Report on marketing research

A Study on consumer market for Aurofood Summer Internship Report Submitted By: Sandeep Raghav 07BS3761 Batch=2008-09 2 A STUDY ON CONSUMER MARKET FOR AUROFOOD INDUSTRY BY Sandeep Raghav (07BS3761) 2008-09 (It is to be noted that this report has been developed as the partial fulfillment of the Project Work under Summer Internship Programme for ICFAI Business School Chennai) Chennai SIP Organization: Littler Associates 3 ACKNOWLEDGEMENT It gives me great privilege to show my deepest sense of gratitude to those people without whom this project would have never been complete. These people, not only mentored me but they also made it a point that this project becomes a classy piece of study and its only their creative ideas, their mentoring, their constructive criticism and guidance that has made the project really meaningful and a well thought out piece of literature. To start off, it’s a privilege for me to express my deepest sense of gratitude to Professor. C.K. Chandrasekhar, my Faculty Guide from ICFAI Business School Chennai {IBS C), my mentor and undoubtedly the mainstay behind this project. It has been an out and out honor to work under him. His versatile viewpoint and understanding of the subject matter, his guidance’s, his constructive criticisms and above all the level of motivation and faith he showed really made me to stay focused and work logically during the course of the study. Secondly, this entire live project owes to Mr. Ramachandran, our Industry Guide and also the Managing Partner of Littler Associates, Sir I would like to thank you for giving us such an wonderful opportunity to work under you, at the onset of our corporate career, you provided me with a very dynamic and challenging project and your mentoring and guidance, your viewpoint towards looking at a particular situation in diversified manner, your constructive criticism really helped me a lot in understanding the case and working towards it and I will be really honored to work with you again. I would also like to thank Mr. Abhishek Roy, My fellow batch mate at ICFAI Business School Chennai {IBS C) and also my colleague at work who has been a great help during the entire course of the study. Thank you all Sandeep Raghav 4 TABLE OF CONTENTS: DETAILS Abstract A. Introduction A.1. Overview of Indian Fast moving consumer goods (FMCG) sector A.2. Indian Biscuit sector A.3. The case A.4. Major issues/problems A.5 Main objectives and limitation of the study. B. METHODOLOGY OF THE STUDY B.1. Formulation of the Hypothesis B.2. Surveys and questionnaire used C. ANALYSIS C.1. RETAILERS SURVEY C.2. CONSUMERS SURVEY D. KEY FINDINGS PAGE NUMBERS 4-5 6-14 6-7 7-14 14-15 14-15 15 15-17 15-16 16-17 17-19 17-18 18-19 19-21 22-25 26-32 33 E. FINAL CONCLUSION AND BUSINESS PROPOSAL F. ENCLOSURES G. BIBLIOGRAPHY 5 ABSTRACT Management consultancy is one of the most exciting and challenging areas of dynamic management decision making and strategy building in the 21st century having a wide spread scope and application and the area of coverage is also huge. With Modern Management becoming highly competitive and dynamic, now a days, every problem is different and requires a unique solution and when it comes to core areas of management consultancy this becomes even more critical. This entire study entails around a core area of management consultancy; to be more specific; marketing consultancy or marketing strategy building. Now Marketing strategy building as a core area of Marketing consultancy is practiced by only few Firms in India and to my great luck Littler associates is one of such firms which deals in it.In a nutshell, the entire project deals with a live case on a client Aurofood Industries Limited and their problem child, True brand of Biscuits. Aurofood Industries, a Pondicherry based FMCG company which is a 100 crore manufacturer of biscuits in the entire Tamil Nadu, is facing several problems over the last few years resulting in poor sales and reduction in market share. With the severe competition around, they are finding it a real problem to increase the sales of their biscuits. The case, in hand, is to assist the client, by providing them a business proposal or rather a business model through which they can revive their brand. The entire is a larger picture of a business proposal report which will cover several important domains of marketing and the lingo will be totally marketing prone. The main portions of the project covers important concepts from marketing consultancy and research point of view, also it covers in a logical sequence how a project kicks on covering areas on problem identification and definition, analysis and conclusion. The readers will really find it interesting to understand and interpret the links in between different concepts and criticalities between alternate variables and how to go about solving the same. Lastly, this has been a very exhaustive study and an honest one too so as to understand the consumer buying behavior of biscuit segments at Tamil Nadu in the process of providing Aurofood with an effective business plan so as to revive the true brand of biscuits. 