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YP60A – Consumer Behaviour

Pre-Class Individual Assignment: Ajanta

Case

1. What are the major characteristics and growth drivers of the glass bottle industry in India?

In the five-year period between 2016 and 2021, the Indian packaging industry was expected to
grow at a compound annual growth rate of 9.2 per cent as opposed to the 6.2 per cent growth
registered between 2011 and 2016. Factors such as rapid urbanization, a surge in middle-class
consumers, an organized retail sector, and the e-commerce boom were all key drivers of growth in
the Indian packaging industry. Growth was also fuelled by innovations such as the development of
lighter packaging with better barrier properties. These changes increased the demand for new
packaging formats, such as different sizes, materials, and strengths.

2. What is the importance of CRM strategies for Ajanta? Evaluate the direct and indirect effects of
CRM initiatives on Ajanta!

CRM is a business strategy to increases the service, satisfaction toward the customer. Ajanta’s
success was driven by sourcing service contracts with various global manufacturing companies. The
idea was to put in place strong procurement and supply-chain systems and a diverse supplier base
to eliminate operational risk (direct effect). Having warehouses in multiple locations gave Ajanta a
strategic advantage over competitors in that it was able to offer its customers lower freight costs
(indirect effect), resulting in higher sales for the company (direct effect). Atjanta also capitalize on
the location advantage it gained from its four marketing offices across northern India by offering
flexible, just-in-time service to its customers because of lower lead times (indirect effect). Not only
was it a quality-focused and cost-effective company, but it also offered its customers prompt and
customized glass-packaging solutions. Wide-ranging quality products and professional expertise
gave Ajanta muscle power to negotiate with its suppliers and customers, and forge successful and
profitable collaborations (direct effect).
Other than that, Atjanta’s CRM most importance strategies is their commitment and their quality of
services, because more than 80% of Atjanta revenues came from repeat customers.

3. What are the possible ways of segmenting Ajanta’s customers?

In the five-year period between 2016 and 2021, the Indian packaging industry was expected to
grow at a compound annual growth rate of 9.2 per cent as opposed to the 6.2 per cent growth
 registered between 2011 and 2016. The projections for 2016–2021 expected the soft drink and
food industries to capture the highest packaging market share by units, with a share growth of 3.4
per cent and 1.3 per cent, respectively. Glass and rigid plastic packaging material were expected to
be the major share gainers, with market share growth of 0.7 per cent and 0.6 per cent, respectively,
during the same period.
The company began by supplying bottles, vials, and jars to pharmaceutical companies and
manufacturers of fast-moving consumer goods, and glass bottles to large liquor and wine
companies. According to the data at previous statement, I would like to say that the most possible
ways for Atjanta’s to segmenting their customers is start from soft drink and food industries
because according to the projection for 2016-2021 that kind of industries capture the highest
market share.

4. What is Key Account Management?

Key account management (KAM) defines full relationship between your business and the customers
you are selling to. It describes the individual approach of sales people to their customers in order to
create long everlasting business relationship. Not every company you are selling to is a key account
for your business. Usually 20% of the customer that buy the product that can make the company
has 80% benefit from the company that is key account.

Deepenker (director at Atjanta) think that the revenue comes from key customers because their
repeat order. Deepanker knew that developing and maintaining the solid relationships with key
accounts was critical to the company‘s success in the hyper competitive market.

Ajanta had many renowned, revenue-generating customers, including Patanjali Ayurved Limited,
G.K. Dairy and Milk Products Private Limited (famous for the brand Gopaljee), Veeba Food Services
Private Limited, Amrit Food, Coffee Day Global Limited (also known as CCD), Carnation Hospitality
Private Limited (famous for the brand Barista), Super Milk Products Private Limited, SF, and Akums
Drugs & Pharmaceuticals Limited

5. How did the relationship between Ajanta and SF evolve over time?

SF was a leading manufacturer in India of sauces, pickles, jam, custard powder, instant mixes,
noodles, and baking powder. SF had been Ajanta’s customer since 2001. It was one of the Ajanta’s
oldest and most important customers and constituted around 15 per cent of Ajanta’s business.
However, although Ajanta received good business from SF, the profit margins were very low. Also,
over time, SF had begun making payments after 60 days and sometimes even as late as 90 days.
This did not work well for Ajanta, as it was expected to pay its suppliers within 30 days.

Currently, company face the situation that need to consider such as: Would it be wiser to accept
the order on SF’s terms, or renegotiate the price, payment date, and delivery schedule to favour
Ajanta? What processes could Ajanta adopt to prevent such a situation in future?
6. Why did Ajanta continue its relationship with SF?

Deepanker was aware of the worth of a company such as SF, retain business with SF as well as keep
his company’s commitments to its vendors and other customers. SF had been Ajanta’s customer
since 2001. It was one of the Ajanta’s oldest and most important customers and constituted around
15 per cent of Ajanta’s business. The volume of SF’s business.
Other than that, as I wrote at previous question that Atjanta business revenue comes from their key
customers because their repeat order. Currently Atjanta had 1700 customers, it means if their
cannot maintain their relationship with SF, the news would be spread rapidly and Atjanta would
face serious problem to their loyal customer.

7. What should Ajanta do about its recent order from SF?

The company need to be stick and focused to their CRM strategies and the Key Account
Management is one of the part of CRM strategies. SF is their oldest and most importance customer
eventhough the profit very low. I think Atjanta still have to accept order from SF no matter what
because Atjanta business revenue comes from their key customers because their repeat order.
Currently Atjanta had 1700 customers, it means if their cannot maintain their relationship with SF,
the news would be spread rapidly and Atjanta would face serious problem to their loyal customer.
But in condition, they have to renegotiate the price, payment date, and delivery schedule. Atjanta
can use the pricing issue due to the raw material price effect their pricing method as the reason for
renegotiate the price.