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Application of E-commerce in B2C - A Case Study of Haldiram's

Application of E-commerce in B2C - A Case Study of Haldiram's

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Published by Abhishek Kumar
Scope and application of E-commerce in a B2C organization such as Haldiram's
Scope and application of E-commerce in a B2C organization such as Haldiram's

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HALIDRAM’S ANALYSIS FOR E-COMMERCE

A Document by: Vishakha Chopra and Abhishek Kumar

This document is an analysis of the sweet and namkeen

shop haldiram, and
how e commerce activity in the company will contribute to its enhancement

1|Page

Contents
Executive Summary ................................................................................................... 3 Market Analysis : HALDIRAM‟S............................................................................... 4 Background……………………………………………………………………………………………….4 Marketing Mix (4P Analysis)………………………………………………………………………6 Products ............................................................................................................. 6 Pricing ................................................................................................................ 7 Place ................................................................................................................... 8 Promotion .......................................................................................................... 8 SWOT Analysis…………………………………………………………………………………………10 Porter‟s Five Forces Model Analysis……………………………………………………………11 1) Threat of Intense Segment Rivalry (Industry Competitors) ........................ 11 2) Threat of New Entrants ................................................................................ 11 3) Threat of Substitute Products ...................................................................... 11 4) Threat of Buyer‟s Growing Bargaining Power .............................................12 5) Threat of Supplier‟s Growing Bargaining Power .........................................12 Competitors of Haldiram‟s (in Namkeen Segment) ................................................13 Levels of Competition………………………………………………………………………………. 13 A. Brand Competition ....................................................................................... 13 B. Industry Competition: ..................................................................................14 C. Form Competition: .......................................................................................14 D. Generic competition .....................................................................................14 E-commerce Rationale ............................................................................................. 15 1. Easy reach to a fast growing online community ........................................ 15 2. 3. Reduces Costs for Inventory Management ............................................. 15 Reaching Global Market ..........................................................................16

..........16 E-commerce serves as an “equalizer” .................. 7.......................................................... 22 References .....................................................” ........................................21 Give Customers a Choice ........................19 Site analysis of the company………………………………………………………………………19 Recommendations for E-commerce activity : .................... 23 .................................................................................................................................. 17 E-commerce critique and recommendations ......................................... 20 Phase 3: Implement the electronic business solution ......................21 Transaction Software .............................. 9...............................................21 Security ..... 20       Build Trust and customer loyality : ........................... 17 Improved customer service ........................21 Site Maintenance ............................................... 6...... 17 E-commerce allows “network production................................................................ ............. 5........................................................................21 Provide Added Value ...............................................16 Reduce Advertising Costs .................................................. 8............ 12.............................................................................................. 10..............16 E-commerce makes “mass customization” possible ........................................... as well as easy to find products........16 Reduces Costs To Establish Store Front ............................. 20 Phase 2: Select the technology infrastructure ........................................................ 17 Reduced costs ....................................................... 11...............................16 Faster buying/selling procedure.................................................... 20 Phase 1: Identify the business opportunity ..............................................2|Page 4.......... Monitoring the Consumers‟ Buying Habit and Interest ........................................................................................21 Conclusion ..................................

India. Thus adopting Haldiram‟s for this study seems to be highly suitable. based in Delhi. but still does not have a web-page where consumers can go and make purchase electronically. having redefined its business model over and over again to keep up with the changing market dynamics and consumer behaviour.3|Page Executive Summary This project has been taken up to study a B2C (Business to consumer) company which does not have practice e-commerce as its major business transaction. packed sweets and confectionaries being their niche products. Haldiram‟s offers an assortment of products. Haldiram‟s story presents the perfect case of coming of age of a small-time business and adopting to the changing tides of time. For this purpose our group has selected Haldiram‟s brand. Having become a house-hold name already. Australia and several European countries. The methodology used in this study is to make an analysis of the company and then gradually move on to other aspects such as various benefits and scopes of implementation of the e-commerce practices. The brand boasts of exporting its products to USA and other countries with strong Indian diaspora and over the time has opened flagship stores all over the world including Canada. which is the market leader of its segment in India. Haldiram's is one of India's largest sweets and snacks manufacturers. .