6 A. INTRODUCTION A.1. OVERVIEW OF INDIAN FMCG SECTOR The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment in the food-processing industry. Automatic investment approval (including foreign technology agreements within specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing. The Indian FMCG market has been divided for a long time between the organized sector and the unorganized sector. While the latter has been crowded by a large number of local players, competing on margins, the former has varied between a two-player-scenario to a multi-player one. Unlike the U.S. market for fast moving consumer goods (FMCG), which is dominated by a handful of global players, India's Rs.460 billion FMCG market remains highly fragmented with roughly half the market going to unbranded, unpackaged home made products. This presents a tremendous opportunity for makers of branded products who can convert consumers to branded products. However, successfully launching and growing market share around a branded product in India presents tremendous challenges. Take distribution as an example. India is home to six million retail outlets and super markets virtually do not exist. This makes logistics particularly for new players extremely difficult. Other challenges of similar magnitude exist across the FMCG supply chain. 7 A.2. INDIAN BISCUITS SECTOR INTRODUCTION: 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 crores. 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 tons per annum and valued at over Rs 50 billion. The unorganized sector accounts for over 50% of the market. The market has been growing at a CAGR of 6-7% P.A. MAJOR PLAYERS OF THE SEGMENT: 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 Kellogg, Nestle, Sara Lee.. Fig: 1 showing the proportionate market share of main players in the biscuit and bakery segment 8 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 flavors like strawberry and chocolate) is indeed an innovation and low-priced biscuits. The industry can also be divided brand wise into popular varieties such as Parle-G 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 tones. The segment can be further divided into the sweet and savory. The savory segment includes salt biscuits, and the salt and sweet variety accounts for the 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. Parle enjoys a 40% share of the total biscuit market. The Parle biscuit brands, such as Parle-G, Monaco and Krack jack enjoy a strong imagery and appeal amongst consumers. A comparative test study done on 12 popular brands of glucose biscuits by an NGO, Voluntary Organization 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 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 organized sector players). However, the values change dramatically if the unorganized sector which accounts for 50% of the total biscuits 9 market is taken into account. Since the market share 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. ORGANIZED VERSUS UNORGANIZED SECTOR: In India, there is a huge unorganized 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 lowerpriced varieties, and it is here that branded biscuits meet with stiff competition from the unorganized sector. The unorganized sector in the biscuits segment does exert pressure on the pricing policies of the organized 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. The duty structure still favors the unorganized sector. Except for select low-priced 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 10 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. 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 2000-01. 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 - Britannia, 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 de-reservation. 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. 