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Project Study Report On Training Undertaken at

Competitive Analysis of Yippee Noodles.


Submitted in partial fulfillment for the Award of Post-Graduation Degree in Management

LACHOO MEMORIAL COLLEGE OF SCIENCE & TECHNOLOGY, JODHPUR


Submitted By:

Dipanshu Mangal MBA 3rd Sem.

Corporate Guide: Mr. Jai PrakashLata Area Executtive ITC Ltd., Jaipur

Faculty Guide: Dr. Ashish M. Mathur DMS, LMC, Jodhpur

2011-2012

DECLARATION

I hereby declare that this project report entitled Competitive Analysis of Yippee Noodles. is a Bonafide record of work done independently by me during the course of summer project and it has not previously formed the basis for the award to me for any degree associate ship, fellowship or other similar title, of any other institute/society.

Date:

Dipanshu Mangal

ACKNOWLEDGEMENT

I,here with, take this opportunity to extent a sincere token of thanks to Dr. R. L. Dadhich, Director, DMS, Lachoo Memorial College Of Science & Technology Jodhpur , for all the guidance, support and help throughout my studies. This study is also one of the outcomes of valuable, continuous and systematic guidance of Dr. Ashish M. Mathur, Faculty Lachoo Memorial College of Science & Technology Jodhpur, His support and constant help has made this study possible. I am grateful for his invaluable support. At the outset of a 45 Days long project study, I take this most awaited moment to express my sincere and heartfelt gratitude to ITC LTD for giving me the opportunity to do such a competent project. I am left with no words to express my thanks for its gracious favors and valuable experiences. This project would have been incomplete without the help and guidance of Mr. JAI PRKASH LATA (Area Executive) for his tireless efforts to help me. His presence by my side acted as a fountain of confidence that helped me to work with zeal for the success of this project. My experience of the project was an endeavor of many people and hence they are the torchbearers through whom I could see the glimpse of the working style and scenario prevalent in the industry. I am very thankful to all the suggestions and technical knowledge and skills which were embodied into me by the valuable support of employees of ITC Ltd. I take pride in mentioning the mental, moral and physical encouragement provided by my parents and my sister. I would also like to mention many thanks to all my friends for their continuous support and help during the project study.

Dipanshu Mangal

Serial No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Executive Summary FMCG Sector in India

Content
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Page No.

Profile Of The Industry Profile Of The Organization Introduction To Yippee Objective Of The Study Research Methodology Limitation Of the Study Data Analysis And Interpretation Finding Suggestion Conclusion SWOT Analysis Bibliography Annexure

13 15 20 23 24 29 30 54 55 56 58 59 61

EXECUTIVE SUMMARY

With increasing foray into various category of food business ITC needs to determine the best way to serve the grocery outlets and build equally strong distribution system that match the long term growth plans of the company in the FMCG business.

This report provides competitive analysis of noodles industry of ITC and its vis--vis nestle. The scope of the study is restricted to Jaipur city. The analysis is based on retailer questionnaire. Various parameter such as credit term quality of service, delivery system, knowledge of salesman etc. have been studied.

The result bring out Nestle as the preferred company, primarily on account high quality of services and consumer demand. The report concluded with recommendation to increase the brand image of the Yippee noodles.

FMCG SECTOR IN INDIA


FMCG is an acronym for Fast Moving Consumer Goods, which refers to things that we buy from local supermarket on daily basis, the thing that have high turnover and are relatively cheaper. A major portion of the monthly budget of each household is reserved for FMCG product. The volume of money circulated in the economy against FMCG product is very high. Competition in FMCG sector is very high resulting in high pressure on margins. FMCG companies maintain intense distribution network. Companies spend a large portion of their budget on maintaining distribution network. New entrants who wish to bring their product in the national level need to invest huge sums of money on the promoting brands. Manufacturing can be outsourced. A recent phenomenon in the sector was entry of multinational and cheaper import. Also the market is more pressurized with presence of local player in rural area and state brand. 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 cost 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, pressure an opportunity to markers of branded products to convert consumer to branded product. Growth is also likely to come from consumer upgrading in the matured product categories. With 20 million people expected to shift to process and package food by 2010, India around US $ 28 billion of investment in the food-processing industry.