expanded the business by establishing a small manufacturing unit for sweets and namkeens in Kolkata. a small district in Rajasthan. 'Bhujia sev.  As demand for Haldiram's products increased. the name 'Haldiram's Bhujiawala' was used for the first time. In 1941.4|Page Market Analysis : HALDIRAM’S BACKGROUND  In 1937. In 1995. (popularly known as Haldiram). the . In 1983. In 1997. The outlet became very popular not only among the Delhiites but also among tourists visiting Delhi. Prabhu Shankar Agarwal (Prabhu). In 1992. a restaurant was opened in New Delhi. The success of this unit motivated Prabhu to upgrade its machinery to improve the quality of its products. a large manufacturing unit was set up in Nagpur in the state of Maharashtra (India). A year later. opened a small sweet shop in Bikaner.  In 1950. Ganga Bishen Agarwal. a manufacturing unit with a retail outlet attached to it was set up in the outskirts of Delhi.  Haldiram's was able to achieve significant growth during the 1980s and 1990s.' a salty snack prepared by Ganga Bishen. along with his father Rameshwar Lal Agarwal (son of Ganga Bishen). a retail outlet was set up in New Delhi. In 1970. Bikaner had a large number of sweet shops selling sweets as well as namkeens. was very popular among the residents of Bikaner and was also purchased by tourists coming to Bikaner. realizing the potential of namkeens. Haldiram's syrups and crushes were successfully launched in the Indian market. it was decided to scale up the company's manufacturing and distribution activities.

 In the mid 1990s. Canada. To add potato products to its existing product portfolio. "To sustain in the competitive market.apeda. Nepal. Japan and Thailand. but also in several other countries. New Zealand.com quoted some of the company's strengths. All its food items were prepared and packaged in a very hygienic environment. competitive price with a special emphasis on consumers satisfaction and its lingering taste is amongst the best available in the world. dairy products. Sri Lanka. UAE. Haldiram's products reached millions of consumers not only in India. UK. At the beginning of the 21st century. machinery was imported from the US.  Analysts felt that the growing popularity of Haldiram's products could be attributed to its constant focus on all the elements of the marketing mix. Haldiram's maintained high quality standards at every stage of the production process. Haldiram's has endeavored stress on its product quality. Australia. including the US. sharbats and ice creams to its portfolio." . An article posted on the APEDA's website . Haldiram' s added bakery items.5|Page company set up a manufacturing unit in Delhi exclusively for making namkeens. packaging. shelf life.

it launched 'Murukkus. However. sweets. The product range included namkeens.6|Page MARKETING MIX (4P ANALYSIS) Products Pricing Place Promotion Products Haldiram's offered a wide range of products to its customers. and 'Chennai Mixture' for south Indian customers. sharbats. Similarly. For example.' keeping in mind customers residing in western India. the Kolkata unit manufactured 37 and the Delhi unit 25. namkeens remained the main focus area for the group contributing close to 60% of its total revenues. papad and icecreams. the company seemed to have created a niche market. It launched products.' a South Indian snack. While the Nagpur unit manufactured 51 different varieties of namkeens. dairy products. bakery items.' and 'Premium' only during the festival season in gift . Haldiram's launched 'Bhelpuri. By specializing in the manufacturing of namkeens. Haldiram's sought to customize its products to suit the tastes and preferences of customers from different parts of India. The raw materials used to prepare namkeens were of best quality and were sourced from all over India. which catered to the tastes of people belonging to specific regions. The company offered certain products such as 'Nazarana.' 'Panchratan.

