RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITSINTRODUCTION Indian marketing is largely described as sellers market. Demand is invariably greater than supply. Purchasing power of mass is limited. More than 30% of our population has income below the poverty line. Bulk of our population resides in villages and markets have got to capitalize rural marketing opportunity. The consumers are ignorant, illiterate, unorganized and hence they have weak bargaining power. Most of our business enterprises are still having selling concepts, which is product, oriented marketing approach. Bigger business houses having national market are adopting integrated corporate planning sound market planning as well as strategic marketing planning have very limited scope of present. A change is taking place is the marketing environment at a reasonable speed and money. Consumer oriented marketing company are beginning to realize the pressure of competition and buyer market. Marketing are called upon to anticipate changes in the marketing environment involving opportunities, risks and uncertainties. They are required to forecast the direction and intensity of these future changes in the environment and secure favorable relationship with the changing environment. To do this intelligent planning marketers need information. Accurate sales forecasting involves collection and reliable sales forecast, marketing plans and programmes through organised information system, we would have profitable marketing activities minimum risks and uncertainties. The essence of modern marketing concepts is that all elements of business should be geared towards the satisfaction of consumers. This requires a through understanding of consumer behaviours and buying motives without such insights marketers will fail to segment market effectively and design strategy for an effective penetration into the defined market segments. 1 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS The adoption of the consumer forecasts in fact the real difference between the traditional concept of selling and the modern concept of marketing. It is the enough for the marketing manager to get suitable relations to the given wants of consumer in a of Business management study programme preparation of the project report on a chosen topic is compulsory. To carry out this task I have undertakes a detail survey of Retailer behaviour on Sunfeast Biscuits and Marketing performance an market share of ITC Limited. A case has study has also be undertaken on Sunfeast Biscuits. Reference is also been made to marketing of other Biscuits passive way. As a part with other competitive brands. In the modern world the Biscuits have become so popular that it is deemed to be best and appealing media of mass entertainment and even for education. An attempt has been made in this project report to know the details regarding history, fundamental concepts, marketing to biscuits and other details of biscuits. Attempt has also been present marketing performance of Sunfeast biscuits and certain suggestions have also been given for promotion of marketing activities by adopting suitable marketing strategy. STATEMENT OF THE PROBLEM: “A RETAILER PREFERENCE TOWARDS BISCUITS IN SHIMOGA CITY WITH SPECIAL REFERENCE TO SUNFEAST” The motto behind the project work was to understand the retailers perception and satisfaction level regarding the sunfeast biscuits and Britannia biscuits with special reference to the retailers of Shimoga City and to review and re-investigates its activities in the market. The opinion of the retailer with respect to any product and the services from the providers varies based on their unique perceptions. For each individual, reality is totally personal phenomenon, 2 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS based on that person’s needs, wants, values and personal experiences. Thus, to the marketer, retailer’s perception and opinions are much more important than the knowledge of objective reality. NEED OF THE STUDY: The need of the retailers’ perception and satisfaction measurement arises along with the need to satisfy the ITC product retailers and customers so that to keep them with the company. Ensuring their satisfaction is vital to the ITC product distributors for long term business survival and profitability. We need to understand and evaluate satisfaction levels of the sunfeast biscuits customers in comparison with the Britannia biscuits. Perception surveys answer many tough questions, which help in the growth of the confectionary sector. A well-designed satisfaction survey can give answer to the most critical questions which are otherwise impossible to get solved and may get complicated upon course of time and may increase the levels of the risks attached with the functioning of the enterprise in its regular course of business. The need for conducting this study was to measure retailers’ preferences, perceptions and choices towards the biscuits of Sunfeast and Britannia and to know the factors affecting them. 3 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS OBJECTIVES OF THE STUDY: To study growth and performances of the confectionary industry. To study retailer choices regarding biscuits of Sunfeast and Britannia. To study preference regarding the Sunfeast biscuits. To find out influencing factor for retailers preference to particular brand. To find out what is the position of Sunfeast biscuits in comparison with Britannia biscuits. SCOPE OF THE STUDY: The scope of the study is broader than mere gauging retailers’ perception regarding Sunfeast biscuits in comparison with the Britannia biscuits. It makes an effort to build and strengthen relationships with the customers. It makes competition analysis as well as helps to knowing the expectation of the retailers. The study will help the wholesale distributors of Sunfeast biscuits to identify, which section need to improve so that it can provide retailers and customers, the enhanced satisfaction. The study will also help the management to decide which strategies are to be used to improve the satisfaction level among the customers. The study was limited to Shimoga city within the constraints, time and sample size. 4 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS LIMITATIONS OF THE STUDY: All the possible key is the taken from the original source and makes the project has authentic as possible. However, it is subject to the certain limitations. They are as under, 1. The information given by the respondents may or may not be true. Because in some cases respondents may be casual they don’t give correct opinion while answering the questionnaire. 