Course Code: MKT 518 Course Title: Integrated Marketing Communication

Course Instructor: Dr. Prashant Chauhan Section: Q1E40

Academic Task No.: 2 Academic Task Title: Cased Based Group Discussion

Date of Allotment: 4th August 2020 Date of submission: 7th September 2020

Student’s Roll no: A035 Student’s Reg. no: 11911770

Evaluation Parameters: (Parameters on which student is to be evaluated - To be mentioned by students
as specified at the time of assigning the task by the instructor)

Learning Outcomes: (Student to write briefly about learning obtained from the academic tasks)
I have learn the concept of Intergrated Marketing Communication with the help of case study.

Declaration:
I declare that this Assignment is my individual work. I have not copied it from any other student’s work or
from any other source except where due acknowledgement is made explicitly in the text, nor has any part
been written for me by any other person.
Student’s Signature:

MAYANK KUMAR VARSHNEY (11911770)

Evaluator’s comments (For Instructor’s use only)

Evaluator’s Signature and Date:
General Observations Suggestions for Improvement Best part of assignment

Marks Obtained: _______________ Max. Marks: ______________

 TABLE OF CONTENT

 ABOUT THE COMPANY

 ISSUES

 ANALYSIS (SWOT)

 SOLUTION

 COMPETITORS ANALYSIS

 PESTLE ANALYSIS

 RECOMMENDATION

 CONCLUSION
 MYSORE GHEE STORE

EXPANSION STRATEGY FOR CLARIFIED BUTTER BUSINESS

SYNOPSIS

Mysore Ghee Store (MGS) produced and marketed ghee i.e. clarified butter in the city of
Hyderabad in India. Most of its ghee sales were Businesses to Businesses like restaurants and
sweet shop makers that used it for food preparation. Due to Decreasing Business to Business
market margins and increasing the sales of packed ghee to end-users through the retail market
prompted So Satish Kumar, Who is the current owner of MGS’s, to enter into the B2C market. He
tied up with a national retail chain for supplying packed ghee in October 2013. MGS’s packed
ghee was also made available across multiple retail channels ranging from independent mom and
pop stores to regional/local chains’ retail outlets and e-retailers. The main point is that Packed
MGS ghee sales through the various retail channels were somewhat encouraging their sales too.
In April 2014, They were looking at two sets of issues. The first was how to proceed with the
brand-building driven marketing communication effort. The second was to assess the strategic
options ahead of MGS and determine the company's need and feasibility for a new strategic plan.

INTRODUCTION (BACKGROUND)

MGS's founder K. V. Ramaswamy was raised in a village near Mysore in Karnataka's southern
Indian state was early on becoming an entrepreneur. His family had some goats, were selling milk
was ghee to neighborhood households. Hoping to expand its business into a city with high ghee
demand, Ramaswamy visited many cities in South India to assess the market. He moved there in
1962, finding that per capita ghee consumption was high at Hyderabad.

He began MGS as a small firm selling ghee through retail outlets to end-users (households),
sometimes delivering ghee on his bicycle. In the mid-1980s, the city was witnessing a boom in
small restaurants serving Hyderabadi biryani, a dish made with basmati rice, spices, lamb or
chicken, and ghee, and MGS took the opportunity to start supplying ghee to these restaurants, as
they were known locally. Besides biryani points, MGS identified sweet shops as potential
customers which consumed large volumes of ghee.

The son of Ramaswamy, R. Shanmugam, by procuring land at Amberpet, a suburb of Hyderabad,

expanded the business to create a large plant. By 2013, MGS was a family business run by
Shanmugam's son, Satish Kumar, in the third generation. A graduate of the business school, Kumar
tried to professionalize MGS by recruiting employees with marketing, finance, and operational
expertise.

In 2016, Mysore Ghee Stores (MGS) chief executive Satish Kumar found himself at a crossroads.
He wasn't sure if his new strategy to target end-users succeeded. MGS was a 50-year-old company
that began by supplying households with ghee (clarified butter) and later turned to businesses,
primarily restaurants and sweet shops in Hyderabad, India.

Decreasing margins in the restaurant/sweets industry and rising packaged ghee sales by its rivals
to retail customers prompted MGS to re-enter the retail market in 2012.

OBJECTIVE

Kumar's goal was to serve high-quality ghee to end consumers and create the brand of
MGS.