The company revised the prices of its products upwards only when there was a steep increase in the raw material costs or additional taxes were imposed.7|Page packs. priced as low as Rs. Pack Weight 30 gms 85 gms 180-250 gms 400-500 gms 1 kg Generalised pricing of „Namkeens‟ Price (In Rs) 5 10 18-35 40-70 95-200 . The company's pricing strategy took into consideration the price conscious nature of consumers in India. The cost of metallized packing also had an impact on the price. sizes and flavours. The cost of metallized packing also had an impact on the price. The company revised the prices of its products upwards only when there was a steep increase in the raw material costs or additional taxes were imposed. These measures helped Haldiram's compete effectively in a market that was flooded with a variety of snack items in different shapes.5. Pricing Haldiram's offered its products at competitive prices in order to penetrate the huge unorganized market of namkeens and sweets. especially in the case of snack foods. The prices also varied on the basis of the type of namkeens and the raw materials used to manufacture it. The prices also varied on the basis of the type of namkeens and the raw materials used to manufacture it. The company also launched namkeens in five different packs with prices varying according to their weights. The company also launched namkeens in five different packs with prices varying according to their weights. Haldiram's launched namkeens in small packets of 30 grams. especially in the case of snack foods.

com and channelindia. Haldiram's products enjoyed phenomenal goodwill and stockists competed with each other to stock its products.The retail outlets earned margins ranging from 14% to 30%. bakeries and ice cream parlours.6 million retail outlets in India.8|Page Place Haldiram's developed a strong distribution network to ensure the widest possible reach for its products in India as well as overseas. The Delhi and Nagpur units together catered to 0. attractive posters. Promotion Haldiram's product promotion had been low key until competition intensified in the snack foods market.com enabled people residing abroad to send Haldiram's gift packs to specified locations in India. Haldiram's also offered its products through the Internet. At the retail outlet level. . margins varied according to the weight of packs sold. Region-specific websites enabled people to send gifts to specified regions. The company tied with 'Profile Advertising' for promoting its products. C&F agents received a commission of around 5%.com.5) compared to the packs of higher weights. brochures and mailers were designed to enhance the visibility of the Haldiram's brand. Different varieties of posters were designed to appeal to the masses. From the manufacturing unit. Apart from the exclusive showrooms owned by Haldiram's.Giftstoindia. the company offered its products through retail outlets such as supermarkets.com. sweet shops. provision stores. while distributors earned margins ranging from 8% to 10%. giftssmashhits. The company tied up with indiatimes. the company's finished goods were passed on to carrying and forwarding (C&F) agents. Consequently. a website owned by the Times of India group to sell its products over the Internet. Moreover. Retailers earned more margins ranging from 25% to 30% by selling 30 gms pouches (priced at Rs. tohfatoindia.com. sweet shops and bakeries stocked Haldiram's products despite the fact that their company's products were competing with these products. One Indian unit had 25 C&F agents and 375 distributors while Haldiram had 35 sole distributors in the international market.

attractive packaging in different colours influenced purchases. For those customers who wanted to know more about Haldiram's products. Captions such as 'yeh corn hain' (this is corn). 'chota samosa – big mazaa' (small samosa – big entertainment). The company projected the shelf life of its products as its unique selling proposition. Haldiram's products are sold in attractive looking special gift packs. the shelf life of Haldiram's products was about six months. and hoardings. . focused on individual products were developed. Mailers were also sent to loyal customers and important corporate clients as a token of appreciation for their patronage. the company placed its hoardings in high traffic areas such as train stations and bus stations. Posters highlighting the shelf life of its products carried the caption 'six months on the shelf and six seconds in your mouth. 'yeh Kashmiri mix khoob jamega' (this namkeen item will gel well) and 'oozing with taste' (for Rasgoolas) promoted individual products.9|Page The punch line for Haldiram's products was. Posters were designed for display on public transport vehicles such as buses. special brochures were designed which described the products and gave information about the ingredients used to make it. While the normal shelf life of similar products was under a week. Diwali?' and 'Keeping your taste buds on their toes'.' During festival season. Packaging was an important aspect of Haldiram's product promotion. 'Always in good taste' Advertisements depicting the entire range of Haldiram's sweets and namkeens were published in the print media (magazines and newspapers). To increase the visibility of the Haldiram's brand. Haldiram's used the latest technology (food items were packed in nitrogen filled pouches) to increase the shelf life of its products. These advertisements had captions such as 'millions of tongues can't go wrong' 'What are you waiting for. Since namkeens were impulse purchase items.

