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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
Dipanshu Mangal MBA 3rd Sem.
Corporate Guide: Mr. Jai PrakashLata Area Executtive ITC Ltd., Jaipur
Faculty Guide: Dr. Ashish M. Mathur DMS, LMC, Jodhpur
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.
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.
4. 5. 13.Serial No. 6. 14. 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 4 . 7. 15. Executive Summary FMCG Sector in India Content 5 6 Page No. 3. 12. 1. 2. 10. 8. 9. 11.
5 . knowledge of salesman etc. This report provides competitive analysis of noodles industry of ITC and its vis-à-vis nestle.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. delivery system. The report concluded with recommendation to increase the brand image of the Yippee noodles. The result bring out Nestle as the preferred company. The scope of the study is restricted to Jaipur city. The analysis is based on retailer questionnaire. primarily on account high quality of services and consumer demand. have been studied. Various parameter such as credit term quality of service.
hair wash etc in India is low indicating the untapped market potential. toothpaste. Manufacturing can be outsourced. 6 . intense competition between the organized and unorganized segments and low operational cost. cheaper labor cost and presence across the entire value chain gives India a competitive advantage.6 billion in 2003 to US $ 33. Penetration level as well as per capita consumption in most product categories like jams. With 20 million people expected to shift to process and package food by 2010. the thing that have high turnover and are relatively cheaper. Burgeoning Indian population. Growth is also likely to come from consumer upgrading in the matured product categories. Availability of key raw materials. Also the market is more pressurized with presence of local player in rural area and state brand. The volume of money circulated in the economy against FMCG product is very high. Companies spend a large portion of their budget on maintaining distribution network. FMCG companies maintain intense distribution network. particularly the middle class and the rural segments. A recent phenomenon in the sector was entry of multinational and cheaper import. India around US $ 28 billion of investment in the food-processing industry. pressure an opportunity to markers of branded products to convert consumer to branded product. New entrants who wish to bring their product in the national level need to invest huge sums of money on the promoting brands.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. A major portion of the monthly budget of each household is reserved for FMCG product. Competition in FMCG sector is very high resulting in high pressure on margins.4 billion in 2015. It has a strong MNC presence and is characterized by a well-established distribution network. The FMCG market is set to treble from US $ 11. skin care.1 billion. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US $ 13.
Up to 100 percent foreign equity or 100 percent for NRI and overseas corporate Bodies (OCB‟s) investment is allowed for most of the food processing sector. 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. especially in small town and rural India. 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.Automatic Investment approval(including foreign technology agreement within specific norms). Around 70% of the total households in India reside in the rural areas. 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. Consumer Demographics & Buying Pattern of Indian Consumer With a population of 1bn people. 7 . India is a big market for FMCG companies. FMCG sector generate 5% of total factory employment in the country and it is creating employment for three million people.
horlicks. soap. Pepsi. But since almost a decade. have made a stern attempt in providing higher quality product with relatively competitive prices. increase in spending power has led to a change in the consumption pattern. making Indian consumer enjoy brands which deliver high quality and adhere to global standard. mosquito coil etc. Dabur products etc. Coke. accessories. the market potential is expected to expand further. But from 2000 onward there has been a negative growth of this industry. branded clothes. FMCG is one sector which cater to the daily and more basic needs of consumer and therefore don‟t have to run out of focus. The rising aspiration levels. From oral care products to packed food to detergent. With growing income at both the rural and the urban level. mobile phones. Apart from the demand for basic goods.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. are the various categories of products that FMCG market makes available to lath of consumer across the country. and various ITC Brand. convenience and luxury goods are growing at fast pace too. Initially. Indian buyers were a bit conservative partly due to lesser disposable income and partly due to fewer competitive and more variety of product. cars. yesterday‟s amenities started becoming necessity like. 8 . The reasons are manifold. Firstly. The plethora of such brands was thrown open to Indian consumer during 1990s which witnessed a rise and growth in FMCG industry. The urban population between the ages of 15 to 34 year is expected to increase from 107m in 2001 to 141m in 2012. brand like nestle. This would unleash a latent demand with more money a new mindset. an increase of 32%.