11 Though dereservation resulted in a few MNCs, i.e. Sara Lee, Kellogg, 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, especially in the high price segment has started from 199899, 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 have been to the extent of 5.5% of the total production. Exports 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 12 supplying 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 organized 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 up gradation in manufacturing, packaging etc has also been a factor affecting our industry, along with inadequate financial credit and support particularly for the 13 medium and small scale biscuit units.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 up gradation diversification. Expansion as also to set up new units has formulated scheme of Grants and Financial Assistance. 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. 14 A.3. THE CASE: Aurofood private limited Pondicherry is a 40 years old FMCG company which mainly deals with three main categories of FMCG variants which are Biscuits, MCP and Pasta. Aurofood is a market leader in pasta, especially vermicelli and it comprises of approximately 48% of the total sales of the company as of the figures of july-december 2007. The biscuit segment comes in the second raking according to sales, Biscuits comprises of around 31% of the total sales of the company; next comes the MCP which comprises of around 21% of the total sales as of july-december 2007. Biscuits are more of their front line products manufactured under the brand name of TRUE biscuits, the total market share in the entire south are about 245 tones, out of which 125 tones in the entire Tamil Nadu. Whereas the total size of the biscuit segment in Tamil Nadu is about 13’245 tones annually. So Aurofood covers less than 1% of the entire business segment in Tamil Nadu. Now the problem with Aurofood is that the company once used to market leaders in biscuits are now pushed hard down by the competitors so much that the sales figures are going down ; and the competition is now so huge that virtually whatever Aurofood does, the competitors can just do it without much efforts because of their huge market size. The idea is to provide Aurofood with a proper business plan which can aid in bringing more profitable results. A.4. MAJOR PROBLEMS FACED BY AUROFOOD: For cutting competition, price of the biscuits has been set marginally less under competition. The packaging of true biscuits is simple not much eye catch and is in line with the standard packaging of main players. Well distribution has been a major problem of TRUE biscuits. This is because of the fact that compared to the scale of distribution networks or channels of other players, the distribution network of Aurofood is quite miniature, also there has been a packaging and quality problems among the users. From the gross profit margin analysis of the SKUs of TRUE biscuits, it can be ascertained that certain SKUs of biscuits are contributing very less (Tiffin contributing 0%, checkmate 1%, 15 Hycount 1%, Glucose 1%). Such lesser proportions are actually lessening down the revenues by 5-6% due to incurring variable costs. A.5. THE OBJECTIVE OF THE STUDY: The main objective or the core purpose of the study is to provide a business plan which will aid Aurofood in reviving its position in the biscuit segment and to make the company more profitable in the long run. A.6. LIMITATIONS OF THE STUDY: 1. Time constraints: The entire schedule of this project report is over a period of merely three weeks, so time is a genuine constraint which limits the scope and also the scale of the study. 2. Data constraints: lack of adequate and accurate data is another major limitation of the study. B . METHODOLOGY OF THE STUDY: B.1. FORMULATION OF A HYPOTHESIS: Generally, a hypothesis is defined as: • • a proposal intended to explain certain facts or observations; a tentative theory about the natural world; a concept that is not yet verified but that if true would explain certain facts or phenomena; "a scientific hypothesis that survives experimental testing becomes a scientific theory"; "he proposed a fresh theory of alkalis that later was accepted in ... • guess: a message expressing an opinion based on incomplete evidence, Now, in this specific study the main issues on which the hypothesis can be formulated are: 16 • • What are the reasons that are mainly leading to the downfall of true biscuits, What are the critical decision areas or the areas that need to be taken care in order to revive the brand, • Who are the main consumers of True biscuits and what are the buying behaviors of the consumers, • What is the visibility of true brand among retailers and consumers, where exactly true is losing itself among the competitors, Having understand the above problem the null hypothesis can be framed as follows, Null Hypothesis, True brand is losing its acceptance