2. The views of the respondents cannot be taken as general view of general public to conclude and prepare the project. 3. Due to limitations of the time, sample size is restricted to 100 respondents. 4. Retailers preferences change as per circumstances, where the information used in the project will become invalid. 5. Market can bring about abrupt changes, which may lead to deterioration in the authenticity of the surveyed project. 6. The qualitative research may have its own basis which again limits for broader undertakings. 5 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS RESEARCH DESIGN: To analyze the retailers perception for Sunfeast biscuits in comparison with the Britannia biscuits. By simple random sampling method, 100 retailers are selected from different places of Shimoga city to put forth their views and to fill the questionnaires. The questionnaire is drafted to find out various motives, preferences and choices of retailers on their Sunfeast and Britannia biscuits providers. The questionnaire covers demographic profiles of the consumers and various attributes. The questionnaire is collected after respondents fill them and simple percentage calculation is drawn to findings and results. SAMPLING METHOD: 1. Sampling design: Research is designed for two sampling plans. It consists of three divisions. i.e., sampling unit, sampling size and sampling procedure. 2 Sampling procedure: Empirical field studies required collection of first hand information of data pertaining to the study from the field. These units of study include geographic area of Shimoga city. The aggregate of the 6 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS all the units pertaining the study is called the population or the universe. Population is the largest group to be studied. It is the total collection of elements about which we wish to make inferences. A member of population is an element. It is Subject on which measurement is taken. It is the unit of study, a part of population is known as a sample. The process of drawing a sample from a larger population is called sampling. The list of sampling units from which a sample is taken is called the sampling frame. For the present study purpose, simple random sampling has been selected. Simple random sample is used because every elementary unit has got equal chance to be included in the sample. 3 Sample units: This particular survey was directed at only those who are selling biscuits in Shimoga city. 4 Sampling plan: Sampling techniques may be classified as non-probability and probability techniques. Nonprobability sampling techniques relay on the research judgments. Consequently, they do not permit an objective evaluation of the precision of the sample results and estimates obtain are not statistically project able to the population. The Commonly used non-probability sampling techniques include convenience sampling, judgment of sampling quota sampling and snowball sampling. In probability sampling techniques, sampling units are selected by chance. Each sampling unit has a non-zero chance of being selected and the researcher can specify every potential sample of the given size that could be drawn from the population, as well as the probability of selection each sample. 7 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS It is also possible to determine the precession of sample estimates inferences make projections to the target population. Probability sampling techniques include simple random sampling, systematic sampling, stratified sampling, cluster sampling, sequential sampling and double sampling. The choice between probability and non-probability sampling should be based on the nature of the research, degree of error tolerance, relative magnitude of sampling non-sampling errors, variability in the population and statistical, operational considerations. 5 Sample size: The sample size is of 100 respondents consisting of retailers selling biscuits in Shimoga city. SOURCES OF DATA: Data are facts, figures and other relevant materials, past and present, serving as basic study and analysis. The data serves as the bases for analysis. Without an analysis of actual data on specific inferences can be drawn on the question under study. Inferences based on imagination or guess work cannot provide correct answers to research questions. The relevance, adequacy and reliability of data determine of quality of findings of a study. 8 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS For the purpose of present study data from two sources have been gathered namely primary and secondary data. 1 Primary data: Primary data are original data collected for the purpose of a particular study. In the present study primary data have been collected by personal interview method with the help of questionnaire. 2 Secondary data: These are the sources containing data, which have already been collected and compiled for other purpose by other researchers. The secondary sources consist of readily available materials and already compiled statistical statements and reports whose data may be used by researcher for his / her studies. Secondary data for the present research collected the major sources of secondary data are given below. Cygnus reports Business line Various websites Different marketing journals 9 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS The primary data are those data collected a fresh and for the first time and thus happen to be original in character. The secondary data on the other hand, are those, which have already being collected by someone else and which have already been passed through the statistical process. The methods of collecting primary and secondary data differ. Since primary data are to be originally collected, while in case of secondary data in the nature of data collection work is merely that of compilation. So, primary data has been gathered for the purpose of the study employing all the above methods. Secondary data has been gathered from various published sources, the same has been given in detail in Bibliography. TOOLS AND TECHNIQUES OF DATA COLLECTION: The researcher has adopted the questionnaire as the data collection tool by means of extensive survey on selected respondents of adequate sample size. The researcher has taken utmost care to see that the degree of bias is kept to the minimum by avoiding the ambiguity in the questions and while recording the responses from the interviewed respondents to come out with a meaningful data collection pattern, which facilitates the effective analysis and interpretation of the collected data to come out with fruitful and worthwhile conclusions and to put forward significant conclusion for the company to implement the same in order to have a competitive edge over the rest of the competitors in the market place. 