Automatic Investment approval(including foreign technology agreement within specific norms). Up to 100 percent foreign equity or 100 percent for NRI and overseas corporate Bodies (OCBs) investment is allowed for most of the food processing sector. FMCG sector generate 5% of total factory employment in the country and it is creating employment for three million people, especially in small town and rural India. Consumer Demographics & Buying Pattern of Indian Consumer With a population of 1bn people, India is a big market for FMCG companies. Around 70% of the total households in India reside in the rural areas. The total number of rural households is expected to rise from 150 m to 165 m in 2012 which represent the largest potential market in the world.

Rural and Urban potential


Urban Population Distribution in 2001-02(m House Hold) Population 2009-10(M house Hold) % Distribution(2001-02) Market(Town/Village) 53 71 28 3870 Rural 135 156 72 635000

An average Indian spends around 40% of his income on groceries and 8% on personal care product. A larger part of the total spending pie along with a large base(in terms of population) makes India one of the largest FMCG markets.

Spending Pattern(%)
28% 4% 11% Saving 9% 8% other Clothing Personal Care Grocery 40% Entertainment

Changing Life Style: Rising per capita income increased literacy and rapid urbanization have caused rapid growth and change in the demand pattern. The rising aspiration levels, increase in spending power has led to a change in the consumption pattern. Apart from the demand for basic goods, convenience and luxury goods are growing at fast pace too. The urban population between the ages of 15 to 34 year is expected to increase from 107m in 2001 to 141m in 2012, an increase of 32%. This would unleash a latent demand with more money a new mindset. With growing income at both the rural and the urban level, the market potential is expected to expand further. FMCG is one sector which cater to the daily and more basic needs of consumer and therefore dont have to run out of focus. From oral care products to packed food to detergent, soap, mosquito coil etc, are the various categories of products that FMCG market makes available to lath of consumer across the country. Initially, Indian buyers were a bit conservative partly due to lesser disposable income and partly due to fewer competitive and more variety of product. But since almost a decade, brand like nestle, horlicks, Pepsi, Coke, and various ITC Brand, Dabur products etc, have made a stern attempt in providing higher quality product with relatively competitive prices, making Indian consumer enjoy brands which deliver high quality and adhere to global standard. The plethora of such brands was thrown open to Indian consumer during 1990s which witnessed a rise and growth in FMCG industry. But from 2000 onward there has been a negative growth of this industry. The reasons are manifold. Firstly, yesterdays amenities started becoming necessity like, mobile phones, cars, branded clothes, accessories.
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Secondly, the disposable income of average Indian consumer rose sharply within the past 5 Year Finally, availability of various financial aides made every reasonable and expensive purchase, easy thereby giving the Indian consumer an unlimited exposure to experience the same. The sales of various brand belonging to key players and the overall FMCG industry performance have picked up and the intense sales promotional efforts, cut throat competitive strategies, stronger distribution efforts have helped various brands penetrate deeper into the market and increased sales. Today, rural Indian consumer market has by far become the highest revenue generator for many of the FMCG product companies and availability of variety of range has allowed todays Indian Consumer to analyze and judge each product accurately and make an idea purchase decision.

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 56,500crore in 2005 to Rs 98,100crores in 2011. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments

Growth Prospect
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
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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%.

Indian Competitiveness and Comparison with the World Markets

The following factors make India a competitive player in FMCG sector: 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.

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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 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.

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Top 10 FMCG Companies

FMCG sector is an ever growing sector and is currently in a boom phase. There are many jobs in FMCG sector at different levels like sales, supply chain, manager, operations, purchasing, supervisor, administration, general management, product development, HR, Finance and marketing. FMCG sector is famous for jobs that are not only well paying but also gives the best perks and bonuses. Freshers are looking for jobs in FMCGsector as these jobs will give them the best career in the industry.