market leader of the segement • Variety of products like papads. cookies. etc • Trusted for quality and hygiene • Attractive and efficient packaging • Good supply chain ensuring availability of products • Aptly priced for the customers • Loved for its taste • Exported to many countries • High Market share • Availability of brand almost on all the outlets Strength Weakness • Consumer proximity to retail outlet. • Sale pushing of other brands • Schemes given to retailer are not enough. dry fruits. chips. low calories and baked • Innovate by introducing snacks catering to the youth Opportunity Threat • Customers are inclined towards western ways. namkeens.10 | P a g e SWOT ANALYSIS • Brand awareness and visibility. and are not interested in Indian snacks • Indian snacks are considered unhealthy • Increased competition from other brands and local players . • Less profit of margin of Haldiram product from other brand. sweets. • Less advertisement • Increase its reach in India and abroad • Expand the hotel business Increase the number of outlets • Agrresively advertise and promote the brand • Introduce healthy snacks like fat free. sherbets.

therefore big companies may enter this segment looking for a quick profit. This has led to various new products being introduced by all. 3) Threat of Substitute Products Threat of substitute products arises from the ability of the consumer to substitute namkeens by other things that suit him. The primary and potential threat that appears to Haldiram‟s is from the unorganized segment with its lower pricing and variety in the products. biscuits. bakery products. The following is the analysis of this model with respect to Haldiram‟s: 1) Threat of Intense Segment Rivalry (Industry Competitors) Haldiram‟s did not face any intense segment rivalry in the initial stages and some time after that. 2) Threat of New Entrants There is a threat of new entrants especially from the unorganized sector that has lesser quality pressures. The entry and exit barriers are both low leading to stable returns. but the last few years have seen a lot of players entering the namkeens/snack food segment. Variety and higher quality standards have been set & the companies are competing with each other to grab a larger market share in this segment and hence there is evident segment rivalry. The players have to monitor prices closely as a fall in the prices of these substitute products may lead to a price cut in the namkeen segment as well.11 | P a g e PORTER’S FIVE FORCES MODEL ANALYSIS Porter‟s five forces determine the intrinsic long-run profit attractiveness of a market or a market segment. For example ice creams. Like wise and outing for burger and other fast food items may also substitute for namkeens. .

. Hence there is no such threat of suppliers‟ growing bargaining power. as it doesn‟t represent a significant portion of the buyers‟ cost. The buyers do not seem to be very price sensitive and nor are they more concentrated (buyers are distributed across a wide geographical region in the country) or organized. 5) Threat of Supplier’s Growing Bargaining Power Suppliers are unorganized and there are a lot of substitutes available to the company. the company is in a strong bargaining position.12 | P a g e 4) Threat of Buyer’s Growing Bargaining Power There‟s no threat of buyers‟ growing bargaining power. Moreover the number of suppliers being large and the size of the suppliers being very small as compared to the company.

     Brand Bikano. the brand competition would be all the companies selling Namkeens along the same lines as Haldiram‟s. LEVELS OF COMPETITION This analysis covers all four levels of competition for Haldiram‟s: Brand.. Pizzas. Because of this brands like Bikano. etc… and the unorganized sector are considered as brand competitors. UnorganizedSector Industry Differentiated Oligopoly Form Traditional snacks like Samosa. Lehar.13 | P a g e Competitors of Haldiram’s (in Namkeen Segment) The following are the major competitors of Haldiram‟s: Frito Lays Bikano MTR Unorganized Sector However the comparison is restricted to Frito Lays.Burgers. Salty Biscuits. MTR. Industry. etc. as this is the closest competitor of Haldiram‟s. Frito Lays. . Kachori. Brand Competition Brand Competition includes other companies offering similar products and services tothe same customers at similar prices. Here. Frito Lays. Bakery Items Generic Any product competing for the same of amountconsumer dollars A.