10 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS COMPANY PROFILE 11 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS ITC PROFILE: ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 18 billion and a turnover of over US $ 5.1 Billion. ITC is rated among the World's Best Big Companies, Asia's 'Feb. 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC also ranks among India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. Take an abiding commitment to world-class quality. Add deep market insight; cutting-edge technology; a pervasive culture of innovation. And you have ITC brands that do India proud across a range of products and services: Aashirvaad, Sunfeast, Kitchens of India, mint-o, Candyman, Wills Lifestyle, John Players, ITC-Welcome group, Expressions, Classmate, Paperkraft, Elemental Chlorine-Free Cyber XLPac, Aim, iKno, Mangaldeep. The list goes on. Even as its brands delight consumers and enrich their quality of life, ITC continues to be powered by its aspiration to make a larger contribution to national imperatives like empowering farmers, greening wastelands, irrigating dry lands, nurturing small scale enterprises, empowering village women and supporting rural education. Because our people and our country deserve the best. 12 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS Business of ITC During the June, 07 quarter, a 12.5% value added tax was levied on cigarettes, which is expected to depress the volume . Since ITC is a dominant player, it has the pricing power to compensate for any fall in volumes. To maintain its dominant position in the tobacco business in the face of the rising competition, ITC has announced plans to invest around Rs.1000 million in the cigarette business. However, its non tobacco business is increasing and acquiring greater significance as the company is betting huge sums on new business. In FY07, the cigarette business accounted for around half of the ITC consolidated revenues but only 37% of its capital expenditure. Not surprisingly, its nontobacco business is growing faster. In FY07, its non cigarette business grew 32% against 14% growth in the tobacco business. Most importantly, profit before tax from non tobacco business was up 34% against 17% growth of its tobacco business. This was achieved despite continued losses reported by non tobacco FMCG business. In the June quarter, revenues from non tobacco business grew 7% mainly, on account of a decline in the profitability of paper and paper board business. ITC is using its strength in rural sourcing network and brand building to acquire industry leadership in branded staples, ready to eat, hospitality and life style apparel segments. In the short run, it has depressed it consolidated margins and returns on capital, but many of these businesses may now start yielding results. It now plans to expand its branded packaged food portfolio by launching more products for which it has stepped up research and development spend. 13 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS ITC is also expanding its hotel business and started rebranding exercise to maintain its premium status as many international chains are planning to foray into India. It is adding around 770 rooms and 100 service apartments in Bangalore and Chennai. Its paper business provides packaging solutions to its other businesses. It is also expanding in the paper business to tap Indian paper growing market. It is doubling its pulp capacity and adding new paperboard machines. This will raise its paper and paper board capacity by around 37% to 4.5 lakh tones. NATURE OF BUSINESS CARRIED: FMCG HOTELS PAPERBOARDS & PACKGING AGRI - BUSINESS GROUP COMPANIES FMCG: CIGARETTES: ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has a leadership position in every segment of the market. It’s highly popular portfolio of brands includes India Kings, Gold Flake, Navy Cut, Scissors, Capstan, Berkeley and Bristol. ITC's leadership is founded on its core strategy of continuously enhancing product values through significant investments in product design, manufacturing technology, quality, marketing and distribution. In just the last 5 years, ITC has made capital investments of over Rs. 7 billion in its cigarettes business. In ITC, one of the pioneers of market research in India, the consumer is still the King. The Company continuously endeavors to provide its consumers products that are benchmarked to international quality. This strategic focus on the consumer 14 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS has paid ITC handsome dividends. The most important of these is its enriched product mix, unmatched by competition. ITC's share of filter cigarettes in the country is more than 70%. In pursuit of international competitiveness, ITC has launched four brands - Checkers, HiVal, Royale Classic and Gold Crest - in the extremely competitive US market. Recently ITC has launched Royale Classic, Gold Cut and Scissors Filter Kings cigarettes in the Middle East. The response to these brands has been encouraging. ITC's cigarettes are produced in its state-ofthe-art factories at Bangalore, Munger, Saharanpur and Kolkata. These factories are known for their high levels of productivity and very contemporary work environment. ITC's FMCG businesses have one of the largest retail networks in the country, consisting of over 2 million retailers. Its reach covers a wide range of the retail spectrum, from premium outlets in the metros to small shops in the interiors of rural India. FOODS: ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the “Kitchens of India” brand. