An Introduction to FMCG Industry
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Industry Profile Fast Moving Consumer Goods FMCG Industry : FMCG are products that have a quick shelf turnover, at relatively low cost and don't require a lot of thought, time and financial investment to purchase •
‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year.
•
Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé, Unilever and Procter & Gamble.
•
The Indian FMCG sector is an important contributor to the country's GDP. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India .
•
This has been due to liberalization, urbanization, increase in the disposable incomes and altered lifestyle.
•
. The lower-middle income group accounts for over 60% of the sector's sales. Rural markets account for 56% of the total domestic FMCG demand.
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FMCG – Evolution : 1950’s-80’s – Low Investment in the sector
Low purchasing power
Govt’s emphasis on small scale sector
HLL and other company’s urbane focus
Post liberalization
Entry of MNCs
Focus shifted to getting to rural consumer first
Others, like Nestle, remained with the urban population
Latest fad to hit the market is the ‘sachet’ bug.
Mushrooming of regional brands
Nirma enters and changes the focus to ‘Value for Money’ in the 70’s
Post liberalization, Jyothi Laboratories, ‘Ghari’ Detergent and ‘Anchor’ toothpaste giving the nation-wide brands a run for their money.
FMCG SECTOR : Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged goods. Items in this category include all consumables (other than groceries/pulses) people buy at regular intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged foodstuff, household accessories and extends to certain electronic goods. These items are meant for daily of frequent consumption and have a
high
return.
.
A major portion of the monthly budget of each household is reserved for FMCG products. The volume of money circulated in the economy against FMCG products is very high.
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Number of products the consumer use is very high. Competition in the FMCG sector is very high resulting in high pressure on margins.FMCG companies maintain intense distribution network. Companies spend a large portion of their budget on maintaining distribution networks. New entrants who wish to bring their products in the national level need to invest huge sums of money on promoting brands. Manufacturing can be outsourced. A recent phenomenon in the sector was entry of multinationals and cheaper imports. Also the market is more pressurized with presence of local players in rural areas and state brands.
THE TOP 10 COMPANIES IN FMCG SECTOR
SL. NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Companies Hindustan Unilever Ltd. ITC (Indian Tobacco Company) Nestlé India GCMMF (AMUL) Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries
SOURCE: http://www.naukrihub.com/india/fmcg/top-companies/
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Biscuit Industry In India
HISTORY OF BISCUITS:
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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 favorite of Christopher Columbus who discovered America. 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 flavored 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".
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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:
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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. 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 co-ordinate their defence against Mongolian invaders.
Biscuit making process
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MIXING: This is a process where all ingredients are put together in right proportion for dough formation. These ingredients are then fed into Mixers where mixing is done and dough is prepared for moulding/cutting .Major ingredients are flour, fat, sugar and others as per the product one would like to have.
MOULDING: In this section we laminate the dough into sheet, which then passes down to gauge rollers, and sheet thickness is achieved for moulder/cutter. Here we have a cutter or moulder as per the variety where one gets the shape and sizes of biscuits.
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BAKING: This is the area where we pass these moulded wet biscuit into baking oven. The biscuits are baked on desired temperatures. Various type of heating are available now days as per the convenience and cost. Different type ovens are available
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COOLING: These baked biscuits are then passed on to cooling conveyors for natural cooling prior too packing .The temperatures are brought down to room temperatures
PACKING: These biscuit are then stacked and fed into packing machine for packing Different packing material are available for packing of these biscuit in different packs slug packs , pouch pack or family packs etc. These packs are then put into secondary packaging like cartons to be transported to retailers.
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BISCUIT INDUSTRY IN INDIA-STATUS PAPER 1. Annual Growth: The biscuit industry in India witnessed annual growth as below:2003-04 - 15% 2004-05 - 14% 2005-06 - 14% 2006-07 - 13% 2007-08 - 15% 2008-09 - 17% (April – June)While the growth rate has been stagnating during last 4 years, it has picked up momentum during the 2007-08 and the first quarter of 2008-09 mainly on account of exemption from Central Excise Duty on biscuits with MRP up to Rs.100/per kg, as per Union Budget for 2007-08.
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Indian Biscuit Manufacturers’ Association (IBMA), instrumental in obtaining the excise duty exemption, estimates annual growth of around 20% in the year 2008-09. Growth in biscuit marketing has been achieved also due to improvement in rural market penetration.
2. Annual Production: The organized biscuit manufacturing industry‘s annual production figures are given below: (In Lakh Metric Tonnes) 2003-04 - 11.00 2004-05 - 12.54 2005-06 - 14.29 2006-07 - 16.14 2007-08 - 17.14 Segments : The organized and unorganized sectors of the biscuit industry is in the proportion Of 60%:40% ratio. EXPORTS of Biscuit is estimated to be around 15% of the annual production during the year 2007-08. IMPORTS of biscuits into India has not shown any significant growth during the
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last two years and has not affected production/sales by the Indian Biscuit industry .
3. Rural-urban penetration of Biscuit: Urban Market :75% to 85% Rural Market : 50% to 65% Marketing : Wholesale and Retail marketing in the Biscuit industry is carried out with a network of C & F Agencies (for States and specific Districts), Dealers / Wholesalers and Retail shops. HIKE IN COST OF PRDUCTION : Biscuit Industry especially the Small & Medium Sector, consisting of around 150 units are facing erosion in their profitability and competitive capability, due to :Steep hike in cost of production on account of increase in prices of major raw materials, i.e. Wheat Flour Veg. Oil, Sugar, Milk, Packaging Materials, Fuel. Wages,etc.Recent increase in prices of Petrol/Diesel in May 2008 has further resulted n cost push. Detailed Comparative Chart showing adverse impact on Biscuit Industry is given below:
4. HIKE IN PRICES OF RAW MATERIALS S.NO Raw Martial
Jan 08
1 2 3
12.23 15.09 52.99
Maida Sugar Parmoline Oil
May 08 12.00 16.00 57.00
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4 5 6 7 8 9
S.M.P Butter Laminate F.O HM Bag Carbon Box Per Kg
122.00 118.94 200.00 26.63 91.92
127.00 130.00 230.00 35.00 105.00
25.00
28.00
The above rates are excluding VAT & other Taxes as well as Cost escalation due to increase prices of Laminate, hike in prices of Petrol/ Diesel, Revision of wages
• • •
S.No
Cost per KG
1
Jan 08
May 08
Difference Rs
Glucose 85 gm 31.08
31.73
0.65
2.09
2
Crunchy 150 gm
bite30.18
32.40
2.22
7.36
3
Golmol 150 gm 34.06
34.26
0.20
0.59
4
Butter 250 gm 41.59
43.82
2.23
5.36
5
2 in 1 75 gm
39.01
41.06
2.05
5.26
6
Milk Cream 7546.38 gm
47.28
0.90
1.94
7
Marie 17 gm
41.21
0.84
2.08
40.37
inIn %age
5. Pattern of Biscuit Consumption(On Zonal basis) in the 15
country are as below: Northern Zone - 25% Western Zone - 23% Southern Zone - 24% East and North East Zone - 28% (Including N.East) The per capital consumption as well as pattern of consumption in the four regions, as shown above, will also increase considerably, in case the industry’s plea for reduction in the rate of Value Added Tax (VAT) from 12.5% to 4% is acceded to Main Categories of Biscuits are broadly as under: Glucose, Marie. Sweet, Cream, & Milk Popular Brands of Biscuits in the country are, Britannia, Parle, Priyagold, Anmol, Sunfeast, Biskfarm, Dukes, Cremica, Priya, Bonn, Raja, Champion, Cookieman etc.
http://www.ibmabiscuits.in/industry-statistics.html
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Biscuits can be broadly categorized into the following segments:
Biscuit Category
Annual Production in
Glucose Marie Cream Crackers Milk Others
Percentage 44% 13% 10% 13% 12% 8%
SOURCE: http://foodbizdaily.com/articles/32688-news-biscuit-industry-inindia-an-overview.aspx
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Britannia Industries Ltd.
