A Report On

“Retail marketing of branded

spice products as well as bulk
trading of spices in wholesale
markets in Bangalore”
at
STCL Ltd.
Bangalore.

Submitted by
Suprabha S M
(MBA724)

University of Agricultural Sciences,

Bangalore-65

1
 “Retail marketing of
branded spice products
as well as bulk trading
of spices in wholesale
markets in Bangalore”

2
 DECLARATION BY THE STUDENT

I hereby declare that the project entitled “Retail marketing of branded

spice products as well as bulk trading of spices in wholesale markets in
Bangalore” is based on the original work carried out by me at STCL Ltd.
under the guidance of K.L. Anand Sai, General Manager, and N. Lakshmi
Pathy, Chief Marketing Manager, STCL Ltd, submitted to University of
Agricultural Sciences in partial fulfillment of the requirement for the award
of degree in “Master of Business Administration” in Agribusiness
Management.

Bangalore (Suprabha S M)

MBA724

3
 CERTIFICATE BY FACULTY GUIDE

This is to certify that the project titled “Retail marketing of branded spice
products as well as bulk trading of spices in wholesale markets in
Bangalore” is original and personally carried out by Suprabha S.M.
(MBA724) under my guidance in partial fulfillment of the award of the
Master of Business Administration in Agribusiness Management, and is
original in content and style.

Place: Bangalore Prof. P.K. Mandanna,

Date: Faculty Guide, UASB

4
 ACKNOWLEDGEMENT

It gives me immense pleasure to acknowledge all those who

have given me things, time and energy to supply all valuable
facts and opinions that has helped me in bringing this project
to fruition.

I am thankful to my Head of the Department and my Faculty

guide Prof. P.K. Mandanna for having given me an opportunity
to carry out the project.

I am most grateful for having been given the chance to work

with a reputed company like STCL Ltd. at the beginning of my
career. I express my deep sense of gratitude to Mr. K.C
Ponnana (Managing Director STCL LTD.) for granting us the
opportunity to work in the organization.

I would like to thank K.L. Anand Sai, General Manager-

marketing and N. Lakhmipathy, Chief Maketing manager for
their support, guidance, encouragement and constant demand
for improvement. Without the knowledge, attention and time
that they have bestowed on me, this project would simply have
been impossible.

I am grateful to Prof. T.N.Venkata Reddy, who has been very

approachable.

Special regards to my parents Siddesh S.M. and Sarveshwari

V.M. for their constant encouragement to accomplish this
research successfully.
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 My acknowledgement would be incomplete if I didn’t thank
my teammates, friends and colleagues. I am grateful for
everyone’s support and help when needed.

(Suprabha S M)

6
 EXECUTIVE SUMMARY

In the Food Industry anticipating trends, needs and developments is of

great importance. And it all starts with the right information. Consumer
perception is gradually changing about spices wherein the homemade spices
and ground blends are gradually being replaced by brands. As the zest for
branded spices is increasing, so is the opportunity for new entrants in spices
market with wider range of varieties. It is hard to imagine what cooking
would be like without the unique flavors provided by herbs, spices, and the
many its products available. By efficient utilization of all the available
resources and knowledge about spices, many new brands are emerging
among which few stand and survive. A new comer in this competitive spices
market has to understand an efficient sourcing of raw materials and
technology. Consumer understanding is a must before any brand comes into
market. It is necessary to know the pulse of spices market from the
wholesaler and retailer point of view. Right from the design of packaging to
reaching the ultimate customers, a brand has to be cautious to prevent any
failure in its sustenance over time. Spices and its products segment having
consumers of all age and customs, understanding their preferences becomes
very important.

In the existing pool of brands in spices and its products market, this
research helps to get fair idea about launching, promotions, market
penetration and growth by introducing a new brand as well as knowing the
consumers better and trying to fill existing gaps in the segment of spices and
its products.

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 TABLE OF CONTENTS

Chapter Content Page no.