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery, Staples and Snack Foods segments. The packaged foods business is an ideal avenue to leverage ITC's proven strengths in the areas of hospitality and branded cuisine, contemporary packaging and sourcing of agricultural commodities. ITC's world famous restaurants like the ‘Bukhara’ and the ‘Dum Pukht’, nurtured by the Company's Hotels business, demonstrate that ITC has a deep understanding of the Indian palate and the expertise required to translate this knowledge into delightful dining experiences for the consumer. ITC has stood for quality products for over 90 years to the Indian consumer and several of its brands are today internationally benchmarked for quality. 15 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS The Foods business carries forward this proud tradition to deliver quality food products to the consumer. All products of ITC's Foods business available in the market today have been crafted based on consumer insights developed through extensive market research. Apart from the current portfolio of products, several new and innovative products are under development in ITC's state-of-the-art Product Development facility located at Bangalore. Leadership in the Foods business requires a keen understanding of the supply chain for agricultural produce. ITC has over the last 90 years established a very close business relationship with the farming community in India and is currently in the process of enhancing the Indian farmer's ability to link to global markets, through the e-Choupal initiative, and produce the quality demanded by its customers. This long-standing relationship is being leveraged in sourcing best quality agricultural produce for ITC's Foods business. The Foods business is today represented in 4 categories in the market. These are: Ready To Eat Foods Staples Confectionery Snack Foods In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification. The unwavering commitment to internationally benchmarked quality standards enabled ITC to rapidly gain market standing in its entire 5 brand 16 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS Sunfeast In 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie and Cream Biscuits. Sun feast’s brand essence, "Spread the Smile" connotes happiness, contentment, satisfaction and pleasure. The mascot Sunny reinforces the emotional aspects of the brand. Sunfeast immediately established itself as a provider of innovative and distinctive products Sunfeast Marie was launched in an innovative orange flavor and the 'Sunfeast Dream Cream' range includes new flavors as well as flavor enhancers. The Sunfeast Dream Cream range is currently available in 8 variants. The Company has also introduced 'Sunfeast Dark Fantasy', a dark chocolate and vanilla cream offering for the premium segment in select markets. Riding on the success of its initial offerings, ITC also entered the milk biscuit category with Sunfeast Milky Magic biscuits. Apart from milk which helps mental growth, these biscuits also contain the finest quality wheat aiding physical growth. In the last two years, the Sunfeast biscuits portfolio has been enhanced to include salted crackers and cookies. The 'Sunfeast Snacky salted crackers are available in 2 unique variants – ‘Chilli Flakes’ and ‘Classic Salted’. Sun feast’s latest offering, 'Sunfeast Special' biscuits are also available in select markets. The Sunfeast Special range currently includes cookies in two variants – Butter and Cashew, as well as cream biscuits in two variants – Choco and Orange. The Sunfeast product portfolio has been further expanded to include healthy snacking options. 'Sunfeast Pasta Treat' is whole wheat based instant pasta for children. After the tremendous success of the 4 initial flavours, the instant Pasta range has been extended with two new exciting flavours – ‘Pizza’ and ‘Chicken’. The pasta segment was further expanded with the launch of 'Sunfeast Benne Vita' in 4 innovative variants. STRATEGIES OF ITC: 17 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS ITC is a board-managed professional company, committed to creating enduring value for the shareholder and for the nation. It has a rich organizational culture rooted in its core values of respect for people and belief in empowerment. Its philosophy of all-round value creation is backed by strong corporate governance policies and systems. ITC’s corporate strategies are: Create multiple drivers of growth by developing a portfolio of world class businesses that best matches organizational capability with opportunities in domestic and export markets. Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology. Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality. Ensure that each of its businesses is world class and internationally competitive. Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITC are various businesses. Create distributed leadership within the organization by nurturing talented and focused top management teams for each of the businesses. Continuously strengthen and refine Corporate Governance processes and systems to catalyses the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability. FUTURE PROSPECTS OF ITC: It is estimated that the company’s sales will grow at the rate of 14% in JAS08 and it is estimated to grow at the rate of 18% and 31% in terms of sales in next two years. 