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COMPANY PROFILE
COMPANY’S BACKGROUND
Britannia was incorporated in 1918 as Britannia Biscuits Co LTD in Calcutta. In 1924, Pea Frean UK acquired a controlling stake, which later passed on to the Associated Biscuits International (ABI) an UK based company. During the 50’s and 60’s, Britannia expanded operations to Mumbai, Delhi and Chennai. In 1989, J M Pillai, a Singapore based NRI businessman along with the Groupe Danone acquired Asian operations of Nabisco, thus acquiring controlling stake in Britannia. Later, Groupe Danone and Nusli Wadia took over Pillai’s holdings.
EVOLUTION OF BRITANNIA :
THE STORY THUS FAR . . . 1892 - A humble genesis was made to manufacture biscuits in a small house in Central Calcutta, with an investment of Rs.295. 1897 - The business was acquired by Gupta brothers who moved operations to Dum Dum in Calcutta under the name of V.S. Brothers. 1918 - Mr C. H. Holmes, an English business man, partnered with Gupta Brothers. Britannia was incorporated on the 21st of March 1918 as a public limited company under the Indian Companies Act VII of 1913. 1921 - Britannia obtained priority certificate to import new machinery. It became the first company east of the Suez Canal to use gas ovens.
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1924 - New factories were established in Mumbai and Calcutta. Britannia became a subsidiary of Peek, Frean & Company Limited, a leading biscuit company in UK. 1935-45 - During World War II Britannia diverted 95% of its production for manufacturing ‘service biscuits’ for soldiers. 1954 - High quality sliced and packaged bread was pioneered and launched in Delhi. 1979 - On 3rd October, the Company was re-christened from Britannia Biscuit Company Limited to Britannia Industries Limited. 1983 - Sales crossed the Rs. 100 crore milestone. 1992 - Britannia celebrated its Platinum jubilee and launched `Little Hearts’. 1993 - The Wadia Group acquired a stake in ABI Holdings Limited (ABIH), United Kingdom and became an equal partner with Groupe DANONE in BIL. Brand ‘50-50’ was launched. 1997 - ‘Eat Healthy, Think Better’ became the new corporate mantra. Britannia entered the dairy business. ‘Tiger’ biscuits were launched. ‘Jim Jam’ and ‘Chekkers’ were launched. 2000 - Forbes Global ranked Britannia among the Top 200 small companies. Britannia was ranked No.1 food brand of the country. Britannia Lagaan Match was India’s most successful promotional activity of the year. 2002 - Britannia formed a joint venture with Fonterra, the world’s second largest dairy company and Britannia New Zealand Foods Private Limited was born. 2005 - Brand Tiger’s re-birth was marked by the slogan ‘Swasth Khao, Tiger Ban Jao’, which became a popular chant. Britannia launched ‘Greetings’ a range of assorted gift packs. Britannia ‘50-50 Pepper Chakkar’ was launched. 2007 - In a survey conducted by AC Nielsen ORG-Marg and published in the Economic Times, Britanniawas rated the No.1 MOST TRUSTED FOOD BRAND. It also ranked as No.1 Brand in Metros across all categories. 2007 - Britannia Industries formed a joint venture with the Khimji Ramdas Group and acquired a 70 per cent beneficial stake in the Dubai-based 20
Strategic Foods International Co. LLC and 65.4% in the Omanbased Al Sallan Food Industries Co. SAOG. 2008 - Britannia launched Iron fortified ‘Tiger’ biscuits, ‘Good Day Classic Cookies’, Low Fat Dahi and renovated ‘MarieGold’. The story of one of India's favourite 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. The beginnings might have been humble-the dreams were anything but. 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 Indianness 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 crores revenue mark. On the operations front, the company was making equally dynamic strides. In 1992, it celebrated its Platinum Jubilee. 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'. 21
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 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.
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BRITANNIA BRAND TIMELINE Launched
Brand Name
Over 50 Years Old
Marie
Over 40 Years Old
Milk Bikis
1986
Good Day
1993
50:50
1997
Tiger
1998
Nutrichoice
2002
Treat
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BRITANNIA PRODUCT LAUNCHES 2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Good Day Coconut Timepass Nimkee Duet Treat- Strawberry & Vanilla Duet Treat- Orange & Chocolate Jam Treat- Orange Cup Cake Pineapple cake Chocolate Cake Rusk Tiger Cream- Kesar Kulfi Tiger Cream- Rose milk Marie Gold Doubles 50-50 Paper Chakkar Greetings Chota Tiger Tiger Cream- Chocolate 50-50 Chutkule Nutri Choice Digestive Nutri Choice Sugar Out Tiger Banana Good Day Classic Cookies Good Day Jambo Pure Magic Cookies Daily Fresh Dahi Cheese Slimz Tiger Cream- Butterscotch Tiger Cream- Strawberry Tiger Cream- Pineapple Nutri Choice 5 Grain Cheese Garlic & Multigrain Bread
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Berry Cheery Cup Cake Eggiess Cake
BRITANNIA OVERSEAS : Exports •
USA
•
UAE
•
Qatar
•
Bahrain
•
Ghana
•
Saudi Arabia
•
Kuwait
•
Singapore
•
Oman
•
Seychelles
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Britannia in the Middle-East : Britannia Industries Limited formed a Joint Venture with the Khimji Ramdas Group, one of the largest and the most respected business conglomerates in the Middle East. Britannia and its Associates have acquired a significant stake in Dubai based Strategic Food International Co. LLC and Oman based Al Sallan Food Industries Co SAOG. The two companies are key regional players in the biscuits, wafers and cookies segment in the GCC markets and export their products across the world. Strategic Food International Co. LLC (SFIC) is one of the largest biscuit and wafer manufacturing companies in the Middle East. An ISO and HACCP certified company, SFIC is also a proud winner of the Dubai Quality Appreciation Certificate. It offers a wide spectrum of products under the brand Nutro, which is a leading biscuit brand in the Middle East.
Bakers Pride : 26
Al Sallan Food Industries Co is one of the foremost companies for the production of cookies, rolls and chocolates. The products are well known under the brand name of Baker's Pride.
PLANT LOCATION : Britannia's plants are located in the 4 major metro cities – Kolkatta, Mumbai, Delhi, and Chennai. A large part of products are also outsourced from third party producers. Dairy products are out sourced from three producers - Dynamic Dairy based in Baramati, Maharashtra, and Modern Dairy at Karnal in Haryana and Thacker Dairy Products at Howrah in West Bengal.
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BRITANNIA LOGO: Britannia had spent 0.1 million US$ to hire Paris based designer Shombit Sen Gupta to create a logo and packaging design. The logo had three objectives: Give consumer reassurance that it was a trusted and familiar brand. Britannia has the ability to change. It had to be appropriate to the business the company was in. The logo consists of the company’s name and slogan, “Eat Healthy Think Better”. The Hindi rendition is “Swastha Khao, Tan Man Jagao”. The corporate statement “Eat Healthy Think Better” captures the Indian concept of the unity of mind and body. The logo has three colours red, white, and green each having its own significance. Colour Red denotes Energy and Vitality. White denotes purity. Green stands for Nutrition and Freshness. The strike communicates Innovation and Futuristic Power of Britannia. Today, Britannia is the largest biscuit and bakery company in the country with the daily sales turnover of over Rs. 8478 million. It is the market leader in the 1.3-million tonne Indian biscuits industry with a 60% share. It has maintained market leadership with a 48% value market share in the organized sector.
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 28
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.