1 Introduction 9

2 Company profile 19

3 Design of study 27

4 Profile 31

5 Analysis and interpretation 38

6 Recommendations and suggestions 58

7 Conclusion 62

8 Bibliography 65

9 Annexure 66

8
 LIST OF TABLES

Table Title Page

No. No.

4.1.2 Consumers: Occupation profile 32

4.1.3.a Preferred buying places: Kirana shops 33

4.1.3.b Preferred buying places: Organized retailers 34

4.1.4 Purchase of groceries 35

4.2.1.A Number of SKUs and floor space 36

5.1.1 Visit to retail outlets 39

5.1.2 Buying frequency of spices and its products 39

5.1.3 Brand decision 40

5.1.4 Purchasing pattern 41

5.1.5 Preferences 47

5.1.6 Factors for trying a new brand 48

5.2.1.1 Unorganized retailers: Number of SKUs 51

maintained

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10
 1. Introduction

The term Spices and condiments applies to ‘natural plant or

vegetable products or mixtures in whole or ground form, which are used for
imparting flavour, aroma and piquancy to food items’. Spices come from the
bark, roots, leaves, stems, buds, seeds, or fruit of aromatic plants and
trees which usually grow only in tropical countries.

According to international organization of standardization (ISO), there

are around 109 spices and India produces as many as 75 in its various agro
climatic regions. Indian spices are famous for their captive
flavour. These spices are used widely in the areas of
pharmaceuticals, perfumery, toiletry and cosmetics.

The important spices produced in India are black pepper, cardamom,

ginger, turmeric, chilly, garlic, coriander, cumin, fennel, fenugreek,

celery, clove, nutmeg, cinnamon, tamarind, kokum, garcinia, curry leaf,
saffron, vanilla and mint.

The south Indian foods are popular for their non steaming spices
such as cinnamon, cardamom, ginger, clove garlic, cumin, coriander
and turmeric.

History of the south Indian spices can be traced back to 7000 years.
It is a chequered history of lands, discovered or destroyed, kingdom built of
brought down, wars won or lost, treaties signed or flouted, favours sought or
11
offered. In Tamil Nadu, Karnataka and Andhra Pradesh, the cultivation of
paprika and a chilly variety with high color value and low pungency is
increased. Within the past one decade international trade has grown by leaps
and bounds.

Basic or essential Indian spices:

Cumin seeds (jeera, jeeragam, jilakara, black cumin, kala jeera, royal cumin,
shah jeera)
- A basic Indian spice. Used mainly in North India. Used for its strong but
very pleasing flavor. Used for digesting foods.
- One of the five spices in the Bengali panchporan (five spice) mixture
- They can be fried whole in oil, or ground, or roasted and ground, or ground
and then roasted, all with different results.

Turmeric (haldi)
- A basic Indian spice.
- Used mainly for its medicinal properties and lovely color that it gives to the
dishes.

Coriander seeds (dhaniya)

- A basic Indian spice.
- Used mainly for its fresh, cooling and soothing taste

Chili Powder -
- Now a basic Indian spice.
- Used mainly for its pungent and fiery taste - one may use fresh green
chilies instead.

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 Mustard seeds (black)
- A basic Indian spice.
- Used mainly in South and West India instead or along with cumin seeds.
Used for its strong but very pleasing flavor. Good for digesting foods.
- One of the five spices in the Bengali panchporan (five spice) mixture

Asafetida (hing, heeng), also spelled asafetida

- A basic Indian spice. Used as a digestive and for its flavor
- Used mainly for its strong sulfur taste on the lines of garlic.

Other Indian spices to complement the above -

Fennel seeds (sounf)

- A basic but not essential Indian spice. Used mainly in North India. Used
for its strong but very pleasing flavor. Used for digesting foods.
- One of the five spices in the Bengali panchporan (five spice) mixture
- They can be fried whole in oil, or ground, or roasted and ground, or ground
and then roasted, all with different results.

Fenugreek (methi)
- A basic but not essential Indian spice which is actually a lentil. Used
throughout India - both in North and South Cooking. Used for its strong,
bitter taste. Used for its bitter taste and wonderful healthful properties.
Besides turmeric it is the most medically useful item in the Indian kitchen.
- One of the five spices in the Bengali panchporan (five spice) mixture
- If it is burnt it gets very bitter and should be thrown away.