18 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS MARKETING PROBLEMS FACED BY THE ITC & DEALER: The main problems faced by the company & the dealer while marketing are as follows; The ITC products are facing a tough competition from other Indian & Foreign The tax levied by the govt. is high. As there are number of different companies products available in market, consumer will not stick to particular brand. If there is no proper channel of distribution, the sales may come down. If there is shortage of supply, consumers may opt other company products. The lack of sales promotion affects the market share. The major problem for the decrease in sales is that of smuggling. Companies. ORGANISATION STRUCTURE PROPRITOR AND PARTNERS MANAGER 19 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS SALES MANAGER SUPERVISIOR SALESMAN INDUSTRY PROFILE 20 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS In Indian Fast moving consumer goods (FMCG) sector is the fourth largest in the economy and has a market size in excess of US$16.1billion. At present, Urban India account for 66% of total FMCG consumption, and rural India accounts for the remaining 34%. However, rural India account for more than 40% of the consumption In personal care, fabric care and hot beverages. Around 70% of the total house holds is expected to rise in 135m in 2001-02 to 153m in 2009-10. This presents the largest potential market in the world. FDI flow in the FMCG sector can create more revenue for the sector. It has been predicted that the FMCG market will reach to US$33.4billion in 2015.The middle class and the rural segments of he Indian population are the most promising market for FMCG, and give brand market the opportunity to convert them to branded products. Most of the product categories like jams, toothpaste, skincare and shampoos, in India, have low per capita consumption as well as low penetration level, but the potential for growth is huge. Lower and middle income groups account for over 60% of total FMCG sales. Rural market account for 56% of the total FMCG. Unlike the perception that the FMCG sector is the producer of luxury items targeted at the elite, in reality, the sector meets the everyday needs of the masses. 21 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS OVERALL PERFORMANCE OF FMCG INDUSTRY IN JAS08: According to the Cygnus estimates, the FMCG sector is expected to post strong revenue growth of 26% JASO8 as compared to JASO7. The estimated aggregate net sales for the FMCG sector comprising of to player in the sector in around Rs.146.29 billion in JAS08. It is estimated that there would be rise in terms of growth in the operating and net profit for the quarter JAS08 in comparison with operating profit is estimated to rise by 18.36 % and net profit by 13.02% in JAS08 in comparison with JASO7 & there will be fall in packing cost by 10.95%, staff cost by 4.72% selling expenses., and other expenditures will increase by 36.70%. Tax related cost will go up by 2.11%. SCOPE OF THE SECTOR: The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest sector in the economy. A well-established distribution network, intense competition between the organized and unorganized segments characterizes the sector. FMCG Sector is expected to grow by over 60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated that FMCG sector will rise from around Rs. 56,500 crores in 2005 to Rs.92, 100 crores in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments, says an HSBC report. Though the sector witnessed a slower growth in 2002-2004, it has been able to make a fine recovery since then. For example, Hindustan Levers Limited (HLL) has shown a healthy growth in the last quarter. An estimated double-digit growth over the next few years shows that the good times are likely to continue. GROWTH PROSPECTS: 22 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise in 2007, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas. Indian Competitiveness and Comparison with the World Markets THE FOLLOWING FACTORS MAKE INDIA A COMPETITIVE PLAYER IN FMCG SECTOR: 23 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS Availability of raw materials Because of the diverse agro-climatic conditions in India, there is a large raw material base suitable for food processing industries. India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest producer of rice, wheat and fruits &vegetables. India also produces caustic soda and soda ash, which are required for the production of soaps and detergents. The availability of these raw materials gives India the location advantage. Labor cost comparison Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest in the world, after China & Indonesia. Low labor costs give the advantage of low cost of production. Many MNC's have established their plants in India to outsource for domestic and export markets. Presence 24 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS across value chain Indian companies have their presence across the value chain of FMCG sector, right from the supply of raw materials to packaged goods in the food-processing sector. This brings India a more cost competitive advantage. For example, Amul supplies milk as well as dairy products like cheese, butter, etc. INDIAN CONFECTIONARY INDUSTRY: The confectionery market consists of chocolate, gum, cereal bars and sugar confectionery. Confectionery in India to 2006 is a detailed analysis of the confectionery market, providing forecast data to 2006. The report examines key local trends in confectionery, with an emphasis on providing quality primary research data, obtained directly from major players in the industry. It establishes the market size and structure, provides analysis of current market trends, and profiles the industry’s major players. Contains information on four confectionery categories - chocolate confectionery, sugar confectionery, gum and cereal bars. The comprehensive data set includes market values, volumes, segmentations and forecasts. All data is for 2001 and full five-year forecasts are provided. The Indian confectionery market reached a value of $433.5 million in 2001. Sugar confectionery is the largest product category. It will remain the most lucrative category over the next five years. These products are most suited to the Indian climate. Chocolate and gum confectionery follow this, each with a similar sized share of the Indian market. Standard grocers are the leading distribution channel, with one third of the Indian confectionery market, by value. Traditional grocers are the only other channel to take a double-digit share. The remainder of the market shows a high degree of fragmentation. Use this report to understand the key trends and issues in confectionery and assess the competitive landscape of the Indian confectionery industry. INDIAN CONSUMER CLASS: India has a population of over 1 billion and 4 climatic zones. Several religious and personal beliefs, 15 official languages, different social customs and food habits characterize Indian consumer class. Besides, India is also different in culture if compared with other Asian countries. Therefore, India 25 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS has high distinctiveness in demand and the companies in India can get lot of market opportunities for various classes of consumers. Consumer goods marketers’ experience that dealing with India is like dealing with many small markets at the same time. Indian consumer goods market is expected to reach $400 billion by 2010. India has the youngest population amongst the major countries. There are a lot of young people in India in different income categories. Top Ten Players in FMCG companies: S. NO. 1. 