Increased focus on farm sector will boost rural incomes. A well-established distribution network. The sales of various brand belonging to key players and the overall FMCG industry performance have picked up and the intense sales promotional efforts.1 billion is the fourth largest sector in the economy. availability of various financial aides made every reasonable and expensive purchase.500crore in 2005 to Rs 98. male grooming. household care. easy thereby giving the Indian consumer an unlimited exposure to experience the same. the Indian rural FMCG market is something no one can overlook. 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 today‟s Indian Consumer to analyze and judge each product accurately and make an idea purchase decision. the disposable income of average Indian consumer rose sharply within the past 5 Year Finally. cut throat competitive strategies. Better infrastructure facilities will improve their supply chain. And if the companies are able to change the mindset of the consumers. hence providing better growth prospects to the FMCG companies. Today. It has been estimated that FMCG sector will rise from around Rs 56. Because of the low per capita consumption for almost all the products in the country. and the chocolates and confectionery categories are estimated to be the fastest growing segments Growth Prospect With the presence of 12.Secondly. 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. FMCG companies have immense possibilities for growth. Scope Of The Sector The Indian FMCG sector with a market size of US$13. stronger distribution efforts have helped various brands penetrate deeper into the market and increased sales. i. intense competition between the organized and unorganized segments characterizes the sector. FMCG sector is also likely to benefit from growing demand in the market. Hair care.100crores in 2011. if they are able to take 9 .e.2% of the world population in the villages of India. female hygiene.
It is expected that the rural income will rise in 2007. with rural India accounting for the remaining 34%. wheat and fruits &vegetables. the demand in urban areas would be the key growth driver over the long term. along with increase in income levels and the availability of new categories. milk. increase in the urban population. Also. 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. spices and cashew and is the second largest producer of rice. urban India accounts for 66% of total FMCG consumption. India is the largest producer of livestock. The availability of these raw materials gives India the location advantage. 10 . At present. they would be able to generate higher growth in the near future. sugarcane. boosting purchasing power in the countryside However.the consumers to branded products and offer new generation products. which are required for the production of soaps and detergents. there is a large raw material base suitable for food processing industries. would help the urban areas maintain their position in terms of consumption. coconut. India also produces caustic soda and soda ash.
butter. Many MNC's have established their plants in India to outsource for domestic and export markets. 11 . Low labor costs give the advantage of low cost of production. Labor cost comparison Low cost labor gives India a competitive advantage. right from the supply of raw materials to packaged goods in the food-processing sector. Amul supplies milk as well as dairy products like cheese. For example. etc. after China & Indonesia. Presence across value chain Indian companies have their presence across the value chain of FMCG sector. India's labor cost is amongst the lowest in the world. This brings India a more cost competitive advantage.
purchasing. 4. general management.Top 10 FMCG Companies FMCG sector is an ever growing sector and is currently in a boom phase. 2. There are many jobs in FMCG sector at different levels like sales. supply chain. 7. 3. operations. ITC (Indian Tobacco Company) Nestlé India GCMMF (AMUL) Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries 12 . Companies Hindustan Unilever Ltd. supervisor. 5. Fresher‟s are looking for jobs in FMCGsector as these jobs will give them the best career in the industry. 6. manager. NO. Finance and marketing. HR. FMCG sector is famous for jobs that are not only well paying but also gives the best perks and bonuses. product development. 8 9. S. administration. 10. 1.
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. having shaken PepsiCo Frito-Lay‟s stranglehold on the packaged snack market with Bingo. CG Foods is also ramping up its production and distribution beyond eastern India. Yet. Three new entrants have thrown their hats into the ring over the last one year: Hindustan Unilever (HUL).300-crore instant noodles market in India is in a state of war. This. however. 13 .PROFILE OF THE INDUSTRY The Rs 1. GlaxoSmithKline (GSK) and ITC with Knorr Soupy Noodles. The year 2010 marked the end of the instant noodle market as we know it. among other things. Horlicks Foodles and Sunfeast Yippee! respectively. ITC‟s over Rs 2.300-crore market. It is not new to marketing offensive either. giving it cost and quality advantages. with three new players having thrown their hats in the ring over the last one year. ITC has claimed the third spot. Aashirvaad for staples and Sunfeast for packaged foods) has a supply chain beginning right at the farm. with Sunfeast competing against the bestseller brands of Britannia and Parle that have been around for 30 to 40 years in the market.500-crore food business (with blockbusters such as Bingo for finger snacks. 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. till now ITC was challenging the incumbents with no new competitor in the ring. it has eager company. Capital Foods’ Ching’s 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. In instant noodles. 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. In biscuits. Players such as Indo-Nissin’s Top Ramen. consumers had a single brand of noodles to dig into — Maggi — giving Nestle over 85 per cent share of the market. For two decades.