S. NO. 1. 2. 3. 4. 5. 6. 7. 8 9. 10.

Companies Hindustan Unilever Ltd. ITC (Indian Tobacco Company) Nestl India GCMMF (AMUL) Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries

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PROFILE OF THE INDUSTRY

The Rs 1,300-crore instant noodles market in India is in a state of war, with three new players having thrown their hats in the ring over the last one year. The year 2010 marked the end of the instant noodle market as we know it. For two decades, consumers had a single brand of noodles to dig into Maggi giving Nestle over 85 per cent share of the market. Players such as Indo-Nissins Top Ramen, Capital Foods Chings Secret and Smith & Jones and CG Foods Wai-Wai tried to make a dent but failed to take up more than 10-15 per cent of the Rs 1,300-crore market.

Now food companies seem to have woken up to the potential of the category growing at a consistent 20 per cent for the last few years. Three new entrants have thrown their hats into the ring over the last one year: Hindustan Unilever (HUL), GlaxoSmithKline (GSK) and ITC with Knorr Soupy Noodles, Horlicks Foodles and Sunfeast Yippee! respectively. ITCs over Rs 2,500-crore food business (with blockbusters such as Bingo for finger snacks, Aashirvaad for staples and Sunfeast for packaged foods) has a supply chain beginning right at the farm, giving it cost and quality advantages. This, among other things, helped catapult it to the league of top companies in packaged foods such as HUL and Nestle in the country in less than a decade. It is not new to marketing offensive either, having shaken PepsiCo Frito-Lays stranglehold on the packaged snack market with Bingo. In biscuits, ITC has claimed the third spot, with Sunfeast competing against the bestseller brands of Britannia and Parle that have been around for 30 to 40 years in the market. Yet, till now ITC was challenging the incumbents with no new competitor in the ring. In instant noodles, however, it has eager company. Both HUL and GSK have made flamboyant entries and are playing to their strengths distribution width and big bang media presence while Nestle has been stirred out of its complacency as well. CG Foods is also ramping up its production and distribution beyond eastern India.

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For its part, ITC is targeting a total of 5lakh outlets. While none of the new players have reached their full distribution strength, ITC would have to look out for HUL and Nestles potential spread. HUL covers up to 6.5 million outlets out of a total 7.5 million outlets in India. Even Nestle spent years perfecting Maggis masala flavor so that it appeals to all the regions. Of course, incumbent Maggi is not sitting idle. In 2010, it reinforced its emotional connect with consumers through an interactive campaign and then went on to launch more variants of its noodles. Its previous attempts at healthier Atta and rice noodles may not have found many repeat customers but the customer today is in a mood to experiment. The task for ITC, therefore, will not be limited to fighting competition. Satisfying the demand of the consumer who loves to experiment will be a much bigger challenge.

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PROFILE OF THE ORGANIZATION


ITC is one of India's foremost private sector companies with a market capitalization of over US $ 30 billion and a turnover of US $ 6 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 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 ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This
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transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Ltd, provides IT services and solutions to leading global customers. ITC InfoTech has carved a niche for itself by addressing customer challenges through innovative IT solutions. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 26,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 4, 08,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value for the Nation, for the Shareholder."

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ITC BUSINESS PORT FOLIO

ITC

FMCG : Cigarettes and Other Hotels

Agri Business

Paper

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ITCs 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 ITCs various businesses.

Create distributed leadership within the organisation by nurturing talented and focused top management teams for each of the businesses.

Continuously strengthen and refine Corporate Governance processes and systems to catalyze the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability.

FOOD DIVISION

Ready To Eat Foods Staples Confectionery Snack Foods

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Introduction To Yippee

ITC has launched noodles under its Sunfeast brand in Chennai, Coimbatore and Kerala. Of late, FMCG companies like GlaxoSmithKline and Hindustan Unilever and private labels like Big Bazaar's Tasty Treat have entered this segment.