13
 Dried Ginger (adrak, or sont)
- A basic but not essential Indian spice. Used mainly in North India. Used
throughout India - both in North and South Cooking. Used for its warming
properties and wonderful aroma and taste.

Nigella Seeds or Kalonji

- A basic but not essential Indian spice. Used mainly in North India. Used
for its strong but very pleasing flavor. Used for digesting foods. Small black
seed, sometimes called onion seeds, although they are not really seeds from
onions
- One of the five spices in the Bengali panchporan (five spice) mixture
- often sprinkled on naan (bread)

Carom (ajowain)
- A basic but not essential Indian spice. Used mainly in North India. Used
for its strong but very pleasing flavor. Used for digesting foods.
- One of the five spices in the Bengali panchporan (five spice) mixture
- Used to flavor breads and root vegetables.

Aromatic or Secondary Indian spices (also called garam masala) to

enhance the above 2 sections:

Green cardamom pods (eliachi)

- A secondary and not essential Indian spice. Used throughout India - both
in North and South Cooking. Used for its strong but very pleasing flavor.
- One of the spices in Garam masala
- It is best to grind small quantities at home using a coffee mill. Cardamom
loses its natural oils quickly, it also loses its flavor. Cardamom is an

14
expensive spice.
- Used to flavor curries, masala chai and certain vegetables and Indian
desserts

Black cardamom (kala eliachi)

- A secondary and not essential Indian spice. Used in North Indian Cooking.
Used for its mellow and warm flavor.
- This larger dark brown variety is used flavoring meat, poultry and rice
dishes. The inner seeds are often used for making Garam masala.

Cinnamon (dalchini)
- A secondary and not essential Indian spice. Used throughout India - both
in North and South Cooking. Used for its sweet and pleasing flavor. It is the
bark of the cinnamon tree
- One of the spices in Garam masala
- Used to flavor curries, masala chai and certain vegetables and Indian
desserts

Cloves (lavang or laung)

- A secondary and not essential Indian spice. Used throughout India - both
in North and South Cooking. Used for its pleasing flavor.
- One of the spices in Garam masala
- It is best to grind small quantities at home using a coffee mill. It easily
loses its flavor.
- Used to flavor curries, masala chai and certain vegetables

Nutmeg
- A secondary and not essential Indian spice. Used throughout India - both
15
in North and South Cooking. Used for its warm and pleasing flavor.
- One of the spices in Garam masala
- It is best to grind small quantities at home using a coffee mill. It easily
loses its flavor.
- Used to flavor curries, masala chai, coffee and certain vegetables and
Indian desserts

Mace (jaivitri)
- A secondary and not essential Indian spice. Used throughout India - both
in North and South Cooking. Used for its warm and pleasing flavor.
- One of the spices in Garam masala
- It is best to use the blades whole and remove them after cooking
- Used to flavor curries, masala chai and certain vegetables and Indian
desserts
Garam masala
- powdered blend of spices that may include cloves, cardamom, cinnamon,
black peppercorns, nutmeg, mace.
- garam means "hot", but not chili hot, hot in the sense that these spices are
said to increase body temperature. Interestingly, many of these spices are
used in deserts in western cooking (i.e. cloves, cinnamon, nutmeg, and mace)

- different regions use different mixtures (masalas) and proportions. Garam

masala will also vary from household to household.
- powdered garam masala is often added at the end of cooking in small
quantities
whole garam masala is used in north Indian cooking, especially meat dishes.
- A whole garam masala could include whole cinnamon sticks, bay leaves,
16
cloves, cardamom (black or green), whole mace, and black peppercorns.
- Often these are fried in hot oil before other wet ingredients such as meat,
onions, garlic, and/or ginger are added.