among the buyers because of lesser visibility in the retail outlets, as a result of which brand presence is getting adversely affected; So the alternate hypothesis will be True brand is accepted well among the buyers because of more visibility in the retail outlets, as a result of which brand presence is increasing, It is to be noted that the key words or phrases in the null hypothesis are Acceptance among Buyers, Visibility in retail outlets, and brand presence, Now if we form an equation it can be easily said that positive combination of acceptance among the buyers and Visibility in the retail outlets is directly proportional to the brand presence i.e. Visibility in the retail outlets + Acceptance among the buyers α Brand presence of True B.2. SURVEYS AND QUESTONNAIRE USED: Now for judging the level of visibility in the retail outlets a retailer’s survey needs to be done following a structured questionnaire which will provide the service levels, marketing strategies and level of distribution penetration of true in the local market. Next for judging the acceptance of true among the buyers, a consumer survey needs to be undertaken following a structured questionnaire aiming at understanding the consumer buying behavior, their tastes and preferences, their attitudes and perception towards biscuits. 17 C. ANALYSIS C.1. RETAILERS SURVEY: The retailer survey has been done following a structured and a uniform questionnaire which comprises of the following details: PART A: General Questions on shop name, Owner name, shop category, location etc. PART B: Questions regarding the available varieties of Biscuits n the shop, and the various categories of biscuits kept n the shop. PART C, whether the retailer deals in true or not, PART C-1: If the retailer deals n true biscuits, then questions were regarding Varieties, sales and service levels of true biscuits. PART C-2: If the retailer does not deal n true biscuits but deals in other true products, then questions regarding why the retailer doesn’t deals in true, PART C-3: If the retailer does neither deals in true biscuits and other true products, then questions regarding the awareness, past dealings etc has been put forth n the questionnaire. It is very essential to understand the fact that in this entire study three possible retailer types has been covered: Type 1, retailer who deals in true biscuits, Type 2, retailer who does not deals in true biscuits but deals in other true products like true vermicelli, sooji etc. Type 3, retailer who does not deals neither in true biscuits nor in other true products, Also ample care has been taken in covering the various categories of shops, and brands of biscuits sold n the shops in respect to the shop category. 18 NUMBER OF RETAIL SHOPS COVERED: 130 C.2. CONSUMERS SURVEY: No. of subjects covered: 40 Consumer’s survey, on the other hand, has been done mainly to judge the buyers behavior towards purchasing and judging the credibility of a biscuit brand. The survey again has been done following a structured and a uniform questionnaire having the following main components: 1. PART A: General questions seeking the name, family status, financial background of the consumer, 2. PART B: Specific questions about which brand of biscuits the consumer mainly consumes, 3. PART C: Questions regarding consumption habits and consumption occasions of the consumer as in who, when, why and how consumes biscuits in the family, 4. PART D: Questions regarding the Purchase habits and Purchase occasions of the consumer as in who, when, why, how and for whom purchases the biscuits n the family, 5. PART E: Questions regarding the Types of brands consumed by the family, the most preferred brand, and the awareness regarding brands like true. 6. PART F : Lastly and most importantly, question seeking leads about the judgments, perceptions, attitudes of the consumer behind purchasing a certain brand, the idea here is to trace the following things: • Who are the main buyers of True biscuits • What is their buying behavior behind buying true biscuits • What is their perception about True as a brand • What categories of Buyers purchase true, i.e. are they conventional buyers, repeated buyers or innovators who likes buying true products. • Simply putting what s the brand salience of true biscuits in the mind of consumers. 19 FINDINGS FROM RETAILERS SURVEY: 1) Most of the shopkeepers are aware about True but they hesitate to keep true in their shop because of no demand in the market. 2) The most simple and famous answer by shopkeeper was that nobody comes for TRUE, customer asks for Britannia and other well known brands. 