ITCs Sunfeast Yippee! Says, Instant noodles was a one-brand category so far and most consumers bought out of habit because there was hardly a choice. So, we had to make them stop and think about the purchase they made.
The new entrants claim market shares of 3-7 per cent in their first few months of launch in south India. Nestle Maggis overall market share, meanwhile, has dipped from 90 per cent in 2009 to 85-86 per cent in 2010. The category penetration is low as well, 25 per cent of the population only. There is scope for these players to grow simultaneously.

ITC launched Sunfeast Yippee! Instant noodles in December 2010, and differentiated it on product attributes. ITC started working on instant noodles a couple of years back. Pasta preceded noodles as it gave the brand a head start with hardly any competition around. It continues to be a small section of the instant foods market as pasta is yet to establish itself as a mainstream food option in India. Yippie comes in round stacks, as opposed to the usual rectangular ones to ensure longer noodles strands. Also it resists clumping when served. Yippee! would need to evolve its communication further , Right now, it is in the stage of Who am I, introducing the brand, its characteristics. Going forward, it is evolving the campaign and lending a clear personality to the brand.

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PRODUCT

Competitor

Maggi

Nestle

Foodles

Horlicks

Knorr Soupy Noodles

HUL

Indo-Nissin

Top Ramen

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OBJECTIVE OF THE STUDY

Primary
To study distribution practices of the ITC & Contrast with nestle and other companies To identify factors influencing retailers brand choice. To examine comparative service quality across retailer base. To provide necessary policy implications to augment brand image of Yippee after research is carried out.

Secondary
To ensure availability and visibility of ITCs Noodles at Retail outlets. To offer suggestions for increasing market-share of ITC in Noodles Industry

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RESEARCH METHODOLOGY

Formulation of Hypothesis

Frequency of DS visit to the outlets: - sample has been taken from the normal

population.

Preference of the brand: - sample has been taken from the normal.

Is DS knowledgeable: - sample has been taken from the normal? DS handling of the grievance: - samples have been taken from the normal.

Time gap between order captured and delivery: - samples have been taken from the

normal.

Payment terms: - sample has been taken from the normal.

Cash Discount: - sample has been taken from the normal.

Credit period: - sample has been taken from the normal.

Stock replacement: - sample has been taken from the normal.

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RESEARCH DESIGN

This study is an Exploratory Research (Both qualitative & quantitative). The primary data is collected mainly with the aid of structured questionnaire & personal interview conducted with retailers (Attached as annexure). Benefit to Company In Knowing the competitors strategy In knowing the retailers perception about companys Brand. In knowing deficiencies in companys distribution channel

Benefit to Retailer Retailer can give their suggestion to the company that without this kind of research they were not able to communicate The can get better services if earlier they were not getting the upto their expectation. Benefit to Researcher This will help the researcher in knowing the actual problems the retailers are going through and comparison of the services provided to retailer by other companies.

EXPLORATORY RESEARCH

Exploratory Research is conducted when one is seeking insight into the general nature of a situation, the possible decision alternative, and the relevant variable that need to be considered. While conducting our study we used exploratory research, it was flexible and was aimed at identifying all the attributes a retailer might look while comparing ITC with our competitors nestle and others.

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RESEARCH METHOD

I have used both qualitative and quantitative research technique to carry out the research. Qualitative research technique has been used to find out the retailers opinion and suggestion and satisfaction through in-depth interview and focus groups. The nature of this type of research is exploratory and open-ended. Quantitative research has been done using the questionnaire. The questionnaires have been used to find out the factors where ITC is lagging behind nestle.