2. 3. 4. 5. 6. 7. 8 9. 10. Companies Hindustan Unilever Ltd. ITC (International Trading Company) Nestlé India GCMMF (AMUL) Daub India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries 26 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS CONSUMER BEHAVIOUR The term consumer is a person who buys goods or services for his own consumption on the other hand buyer is a person who purchases goods either for resale or for use in production. Hence these two terms are not same. Customer behaviour has got the importance in a consumer or market oriented, marketing pouring management. The study of consumer behaviour is as attempt to understand what consumers really want and why they want it. The subject of buyer behaviour is new discipline in marketing. Therefore, the marketing management must be finding out the various factors that influences the buying decisions of the consumers. Consumer behaviour means, is all psychological, social and physical behaviour of potential customers as they became aware of evaluate purchase, consumer and tell others about products and services. CHARACTERISTIC OF CONSUMERS BEHAVIOUR: 1. Consumer behaviour comprises mental and physical activities of a buyer. When he want to buy goods and services to satisfy his needs. 2. It includes both visible and invisible of a buyer. 3. The behaviour of a buyer is very complex and dynamic. His behaviour changes constantly which force to management to adjust his marketing mix with such changes. 27 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS 4. The behaviour of an individual buyer is influenced by internal and external factors. DETERMINENTS OF CONSUMER BEHAVIOUR: The buyer behaviour is influenced by several factors and forces. They are. 1. Psychological Factors 2. Social Cultural Factors 3. Economic Factor 4. Environmental Factor of buyer behaviour 1. PSYCHOLOGICAL FACTOR: The behaviour of a consumer is influenced by the psychological factor such as: 1. Motivation 2. Perception 3. Learning 4. Belief and attitudes 5. Personality and self concept MOTIVATION: It is the underlying force of any human activity it is the psychological technique of inspiring human being to act in a particular way according to the desire of the agent or motivators under marketing motivation is a driving force that impels an individual to take action in order to satisfy his needs. In fact, it is a mental phenomenon effected by perceptions, attitude and personality trait, Motivation refer to the wishes or desires that initiates the sequence of events known as behaviour. 28 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS PERCEPTION: A motivated person is influenced by his perception of the situation. The consumer learns through information out of five senses namely sight, hearing, smell, touch and taste. However consumer perceives, organizes and interprets the information to forms a meaningful picture of the word is called perception. However people can form different perception of the same stimulus because of three percept ional process; 1. Selective exposure 2. Selective distortion 3. Selective retention LEARNING: Learning explains the changes in the behaviour of an individual arising from previous experience, learning is the product of reasoning, thinking, information processing and perception because of their learning experience, and the behaviour of a buyer is affected. Thus learning accurse through the inter play of drives, stimuli, cues, responses and reinforcement. The importance of learning theory is that the marketing managers can build a demand for their product by associating with it strong drives, Cues and reinforcement. A new firm can enter the market by appealing to the same drives as its rivals by providing similar cues or even better cues to attract buyers. 29 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS BELIEF AND ATTITUDE: Most of the people their belief and attitude through acting and learning which influences their buying behaviour. Beliefs refer to a descriptive through whom a person has about something, A buyer called ‘X’ may believe that ‘Samsung’ product are superior reasonable price, high quality etc…., This knowledge opinion or faith may tries to believe Samsung product may to buy it. However it may not carry emotional change. For instance, the consumer beliefs that Samsung product are delicate may not matter for then to their decision on buying it. An attitude explains person’s consistent evaluations, feelings and tendencies towards an object or idea. Psychologists have defined attitude as, an emotionalized inclination to respond positively or negatively to an object or a class of objects. PERSONALITY AND SELF-CONCEPT: Personality of an individual refers to his personal qualities that determinate his behaviour personality is made up sociability, responsibility, of such personal traits like dominance, adventurousness, friendly now, aggressiveness, independence, competitiveness, self-consciousness, exhibitionistic etc…….., which indicate how people behave success himself and how he believes other to success him at a particular time. Self concept as three parts that is what you would like to be, how you think others see you, your own concept of what you are like. 30 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS 2. SOCIAL CULTURAL FACTOR: The buying of a consumer is shaped by social cultural factors like; 1. Family 2. Reference group 3. Social class 4. Culture 5. Occupation 1. FAMILY: The behaviour of a buyer is influenced by the members of the family. The tastes, likes, dislike and life styles of the family members arise through family buying behaviour. The family influences on the buying behaviour of a member found in two ways 1. Family influences on the individual personality characteristics. 