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tci case report

tci case report

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Published by: somesh 08111 on Jul 25, 2009
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01/10/2014

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International Marketing TCI CASE SUBMISSION Submitted To: Submitted By

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CORE ISSUES • What are the problems faced by the cashew industry regarding packaging of cashews for exports? • Is the cashew packaging market attractive enough? • What are the stakes of different stakeholders in cashew packaging? • What should be the marketing strategy for out new pack? Problems in Bulk packaging of cashew exports The Industry is facing pressure from the Importing Countries to adopt Alternative Packaging methods They have stated following Problems with the present packaging system. • Lead Solder contamination • Disposability • Recyclability • Safety Aspects The features specified for bulk packs by Council for Cashew Exports and Promotion (CCEP) and Association of Exporters • Enough Strength to withstand the pressure of Handling and Transport • Containers should be Leak-Proof • Shelf Life of the Cashews • Splits and Broken Percentage • Resistance to pest attacks in godowns • Price of Bulk packs • Investments The Present cashew packaging market Based on the existing scenario it’s not attractive due to the restrictions imposed by the importers. The present situation may lead to the importers preferring other countries if the packaging method is not altered. This shows that for existing players this has become a very important issue to handle immediately. But there is Scope for the new players to come up with new packaging. That may help in getting the upper hand on existing market players. They have to consider the cost factor. And ensure the packaging system doesn’t exceed the cost of investment. With increasing Cashew kernel exports Cashew Packaging market is growing too. Stake holders The different stakeholders that are affected by the cashew packaging issue are the

producers, Cashew kernel exporters, Packaging companies, and Channel agents, Retail Chain, Government. Government: They earn revenues from exports. If the Cashew exports packaging is not changed the importers may stop the import from India. This will eventually affect the revenues of the government. Producers of cashew kernels: They should have an incentive for production of cashews. The cashew production in India is unorganized. They can go to any other product if the cashew business is not attractive. Importers: The importers are the ones who are putting standards for the packaging system. The main aim is to achieve best quality kernels. If the packaging is having problems they affect the quality of the product. So their stakes are also at risk. Agents: The agents are the link between the suppliers and the customers. If the exports decrease their commission is also affected. The increase in threat from countries like Brazil will affect their stakes Packaging Industry: Tin producers for packing are dependent on exports. Cashew has a high exports and this is generating good revenue. About 3 percents of total value of exports goes into packaging. The packaging methods are 1) Kovak Packaging: This involves packaging cashew kernels in an aluminum foil pack, which is closed on three sides and has an opening on one side. The strength of aluminum foil pack to wear and tear is not very clear. This is used by Brazil. For small distance it was successfully implemented. 2) CAM Company’s Packaging. CAM company’s packaging involves composite cans for small consumer packs up to 1 kg. These carts are made of hard cardboards, which are glued after rolling them into required shape. The top and bottom of bottom of the can is made of tin sheets. 3) TCI Bag in Box Flexi Packs. TCI has been trying to adapt the BIB technology to evolve an alternative bulk packaging solutions for cashews. It involves aluminium foils and HDPE(high density poly ethylene). The pack was successfully tested with a load of cashews to Japan through TCI’s Agri-Business Division. The problems are the broken and splits component is 7 percent. And it is susceptible to rats. Marketing Strategy 1) Product: The BIB is a made from Aluminium and HDPE and the salient features of BIB are Convenient to use, Hygienic, Tamper proof. The expected changes to be made in the vitapack system to accommodate this new pack were also minimal. The advantages of HDPE are • Virtually maintenance free

• • • • • • •

Impervious to insects Will not crack or split Does not contaminate ground or soil High abrasion resistance Splinter free Does not contain harmful chemicals Attractive appearance

2) Price The BIB packaging is Lower cost than tin containers and its very Cost effective one more advantage of HDPE is Durable and ReCycled Plastic, it needs Minimal changes to be made from Vitapack system 3) Promotion We have to get Association of Promotion) the addressing the 4) Place The location is selected where the exports of cashews are take place. Apart from these 4p’s The marketing head should focus into the following areas Firstly focus of the business should be on growing the business itself in packaging apart from the cashew industry as a whole. Secondly PPD itself can become a company solely focused on packaging. Therefore it can focus more into R&D and cater to packaging of various agro and other products. And last but not the least the focus should not be on the cashew industry only. Furthermore as South East Asia is nearest and also has an export amount of 18.5 %. We can clear the existing tin package stocks by exporting to these countries with Vitapack system. Then the Western Europe exports amount upto 30 % so we can test the BIB package durability and reliability and stability by exporting the cashew kernels through BIB to these countries. Competitors As far as the competitors goes we can take CAM’s company as our local competitor (working assumption). Their technology is still in testing and development stage. But their advantage is minimum or minor modifications in existing system. EIA ( Export inspection Agency) certification. We will show the Cashew Exporters and CCPE (Council for Cashew Exports and Cost advantages of this new pack. By explaining how it is Importers standards we can create awareness of its usage.

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