3) The supplier service is low in comparison with other brands because of no demand. 4) Only very few shopkeeper keep large number of varieties of TRUE biscuit in their shop. 5) Most of the shopkeeper doesn’t want to keep TRUE in their shop but they keep because of maintaining different varieties in their shop. 6) Only large departmental store keep no. of varieties of TRUE in their shop. 7) According to shopkeeper most of the customer doesn’t know about TRUE. 8) Only in some areas availability of TRUE is good. 9) According to findings of survey most of the shopkeeper doesn’t recommend TRUE to the customer. 10) TRUE is lacking in marketing and promotional activities according to shopkeeper. FINDINGS FROM CONSUMER SURVEY: Before going to the main elements and observations of this exploratory survey, it is very pertinent to talk about the content and the context of the survey. Now, content wise, it was more of an one-to-one interview kind of survey than a typical questionnaire based survey where significant questions regarding the following areas were asked: Introductory and general questions regarding the identity, background, family, status of the consumer, THEN came the more deeper or rather the more related questions which comprises of the following main headings: Consumption Occasions, questions judging ,who, when, where, how and why the consumer consumes biscuits; Purchase Habits, Questions judging who, when, how and where from buys biscuits in the family; 20 Preferred brands, questions judging the most preferred brands of the biscuits; Attitudes, brand images/judgments/relatedness of the consumer with the brands. Talking about the context, the survey has been conducted over a period of seven days, taking into consideration the need for a diverse background, or, in simple terms the variety of consumers according to age, demographics and financial background. So, out of the thirty four consumers surveyed, care was taken about the fair mix of people from different levels, different classes of the society. OBSERVATIONS AND MAIN FINDING The following observations came out from the survey: Most of the families observed consume biscuits quite frequently in a month and also in considerably larger volumes. There were more consumption occasions as a result of which purchase occasions were also more. Behind every consumer buying behavior, a strong brand presence could be felt, the fact that about approx 75% of the subjects identified themselves with Britannia proves the fact even more. Most subjects admitted the strong brand presence of Britannia, the quality and the variety of biscuits, and also the fact it is been there for a long long time are some of the main reasons for them to try out Britannia. Most of the families preferred branded biscuits than non branded or local biscuits, True, sadly was not even in the frame. Almost 90% of the subjects in the study had one common consumption occasion in the form of having Marie along with tea, and Britannia and Parle e were mostly preferred. Kids and guests were the two mostly seen consumers among the families that were surveyed. 21 Most of the families gave a lot of important to the quality and the brand presence in the sense that JO DIKHTA HAIN, WOHI BEEKTA HAIN ☺ and since Britannia is a very old company in that sense also there was a huge connection. Regarding purchasing habits, Women of the family stood the 1st place in purchasing biscuits, and then men. Most families agreed to the fact that there were not many as such purchasing occasions for biscuits, simply biscuits are a necessity, when there was need rather demand they went for purchasing the biscuit. Sun feast is the most strongly raising brand. Sunfeast is almost present in every shop and takes second place after Britannia in terms of availability. Most of the people doesn’t know about the TRUE brand and are not aware of various varieties of TRUE. Hardly they seen any advertisement or any promotional activity by TRUE. Large departmental store is the only place where they can know about TRUE biscuits, because in Kiranas or in provisional stores either visibility is not so much or nobody recommends TRUE, that’s why TRUE is out of reaches for consumer. TRUE vermicelli still popular in market but Bambino is the leader. During the survey only very few people had knowledge about TRUE. 22 CONCLUSION AND BUSINESS PROPOSAL From the analysis and observations, it can be seen that True Brand of biscuits at todays date is in a volatile situation because of the following reasons: a. The visibility of the brand in the local retail shops of Tamil Nadu is much lesser n comparison to other brands. b. Most