2. It influences on the decision taking process. 31 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS 2. REFERENCE GROUP: The behaviour of a buyer is also influenced by many small groups which or directly or indirectly influences on his behaviour. These groups may be friends, neighbours relative, co-workers close associates etc; 3. SOCIAL CLASS: Every society consists of some form of social class structure. Social class is relatively a permanent and ordered division in a society where numbers share similar value, interest and behaviour. The social class is determined by various factors such as income, occupation, education, properly, life styles and consumption patterns etc.., The three Social classes in India are upper class, middle class and lower class. The mentality of the rich class is such that they give priority for high quality and expensive products where as the middle class always analyze and collect information before buying. The lower class for which quality is secondary and importance for quality at less price. 4. CULTURE: Culture is a way of it is distinctive form of environmental adoption. It consists of a unique set of learned beliefs, values, attitudes, customs, habits, dress, philosophy, traditions etc…, and forms of behaviour shared by the people in the people in the society and it is transmitted from generation to 32 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS generation. Culture is not state but always changing snd influences the pattern of consumption and decision-making. 5. OCCUPATION: The consumption pattern of a buyer also varies according to their profession or occupation. The buying habits of doctor may vary to that of a lower or teacher. Hence the marketing manger should concentrate their activities based on the occupation. 3) ECONOMIC DETERMINENTS: The behaviour of the consumer is largely influenced by the economic factors like; 1. Personal Income 2. Family Income 3. Income Expectation 4. Consumer Credit 1. PERSONAL INCOME: The personal income is an individual of an individual is an important determinant of gross income consists of disposable income and discretionary income. The income which remains at disposal 33 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS of an individual after deducting several items. Discretionary income refers to the balance remaining after meeting basic necessities of life. 2. FAMILY INCOME: It is the income of all the members of the family. The surplus family income is made available for buying durables, shaping goods and luxuries. The size and life of the family will also have impact on the buying behaviour of the family. 3. INCOME EXPECTATION: It is another determinant. If the expectation of an individual about his income is more, he is tempted to buy durable and luxuries. If his expectation is less on income, he will not go for luxuries. 4. CONSUMER CREDIT: Consumer credit means availability of credit facilities increases the buying habits of an individual. If a person gets easy credit he will buy the durable on instalment and vice-versa. Likewise savings and liquid assets are also the economic determinations of consumer behaviour. 5. ENVIORNMENTAL FACTORS: 34 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS This factor is political system, legal, technological and ethical forces which influences the buying behaviour of the consumers. POLITICAL SYSTEMS: The system of politics has an impact on the consumption pattern. In a controlled economic stage, that consumption pattern is determined by the Government. But in a free capitalistic economy, consumers enjoy wider choice and free to spend their income. LEGAL FORMLITIES: More the legal like stamp duty, customs duty etc.., Consumers are interested in fair and lawful dealing on the other hand, if legal restrictions are less, the expenditure of consumer is more. TECHNOLOGICAL FORCE: The development of technology encourages consumers spend more on up to date and sophisticated goods against absolute and outdated goods. CUSTOMER RELATIONSHIP MANAGEMENT 35 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS CRM has been defined in a variety of different ways. For some, CRM is a way to identify, acquire, and retain customers. For others, it is a way of automating the front office functions of sales, marketing, and customer service. For some vendors, whatever their current product may be, that is CRM. This diversity of definitions is a result of differences in perspectives. The first is based on a business perspective of increasing competition that is driving companies to focus on their customers. The second is based on the relatively new phenomenon of the integration of previously separate applications such as Sales Force Automation and Customer Service Support into Enterprise Applications. The third is a result of software vendors re-positioning their information technology product and services under the CRM umbrella, to take advantage of the fast growth of the CRM market. For the purposes of this paper, we propose the following definition: CRM is a technology-enabled business strategy whereby companies leverage increased customer knowledge to build profitable relationships based on optimising value delivered to and realised from their customers. The proposed framework is closely aligned with this definition and clearly emphasizes the links between customer knowledge and increased profits. The definition also makes it clear that CRM is in fact about crating value for customers. CRM itself is a not a technology, even though technology is required to enable CRM. Technology makes it possible to integrate the large volumes of customer information that are required for CRM, and to efficiently transform this information into useful knowledge. Technology also enables a company to interest with its customer, as well as makes it easier for the customer to do business with them. However, leveraging this customer knowledge to make better business decisions and to be responsive to customers, remains the responsibility of individual managers and workers at all levels within the company. The most obvious question for most companies is why they have to use CRM. The 36 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS bottom line is to optimise profitability. In addition to this, there are other long-term objectives that a company