In 2010. Even Nestle spent years perfecting Maggi’s masala flavor so that it appeals to all the regions. 14 . will not be limited to fighting competition. While none of the new players have reached their full distribution strength. therefore. ITC would have to look out for HUL and Nestle’s potential spread. The task for ITC. HUL covers up to 6. 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. it reinforced its emotional connect with consumers through an interactive campaign and then went on to launch more variants of its noodles. incumbent Maggi is not sitting idle.5 million outlets in India. ITC is targeting a total of 5lakh outlets.5 million outlets out of a total 7.For its part. Satisfying the demand of the consumer who loves to experiment will be a much bigger challenge. “Of course.
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. Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine.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 has a diversified presence in Cigarettes. Paperboards. This 15 . in a study conducted by Brand Finance and published by the Economic Times. Packaging.2 billion in the last decade). ITC ranks among India's `10 Most Valuable (Company) Brands'. Branded Apparel. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery. Agri-Business. Information Technology. The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. ITC's Agri-Business is one of India's largest exporters of agricultural products. Safety Matches and other FMCG products. Stationery. Hotels. Packaging and Agri-Exports. among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC is one of the country's biggest foreign exchange earners (US $ 3. Branded Apparel. superior brand-building capabilities. the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC is rated among the World's Best Big Companies. Personal Care. Packaged Foods & Confectionery. Personal Care and Stationery. Paperboards & Specialty Papers. Over time. effective supply chain management and acknowledged service skills in hoteliering. Hotels. While ITC is an outstanding market leader in its traditional businesses of Cigarettes.
This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value for the Nation. is expected to progressively create for ITC a huge rural distribution infrastructure. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC InfoTech India Ltd.transformational strategy. fulfill the aspirations of its stakeholders and meet societal expectations. ITC employs over 26. which has already become the subject matter of a case study at Harvard Business School.000 shareholders.000 people at more than 60 locations across India. ITC InfoTech has carved a niche for itself by addressing customer challenges through innovative IT solutions. ITC's wholly owned Information Technology subsidiary. 08. ITC's production facilities and hotels have won numerous national and international awards for quality. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 4. safety and environment management systems. significantly enhancing the Company's marketing reach." 16 . provides IT services and solutions to leading global customers. for the Shareholder. productivity.
ITC BUSINESS PORT FOLIO ITC FMCG : Cigarettes and Other Hotels Agri Business Paper 17 .
\ 18 .
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. Ensure that each of its businesses is world class and internationally competitive. Benchmark the health of each business comprehensively across the criteria of Market Standing. Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITC‟s various businesses.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. Create distributed leadership within the organisation by nurturing talented and focused top management teams for each of the businesses. Hotels. Agri Business and Information Technology. Paper. FOOD DIVISION Ready To Eat Foods Staples Confectionery Snack Foods 19 . Profitability and Internal Vitality. Paperboards & Packaging.