Form Competition: Form competition essentially means that competitors who produce products that supply the same service. D. This means that the namkeens industry follows the pattern of „Differentiated Oligopoly‟. In case of Haldiram‟s Namkeens. kachoris etc. Generic competition Generic competition essentially includes those companies competing for the same amount consumer money. styling and services. C. it includes all edible products in the same price range .14 | P a g e B. pizzas. In case of Haldiram‟s. and others like salty biscuits. burger and bakery items as people tend to substitute namkeens very easily with these products. Industry Competition: The namkeens industry is essentially made up of a few players producing the same product partially differentiated along the lines of quality. it faces stiff competition from traditional snacks like samosas.

Operational benefits are realized when the inventory control processes are made simpler or eliminated and at the same time are able to handle inventory thus ensuring that there will be no large stockpiles of inventory. its hardly a reason sufficient enough to jump the e-commerce bandwagon. Easy reach to a fast growing online community Developing economies such as India and other developed economies such as American and European have registered exponential growth of internet user. . processing.15 | P a g e E-commerce Rationale  While e-commerce certainly seems to be in vogue and the new way of doing business. Electronic commerce decreases the cost of creating. For example. The daily production involves maintaining. distributing. Hence. This method indirectly can save their operational costs. in this section we discuss several benefits an organisation like Haldiram‟s would be able to reap by adopting e-commerce. and retrieving paper-based information. Majority of these user are from the youngsters and socially upward growing section. lucrative and ample profit-making scope. storing. Hence in order to harness this new and emerging section of users e-commerce is the perfect tool. companies can cut the purchasing administrative costs by as much as 85 percent. by introducing an electronic procurement system. Every organization would rather weigh its options before deciding to adopt ecommerce and will embrace it only if the organization finds it feasible. the suppliers can reduce costs to manage their inventory of goods because they can automate the inventory management using web-based management systems. Electronic commerce enables people in Third World countries and rural areas to enjoy products and services that otherwise are not available to them 2. 1. Reduces Costs for Inventory Management With e-commerce. and accounting for product inventory. while simultaneously reducing out of stock situations. which is the cutomer group known for experimenting new products and looking for novelty in the services. organizing.

E-commerce serves as an “equalizer” It enables start-up and small. Customers can easily select products from different providers without moving around physically.16 | P a g e 3. With minimal capital outlay. . In other words. as well as easy to find products. 7. Electronic commerce expands the marketplace to national and international markets. and the most suitable business partners worldwide. Electronic commerce provides customers with more choices. the best suppliers. Reduce Advertising Costs E-commerce can reduce advertising costs because it is easier to update the advertisement using software technology. Reaching Global Market E-commerce allows the suppliers to reach global market segment. it allows the suppliers to increase their sales meanwhile decrease the investment costs. 8. they can select Electronic commerce frequently provides customers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons. 4. Reduces Costs To Establish Store Front The overhead costs to build the physical store front may be prevented to the suppliers who use e-commerce as their business operation. Monitoring the Consumers’ Buying Habit and Interest The suppliers can monitor the consumers‟ buying habits and interests so that they can tailors their offer suit to consumers‟ needs and keep the on-going relationship with them.and medium-sized enterprises to reach the global market. 5. Faster buying/selling procedure. 6. a company can easily and quickly locate more customers.

retain its customers and improve the quality of services provided. 12. paying bills and making products or delivering services are largely reduced due to the automation processes of e-commerce applications. and new systems when they are needed. and transaction costs. A relationship related benefit is perceived if the level of satisfaction the customer (business or individual) experiences from conducting business with the . Internet is an inexpensive. For instance. flexible. With network production. Reduced costs The costs experienced by organizations in their daily business operations from paperwork. administrative costs. a company can assign tasks within its non-core competencies to factories all over the world that specialize in such tasks.17 | P a g e 9. E-commerce allows “network production. services. 10. E-commerce makes “mass customization” possible E-commerce applications in this area include easy-to-use ordering systems that allow customers to choose and order products according to their personal and unique specifications. and efficient means for businesses to trade and communicate.” This refers to the parceling out of the production process to contractors who are geographically dispersed but who are connected to each other via computer networks. and the facilitation of selling add-on products. The benefits of network production include: reduction in costs. Operational benefits are realized when the total costs after e-commerce adoption are lower than the costs of operating the business before adopting e-commerce. 11. Improved customer service Improved customer service refers to the quality of tasks that an organization performs to increase sales. These include operational costs. a car manufacturing company with an ecommerce strategy allowing for online orders can have new cars built within a few days (instead of the several weeks it currently takes to build a new vehicle) based on customer‟s specifications. more strategic target marketing. This can work more effectively if a company‟s manufacturing process is advanced and integrated into the ordering system.