PARTICIPANTS
Owners of kirana Stores, General Stores, Departmental Stores, Convenience Store & Wholesale outlets. Sources of Data Data is primary in nature, collected through surveying and interacting with retail outlets of Jhotwara, Vaishallinagar, Tata nagar, Sodala, Sirsi Road, Niwaru road, Pratapnagar,Malviya Nagar of Jaipur. Method The communication approach Structured Questioning i.e. personal interview with the aid of printed questionnaire (Attached as annexure). The questionnaire feedback has been analyzed using MS-Excel 2007. Secondary data is obtained through internet.

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Questionnaire Design Before questionnaire was designed, a pilot test was conducted for at 4 days covering 85 outlets, thereafter the desired questionnaire was designed. The questionnaire contains both close ended and open ended questions. Fixed choices are given to retailer and they had to select one out of that given choice but along with it open ended questions where retailers were free to point their opinion were also used in the questionnaire. The questionnaire contains a maximum of 15 questions.

Sample Design Retailer sample size: 453 retail outlets. Sampling technique: Convenience Sampling The division between type of outlet is as follow: Kirana& General Stores Departmental Stores Wholesalers Convenience stores

Time Frame: The data collection was done over a period of 30 days, by visiting various Kirana Stores & General Stores, Departmental Stores, Convenience Stores & Wholesale outlets serviced by ITC in Jaipur.

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Scope of Study: The research will help ITC to find out the factors that would help in increasing their net sales & earning. It will help ITC to review their quality, promotional method. It will explore the way to improve Retailer satisfaction. It will also explore the way to come up as increase in the market share in noodles industry.

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LIMITATION OF THE STUDY


Non response: Out of the total respondent surveyed some of them were not cooperative due to which accurate prediction was not possible Interviewer Error: These can occur when the interviewer incorrectly record the responses from the survey. Biased Response: The responses given by the respondent are assumed to be true however chance of getting false and biased information cant be look fully. Confined Study: The study was confined to the Jaipur city only.

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Data Analysis and interpretation


Data was collected through visiting and surveying 453 outlets (Departmental Stores. Grocery Stores, Convenience Stores, Wholesale outlets) serviced by ITC in Jaipur. The outlets covered were present in area covered by two WDs of ITC, namely S.K. MonutradePvt .Ltd. and Khanlwal WDS. The objective of the focused data collection was to get a clearer comparative picture. Area Covered Sirsi road Vaishalinagar Pittal factory area Jhotwara Khatipura Mansarovar Malviya Nagar Jagatpura

Area of Questioning Companies stocked & preferred company. Availability of product. Frequency of salesman visit. Cash and credit term. Weekly sales. Stock Replacement. Trade scheme and consumer promotion.

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1. SALESMENS VISIT TO THE MARKET

HUL

380

DS Visit NESTLE 338

ITC

453

100

200

300

400

500

Out of 453 outlets covered, since outlets were visited with the salesmen of ITCs WD, so all453 outlets are visited by the ITCs salesmen, and nestle DS visits 338 outlets and HUL DS visits 380 outlets. Since in rural area at many outlets the DS of nestle and HUL do not visit the outlets.

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2. DS Visit in a week

more Thrice a week Twice a week once a week 0

0 0 0 0 0 0 28 HUL 50 51 302 287 50 100 150 200 250 300 350 400 450 Nestle ITC 453 500

Once a week ITC Nestle Hul 453 387 302

Twice a week 0 51 50

Thrice a week More 0 0 28 0 0 0

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3. Availability of Product

HUL

170

Nestle

453

Availability of product

ITC

250 0 100 200 300 400 500

ITC Availability of Product 250

NESTLE 453

HUL 170

Out of 453 outlets, In case of ITC DS visit all the outlets but only 253 outlets buy the yippee noodles because of consumer demand. In case of nestle whether the salesmen visit or not but all outlets keep the stock of nestle due to the high consumer demand. Only a70 outlets keep the stock of HULs noodles.

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4. Preferred company

Prefered Company
HUL 5% 0%

ITC 20%

NESTLE 75%

Total outlets 453

ITC 90

NESTLE 340

HUL 23

The above data clearly indicate that Nestle is most preferred company by the outlets due to the consumer demand and a strong brand image of the company. Some outlets prefer the ITC and HUL just because of non-reach of the DS of the Nestle.