So. meanwhile. ITC started working on instant noodles a couple of years back. 20 . Coimbatore and Kerala. Yippee! would need to evolve its communication further . its characteristics.Introduction To Yippee ITC has launched noodles under its Sunfeast brand in Chennai.” ITC launched Sunfeast Yippee! Instant noodles in December 2010. “Instant noodles was a one-brand category so far and most consumers bought out of habit because there was hardly a choice. as opposed to the usual rectangular ones to ensure longer noodles strands. “Right now. Yippie comes in round stacks. “The category penetration is low as well. There is scope for these players to grow simultaneously. FMCG companies like GlaxoSmithKline and Hindustan Unilever and private labels like Big Bazaar's Tasty Treat have entered this segment. Going forward. Pasta preceded noodles as it gave the brand a head start with hardly any competition around. 25 per cent of the population only. ITC‟s Sunfeast Yippee! Says. Also it resists clumping when served. we had to make them stop and think about the purchase they made. Nestle Maggi’s overall market share. it is evolving the campaign and lending a clear personality to the brand. and differentiated it on product attributes. it is in the stage of „Who am I‟.” The new entrants claim market shares of 3-7 per cent in their first few months of launch in south India. introducing the brand. has dipped from 90 per cent in 2009 to 85-86 per cent in 2010. Of late. 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.
PRODUCT Competitor Maggi Nestle Foodles Horlicks Knorr Soupy Noodles HUL Indo-Nissin Top Ramen 22 .
To provide necessary policy implications to augment brand image of Yippee after research is carried out. To examine comparative service quality across retailer base. Secondary To ensure availability and visibility of ITC‟s Noodles at Retail outlets. To offer suggestions for increasing market-share of ITC in Noodles Industry 23 .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.
Stock replacement: .samples have been taken from the normal.RESEARCH METHODOLOGY Formulation of Hypothesis Frequency of DS visit to the outlets: . Preference of the brand: . 24 .sample has been taken from the normal.sample has been taken from the normal.sample has been taken from the normal population. Cash Discount: . Is DS knowledgeable: .sample has been taken from the normal? DS‟ handling of the grievance: .sample has been taken from the normal. Payment terms: .sample has been taken from the normal. Credit period: . Time gap between order captured and delivery: .sample has been taken from the normal.samples have been taken from the normal.
RESEARCH DESIGN This study is an Exploratory Research (Both qualitative & quantitative). EXPLORATORY RESEARCH Exploratory Research is conducted when one is seeking insight into the general nature of a situation. 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 company‟s Brand. it was flexible and was aimed at identifying all the attributes a retailer might look while comparing ITC with our competitors nestle and others. the possible decision alternative. While conducting our study we used exploratory research. In knowing deficiencies in company‟s 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. and the relevant variable that need to be considered. 25 .
Convenience Store & Wholesale outlets. Vaishallinagar. Quantitative research has been done using the questionnaire.e. Pratapnagar. The questionnaires have been used to find out the factors where ITC is lagging behind nestle. collected through surveying and interacting with retail outlets of Jhotwara. Tata nagar. Sources of Data Data is primary in nature. The nature of this type of research is exploratory and open-ended. PARTICIPANTS Owners of kirana Stores. Niwaru road. Method The communication approach Structured Questioning i. 26 . Secondary data is obtained through internet. personal interview with the aid of printed questionnaire (Attached as annexure). Sirsi Road. Departmental Stores.RESEARCH METHOD I have used both qualitative and quantitative research technique to carry out the research. Sodala. General Stores. The questionnaire feedback has been analyzed using MS-Excel 2007.Malviya Nagar of Jaipur. Qualitative research technique has been used to find out the retailers opinion and suggestion and satisfaction through in-depth interview and focus groups.
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.Questionnaire Design Before questionnaire was designed. Departmental Stores. Sample Design Retailer sample size: 453 retail outlets. The questionnaire contains both close ended and open ended questions. a pilot test was conducted for at 4 days covering 85 outlets. thereafter the desired questionnaire was designed. by visiting various Kirana Stores & General Stores. The questionnaire contains a maximum of 15 questions. 27 . 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. Convenience Stores & Wholesale outlets serviced by ITC in Jaipur.
28 . It will also explore the way to come up as increase in the market share in noodles industry. It will help ITC to review their quality. It will explore the way to improve Retailer satisfaction.Scope of Study: The research will help ITC to find out the factors that would help in increasing their net sales & earning. promotional method.
Biased Response: The responses given by the respondent are assumed to be true however chance of getting false and biased information can‟t be look fully.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. 29 . Confined Study: The study was confined to the Jaipur city only.