should constantly try to achieve. The importance of CRM CRM is important because of the changes occurring in the competitive environment. Globalization and the Internet mean that competition can now come as easily from around the world as from around the corner. Power and choice are moving to the customer as never before and leading to the commoditization of products and services in most situations. In this environment, product quality and features are a given, and in many industries are now so undifferentiated as to provide no significant competitive advantage. As a company, you must choose\whether to compete on the basis of price in a cut-throat commodity market or on the basis of customer relationships created through a superior value proposition. This second approach is what CRM is all about. It helps you to sense ever more precisely the needs of your customers, and to respond to those needs with highly targeted offering and marketing messages. Fundamental Concepts The Strategic CRM Framework is based on a number of concepts about today’s marketplace: Changing Customer Expectation; The Nature of the Customer Relationship; and 37 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS The Difference between Loyalty and Captivity Changing Customer Expectations A CRM strategy is not just about implementing “point solutions” such as a Sales Force Automation system, or setting up a web site. It is about evolving a business along a number of dimensions: From being focused on making and selling products to sensing customer needs and responding with targeted product and service offerings. This is reflected in the “knowing your customer” and “ Increasing value – add” components of the strategic framework. From mass marketing(e.g. TV) to marketing to segments of one (e.g. through personalized web portals). This is reflected in the “Customer interaction” components of the framework. From business-centric interactions designed for the business’s efficiency and convenience to customer-centric interactions designed for the customer’s efficiency and convenience. This is another aspect of “Customer interaction” BUSINESS OBJECTIVES OF CRM The business objectives of CRM can be stated as: 1) Increasing revenues, optimizing profitability and sustaining a high rate of returns of investment. 2) Increasing market share and customer base. 3) Establishing competitive advantage and differentiation. 4) Long-term retention of existing customers. 5) Proper identification of new customers. 6) Ensuring high levels of customer satisfaction. The decision to whether or not to go for CRM systems shall primarily depend on the cost-benefit analysis. However, carrying out a cost-benefit analysis in this case is not going to be an easy task. Also, 38 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS there is no direct method to calculate the cost-benefit analysis of implementing a CRM system. The role of technology is extremely pivotal in maintaining a relationship with the customer. Today, the customer interacts with the company in a number of ways. Common customer touch points include: Sales. Marketing and advertising. Internet/www/email. Field services. Customer call centers and supports. THE IDEAL CRM Features that an ideal CRM should provide are: Constantly show real-time behaviour predictions such as customers’ likelihood to churn, accept up sell and cross-sell opportunities, and exhibit payment risks Recommend offers and actions in real-time, based on customers’ predictive profiles, to increase customer interaction efficiency Automatically creates highly accurate models predicting critical customer behaviours such as bad debt, responses to part offers/actions, and churn Store predictive knowledge in an active repository – customer Knowledge Hub – accessible by collaborates and front-office systems Enable marketers to manage and optimise push/pull campaigns through the predictive knowledge enterprise portal, 24*7 Marketer, across channels handled. CLASSIFICATION, TABULATION, ANALYSIS & INTERPRETATION OF PRIMARY DATA 39 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS GRAPH-1 MONTHLY TURN OVER OF RESPONDENTS Monthly Turnover No of respondents less than 10000 10 10000-20000 20 20000-30000 30 30000 and above 40 RESPONDENTS MONTHLY TURN OVER 40 40 35 30 25 20 15 10 5 0 1 10 20 30 Monthly Turnover less than 10000 10000-20000 20000-30000 30000 and above OBSERVATION: In the above analysis 10% of respondent’s monthly income is between less than 10000, 20% of monthly income is between 10000-20000, 30% of monthly income is between 2000030000 & 40% of respondent’s monthly income 30000 & above 40 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS GRAPH 2 AGE GROUP OF RESPONDENT Respondent Age Group below 20 years 20-35 years 35-45 years above 45 years 5 35 40 20 RESPONDENT AGE GROUP 45 40 35 30 25 20 15 10 5 0 1 5 20 Respondent Age Group below 20 years 20-35 years 35-45 years above 45 years 35 40 41 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS OBSERVATION: Inn the above analysis 5% belongs to the age group of below 20 years, 35% belongs to the age group of 20-35 years, 40% belongs to the age group of 35-45 years, 20% belong to the age group 45 above years GRAPH-3 SALE OF BISCUITS Opinion of the respondents Yes No Total No of respondents 100 0 100 Percentage 100% 0% 100 42 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS Respondent opinion about sell the Biscults 100 80 60 40 20 0 0 yes no 100 OSERVATION: From the above shows that all the respondents sell biscuits GRAPH-4 BRAND PREFERANCE 43 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS Respondent opinion about preference of biscuit brand Sun fest Britannia Parle Others 35 20 25 20 Respondent Brand preference of Biscuits 20 35 Sunfest Britannia Parle Others 25 20 OBSERVATION: From the above Table we can observe that, out of 100 respondents about 35% of them prefer Sunfeast, about 25% of the respondents prefer Britannia, and 20% of respondents prefer Parle and other biscuits. From the above table and analysis we can infer that, most of the respondents prefer Sunfeast. GRAPH-5 44 RETAILER PREFERENCE TOWARDS SUNFEAST BISCUITS PURCHASE OF SUNFEAST BISCUITS Sl. No. 1 2 3 Sub Brands Sunfeast milkly magic Sunfeast marie Sunfeast glucose No.of Respondents 79 68 63 Percentage 21% 18.37% 17.02% 45