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5. FACTORS AFFECTING PREFERENCE AMONG RETAILERS

TOTAL OUTLETS FAVORONG ITC 90

Consumer Schemes Demand 15 30

Price Differentiation 5

Good Services

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ITC
Consumer Demand 17%

Good Services 44%

Schemes 33%

Price Differentiation 6%

Consumer Demand is a major concern ITC must work on it to increase the preference of the retailer as well as the consumer.

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TOTAL OUTLETS FAVORONG NESTLE 340

Consumer Schemes Demand

Price Differentiation

Good Services

320

20

Schemes 7%

Consumer Demand 93%

Consumer Demand of the Nestle is very high,soretailers prefer to keep the stock of the Nestle. Scheme and price differentiation does not matter if consumer is very keen to buy the product

Consolidated Data

Consumer Schemes Demand

Price Differentiation

Good Services

453

280

30

80

63

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Good service 14% Price Differentiation 17% Schemes 7%

Consumer Demand 62%

The consolidated data shows that Retailers buy what consumer want. If consumer is not willing to buy the product there is no use of that product for retailer.

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6. Grievance handling by DS.


ITC Total 453 Yes 350 No 103 Total 338 Nestle yes 290 no 48 Total 380 HUL Yes 300 No 80

ITC
No 23%

Yes 77%

Nestle
No 15%

Yes 85%

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HUL
No 21%

Yes 79%

During the survey it was found that as compared to the DS of ITC, the DS of NESTLE are more efficient in handling the grievances of retailer. However the salesman of ITC is knowledgeable according to the response of the retailers. A frequent complaint is the result of delay in the delivery and order capturing. There must be a training program for the retailers to improve their knowledge and skills about the product and selling.

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7. Time Gap between order captured and delivery


250 220 200 200 180

150 120 100 100 60 50 0 0 Same day 1 Day 2 Day 3 Day More 0 0 63 50 60 50 28 ITC Nestle HUL 40

ITC Same day 1 Day 2 Day 3 Day More 0 120 220 63 50

Nestle 0 200 60 50 28

HUL 0 100 180 60 40

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ITC
Same day 0% More 12% 3 Day 14%

1 Day 26%

2 Day 48%

Nestle
Same day 0% More 8% 3 Day 15%

2 Day 18%

1 Day 59%

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HUL
More 10% 3 Day 15%

Same day 0%

1 Day 27%

2 Day 48%

The above result shows that nestle is more efficient than ITC in delivery system as the delivery period of nestle is one day in most of the responses and that of ITC take two days.

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8. One Time Full Delivery


Yes ITC Nestle HUL 210 200 250 No 243 138 130

ITC

No 54%

Yes 46%

NESTLE
No 41% Yes 59%

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HUL
No 34%

Yes 66%

The one time full delivery should be taken into care. Retailer complaints that they are never delivered with complete order or order given is out of stock.

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9. Payment Term
ITC Only Cash Only Credit Cash + Credit 159 172 122 Nestle 250 30 58 HUL 200 120 60

Payment Term Of ITC

Cash+Credit 27%

Only Cash 35%

Only Credit 38%

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Payment Term Of Nestle


Cash+Credit 18%

Only Credit 9%

Only Cash 73%

Payment Term Of HUL


Cash+Credit 16% Only Cash 52%

Only Credit 32%

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10.Cash Discount
Yes ITC Nestle HUL 0 338 250 No 453 0 130

Cash Discount ITC


0

Yes No 100%

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Cash Discount Nestle


0

Yes

100%

Cash Discount HUL


34%

Yes No 66%

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11.Credit Period One week ITC Nestle Hul 170 50 110 Two week 80 30 50 Three week 44 8 20 More 0 0 0

Credit period of ITC


Three week 15% Two week 27%

One week 58%

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Credit period of Nestle


Three week 10%

Two week 34%

One week 56%

Credit period of HUL


Three week 11%

Two week 28%

One week 61%

The credit period is extended for 1 week only in all companies. But some time company provides two or three week to its premium customer. So credit policy is flexible in almost all companies

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12.Satisfaction on D&D(Damage and Destroy) replacement.