of the consumer prefers Britannia and Parle over other brands, and the awareness of True is almost not there. c. The service level of true with respect to other companies has been down and there has been several quality related issues too. d. Lastly true, as a brand has lessened its brand loyalty, brand attractiveness and brand image among the customers has also decreased over the years. Having known all the above problems of True, let us visualize this case under the limelight of marketing, taking into account the various pros and cons of the case: MARKETING STRATEGIES: In lieu of competition, if we have to analyze the case, we can categorize True as a market follower in a market in which the market leader s are Britannia and Parle , Market challengers are ITC and Market niches can be McVities and certain other brands. 23 Now what needs to be understand here is that Britannia, Parle being the Market leaders determines the price, quality and variability in the segment, whereas Mcvities because of its unique selling proposition has been able to create a market on its own which the leaders have not been able to resolve. Whereas Brands like True , with lesser capacity and limited corpus are in nowhere in between, Because of the sheer power and penetration by the leaders, The company has lost a major chunk of its market Share and is in the verge of getting whitewashed now. Taking from another Marketing point of view, the positioning aspect of the true brand, now the term positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. Now having said that True is actually suffering from confused positioning as it has not been able to identify its target market. Besides all this the company is having problems in distributing its products also because of the huge power stroke, brand stroke of the competitors the distribution is also lesser. Lastly over the years with more and more quality issues, packaging problems and all true has lost its brand loyalty by leaps and bounds as unlike Britannia not many people can identify itself with the true brand. BUSINESS PROPOSAL: Now after coining all the possible reasons for the downfall of the brand, let us look at the plus points of true: Firstly, the company is a forty year old one and is well spreaded among the major cities of South. The Brand True is an old brand and is still popular in certain parts of Tamil Nadu, Certain SKUs like Niche, Elaichi are still market leaders in their own segment. Now there can be two ways for True to look at the above issues, rather two approaches, REACTIVE APPROACH: Now a reactive approach can be further building on the strengths the company has, despite of going for new areas. This makes sense as the company has certain products which are market leaders and selling quite well. Two important things need to be done here, firstly identify the core areas of improvement and secondly ascertain the strategies in line with the core areas of improvement. The man strategies true can follow is : 24 Cut down on unnecessary SKUs keeping only the most selling SKUs. Increase the volume and the marketing of the most selling SKUs. Cut down unnecessary sales force, and then increase the compensation of those who deserve to stay with the company. Special Attention must be taken about the quality and the packaging of the product, as if the product is a telling one other communication tools will automatically be successful. Go for selective distribution of the product, create a customer grievance handling and monitoring cell which will keep track of the customer grievances and will be n constant touch with the retailers where true is kept. • PROACTIVE APPROACH: Modern marketing always calls for a proactive approach as companies now a day’s always needs to be two step ahead of the competitor. When everything is going wrong, the idea is to dismantle competitors by doing Out of the box thinking which includes bringing innovative products, effective marketing and positioning of the product in such a way that competitor is not able to ape in the short run. The idea is to create a Niche in the market, or, a space in the market that will be untouched by the competitors. Aurofood can follow the below mentioned strategies in this case: • A fully fledged and independent R & D Department which will do adequate market research and bring out innovative products which other companies have never launched. • Identifying the adequate cost and revenue centers is again very important. Lessening the dull SKUs and unwanted part of the sales force will aid in re engineering of the entire process. • Identifying the exact target market and establish a well communicable product campaign. • Taking proper attention to increase the quality of the biscuits, eye catchy pack sizes which appeal to masses. …………………………….