURE QUESTIONNAIRE FOR CONSUMER

1. Write down the first brand name that comes in your mind regarding biscuits? .

2. What others brands of biscuits can you recall? a) .. b) .. c) .. . d) .. . 3. What is the frequency of biscuits you take? (Tick you prefer). a) Once in a week b) Thrice in a week b) Twice in a week d) .Any others h) g). f). e)

4. What brand do you have on occasions? (Tick you prefer). a) Britannia c) Sun feast b) Parle d) Priya Gold

5. Which biscuits gets you best freshness? (Tick your choice).

98

a) Mari Gold b) .Good Day

c) d)

.. 50-50 Krack Jack

6. Have you any complain about the biscuits? (Just tick). a) . Price to highd)Non-availability near by b) . Dirty Rappers e) Shortage

c) . Bad quality f) Others reason 7. Which brand do you prefer mostly? (Just tick). a) Britannia c) Sun feast b) Parle d) Priya Gold

8. Can you change your mind for others brand, if the brand is not available in shop which you prefer? (Just tick choice). a) .Yes b) .No 9. Choose your most popular brand of biscuits for each of the following criteria? (Just tick).
Crit Britannia eria Something Special Strong After Taste 99 Parle Priya Gold Sun Feast

Really Refreshing Relaxing Distinctive Flavor Any Other

Classification Data 1. Name: - 2. Sex:- Male Female 3. Age: - .. 4. Occupation: - . 5. Income Group:5,000-10,000 .10,000-15,000 ..15,000-20,000. Above 20,000

Thanking you

100

CHAPTER VIII BIBLIOGRAPHY

101

BIBLIOGRAPHY
Effective Planning in Marketing and Development World Class Marketing Marketing in Practice Human Resource Management Human Resource Management Human Capital Leslie Rae Kaye Thorne Blackwell C.B.Gupta T.N.Chabra Journal

102