Yes ITC Nestle HUL 295 250 250 No 158 88 130

ITC

No 35%

Yes 65%

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NESTLE
No 26%

Yes 74%

HUL

No 35%

Yes 65%

The replacement of the expiry or damaged Noodles is also a thing that needs a focus. The replacement of Nestle and HUL is more frequent than ITC. Most of the retailer refuse to place any order just because they were having a lot of stock to be replaced and told that they will place order only when the stock would be replaced

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13.Managing Stock Out Total Outlets Contact Ds Contact WD directly 453 135 90 225 Other

Managing Stock Out

Other 50%

Contact Ds 30%

Contact WD directly 20%

In the situation of stock out, nearly 5o% outlets point out that they wait for next visit by DS or buy substitute (other) where as 23% said they purchase product from secondary wholesalers.

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FINDINGS Important factors

Credit System

Promotion

Margin

FOOd
Wastage Distribution Network

Stock out

During the project, it was found most of the retailers were complaining against the supply of the expired stock by ITC WDs.
In the area I visited the market share of nestle is four times more than ITC. As far as the retailerspreference towards the brand is concerned, they clearly favor Nestle, solely on the basis of consumer demand. Nestle gives cash discount 1-2% to retailers.

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Suggestions And Policy Implications

ITC can put some small toys into Yippee to attract childrens. ITC should distribute free cooked Yippee noodles it will give correct feedback from market. ITC can launch other flavors of Yippee. ITC should give hangers to retailers for hang Yippee ladi pack. Focus more on advertisement as some consumers are not aware of the product Opt for a differentiation strategy because even if people buy yippee, they demand it as maggi dena. Improve the taste of classic flavor. Change its packaging style as its similar to Maggi. Retailer should be provided some attractive schemes. Schools can also be targeted for making awareness among the kids because they are the major consumer. POP and display activities should be on regular basis. There should be training for salesman because salesman also sale the Yippee with name Maggi. Reward to highest seller (wholeseller/retailer) of Yippee. Retailer should be provided with a helpline no. so that they can solve their problem. Cash discount should be given to the retailer to encourage prompt cash payment.

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CONCLUSION
The skeleton of distribution system is same for all the companies. Company tries very hard to make a difference at some point to get the competitive advantage. ITC has a very strong distribution network for their cigarette brand and they are using this network to push their new biscuit brand. Credit system also depends upon the position of the product in the market. In Jaipur market, nestle is clearly the leading brand in terms of consumers as well as retailers preference. With emergence of various players like Horlicks, HUL the competition has toughened in noodles industry these player gives good margin to the retailer. But after the introduction of the yippee there is constant fall in the sale of the maggi, however magi is still most preferred brand but the market share in 2010 it was 90% has come down to 75%.

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Work Process
To get rid of old stock being delivered ITC work upon setting manufacturing unit near Jaipur which will make stock reach the market soon and will also reduce dissatisfaction level among the retailers as well as consumer against expired stock. D & D (Damage & Destroy) tracking should be undertaken for retail outlets also. This would help to ascertain outlets where are stocks are not moving and also help to understand the stock trend for particular routes. Display space should be purchased because most of the outlets complaints that company does not provide display and nestle and other company provides so we sell their product. The high visibility of Yippee must be ensured.

For retailers Retailer think about the GMROI(Gross margin return on investment) and they
promote the brand which provide them highest. They expect return in the form of profit margin, company schemes, window display and references of the shop. Among these, company scheme make the difference and are highest source of motivation after profit margin.

There is a greater need to understand the retailers behavior considering them


as a team working for the company may help them to attached with the company. There should be feeling of belongingness to the company in inner of the retailers. Selling values club for retailer so that they may exchange views with the company and help in understanding consumer behavior.