BOARD OF DIRECTORS Name
Designation
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Mr. Nusli Neville Wadia
Chairman
Ms. Vinita Bali
Managing Director
Mr. A.K.Hirjee
Director
Dr. Ajai Puri
Director
Mr. Avijit Deb
Director
Mr. Jeh N Wadia
Director
Mr. Keki Dadiseth
Director
Mr. Nasser Munjee
Director
Mr. Nimesh N Kampani
Director
Mr. Pratap Khanna
Director
Mr. S.S.Kelkar
Director
MANAGEMENT HIERARCHY
Vision : To dominate the food and beverage market in India with a distinctive range of “Tasty Yet Healthy” Britannia brands.
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Mission : To dominate the food and beverage market in India through a profitable range of “Tasty Yet Healthy” products by making every Indian a Britannia consumer.
Short-term Objective : To improve image to shareholders. To improve internal processes and controls.
Long-term Objective : To be the lowest-cost producer in the market. To become largest volume player in the bakery industry.
Distribution Strategy :
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Basic Strategies : New product development New market development Outdoor promotion Rural thrust Cost management
Quality Policy : Customer Satisfaction Total quality management •
Continuous up gradation of technology
•
Improvement in processes
•
Focus to meet emerging needs of the customers
•
Mutually dependent lasting relationship with co-packers, associates and suppliers.
Environment responsibility Development of human resources Improving skills and knowledge 32
•
Generating motivation to excel
•
Installing a sense of pride
•
Commitment towards quality
Quality Objectives : Reduction in customer complaints To start documentation of market returns dealer wise To empower the workmen on individual work area to ensure that only quality product are passed on the next page of production. Continuous training for the development of human resources. To minimize the accident level. As part of the growth strategy, the company always try to build on the values of brand "Britannia" by aggressively pursuing tasty yet healthy offerings of mass appeal and also launching a host of affordable products, which would help rejuvenate the mother brand and drive category consumption.
GLOBAL PARTNERS : The Wadia Group of India along with Groupe Danone of France, are equal shareholders in ABIL, UK which is a major shareholder in Britannia Industries Limited. GROUPE DANONE is an International FMCG Major specializing in Fresh Dairy Products, Bottled Water and Biscuits/Cereals. One of the World leaders in the food industry, these are some of the laurels it possesses: •
No # 1 worldwide in Fresh Dairy Products
•
No # 1 worldwide equally placed in Bottled Water (by volume)
•
No # 2 worldwide in Biscuits and Cereal Products
Through its three core businesses (Fresh Dairy Products, Beverages and Biscuits and Cereal Products), GROUPE DANONE is committed to improving the lives of people around the world by providing them with 33
better food products, a wider variety of flavors and healthier pleasures. Its dominant position worldwide is based on major international brands and on its solid presence in local markets (about 70% of global sales come from
brands
that
are
local
market
leaders).
GROUPE DANONE is recognized for the dynamism and strength of its brands: •
Danone: the leading brand worldwide for Fresh Dairy Products; DANONE represents almost 20% of the international market. DANONE is present in 40 countries worldwide.
•
Evian: the best selling mineral water brand, with 1.5 billion bottles sold every year. Present in the 5 continents, in 125 countries.
•
LU: the second brand worldwide, the first biscuits brand of GROUPE DANONE, which represents almost the half of the sales for the Biscuits and Cereal Products division. LU is mainly present in Western Europe.
•
Wahaha: the leading brand for refreshing still water (water, ready made tea, fruit juices). The brand is one of the most popular in China, with more than 1.5 billion liters of water sold each year. Its name means "the child who laughs".
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Business Today, Special, 15 June 08, ranks Britannia Industries Limited 27th in its list of India's Fastest Growing Large Companies (Revenues More Than Rs.2000 Crores)
BUSINESS PROFILE: Britannia core businesses constitute of Bakery and Dairy products. Bakery products account for 90% of the revenues and include Biscuits, Bread and Cake & Rusk. Dairy products contribute to 10% of Britannia’s annual turnover of Rs13.38bn. Throughout its existence, Britannia has operated on the principles of providing products to the consumers that are healthy and tasty. This is brought about by the use of high quality ingredients
with
a
strong
focus
on
‘naturalness’
and
modern
manufacturing practices. The company today has a wide range of bakery products in the biscuit, bread and cake segment. It has trimmed down its wide product portfolio by reducing the products from 35 to around 25 and began to focus on value-added instead of low-margin products.
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BIL (Britannia Industries Ltd.)
Bakery Products
Dairy
Products (90% revenue contribution)
(10%
revenue contribution)
BIL (Britannia Industries Ltd.) has decided to focus on seven core brands in the biscuits and bakery category. The brands included Good Day, Tiger, 50-50, Snax, and the Cream Treat brands, among others. With the launch of Tiger brand, it has taken a plunge in the low-end category, taking competition head on with Parle, which is the leader in this segment. The company has also diversified within dairy and bakery products to enter the butter, cheese and ghee markets. The portfolio was expanded with the launch of butter, pure flavored milk in tetra packs and UHT milk. Britannia has built an enviable retail distribution network, which services 400,000 retail outlets in 2,200 towns with the help of 2,500 distributors. The company is aggressively expanding its network with a bias towards the rural markets Recently, in the ethnic food segment, the company introduced a new range of traditional ‘namkeens’ in Mumbai called Britannia Snax. The new range includes seven varieties of traditional namkeens like 'Bikaner ki Bhujia' and 'Rajasthani Alu Bhujia' in a price range of between Rs 5 and Rs 20.The company is in the process of setting up a Greenfield Biscuit Project in Uttaranchal to augment its production capacity, entailing an investment of about Rs 55.2 crore. This plant will have capacity to produce over 45,000 tonnes of two or three 37
varieties of biscuit per annum.So after over seven decades of being inseparable part of life in India, Britannia is now set to usher its customers into a healthier and tastier future.
PRODUCT PROFILE 1.
Tiger
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Tiger, launched in 1997, became the largest brand in Britannia's portfolio in the very first year of its launch and continues to be so till today. Tiger has grown from strength to strength and the reinvigoration in June 2005 and more recently, in Apr 2008 has further helped bolster its growth in the highly competitive glucose biscuit category. Tiger is a Glucose biscuit, which comes with the added goodness of wheat and milk. It is for modern mothers who play an enabling role for their children to compete in today's world and thus want the best. Now Tiger Glucose has been fortified with "Iron Zor" with an attempt towards addressing the Iron Deficiency crisis the children of India face. Over the years, Tiger has become the mass-market face of Britannia symbolising fun and energy in both urban and rural India, and transcending glucose biscuits. Tiger Coconut : Delicious Coconut Flavoured Energy Biscuits, launched in 2001 Tiger Creams : Was Introduced in 2002 at just Rs 5 per pack. Tiger Cream is now available in Orange, Elaichi, Chocolate, Pineapple, Strawberry and Butterscotch flavours, and promises to bring more fun and more energy to children across the country. Chota Tiger : Is an extension of brand Tiger launched nationally in May, 2007. It is mini sized poppable glucose biscuit with coloured sugar sprinkling. It comes in two variants: Milk Sparkies and Choco Sparkies Tiger Banana : Purposefully taking forward the credo of 'Eat Healthy, Think Better ', Britannia launched a new variant under our power brand TIGER - TIGER BANANA - power packed with IRON ZOR & and with the delightful taste of banana. 39
IRON ZOR helps make mind sharper and body stronger. A Rs.4 pack has as much IRON ZOR as that in 1 kg of Banana. R&D in Britannia has spent considerable time to develop this nutritious and delightful snack for children. Britannia Tiger Banana packed with IRON ZOR and goodness of Banana is accessible to all, being available in convenient packs priced at Rs.2, Rs.4 and Rs.10.
2.