INDIAN GHEE MARKET

India was the world's biggest producer and user of ghee in 2014. It is an important part of the
Indian diet nowadays, Ghee was the country's second-largest consumed dairy after milk powder.
India's total ghee market size was (0.1 million tonnes), increasing at a compounded annual growth
rate (CAGR) of 4% between 2000 & 2013. Also, Ghee production had been monitoring the
production of milk. India's milk production increased from 2000 to 2013 at a CAGR of 3.5 percent.
While ghee was a key ingredient in many Indian dishes, it was a luxury commodity, so consumers
with low income and low-end restaurants opted Ghee instead of hydrogenated vegetable oil in their
cooking.
 MARKET SHOULD BE TARGETED

Mysore Ghee Stores Expansion Strategy for Clarified Butter Business targets both high end and
low-end market segments. The organization's decision to choose broader and multiple segments
have expanded the scope of opportunities. The targeted segments are expected to have a steady
market growth rate in the future.

The primary customer segment of the MGS Business is the family with children, which requires
MGS Expansion Strategy for Clarified Butter Business to do social, emotional, and functional jobs
to keep this market segment happy and satisfied.

Customers of the MGSs company were biryani points and sweet shops. MGS operated
Approximately 50 biryani points and near about 200 sweet shops in 2013. Few of its business
clients were loyal, thus MGSs were subject to substantial volatility in sales volume and profit
margins. Transactions between business customers were informal. MGS had around 35-50
business clients who had regularly purchased ghee from them over the last five years. Just four
bulk buyers accounted for 75 % of MGS sales, among them. In the market field, ghee was not
packed in jars made of the poly pack (translucent polypropylene pouches) or polyethylene
terephthalate ( PET).

Customers either visited the MGS store in person to pick up the ghee, or they were shipped by
MGS in 10, 20, or 50 kg boxes that could be refilled when additional supplies were required. Some
of the company clients had been wholesalers. Among some wholesalers, MGS observed an
amazing pattern. They bought MGS ghee, manufactured their own branded retail packs, and
marketed them to end-users. In the business customer group, the profit margins were too low and
there was fear of adulteration by wholesalers who made (MGS ghee) retail packs.
 BARGAINING POWER OF SUPPLIERS

The weak bargaining power of suppliers makes it a comparatively less important strategic issue
for MGS Expansion Strategy for Clarified Butter Business as suppliers cannot dictate the prices
and have to accept the Mysore Ghee Stores Expansion Strategy for Clarified Butter Business ’
terms and conditions. Three factors were result in moderate to weak suppliers power:

 A large number of suppliers

 High overall supply
 Suppliers’ weak control over their distribution network

COWORKERS

An in-depth collaborator analysis requires MGS Expansion Strategy for Clarified Butter
Business to conduct a detailed value chain analysis and carefully consider the bargaining
power of suppliers to explore the collaboration opportunities.
It includes the downstream and upstream value chain partners, business allies, community
leaders, government, and others. To choose the appropriate collaborator partners, Mysore
Ghee Stores Expansion Strategy for Clarified Butter Business needs to evaluate different
value chain factors, like- value chain flexibility, efficiency, revenue sharing among value
chain partners, and strengths and weaknesses of possible collaborators.
A flexible supply chain can make collaboration easier for Mysore Ghee Stores Expansion
Strategy for Clarified Butter Business.
MGS has partnered with various collaborators that allowed the company to develop new
product lines and enhance the product development and distribution process.
It is important for Mysore Ghee Stores Expansion Strategy for Clarified Butter Business to
understand the behaviors, relationships, choices, purpose, and context of collaborators to
make the right decision.
 PROBLEM/ ISSUES IN THE CASE

The first was how to proceed with the brand-building driven marketing communication
effort.
The second was to rethink the strategic options in front of MGS and assess the need for
and viability of a new strategic direction for the company.
Competitors were Increasing Both Local and National.
Manufacturing Units were not running at full capacity.
With the increase in Ghee Consumption, Adulteration also increased.

SWOT ANALYSIS

•Strong Brand Equity and

Brand Awarness. •Project Management is
•Successful go to market too focus on internal.
Track record. •Delivery.
•Wide Product Portfolio. •Poor Inventory
•Access to Suplliers. management.
•Highh Quality Product. •Customer Dissatisfaction.
• Strong Geographic Presence •lack of Work Force
STRENGTHS WEAKNESS diversity.

OPPOTUNITIES THREATS

•Growing Market Size.