************…………………….. 25 F. ENCLOSURES RETAILER QUESTIONNAIRE PART-A A.1.Shop.Name………………………………………………………………………………… A.2 Owner Name………………………………………………………………………………. A.3.Contact No.………………………………………………………………………………... A.4.Location…………………………………………………………………………………… A.5. Category of Shop a) Chain Store f) Kiosk b) Large Departmental g) Provisional Store c) Pharmacy d) Bakery e) Kirana PART-B B.1. What brands of biscuits do you sell? a) TRUE® b) Britannia c) Parle d) Sunfeast e) Other B.2. Rank the brands in order of sales……………………………… B.3. Variety of biscuits stocked a) Marie f) Milk b) Cream g) Other c) Bourbon d) Salted e) Glucose B.4. Any imported Brand of Biscuits? 26 C. Do you deal in TRUE® Biscuits? a) Yes c) No PART-C-1 [If answer to C. is a)- YES] C1.A What Varieties of TRUE® Biscuit do you have? a) Marie f) Milk b) Cream g) Other c) Bourbon d) Salted e) Glucose C1.B Rank the above varieties in order of volume of sales ……………………………………. C1.C Trend of TRUE® in comparison to other brands a) Higher [In case answer to C1.C is a) Higher] M1. Why TRUE® is selling more? a) Demand [In case answer to C1.C is b) Lower] L1. Reason for lower sales of TRUE®? a) Demand b) Service PART-C-2 [If answer to C. is b)- No.] C2.a Do you deal in other TRUE® Products? a) Yes b) No c) Margin b) Service c) Margin b) Lower c) Equal If yes, then name of products …………………………………………………………………… ……………………………………………………………………………………… [If No, proceed to C-3] 27 C2.b. Why don’t you deal with TRUE® biscuits? a) Inadequate Demand b) Poor Service levels c) Inadequate Margin d) Quality issues and delayed settlement PART-C-3 [If answer to C. is b)- No. and answer to C2. a), is b)- No] C3 a. Are you aware of the TRUE® brand? a) Yes c) No C3.b. If answer to above is a)- Yes, Why don’t you deal with TRUE® biscuits? a) Inadequate Demand b) Poor Service levels c) Inadequate Margin d) Quality issues and delayed settlement C3.c. Were you selling TRUE® biscuits in the past? (If this is not indicated in answer to earlier question) a) Yes c) No C3.d. If yes than why have you stopped? a) Inadequate Demand b) Poor Service levels c) Inadequate Margin d) Quality issues and delayed settlement Note: Probe clues for preference for any one variety of TRUE ® biscuits. 28 Greetings PART A Observations and introductory questions QUESTION NO A1, A2, A3, A4, A5, A6 PART B General questions on biscuit brands QUESTION NO B1, B2, B3, B4, PART C, DISPOSITION TO TRUE® BRAND OF BISCUITS PART C1 DEALER IN TRUE® BISCUITS PART C2 YES HE DEALS IN TRUE® PRODUCTS BUT NOT BISCUITS PART C3 NOT A DEALER IN TRUE® Question no C1.a, C1.b, C1.c., Question no C2.a, C2.b C2.c etc Question no C3.a, C3.b, C3.c, C3.d etc Sale is Higher Sale is lower M1, M2, M3 ETC L1, L2, L3 ETC DEPENDING ON THE RESPONSE 29 CONSUMER QUESTIONNAIRE: Name………..………………………………………………………………………………........... Occupation…………………………………………………………………………………………. Address……………………………………………………………………………………………. 1) a) <15 2) a) Father Age b) 15< 25 c) 25<40 d) 40<60 e) 60< Who generally do shopping (Food Products) in your family? b) Mother c) Children d) Yourself e) Other 3) Who is the main consumer of biscuit in family? a) Children b) Elders c) Guests 4) Which brand of biscuit do you like? a) Parle b) Britannia c) Sunfeast d) True e) Other 5) Why do you like this particular brand of biscuit? a) Quality b) Taste c) Brand d) Price e) Packaging 6) If you don’t like True biscuit then the reason? a) Quality b) Taste c) Brand d) Price e) Unawareness 7) Any particular reason for which you attract most towards a biscuit brand? 30 a) Quality with less price b) Quality with great taste c) Advertising d) Brand Ambassador e) After Promoting by Shopkeeper 8) If you like True Biscuit, then which type of variety you like most? a) Cream b) Marie c) Glucose d) Vita milk e) Other 9) How do you find availability of True biscuit in your area? a) Very Good b) Good c) Poor d) Very Poor e) Not at all 10) What is the source of information about True Biscuit? a) Shopkeeper b) Friend c) T.V d) Newspaper e) Other Any Suggestion…………………………………………………………………………………….. 31 BIBLIOGRAPHY: Marketing Management and Contemporary practices, 3rd Edition, Philip Kotler. Business Research Methods, Cooper and Schindler, 3rd edition. ICMR publications on Biscuit sector. Management consultancy: A Guide to the Profession, Milan Kubr. http://www.biscuitfederation.org , the Indian Biscuits federation official Website. http://business.mapsofindia.com/india-industry/biscuits.html Biscuit segment. Article on Indian