Good Day
Britannia Good Day was launched in 1986 in two delectable avatars - Good Day Cashew and Butter. Over the years, new variants were introduced - Good Day Pista Badam in 1989, Good Day Chocochips in 2000 and Good Day Choconut in 2004. This rich cookie enjoys a fan following of consumers across all ages, loyal to the brand promise of a great taste, evident from the visibly abundant ingredients. Good Day is among the fastest growing brands in Britannia's portfolio and it has been the leader in the cookies category ever since its launch. The brand is synonymous with everyday treats that infuse happiness into people's lives. After two decades of magnificent success; it was time to give the nation yet another reason to have a good day. Abundance, goodness, indulgence and now unrestrained joy - that is the message of this new campaign. The new TT ad is the uncontrollable expression of the ticket collector's happiness and joy that is stimulated by consumption of the cookie, that spreads cheer amongst the people around him creating an atmosphere of shared joy that's unorchestrated and straight from the heart. The celebration was taken to the IPL as Good day cheered along with a million cricket fans in the stadiums, 40
each screaming and proclaiming "Ho gaya re Good Day". The dazzling brilliance of this endeavour, the contagious rhythm needs to be lived and spread through the nation, making 'Iska toh ho Gaya Re Good Day' a part of the common lingo and a way of life. Good Day truly believes laughter and happiness are infectious, it transcends race, caste creed unifying humanity in an inclusive emotion. The brand perseveres to infuse cheer, hearten the nation and enliven lives. With its rightful place on the front page of The Times of India, Good Day gifts the nation a priceless treasure, that of spreading JOY!
3.
50-50
With a brand name like 50-50, can the product be anything but fun? Launched in 1993, 50-50 belongs to the family of crackers and is considered the "very very tasty tasty" snack. Britannia 50-50 is the leader in its category with more than one-third of market share. The versatile and youthful brand constantly aims to provide a novel and exciting taste experience to the consumer. As a result, in 2001, the delicious Maska Chaska was launched as a variant of the original brand and became an instant success.
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4.
Bourbon
Thick, rich and delicious chocolate packed between two crunchy chocolate biscuits, topped with sugar crystals - presenting, the original Bourbon, from the house of Britannia. India's first and favorite Bourbon's sweet adventure began in 1955. Since then, Bourbon lovers across the country have been caught opening this chocolate couplet, licking the cream, and nibbling at the melt-in-your-mouth biscuit, bit by bit. Some have been witnessed chomping it whole, at one go. Some have been noted to alternate it with sips of coffee; others team it with lots of gossip and gupshup, while a few have been observed enjoying it with a book. And some have been seen reluctantly sharing their Bourbon. Whatever the occasion, wherever the hangout, Bourbon makes for great company. You can grab your very own Nano Pack or a Pocket Pack. The Hangout Pack is just right for chilling with friends. Take along a Party Pack for... yes, a party! And the Gift Pack will surely win you a few brownie points!
5.
Rusk
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Britannia launched its rusks in the year 2005. In a Market full of unbranded players, Britannia rusks have stood head and shoulders above the rest in terms of sheer quality .They are made from the finest ingredients and baked with care as they are twice as crisper as and tastier than ordinary rusks. The communication for this mouthwatering offering is aptly “Enliven your spirits with Britannia rusks”.
6.
Cakes
Britannia entered the cake market in the year 1963 and is the leading player in the market. Britannia Cakes range is divinely scrumptious and has Bar Cakes, Chunk Cakes and Cup Cakes which were launched in 2005. Bar Cakes are available in variants that include Fruit, Butter Sponge, Chocolate, Pineapple, Milk, Vanilla Chocolate and Orange. Apart from being delicious, these snacks are packed with healthy ingredients making them wholesome & delightful. Britannia cup cakes come in vanilla and orange and mixed fruit flavors whereas chunk cakes come in fruit flavor. Britannia has recently launched for the 1st time ever in the packaged segment Veg Cakes, pure and eggless. These Vegetarian Cakes are soft, juicy and filled with real fruit bits which can be enjoyed just by themselves or mixed with a variety of ingredients to 43
make quick, delicious desserts. With zero cholesterol and hygienically packed for a shelf life of 3 months, they are a more wholesome and healthy option than other sweet dishes available in the market. Britannia Veg Cakes come in Twisty Fruity avatar and are priced at Rs 15/- for a 75 gram pack. They enjoy a 3 month shelf life.
7.
Marie Gold
Britannia's oldest brand enjoys a heritage that spans the last 50 years - and going strong. In a market swamped with me-too products and where even the name 'Marie' has become generic, Britannia Marie Gold has maintained its stronghold. Today, the everpopular Marie Gold is synonymous with the 'Tea Time Biscuit'. Its taste, crispiness and lightness make it a must for every tea break. It is the #1 brand in its category by a long shot.
8.
Treat
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As a move to consolidate all the individual Cream Treat offerings under a single umbrella, Britannia launched Treat in 2002. Treat has a range of tasty delights for all kids with yummy creamy treasures within the biscuit shells. The kids have always relished unraveling the irresistibly delicious creams hidden inside the biscuit Britannia Treat offers a wide variety of flavors, such as the Elaichi, the Fruit Flavored Creams such as Orange, Pineapple, Mango, and Strawberry, the Jam Filled Centers under the Jim Jam range, and the Duet Range (biscuits with two flavours of cream between three layers of biscuit) comprising Strawberry Vanilla and Duet Strawberry Chocolate. Britannia Treat has now launched yet another mouth watering delight under its umbrella. The delicious Fruit Rollz take the Treat brand beyond the cream biscuits and provides yet another lip smacking delight to its consumers! Fruit Rollz are soft rolls filled with the goodness of real fruits, and provide a healthy yet scrumptious treat to our 'loveable devils' Treat also introduced its naughty and adorable brand mascot FUNTOOSH whose primary occupation is mischief! FUNTOOSH is the guy who will pull off any trick to make sure he gets to eat his Britannia Treat.
9.
Milk Bikis
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Kids may dislike drinking milk, but they love Britannia Milk Bikis! Milk Bikis has been trusted by mothers as a source of growth energy of milk and their loyalty to the brand has made it an integral part of their children's nutrition regimen. In 1996, Milk Bikis launched a variant called Milk Cream. These round biscuits come with smiley faces and are full of milk cream that makes them very popular with children. Milk Cream also promoted the idea of 'eating milk' in a yummy way, which makes mothers happy as well. To keep pace with the demands of the new generation and to bring milk nutrition to the masses in a delightful form, Milk Bikis, went one step further in the last quarter of 2006 in providing not just energy but ‘developmental fuel’ for children. With a unique and attractive honeycomb design and an enhanced product experience, the new biscuit is now fortified with SMART NUTRIENTS – 4 vital vitamins, iron and iodine, proven to aid mental and physical development in growing kids.
Unique features of Britannian : If you think Britannians are extraordinary individuals who are passionate about everything they do…create inspiration through everything they do…and succeed in everything they do…you’re probably right. Britannians are hand-picked for a singular purpose…to perpetually 46
ensure Market Leadership and generate exemplary performance in every function. Britannians exhibit the following leadership behaviors (we fondly call BULBs – Britannia Universal Leadership Behaviors) •
Integrity
•
Team Orientation
•
People Development
•
Learning Orientation
•
Customer Orientation
•
Quality Orientation
•
Drive for Results
•
Entrepreneurial Spirit
•
System and Process Orientation
•
Communication
:
COMPETITORS :
Other Players 47
• • • • • • • • •
HLL, Bisk Farm, Anmol, Elite, Cremica, Dukes, Anupam, Craze, Nezone
Generally all organizations have competitors in the market. A particular organization always comprises with other same business and according to market share we clarify the brand of product is giving more challenge to my product.