•E- Commerce and Social Media •Changing Regulatory Framework.
Oriented Business. •Threats of New Entrants.
•Increasing bargaining power of
•Models. buyers.
•Opportunities In international •Shortage of Skilled labours.
markets. •Rise in Inflation
•Changing Cusomer needs. •International Geo-Political factors.
 SOLUTIONS (HOW TO GET RESULTS)

MSG ought to assess their publicizing approach. To come out of this issue as opposed to
making sensible methodology they ought to go with the passionate methodology or must
have the harmony among coherent and enthusiastic methodology.

Increases the sores outside of the home country.

Increasing the Marketing budget of the marketing and do a Research on that.

Research and Development

It invests heavily on research and development activities to maintain its leadership position
in various product segments. Heavy investment in IT network development, marketing ,
product design, and process optimization supports the strategies for delivery and
promotion.

Culture
It has a strong culture of process and product innovation. Top management supports the
innovative and creative ideas, and employees are encouraged to participate in the problem
solving process. The organizational culture supports the vision, mission and values.

Scale of production
Its has a large scale of production, which enables the company to achieve the benefits of
economies of scale. Large scale production enhances the competitive strength of the
company and enables the company to produce better quality products at reduced costs.

Brand loyalty
It operates in the low-involvement product category. Usually, developing brand loyalty in
low-involvement markets is challenging compared to high-involvement markets as a lot
of alternative options are available and psychological switching costs are also low.
 Its customers are price sensitive. Their price sensitivity, changing tastes and preferences
and high health consciousness requires Mysore Ghee Stores Expansion Strategy for
Clarified Butter Business to invest in customer research activities and closely monitor their
attitude and consumption behavior and use the concept of Online Retailing.

Improving the Ambience of Service and it should have Strong Digital Presence

.
Also Follow Market Trends and do some Innovations in their Strategy.

COMPETITORS MARKETING STRATEGIES

National brands like Britannia, Heritage, and Amul presented themselves as omnipresent
brands of health, with taglines like One spoon a day and omnipresent wellbeing and
happiness at home. Ses labels intrigued the health-conscious consumer of ghee. Their
media reports focused on ghee's health aspects and their contribution to overall well-being.
Several ghee brands linked freshness and purity to their products.
Regional brands such as Nandini, Jersey, and Govardhan stood on taste. Their
advertisements and websites focused on topics such as pleasant taste, food taste, and
The choice of the housewife should be made. The photos used in their advertising were
rich foods in festive environments, such as religious festivals or weddings, such as sweets
and fried savory products.
Southern ghee brands like Dodla Dairy concentrated on fragrance, as aromatic ghee was
considered to be favored by South Indians. A few brands such as Hatsun, Tirumala, and
Durga were both based on aroma and taste. In her TV advertisements and other marketing
campaigns, Durga stressed all of the main qualities of ghee such as freshness, flavor, taste,
and health. Since it was a new entrant in the consumer market, in the end, MGS was unsure
if there were any prospects left to establish a unique place for its brand.
 SOME STRATEGIES OF MARKETING ADOPTED WERE

In early 2014, Kumar felt he was facing an existential crisis. Given the low and fluctuating
levels of sales and profitability in catering to largely business customers, he was worried
about MGS’s long- term viability.
Kumar’s first option was to expand further into the consumer market for ghee. In December
2015, MGS’s ghee sales to business and end consumers were 75% and 25% of total sales,
respectively. MGS estimated its share in the business and end consumer markets in
Hyderabad to be around 5% and 2%, respectively.
The second option was to utilize MGS’s excess production capacity to offer ghee making
services to small operators who lacked the sophisticated ghee making capability that MGS
possessed. MGS’s ghee making capacity of 3,000 kilograms per day was significantly
underutilized. Kumar knew that many small dairy producers produced unbranded ghee for
sale at relatively low prices.
The third option in front of Kumar was more radical. A recent conversation with one of his
friends, a finance professional, led him to wonder if he was getting an adequate return on
the investment he had made in MGS.
The fourth and final option one that appealed to Kumar was to export ghee to Middle
Eastern countries. There was a large Indian diaspora in the Middle East, and many Indian
restaurants operated in those countries to cater to this population. Some of Kumar’s friends
in the ghee industry reportedly had had some success with this strategy. Kumar was clearly
tempted to pursue the ghee export option but realized he had no idea how to go about
assessing and exploiting it.