New promotional schemes should be introduced to attract more retailers &


encourage them to push our brand to consumer.

Cash discount should be given to retailers to encourage cash payment. Occasional discount: The Company may go for occasional discount offer or
price off from time to time specially during festival.
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SWOT ANALYSIS

Strength
Wide expanded distribution network. Sales and distribution activity is done in a timely manner. Well established Image of ITC. Regular supervision of market. Direct dealing with retailer. D&D policy (Damage and Destroy).

Weakness
Promotion strategy of yippee. Brand image of yippee. Less flavor availability. Packaging is not effective. Non availability of family pack.

Opportunity
Still the rural market is uncovered. Scope for target oriented sale offer for retailer. ITC can introduce a family pack.

Threat
Pre-Established Strong Brand Image of Maggi. Additional discount and schemes offered by other companies.

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Bibliography
Reference book C.R. Kothari Research methodology: methods and techniques New Age International Pvt. Ltd. 1985. Marketing Management Philip Kotler, NorthWestern University.
Marketing Research by G.C.Beri.

Website Google search: (www.google.com) Wikipedia search: (www.wikipedia.com) Yahoo search: www.yahoo.com www.itcportal.com http://www.itcportal.com/sets/food_frameset.html http://managementfunda.com/tag/sunfeast

Newspapers
Times Of India The Economic Times The Hindu

Reference Journals
India Today 4 P`s of Marketing

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RETAILER QUESTIONNAIRE
Outlet Name _______________________________ Date________________ Location ___________________________________ 1. Which Noodles company do you stock ? ITC nestle Horlicks Hul________

2. Which is your most favored company? ITC Hul Nestle Horlicks________

Why (Give triggers:- Consumer demand, Scheme, price difference etc.) ____________________________

3. How often does DS Visit you? ITC Once a week Hul Once a wee Nestle Once a week twice a week thrice a week More than thrice twice a week thrice a week More than thrice twice a week Thrice a week More than thrice

4. Is The DS knowledgeable? And able to answer all your queries? ITC Yes No Hul Yes No Nestle Yes No Horlicks Yes No

5. Does DS Redress your grievances satisfactorily? ITC Hul 60 Nestle Horliks

Yes

No

Yes

No

Yes

No

Yes

No

6. What is the time gap between order capture and delivery? ITC 1 Day Hul 1 Day Nestle 1 Day 2 Days 3 day > 3 Days 2 Days 3 day > 3 Day 2 Days 3 day > 3 Day

7. How is the order delivered to you? ITC Hawker Hul Hawker Nestle Hawker Delivery Van Horlicks Hawker Delivery Van Other_______ Other_______ Delivery Van Other________ Delivery Van Other_______

8. Are there any companys products being carried by DS/delivery van? Yes No

If yes then which product ________________.

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9. Are your order always received on time? ITC Yes No Hul Yes Nestle No Yes Horlicks No Yes No

10. What are the payment terms? ITC Only Cash Hul Only Cash Nestle Only Cash Only Credit Cash + credit Only Credit Cash + credit Only Credit Cash + credit

If cash, do you get any cash discount? Yes No

If credit then what is credit period? 1 Week 2 Week 3 Week > 3 Week

11. How long does your stock last? ITC 1 Week Hul 1 Week Nestle 1 Week 2 Week 3 Week > 3 Week 2 Week 3 Week > 3 Week 2 Week 3 Week > 3 Week

12. Do the companies do any stock replacement? ITC Yes No Hul Yes No Nestle Yes No Horlicks Yes No

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If yes the what are the replacement norms__________________ 13. How do you manage your stock out? Contact to D Contact to WD Other__________

How long does the replenishment take? __________________________ 14. What is your monthly sale of? ITC _____________________ Hul _________________ Nestle____________________ Horlicks ___________________ 15. What is margin you receive ? ITC____________________ Hul________________ Nestle___________________ Horlicks __________________

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