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Major Market Share Holders – Organized Sector
49
Project Magnum
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Overview BRITANNIA INDUSTRIES LIMITED had launched a pilot project, which was first of its kind, in the heartland i.e. the rural markets of Uttar Pradesh. This project is the biggest project undertaken by Britannia ever in the rural markets. Rural markets according to the government of India are those areas that have a population of less than 400 persons/square kilometer and more than 75% of the people are involved in Agriculture. The biscuit market situation in the rural market is such that Parle is considered to be a god in these markets. Britannia is a market leader in the urban market but it has a comparatively low market share in the rural markets. Project MAGNUM was dedicated to take the awareness of the products of Britannia to the next level. The impact areas of the project were considered to be the retailers and the wholesalers. The customers for Britannia would be the wholesalers and retailers. The wholesalers sell the products only to the customers whereas the Retailers sell the products to the customers as well as the consumers. The consumers in the rural markets are considered to be price sensitive as they have less disposable income and look for products that are economical. However, studies have revealed the fact that the consumers in the rural markets have started looking for value and are no more too much price sensitive.
Objective The main objective of the Project MAGNUM was to increase the sale of Britannia Industries Limited products by increasing the awareness of the products in the rural markets of Uttar Pradesh. By the end of this project we have learned the Britannia Industries Limited’s way of working in the rural markets. I was recruited as a summer trainee under this project and was called as promoter.
Strategy The strategy was to focus on product’s features and benefits and thereby promote the products in the rural markets of Uttar Pradesh. The project targeted the top 20% RPDs (Rural Preferred Dealers) of a city. There were around 40 promoters in the state of Uttar Pradesh. Each of the promoters was allotted an area. I was allotted the district HARDOI that comes under the eastern UP region. The HARDOI district had around 30 RPDs and I had 7 of them.
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Flow Of Stocks URBAN 1. FACTORY 2. CFA(CARRYING AND FORWARDING AGENT) 3. AUTHORISED WHOLESALER/ DISTRIBUTOR/ DEALER 4. RETAILERS AND WHOLESALERS RURAL 1. 2. 3. 4. 5.
FACTORY CFA SUPER STOCKIST RPD(Rural Preferred Dealers) WHOLESALERS & RETAILERS
The flow of stocks in the rural markets occurs in the above-described manner. The stocks flow from the company to the carrying and forwarding agent. Thereafter they are taken to the super stockiest. Generally there is 1-2 super stockiest per district. There onwards the stocks are taken to the RPDs (Rural Preferred Dealers). These RPDs supply the stocks to the local wholesalers and the retailers. Britannia provides software named UDAAN to its super stockiest so as to track the sales. The software keeps a record of the daily sales and the stock supplied to each RPD.
Role Of Promoters We as promoters were expected to work on the top 20% RPDs of the district allocated to us. Britannia had a product portfolio for the rural markets. They had launched low price units such as Tiger Glucose (Rs2), Goodday Butter (Rs 5) and Goodday Kaju ( Rs 6). These were the main products that we had to promote as these products were low priced and the people from the rural areas have low disposable income and thus have a tendency to buy low priced units. We used to start early in the morning at around 8:00 AM. We went to the super stockiest to collect the POSM (Point of sales material). The POSM consists of poster, tape, toran, sticker, banner, basket etc. Thereafter we 52
collected the names of 10 retailers and 2 wholesalers who were well established in the market from the super stockiest. We used to go to the retailers before 12:00 PM. The reason for visiting the retailers before 12:00PM was that in the rural areas the markets close in the afternoon and they open up again at around 3:00 PM. At the retailer shops we created visibility of the Britannia products by the help of the POSM provided to us. We also did sampling of the products of Britannia and convinced them to keep the products in a proper shelf. We were also provided with backing sheet and the madhurification tapes. We convinced the retailers to provide a counter somewhere in the front portion of the shop. We laid down the backing sheets and pasted the madhurification tapes at the corners of the counter. While displaying the POSM we took care that it is displayed at a place from where it is clearly visible to the customers visiting the shop. We promoted the Brands Tiger and Goodday. Thereafter we started again in the noon at around 3:00 PM and visited the two wholesalers. At the wholesalers we used to spend around 2 hours at each of them. The retailers from the other peripheral regions of the town were the customers of these wholesalers. We did the sampling of the Britannia Products to them and convinced them to buy Britannia products and keep these products in their shops. We also provide them with the POSM at their shops and created visibility of the Britannia products. Here I would like to point out that I had to promote only three brand of LUP (low unit packet) i.e. TIGER GLUCOSE (38gm, Rs.2/-) TIGER CREAM (74 gm and 80 gm, Rs.5/-) GOODDAY BUTTER (54 gm, Rs.5/-) We used to collect 5 samples of each of the above stated SKUs. I was given a receipt from Britannia and I used to get it filled by the RPD. We also had a sheet where we used to write the problems and suggestions given to us by the retailers and the wholesalers. At the wholesalers we were directed to target at least 20 retailers. At the end of every week I had to send the promoters daily record of all RPD’s allotted to me to the supervisor. At the end of each month promoters were supposed to track the sales of the districts allotted to us and thereafter send it to the supervisors.
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My Learning Experience In Britannia Industries Limited after working as a promoter I gained a lot of knowledge of the FMCG sector. I came to know Britannia Industries Limited’s way of working in the rural markets. Now I have an understanding of how the flow of stocks occurs in Britannia. I also have an idea of how to promote sales of a product. Britannia Industries Limited has a proper channel and follows a hierarchy pattern as represented below:
I also learned about the relationship of whole sellers and retailers and how to create a proper positioning and madhurification of our brand. In the rural markets and another problem was that the people do not understand English so we had to be prepared professionally to handle people and talk to them. Britannia industry Limited was the first to use madhurification tapes in the biscuit industry to promote The Temporary type of point of sales sales.
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POSM (Point of Sales Material) The point of sales material generally has three elements, i.e. , 1. Temporary type 2. Semi-Permanent type 3. Permanent type material has an expiry life of about 2 weeks at the outlets. It announces brand specific communication. We had to focus mainly on the GOODDAY and TIGER brands of Britannia and thus we were provided with temporary point of sales material of these brands. The semi- permanent type of point of sales material has an expiry life of about 6-8 weeks at the outlets. These highlight the presence of Britannia and Britannia brands in the outlet. The third type of point of sales material has an expiry life of at least one year at the outlets.
Elements of Point of Sales Material
Temporary Type
Semi-Permanent Type
Permanent Type
Sticker Paper Flange Poster Wobblers Danglers Streamer
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Elements of temporary visibility such as sticker, Paper flange, Poster, Wobblers are pre-gummed and thus can be stuck on the retail and wholesale shops at appropriate locations. The Point Of Sales Material such as Dangler and Streamer are hanging type and are hung at appropriate locations in the outlets. Temporary Type
Semi-Permanent Type
Expected Life at Outlet -2 weeks
Expected Life at outlet-6 to 8 weeks
Permanent Type
Expected Life at outlet-at least one year Announces Brand specific Highlights presence Establishes communication of Britannia and Vonnect and Britannia brands in dominance in the outlet the market In- store In-Store Window In-store Poster,Sticker,Wobblers,Danglers kit ,shelf Beams, talker,flanges(paper) Pillars,counters etc etc. Out-store Toran,Streamers Out-Store Banners Out-store Dealer Boards,Beams, Pillars,Flanges
Norms of Placement of The Point of Sales Material We were suggested certain norms of placement of the Point of sales material. Point of sales material comes at a cost and we were given instructions of its placement in order to properly utilize it.
DO’s Place near the product or cash counter Place only if there is right space in the outlet. 56
We also had to carry material like scissors, cello tapes, blade etc. in order to properly display the point of sales material.
Madhurification Madhurification is a term used in terms of point of sales material. It generally refers to the use of certain material which helps in the beautification of the shops. The elements of madhurification include shelf kit which includes shelf strips and backing sheet. It also includes Banners and Torans. Elements of Madhurification
Shelf Kit (Shelf strips and Backing Sheet)
Banners and Toran
Importance of Madhurification
1. Demarcates Category 2. Highlights our Products 3. Brand Britannia Visibility Britannia was the first ever biscuit company to use Madhurification.