MonutradePvt . 30 . The outlets covered were present in area covered by two WD‟s of ITC. Trade scheme and consumer promotion. Stock Replacement. Frequency of salesman visit. Area Covered Sirsi road Vaishalinagar Pittal factory area Jhotwara Khatipura Mansarovar Malviya Nagar Jagatpura Area of Questioning Companies stocked & preferred company.Ltd.K. Cash and credit term. The objective of the focused data collection was to get a clearer comparative picture. and Khanlwal WDS. Weekly sales. Grocery Stores. Wholesale outlets) serviced by ITC in Jaipur. Convenience Stores. Availability of product. namely S.Data Analysis and interpretation Data was collected through visiting and surveying 453 outlets (Departmental Stores.
Since in rural area at many outlets the DS of nestle and HUL do not visit the outlets.1. SALESMEN’S VISIT TO THE MARKET HUL 380 DS Visit NESTLE 338 ITC 453 0 100 200 300 400 500 Out of 453 outlets covered. since outlets were visited with the salesmen of ITC‟s WD. so all453 outlets are visited by the ITC‟s salesmen. and nestle DS visits 338 outlets and HUL DS visits 380 outlets. 31 .
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 32 .
Only a70 outlets keep the stock of HUL‟s noodles.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. 33 .
4. 34 . Some outlets prefer the ITC and HUL just because of non-reach of the DS of the Nestle. 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.
FACTORS AFFECTING PREFERENCE AMONG RETAILERS TOTAL OUTLETS FAVORONG ITC 90 Consumer Schemes Demand 15 30 Price Differentiation 5 Good Services 40 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. 35 .5.
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 36 .soretailers prefer to keep the stock of the Nestle.TOTAL OUTLETS FAVORONG NESTLE 340 Consumer Schemes Demand Price Differentiation Good Services 320 20 0 0 Schemes 7% Consumer Demand 93% Consumer Demand of the Nestle is very high.
” If consumer is not willing to buy the product there is no use of that product for retailer.Good service 14% Price Differentiation 17% Schemes 7% Consumer Demand 62% The consolidated data shows that “Retailers buy what consumer want. 37 .
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% 38 .6.
HUL No 21% Yes 79% During the survey it was found that as compared to the DS of ITC. 39 . the DS of NESTLE are more efficient in handling the grievances of retailer. A frequent complaint is the result of delay in the delivery and order capturing. However the salesman of ITC is knowledgeable according to the response of the retailers. There must be a training program for the retailers to improve their knowledge and skills about the product and selling.
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 40 .
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% 41 .
42 .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.
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% 43 .
44 . Retailer complaints that they are never delivered with complete order or order given is out of stock.HUL No 34% Yes 66% The one time full delivery should be taken into care.
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% 45 .
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% 46 .
10.Cash Discount Yes ITC Nestle HUL 0 338 250 No 453 0 130 Cash Discount ITC 0 Yes No 100% 47 .
Cash Discount Nestle
Cash Discount HUL
Yes No 66%
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%
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
Satisfaction on D&D(Damage and Destroy) replacement.12. Yes ITC Nestle HUL 295 250 250 No 158 88 130 ITC No 35% Yes 65% 51 .
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 52 .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.
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.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. 53 .
solely on the basis of consumer demand. 54 . In the area I visited the market share of nestle is four times more than ITC. As far as the retailers„preference towards the brand is concerned. it was found most of the retailers were complaining against the supply of the expired stock by ITC WD‟s. Nestle gives cash discount 1-2% to retailers.FINDINGS Important factors Credit System Promotion Margin FOOd Wastage Distribution Network Stock out During the project. they clearly favor Nestle.
they demand it as “maggi dena”.Suggestions And Policy Implications ITC can put some small toys into Yippee to attract childrens. Change its packaging style as its similar to Maggi. ITC can launch other flavors of Yippee. so that they can solve their problem. ITC should distribute free cooked Yippee noodles it will give correct feedback from market. 55 . Focus more on advertisement as some consumers are not aware of the product Opt for a differentiation strategy because even if people buy yippee. Reward to highest seller (wholeseller/retailer) of Yippee. Schools can also be targeted for making awareness among the kids because they are the major consumer. Cash discount should be given to the retailer to encourage prompt cash payment. Improve the taste of classic flavor. POP and display activities should be on regular basis. Retailer should be provided some attractive schemes. There should be training for salesman because salesman also sale the Yippee with name Maggi. ITC should give hangers to retailers for hang Yippee ladi pack. Retailer should be provided with a helpline no.
