Professional Documents
Culture Documents
On
Training Undertaken at
Award of
1
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.
2
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
3
Serial No. Content Page No.
1. Executive Summary 5
5. Introduction To Yippee 20
7. Research Methodology 24
10. Finding 54
11. Suggestion 55
12. Conclusion 56
14. Bibliography 59
15. Annexure 61
4
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-à-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.
5
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.
6
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.
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.
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.
Urban Rural
% Distribution(2001-02) 28 72
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.
7
Spending Pattern(%)
Saving
28% 4%
11% 9% other
Clothing
8%
Grocery
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
don’t 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
8
a negative growth of this industry. The reasons are manifold. Firstly, yesterday’s amenities
started becoming necessity like, mobile phones, cars, branded clothes, accessories.
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 today’s Indian Consumer to analyze and judge each product
accurately and make an idea purchase decision.
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
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
9
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
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%.
10
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.
11
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. Fresher’s are looking for jobs in FMCGsector as these
jobs will give them the best career in the industry.
S. NO. Companies
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8 Britannia Industries
Procter & Gamble Hygiene and
9.
Health Care
10. Marico Industries
12
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-Nissin’s Top
Ramen, 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 1,300-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.
ITC’s 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-Lay’s 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
13
— while Nestle has been stirred out of its complacency as well. CG Foods is also ramping up
its production and distribution beyond eastern India.
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 Nestle’s 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 Maggi’s 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.
14
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.
15
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
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."
16
ITC BUSINESS PORT FOLIO
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18
ITC’s corporate strategies are :
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 ITC’s various businesses.
FOOD DIVISION
19
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.
ITC’s 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 Maggi’s 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
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.
20
21
22
PRODUCT Competitor
Maggi Nestle
Foodles Horlicks
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.
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
24
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.
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.
25
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
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
26
flexible and was aimed at identifying all the attributes a retailer might look while
comparing ITC with our competitors nestle and others.
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
Method
27
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.
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.
Sample Design
28
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.
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.
29
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 can’t be look fully.
Confined Study:
30
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 WD’s 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
Jhotwara
Khatipura
Mansarovar
Malviya Nagar
Jagatpura
Area of Questioning
Availability of product.
31
Weekly sales.
Stock Replacement.
HUL 380
Column
2
NESTLE 338
ITC 453
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. Since in rural area at many outlets the DS of nestle and HUL do not
visit the outlets.
32
2. DS Visit in a week
0
more 0
0
28
Thrice a week 0
0
HUL
50 Nestle
Twice a week 51
0 ITC
302
once a week 287
453
33
3. Availability of Product
HUL 170
ITC 250
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 HUL’s noodles.
34
4. Preferred company
Prefered Company
HUL
5%
ITC
20%
NESTLE
75%
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.
35
5. FACTORS AFFECTING PREFERENCE AMONG RETAILERS
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.
36
TOTAL OUTLETS Consume Schemes Price Good Services
FAVORONG r Demand Differentiation
NESTLE
340 320 20 0 0
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
37
Good service
14%
Price Differentiation
17%
Consumer Demand
62%
Schemes
7%
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.
38
ITC Nestle HUL
Total Yes No Total yes no Total Yes No
453 350 103 338 290 48 380 300 80
ITC
No
23%
Yes
77%
Nestle
No
15%
Yes
85%
39
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.
40
7. Time Gap between order captured and delivery
250
220
200
200
180
150
120 ITC
100 Nestle
100
HUL
60 63 60
50 50
50 40
28
0 0 0
0
Same day 1 Day 2 Day 3 Day More
Same day 0 0 0
3 Day 63 50 60
More 50 28 40
41
ITC
More
12%
1 Day
26%
3 Day
14%
2 Day
48%
Nestle
More
8%
3 Day
15%
1 Day
2 Day 59%
18%
42
HUL
More
10%
1 Day
27%
3 Day
15%
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.
43
8. One Time Full Delivery
Yes No
ITC 210 243
Nestle 200 138
HUL 250 130
ITC
Yes
46%
No
54%
NESTLE
No
41%
Yes
59%
44
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.
45
9. Payment Term
Only Credit
38%
46
Payment Term Of Nestle
Cash+Credit
18%
Only Credit
9%
Only Cash
73%
Cash+Credit
16%
Only Cash
52%
Only Credit
32%
47
10.Cash Discount
Yes No
ITC 0 453
Nestle 338 0
HUL 250 130
Yes
No
100%
Yes
No
100%
48
Cash Discount HUL
34%
Yes
No
66%
11.Credit Period
49
Credit period of ITC
Three week
15%
Two week
34% One week
56%
50
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
Yes No
ITC 295 158
Nestle 250 88
HUL 250 130
51
ITC
No
35%
Yes
65%
NESTLE
No
26%
Yes
74%
52
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
53
Managing Stock Out
Contact Ds
30%
Other
50%
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.
FINDINGS
Important factors
54
During the project, it was found most of the retailers were complaining against the
supply of the expired stock by ITC WD’s.
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, they clearly favor Nestle,
solely on the basis of consumer demand. Nestle gives cash discount 1-2% to retailers.
ITC can put some small toys into Yippee to attract childrens.
55
FO
ITC should distribute free cooked Yippee noodles it will give correct feedback from
market.
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”.
Schools can also be targeted for making awareness among the kids because they are
the major consumer.
There should be training for salesman because salesman also sale the Yippee with
name Maggi.
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.
CONCLUSION
56
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 consumer’s as well as retailer’s 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%.
Work Process
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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.
SWOT ANALYSIS
58
Strength
Wide expanded distribution network.
Weakness
Promotion strategy of yippee.
Opportunity
Still the rural market is uncovered.
Threat
Pre-Established Strong Brand Image of Maggi.
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Bibliography
Reference book
C.R. Kothari Research methodology: methods and techniques New Age International Pvt.
Ltd. 1985.
Website
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
Date________________
Location ___________________________________
____________________________
ITC
Hul
Nestle
61
5. Does DS Redress your grievances satisfactorily?
ITC
Hul
Nestle
ITC
Hul
Nestle
Horlicks
62
8. Are there any company’s products being carried by DS/delivery van?
Yes No
ITC
Hul
Nestle
Yes No
ITC
Hul
Nestle
63
ITC Hul Nestle Horlicks
ITC _____________________
Hul _________________
Nestle____________________
Horlicks ___________________
ITC____________________
Hul________________
Nestle___________________
Horlicks __________________
64