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Products which were promoted: Good Day Butter:
1. Good Day Butter is the only premium brand that is available at only Rs 5/-. 2. Good Day is the no. 1 brand among cookies in India. 3. Good Day is the best selling biscuit in the urban areas. 4. Good Day appeals to young and old alike. 5. The quality of Good Day is much better compared to its competitors. It is much more crispier and has a rich butter taste (Use the word “makhan”).
Tiger Creams Orange:
1. Tiger Creams has a shiny metal packing (“chamak”) that is very appealing to the customers. 2. Tiger Creams has the vital element of iron, which is very important for nutrition. It keeps mind and body stronger. 3. It is available in both round and square packs. 4. In the round packs, every biscuit in the pack has a different design, which is very appealing to kids. 5. The square packing doesn’t break as easily as the round packs.
Tiger Glucose:
1. Tiger Glucose has the essential element of iron which is missing in Parle and Sunfeast. 2. The iron content helps to keep mind sharper and body stronger. 3. The iron content is equal to one cup of spinach (“ek katori jitna paalak”) which is essential for nutrition. Kids generally don’t like spinach. So, mothers will prefer to buy Tiger Glucose instead of other products. The earlier problems of hard/highly sweet quality of biscuits have been rectified in Tiger Glucose now.
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Wall Painting Plan The main focus of the wall painting activation plan is in the districts falling in the Central and Eastern Parts of UP, as identified under Project Magnum. However, a relatively smaller amount of wall painting has also been calculated for the districts in Western UP, as a way of kick starting activities therein. The Super Stockist regions have been divided into various bands by comparing the average Parle sales to the average Britannia sales for the districts. On the reasoning that a lower Parle: Britannia ratio would entail the prospect of a more promising market, or a market where initial inroads have already been made, a larger amount of wall painting is prescribed for such bands with lower Parle:Brit sales ratio. The objective here is to expand in / penetrate the markets showing promising returns and then expand more proactively in the other regions through activations in later phases. The column showing the total value of Parle+Britannia sold in a district, in general, would give an indication of the size of the market. Positive corrections have been added to the prescribed amounts of wall paintings per RPD in case the total value of Parle+Britannia goods sold is seen to be large and negative corrections are done if the value is low. (See Chart on Right Side of Sheet 2) Looking upon the prescribed wall painting amount per RPD from the chart and multiplying it by the number of RPDs for the Super Stockist have arrived upon the numbers for wall painting for each Super Stockist region.
The wall painting plan arrived at above is for each SS region. Each SS territory consists of a number of RPDs at various towns. The wall painting calculations for each RPD town are shown in Sheet 1. These are arrived upon by splitting the total wall painting amount 59
arrived at for each SS in Sheet 2, into all the RPD towns for the SS, based on the value of Parle+Brit sales in each RPD town. Therefore, an RPD town with a higher Parle+Brit would receive a higher amount of wall painting. (The Parle+Brit value is also a reflection on the population of the town, which again is an indicator of the market size.) For each RPD town, the square feet wall painting plan has then been divided in a simple ratio of 60:40 for Tiger and Good day.
Avg. BIL
Avg. Parle:
Total Parle+
Wall Painting
Wall Painting
(Tiger Ft. 60%) Ft
Wall Painting
(lakhs Avg. ) BIL
BIL (lakhs)
Sq. Plan
Sq (Good Day 40%) Sq Ft
0.47
4.29
2.47
434
260
174
0.30
3.38
1.30
228
137
91
0.42
11.80
5.42
954
573
382
0.85
14.16
12.85
2260
1356
904
0.36
4.19
1.86
327
196
131
0.23
12.89
3.23
569
341
228
0.53
26.47
14.53
2556
1534
1022
0.37
5.39
2.37
417
250
167
0.55
29.27
16.55
2911
1747
1164
0.27
14.80
4.27
751
451
301
0.16
6.22
1.16
204
123
82
0.10
10.01
1.10
194
116
77
0.79
7.61
6.79
1194
717
478
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SAMPLING – Sampling also comes in the promotional activities. In the sampling part we used to do sampling to the retailers at the wholesalers point. In this part we sampled those retailers who come from the rural part of that town so that they can purchase the biscuit, which we were promoted. We sampled those retailers by the help of the samples, which were being provided by the RPD.
QUALITATIVE CHANGES – Taste is the base to know that what customer/consumers would like to purchase because if the quality and the taste is good or better than the other biscuit than the consumer will switch over on the good one. In middle of the Project Company make some quality (taste) changes in their products on the basis of the suggestion, which is given by the promoters. Company made some qualitative and quantitative changes like in TIGER GLUCOUSE (low-price small pack). Company increases the number of biscuits.
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SWOT ANALYSIS OF BRITANNIA Strength •
Weakness
Fulfill one of our Basic
•
Decreases nutritional value
Requirement among Air ,
•
Increases the cost of food
Water , Food, Shelter •
Widely accepted in all
product •
Generations •
•
Easily available in various
Industry and technology requires high investment
•
Regular usage of processed
forms
food can cause alteration
Provide good Instant
in health
Remedy for hunger in the form of readymade food •
Preserves the non seasonal food and makes it available all throughout the year
Opportunities •
Increase economy of India
•
Generate employment
Threats •
Many companies are result oriented
opportunity
•
Increase in pollution
•
Good quality of Goods
•
Sometimes provide poor
•
Provide competition to
quality of product for more
foreign companies
profit
•
Improve living standard
•
Lack of technology
•
Provide goods to nation at
•
Unable to utilize all the
cheaper rate •
resources efficiently
Inflow of foreign reserve and funds for the govt. (taxes)
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WHAT IS RURAL MARKRTAccording to the census of India village with clear surveyed boundaries not having a municipality, corporation or board, with density of population not more than 400sq.km and with at least 75 per cent of the male working population engaged in agriculture and allied activities would quality as rural. According to this definition, there are 6.38,000 villages in the country. Of these, only 0.5 cent has a population above 10,000 and 2 per cent have population between 5,000 and 10,000. Around 50 per cent has a population less than 200. Furthermore, for FMCG, any territory that has more than 20,000 populations is rural market. So, for this, it is not rural India, which is rural. According to them, it is the class-II and III towns that are rural. According to the census of India 2001, there are more than 4,000 towns in the country. It has classified them into six categories-around 400 classI towns with one lakh and above population (these are further classified into 35 metros and rest non-metros), 498 class-II towns with 50,00099,999 population, 1,368 class-III towns with 20,000-50,000 population, 1,560 class-IV towns with 10,000-19,999 population. It is mainly the class-II and III towns that marketer's term as rural and that partly explains their enthusiasm about the so-called "immense potential" of rural India.
Evaluation of Rural Market63
Advantages1) Growing Income- Due to increase in the productivity in Agriculture the per-capita income is increasing. 2) Growing Awareness- Because of the easy accessibility of information medium (Radio, Television, Newspaper, communication mediums and commitments to the near by town). There level of awareness is increasing. 3) Growing Literacy Rate- Since due to the efforts of the government and private institution in rural India the rate of literacy is increasing and this initiated them
to know the product ,they use. 1) Virgin Market- A
bigger chunk of the rural market is still virgin .So it is the best opportunity for the companies to take advantage of entering first. 4) Less Competitors – In rural market the number of big and strong competitors is very less so the promotion of a product is not much difficult. 5) Potential Market- The potential of the rural market is very high and the products which demand has been nearly saturated in the urban market can move towards the rural market. 6) Alikeness – Since rural market also like the same quality of products as in the urban market .So the companies which are going to the rural markets need not to go for renovation on a bigger prospect. But if still innovation is necessary only a minor change can do it. 7) Support- Since every government is abide by the development of the rural areas .so if a new company going to the rural market it also get support from the administration of that area . Disadvantages – 64
1) Volatility- Since rural market is in the transisation phase of growth .So it is not assumed stability yet. This has made it volatile in nature. This results in the fluctuated demand. 2) Trendy – This is the bigger weakness of the rural market and the consumer in this market is comparatively more trendy (They use the products which are/were being used by their elders) than the urban consumer. 3) Unorganized Outlets- In the rural area the outlets are much unorganized and hence it is very difficult to full-fill the demand of each and every outlet on time. 4) Physical selling – Since in the rural area only physical selling is possible and it takes a lot of the and a lot of efforts if a company wants to deliver the product at the demanded place and in the demanded course of time and also it takes a huge investment in the logistic. 5) New consumer- In rural market every day new consumers are getting attaches. So very exact forecasting of the demand is not possible and the unsatisfied demand of a particular product of a particular company may result the opportunity for the other company in the same segment of the products. 6) Price sensitiveness – Rural market is highly price sensitive so the company visiting in this market must have a good eye on its competitor’s price list in the same segment of the products. 7) Quantity Oriented – A large part of the rural consumer are Quantity oriented rather than Quality oriented.