Company tries very hard to make a difference at some point to get the competitive advantage. With emergence of various players like Horlicks. Credit system also depends upon the position of the product in the market. ITC has a very strong distribution network for their cigarette brand and they are using this network to push their new biscuit brand. But after the introduction of the yippee there is constant fall in the sale of the maggi. HUL the competition has toughened in noodles industry these player gives good margin to the retailer. however magi is still most preferred brand but the market share in 2010 it was 90% has come down to 75%. nestle is clearly the leading brand in terms of consumer‟s as well as retailer‟s preference. 56 . In Jaipur market.CONCLUSION The skeleton of distribution system is same for all the companies.
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. company schemes.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. window display and references of the shop. For retailers Retailer think about the GMROI(Gross margin return on investment) and they promote the brand which provide them highest. D & D (Damage & Destroy) tracking should be undertaken for retail outlets also. The high visibility of Yippee must be ensured. company scheme make the difference and are highest source of motivation after profit margin. 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. They expect return in the form of profit margin. Occasional discount: The Company may go for occasional discount offer or price off from time to time specially during festival. Cash discount should be given to retailers to encourage cash payment. This would help to ascertain outlets where are stocks are not moving and also help to understand the stock trend for particular routes. There should be feeling of belongingness to the company in inner of the retailers. 57 . Among these. 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.
Weakness Promotion strategy of yippee.SWOT ANALYSIS Strength Wide expanded distribution network. Additional discount and schemes offered by other companies. Direct dealing with retailer. Brand image of yippee. Opportunity Still the rural market is uncovered. Sales and distribution activity is done in a timely manner. Packaging is not effective. Well established Image of ITC. Threat Pre-Established Strong Brand Image of Maggi. Scope for target oriented sale offer for retailer. Less flavor availability. Regular supervision of market. Non availability of family pack. 58 . D&D policy (Damage and Destroy). ITC can introduce a family pack.
Bibliography Reference book C. Website Google search: (www.com) Yahoo search: www.itcportal.itcportal.com/sets/food_frameset. Marketing Research by G.C. Ltd.R.wikipedia. 1985.com http://www. Kothari Research methodology: methods and techniques New Age International Pvt. Marketing Management Philip Kotler.html http://managementfunda.com/tag/sunfeast Newspapers Times Of India The Economic Times The Hindu Reference Journals India Today 4 P`s of Marketing 59 . NorthWestern University.google.com www.Beri.yahoo.com) Wikipedia search: (www.
price difference etc. 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. Scheme. Which Noodles company do you stock ? ITC nestle Horlicks Hul________ 2.RETAILER QUESTIONNAIRE Outlet Name _______________________________ Date________________ Location ___________________________________ 1. Does DS Redress your grievances satisfactorily? ITC Hul 60 Nestle Horliks .) ____________________________ 3. Is The DS knowledgeable? And able to answer all your queries? ITC Yes No Hul Yes No Nestle Yes No Horlicks Yes No 5.Consumer demand. Which is your most favored company? ITC Hul Nestle Horlicks________ Why (Give triggers:.
61 .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. Are there any company’s products being carried by DS/delivery van? Yes No If yes then which product ________________. 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.
do you get any cash discount? Yes No If credit then what is credit period? 1 Week 2 Week 3 Week > 3 Week 11. 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. 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. Are your order always received on time? ITC Yes No Hul Yes Nestle No Yes Horlicks No Yes No 10.9. Do the companies do any stock replacement? ITC Yes No Hul Yes No Nestle Yes No Horlicks Yes No 62 .
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.If yes the what are the replacement norms__________________ 13. What is margin you receive ? ITC____________________ Hul________________ Nestle___________________ Horlicks __________________ 63 .
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