Role of Integrated Marketing Communications

Priming purchases at POS.

Billboards.
Bus Stop Ads.
POP Displayers.
Got Ghee stickers etc.
The job of the IMC in this crusade has assumed a huge job for the MSG. The slogan
"Extraordinary ghee In February 2012, MGS launched its end consumer campaign and pitched
against Durga Ghee as regards pricing. MGS retailed about 200 independent stores and some
200 supermarkets, 80 of which belonged to MoreTM, the retail chain. . In 2014, MGS spent
substantially on advertisement and sales promotion. Employee benefit expenses and finance
costs also increased considerably

PESTLE ANALYSIS

Political Factors

Political and Legal Structure

The political system seems stable and there is consistency in both economic policies and
foreign policies.
Little dangers of armed conflict
Based on the research done by international foreign policy institutions, it is safe to conclude
that there is very little probability of a country entering into an armed conflict with another
state.

Economic Factors

Foreign Exchange movement is also an indicator of economic stability. Ghee Mgs should
closely consider the forex inflow and outflow. A number of Ghee Mgs competitors have
lost money in countries such as Brazil, Argentina, and Venezuela due to the volatile forex
market. The inflation rate is one of the key criteria to consider for Ghee Mgs before entering
into a new market.
Social Factors

Leisure activities, social attitudes & power structures in society - are needed to be
analyzed by Ghee Mgs before launching any new products as they will impact the demand
of the products.

Consumer buying behavior and consumer buying process – Ghee Mgs should closely
follow the dynamics of why and how the consumers are buying the products both in
existing categories and in segments that Ghee Mgs wants to enter.

Technological Factors
Artificial intelligence and machine learning will give rise to the importance of speed over
planning. Ghee Mgs needs to build strategies to operate in such an environment.
5G has the potential to transform the business environment especially in terms of marketing
and promotion for Ghee MGS.

Environmental Factors
Consumer activism is significantly impacting Ghee Mgs branding, marketing, and
corporate social responsibility (CSR) initiatives.
Environmental regulations can impact the cost structure of Ghee Mgs. It can further impact
the cost of doing business in certain markets.

Legal Factors
Health and safety norms in the number of markets that Ghee Mgs operates in are lax thus
impact the competitive playing field.
Property rights are also an area of concern for Ghee Mgs as it needs to make significant
Marketing, Strategy execution infrastructure investment just to enter a new market.
 RECOMMENDATIONS AND ACTION PLAN ARE AS FOLLOWS:

It should focus on making use of its strengths identified to make the most of the
opportunities identified from the PESTEL.
It should enhance the value of creating activities within its value chain.
To achieve its overall corporate and business level objectives, it should make use of the
marketing mix tools to obtain desired results from its target market.

CONCLUSION

From the above conversation, we can see that the utilization of the IMC in the present period is
significant. The organization or the nation who need to remain in this sort of serious condition
need to have the capacity of the flexibility. These are the apparatuses that would assist with making
the item remain in the market. The constant advancement of the items, making great connection
with the customer and connect with all media stage that are helpful for the item advancements
make the organization ascend to enormous degree. This Organisation can expand if this focus of
Budgeting and find some new marketplaces as the home market is soon going to reach a saturation
level. Firms Online Presence was very less specially on social media networks. If they start
connecting with the consumers they can gain several benefits out of it. By keeping the economies
of scale firm can decrease per unit cost easily and earn profit. The infrastructure of the firm is a
kind of value for the firm and according to me firm should not decrease the production and use the
land for real estate as his friend suggested.

Apart from these as per the case study, they do not have strong forecasting system they need to
add that so that they can take correct decision when it comes to investment. Other changes which
they need is that they don’t have proper quality assurance team or department they need to add this
as they already faced little quality issue consecutively so they should inculcate this to their
manufacturing process. In addition, they need to fix their internal problem like problem related
with workers training so they need to go for robust training facilities and the safety requirement
should fulfilled.
 REFERENCES

https://www.google.com/search?q=mysore+ghee+store%3A+expansion+strategy+for+clarif
ied+butter+business%5C&oq=mysor&aqs=chrome.0.69i59l3j69i57j46j69i60l3.5178j0j7&s
ourceid=chrome&ie=UTF-8#

https://mgsghee.co/

https://store.hbr.org/product/mysore-ghee-stores-expansion-strategy-for-clarified-butter-
business/ISB103

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