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8) Personal Selling- Rural marketing is oriented more on the personal selling because the marketers have to have very close watch and understand the psyche of the consumer and then act accordingly.
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Impact of Profect Magnum
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RPD-1 Name of RPD- Bhagvan Das Kirana Store Location- Sandila At Sandila PRD the dealer M/S Bhagvan Das Kirana Store owns a big shop. In my point of view he owns approximately 20 agencies at this time. Having too much agencies he is not able to focus properly on Britannia. Each time when I visited his shop it will take two to three hours when he gave proper attention on me. The same condition holds for the whole market. He is not willing to take the damage claim. There is a large number of shopkeepers who claim that the damage is not taken by the dealer so they don’t want to sell Britannia further. This is a big problem in Sandila. Sandila is a big market and full market coverage is also not there. If marketing is done properly in Sandila it will give huge sell.
MONTH
SALES
April
27845
May
48841
June
52314
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RPD-2 Name of RPD- Maa Durga Agencies Location- Shahabad The RPD at Shahabad is changed in the month of April. The RPD Maa Durga Agencies is new in the market. If we consider the old RPD the working is not good. The supply chain is not effective and order processing is very bad. As the shopkeepers told me that orders are in pending for a week or two. By this way of working the image of Britannia is adversely affected in the market. The new RPD is working much better than old one. New RPD markets the products properly. As the RPD is new we to wait and watch for the results. There are some damage claim of old RPD which are not resolved till now.
MONTH
SALE
April
80413
May
66328
June
78589
RPD-3 69
Name of RPD- M/S Pankaj Kirana Store Location- Bilgram The RPD in Bilgram is also changed in last of May. The new RPD M/S Pankaj Kirana Store is marketing very well. The old RPD is not marketing properly. He made most of his sale from counter only so full market coverage is not there. But new RPD is working well on this aspect. There are not such any problem exists at this RPD.
MONTH
SALE
April
10692
May
36649
June
43265
RPD-4 70
Name of RPD- M/S Shyam Kirana Store Location- Pisawa The RPD in Pisawa is M/S Shyam Singh Kirana Store. The problem face by me at this RPD is of samples. As the project head told us that we have to use the samples which are manufactured after March. But at this RPD samples available of glucose tiger Rs.2 is manufactured in March and RPD has a good stock of it. So it is of no use for the sampling purpose. The problem of sampling of tiger exists at this RPD throughout the project. But in all other cases the RPD is working well and has a reputation. MONTH
SALE
April
35832
May
56029
June
63435
RPD-5 71
Name of RPD- M/S Vishnu Kirana Store Location- Shahabad The RPD at Beniganj M/S Vishnu Kirana Store is a well known shop in the town. The owner Mr. Vishnu Kumar Gupta has a reputation in the market. Beniganj is a big market. The problem in Beniganj is that the RPD is doesn’t want to sale on credit because he purchases on cash basis so he wants to sale on cash basis. But a big part of transaction in the town is on credit basis. Due to this the sale is low in the town. The RPD sold its product in more rural areas but market share in Beniganj town is very low for Britannia. Another problem is of sampling of tiger Rs.2 pack because this RPD also have the old stock. MONTH
SALE
April
33996
May
65334
June
54682
RPD-6 72
Name of RPD- M/S Rathaur Medical Store Location- Sawaijpur M/S Rathaur Medical Store is the RPD in the Sawaijpur town. The town is small and developing. There are only 11 to 12 shops in the market. I don’t have any problem at this RPD. The owner Mr. Amit Kumar is hardworking businessman and a well known person. MONTH
SALE
April
4045
May
8649
June
10156
RPD-7 73
Name of RPD- Agnihotri Agencies Location- Roopapur M/S Agnihotri Agencies is the RPD in Roopapur. The owner Mr. Adesh Kumar is very cooperative. Roopapur is a very small town with very few shops. The only problem at this RPD, as the owner told me that there are differences in number of packs of tiger Rs.2 in a plastic bundle. It varies from 21 to 24, while the standard number is 24. If there are less packs then it will adversely cost to RPD. This is a big question mark that who is responsible for this. In all other cases the RPD is cooperating very well.
MONTH April
SALES 1745
May
3665
June
4265
Total Sales From 7 RPD’s 74
The total sales from 7 RPD’s shows increasing trend throughout the period of project MAGNUM. This shows the importance of project regarding sale promotion in rural market.
MONTH
SALE
April
194568
May
285495
June
306706
75
LIMITATIONS The research was confined to HARDOI Distrist only. Time was one of the prominent factors with respondents. A low literacy level of the RPD’s & Retailers that makes difficult for us to explain . Very low population density, requiring long travels. Problem in translating every sentence in their mother tongues. Poor access of respondents due to their migration to different places to do their work. Different daily schedules or time table Poor communication with female Retailers. Tendency among Retailers to flock together and prompt or help others with responses.
76
RECOMMENDATIONS However I am fresher in corporate sector and my knowledge is limited and most of the decisions are already taken by the Britannia Industries Limited but as recommendations were asked from me, I have given some points of suggestion to the management which we found during the training. Instead of the larger coverage area the company has many opportunities to expand their rural l level. Although they are covering large number of villages and towns but still many more areas are left untouched. The Company should consider its inbound logistic for rural markets because this will make available of the products of the company which is in demand and shall encourage the sellers to sell or to have a stock of the products as much as it would be necessary. Although BRITANNIA makes a wide range of products for different segment of markets but still they can make such an arrangement on increase of number of biscuits in a pack. The company should revise its system of communication (Especially in the rural area) in such a way that could respond the problems of the lower level (Retailers and Wholesalers) more speedy and could fix the accountability of each person related to the industry. Regional brands and Local brands are giving tough competition in same market by providing low priced products, so the customer base is also shifted towards those brands so they need to rejuvenate themselves to face that competition in the market. Company is doing promotional activities for their products but they are not as strong as other companies do so that they need to take strong steps to promote their products by using different communication mediums. The Company should make a system of speedy solving the problems of damage returning. Company should provide better services to their distributors and their customer to enhance their good image which is already in the minds of them. The company should also care for the small retailers and wholesalers because they also constitute a large part in the rural market.