that will in turn determine the customers satisfaction reflected in their trusting beliefs. . This in turn increases the customer‟s loyalty and purchasing behaviors. The degree to which the perceived service meets the customer expectations related to the service quality.18 | P a g e organization is raised after e-commerce adoption.

.19 | P a g e E-commerce critique and recommendations SITE ANALYSIS OF THE COMPANY Haldiram‟s has its own web-site which serves as information source for the company‟s line of products and other organizational information.

computer security. many factors are involved.20 | P a g e Recommendations for E-commerce activity : In the successful implementation of electronic business. the next step is to look for places where an organization can capitalize on its existing technology infrastructure. . It is important to make sure that a solution is tightly integrated with other systems and operations. Use of a matrix can also identify the kinds of technology and business partners. Phase 2: Select the technology infrastructure Different electronic business opportunities demand different technology solutions. The approach of using of an electronic business consists of the following three phases: Phase 1: Identify the business opportunity Determining where the organization falls in the matrix of electronic business. which can help the organization to achieve its goals. Phase 3: Implement the electronic business solution This phase involves complex technology and organization issues. For example. and applications to make electronic business a reality. suppliers. a tool that can enable web applications would require network bandwidth. and employees built into it. The implementation also needs to have the partners. customers. After identifying the business opportunity.

especially with respect to taxes and shipping costs. honest.  Security : Details regarding personal information and data regarding electronic money transactions must be highly secure .  Transaction Software :The transaction and payment software must perform correct calculations.  Provide Added Value : The organization should provide added value. The organization should be open.  Site Maintenance :The organizations should have enough trained programmers to maintain the web site. and concise in terms of letting the customer know what it will do or will not do.21 | P a g e In order to build a successful e-commerce venture following OBJECTIVES shall be met :  Build Trust and customer loyality : To build customer loyalty. an organization must first build trust. clear. which actually makes the customer‟s demand and expectations  Give Customers a Choice: The organizations should make sure that the customers are given enough choices and are allowed to make decisions themselves.

This reduces the dependency on retail or channel partners. thus it proves to be a quick and easy mode of providing information. physical infrastructure. maintenance etc. the manufacturers‟ bring the convenience and comfort of shopping to the consumers thereby increasing their prospective customers. By reaching out to new markets the manufacturers can increase their business‟s brand name and about their product line. Manufacturers can directly open a dedicated channel to service the end customers by having an own B2C ecommerce website. business associates. reduced operating costs. B2C ecommerce website reduces the costs of running their business by less staffing. The e-shopping is accessible from anywhere anytime. An online ecommerce website can help Business in establishing new opportunities and relationships with potential customers.22 | P a g e Conclusion The ecommerce brings the shopping experience to the consumer‟s home. A B2C ecommerce website is the sure way to leverage the internet for increased efficiency. Moving to eBusiness can lead to low operational costs for manufacturers. Manufacturers can provide extensive updated information of their product range through their customized ecommerce website design. When the manufacturer owns the retailing operations also. Owning a B2C ecommerce website makes it easier for the manufacturer to target smaller consumer and niche markets for his products . and maximum return on investment for any manufacturing business. it can create brand awareness more prominently. By launching a B2C ecommerce website. leading to costs benefits.

uni-mb.com .cii.nsf/ www.si/proceedings.gov.com www.23 | P a g e References www.fov.in https://domino.haldirams.google.

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