77
CONCLUSION By observing and interacting to the retailers and wholesalers I got to conclude that the appearance of the company in the rural market is good and the selling eagerness of the products of BRITANNIA INDUSTRIES LTD. is comparatively better than its nearest competitor except Parle in the same rural market .It means that the brand awareness is Satisfactory in the rural market. The sales volume of biscuits (Of all brands) in the rural market is also very good and this shows the potential of the rural market that can be tapped by the company or a good chunk of it can be converted in the sales volume of the company Britannia .The price and the size matters to a large extent in the rural market irrespective to the quality of the products (that’s why Parle has more number of biscuits of small size and less thickness in a pack). For Ex –The again and again changing of the numbers of biscuits in the low-price (Rs-2/) pack of the Britannia Tiger Glucose and very low sales of Britannia GoodDay (Rs-5/) pack. On the price front of LUP’s (Low Unit Product) it remains Rs. 2, 3, & 5 for long time. The availability of the product plays a major role. On this aspect Britannia faces a cut-throat competition from Parle, ITC and Priyagold. In many RPD’s Britannia run short of availability which causes loss of market share. I think the main opportunity that Britannia can better exploit in rural market is it has to maintain a proper supply chain especially at times when Parle is short in the market. As RPD told me that in past when Parle is short on demand than at the same time Britannia is already short. Another point is that in the month of April a candy is free with tiger Rs.2 pack which increases the demand handsomely. And when it is about to capture the market the candy is removed and demand goes on diminishing. So there should be a proper promotional scheme. And the final thing is to convince the retailer because retailer is the boss in rural market. The product Retailer will make available in the market that will be sold.
78
BIBLIOGRAPHY BOOKS # Marketing Management by Philip Kotler # Advertising and Sales Promotion by S.H.H. Kazmi & Satish K. Batra
WEBSITES # www.britannia.co.in # http://www.naukrihub.com/india/fmcg/top-companies/ # http://www.ibmabiscuits.in/industry-statistics.html # http://foodbizdaily.com/articles/32688-news-biscuit-industry-in-india-anoverview.aspx
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ANNEXURES THE VARIOUS INSTRUMENTS PROVIDED BY THE COMPANY TO DO AND MONITER THE ABOVE SAID ACTIVITIES1) PROMOTER DAILY RECORD SHEET - This sheet was provided by the company authority to every promoter to record …… 1) The name of the retailers (at least 10) and wholesalers (at least 2) of the rural area he visits. 2) The number of samples the promoter collects of each SKU’S at RPD center. 3) The type of POSM activated at the shops he visited. 4) The most important thing is the Promoter remark which describe what kind of difficulty a particular seller is facing, or what is the expectation a particular seller has from the company. This gives a clear picture of the effort made by the company and the return the company can expect. 5) The number of retailers sampled at the wholesalers point is the mirror of the feedback company getting from its target customers. Promotion Daily Record Sheet is the ultimate medium to know that the promotion programme is going smoothly and the person who has been employed in this work is doing his work regularly.
80
The specimen of the sheet BRITANNIA INDUSTRIES LIMITED Promoter’s Daily Record POSM activated Details of Samples Collected at RPD Tiger SKU Glucos e No.
38 gm (Rs-2)
Tiger Cream s
74gm
Good
SKU
Tige r Cre ams
Good Day
50 50
R u sk
Promote r’s Remarks
5
(Rs-5) No.
5
SKU
54gm
Day
(Rs-5)
No. 50-50
Retailer Tiger visited Glucose
5
SKU No.
Rusk
SKU No. Wholes aler visited
Promoter’s Remarks
No. of retailers sampled at W1 No. of retailers sampled at W2 Promoter: RPD:
Supervisor: District:
Date:
Details of Wholesaler 1: Owner: __________________________________________________ 81
Manager/Caretaker: ______________________________________ Address _________________________________________________________ _________________________________________________________ Telephone Numbers Landline: ____________________________________________
82
2) PROMOTERS VOUCHER SHEETS-This sheet was necessary to collect from the promoter at the time the sample the RPD give to the promoter and in this sheet the promoter has to write the number of different SKU’S he collected at RPD center and by the help of this sheet the RPD would get the reimbursement from the company for the samples he given to the promoter.
BRITANNIA INDUSTRIES LIMITED Promoter’s Voucher Sheet Promoter: Date: Brand
Supervisor: RPD: SKU
District: No. of samples
Signature of Promoter Signature of RPD owner
* On production of this voucher by the promoter, the RPD is required to provide him with the requested number of samples of Britannia SKUs. The RPD will be reimbursed for the value of these samples by its super Stockist on production of this voucher.
83
3) SALES TRACKING SHEET-This sheet was provided by the company in order to know the fluctuation of sales in the last eight week’s before starting the project and in the first four week’s of starting the project .By the help of this sales tracking sheet the company can make the comparison in the sales before and after starting the project MAGNUM. This sheet also includes the type of active advertisements means before and after running the project MAGNUM and what are the effects of these advertisement means, Are these advertisements providing positive results or the desired results as it were expected by the company in the starting of this project. Total RPD Sales for the Week
RPD Town 2
End of Week
Cost of Visibili ty Activati on (Rs)
Tiger Glucos e
Good Day Butter
Good Day Cashew
Tiger Creams Orange
Tiger Glucose Brand
Good Day Brand
Tiger Creams Brand
Brita nnia Sales
(Rs 2)
(Rs 5)
(Rs 6)
(Rs 5)
(Total)
(Total)
(Total)
(Tot al)
NAGR AM 16 march To 21 march
Week -8
_
_
_
_
_
_
_
_
23 march To 28 march
Week -7
5668.6 5
_
_
_
6041.9
2861.57
4167.9
2214 9.66
30 march To 04 April
Week -6
3779.1
514.5 1
618.19
6283.07
3779.88
3994.27
6283.07
2144 0.5
06 April To 11 April
Week -5
11337. 3
1029. 02
618.19
_
12083.81
9060.99
4952.92
4206 5.55
13 April To 18 April
Week -4
_
_
_
_
_
_
_
_
20 April To 25 April
Week -3
_
_
_
_
_
_
_
_
27 April To 2 may
Week -2
5466.1 5
_
_
1562.96
5466.15
4809.33
5730.86
2318 2.68
04 may To 09
Week -1
_
514.5 1
_
_
0.78
2312.33
6390.28
9794 .34
84
may 11 may To 16 may
Week 0
2186.4 6
514.5 1
618.19
_
2186.46
4985.46
3207.9
1165 3.01
18 may To 23 may
Week 1
_
514.5 1
618.19
_
311.04
7216.26
2637.61
1527 7.58
25 may To 30 may
Week 2
_
_
_
_
_
_
_
_
1 June To 6 June
Week 3
_
_
_
_
_
_
_
_
8 June To 13 June
Week 4
_
515.1 7
_
2097.26
_
5693.98
2097.26
1040 4.8
15 June To 20 June
Week 5
_
1030. 33
617.15
2516.7
503.66
5057.47
2831.29
1170 4.17
22 June To 30 June
Week 6&7
_
_
_
_
_
2850.4
1106.18
1247 5.66
(3) MONTHLY SALES RECORDING SHEET 85
PROGRESS REPORT (TOWN WISE) Name of the promoter:Cluster name:Town Name
1.Sandila 2.Shahabad 3.Bilgram 4.Pisawa 5.Beniganj 6.Sawaijpur 7.Roopapur 8. 9.Gross
Total Britannia sale April May 27845 80413 10692 35832 33996 4045 1745 194568
June
48841 66328 36649 56029 65334 8649 3665
52314 78589 43265 63435 54682 10156 4265
285495
306706
86
4) MINI PROJECT (REVIEW FORM) PROJECT REPORT Name: Location:
Problems faced by you at Super Stockist:
Problems faced by you at RPDs:
Problems/Grievances/Complaints of Super Stockist:
87
Problems/Grievances/Complaints of RPDs:
Support you have received from Sales Officer:
Support you have received from PSM:
POSM Availability:
What are the threats faced by Britannia from competition or other factors?
88
What, according to you, are the opportunities that Britannia can better exploited in the rural markets?
Review form- the importance of this review sheet is that, it was a mini project report on the various activity done by the each promoter of each area and this report is the mirror of the efforts made by the each individual attached with the project magnum. This report also provides an opportunity to give recommendation on the various opportunity the company can exploit in the rural market and this report provide an eye-sight to the company to know which unit of the marketing and sales needs consideration again.
89