The general indications about some of the spices are as follows:

Herbs /
English name General Indications
Spices
Carum
Ajwain Seeds An Indian spice useful in stomach diseases
copticum
Badi Ilaichi – Amonum
An indian spice for improving digestion
Cardamom subulatum
Cinamomum
Dalchini Indian spice useful in acid peptic diseases
zeylanicum
Dhaniya
Coriander An Indian spice useful in improving digestion
seeds
Imli -
Tamarind Useful in improving digestion
seedless
Spice & useful in obstretics. They help to
cure flatulence and colic pain.( After heavy
meals and to children after feed it can be
given to prevent intestinal colic. In 1 litre
water add 1-teaspoon cumin seeds and boil it.
This water has to be consumed the same day
it should not be used the next day.) Cumin is
Jeera Cumin seed
of benefit to the heart and uterus and is given
to women after childbirth to increase breast
milk. Cumin seeds contain good amounts of
protein, fat, carbohydrates,fibre, calcium, iron
and phosphorous. Externally it can be used in
liniments for stimulating circulation and
bringing warmth to the area.
Kalonji Nigella seeds Dysmennorrhoea and painful menstruation
Useful in inflamatory disorders, joint pains &
Methi Fenugreek
in Diabetes
Pudina leaves Mint leaves Emergency remedy in stomach upset
Suva Dil seed Spice & useful in obstetrics
Cinnamomum
Tejpatra An Indian spice for improving digestion
tamala
Ocimum
Tulasi Leaves Blood purifier
sanctum

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 Indian cuisine is an epic tale, told with spices. India's history is as
rich and colorful as its food. A land of centuries- old traditions, many
faiths, and a plethora of languages and dialects, India's culture never
fails to mesmerize or its food to tantalize. Indian food is characterized
by a masala of spices - from cardamom and coriander to chilies, are
the mysterious ingredients that give Indian cuisine its distinctive taste,
flavour and aroma making it one of the world’s readily accepted cuisines.

India is recognized all over the world as the "SPICE KING", land with
innumerable food tastes and an exotic range
of food preparations. The blend of various
spices has been a traditional secret
transferred from generation to generation.
The purpose of spices as additives is to make
food more appetising for everyone,
especially children. Spices act as a good
preservative and are rich in antioxidant
properties. Spices were a major attraction for European settlers in our
country several years ago. Indian Cooking is known for its use of spices,
herbs and flavorings. The dishes from this country range from mild creamy
kormas to the hot curries of the south. . How many spices, in what
proportions, and in what order to blend, determines the authentic taste of
over a thousand Indian dishes.

Ideally, whole spices are best - they may be used whole as a natural spice
sachet and removed when having the meal. They may be ground them as
18
you need them in a coffee grinder or in a mortar. Most spices quickly lose
their flavor exceptions are chili powder, asafetida, turmeric, ginger powder
and mango powder. Spices are best stored in airtight containers and kept in
a cool dark place, preferably a wood cabinet.

Shifting trend:

With an increasing awareness of brands, consumers are moving towards

various brands of spices and its products in India. Leading brands of spices
and its products in Bangalore are MTR, MDH, Badshah, Everest, Swastik
etc. all the leading brands have a constant and steadily maintained quality
and uniqueness which attract consumers to use them repeatedly and creating
a brand loyalty.

Recent developments in this sector are brought by prominent

multifarious players like ITC entering with its Aashirwad brand, introduction
of organically grown spices by the existing big brands in market.

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20
 2. Company Profile:

2.1 About the organization:

Spices Trading Corporation Limited is a premier organization involved
in Exports, Imports and Domestic trading of diverse range of commodities.
STCL provides customers with a comprehensive portfolio of quality
products. STCL is renowned world over as a reliable trading company
dealing with quality products and superior service.
STCL deals with a variety of quality spices, Agricultural products as
well as Non-agricultural products. STCL's main objective is to extend to the
world, the age-old excellence of Indian quality products as well as to make
available quality products to Indian consumers by importing from global
source markets. At STCL, the tradition is to maintain not just the best but
legendary quality in all its products.

2.2 History:
STCL Ltd. was initially established in 1982 as Cardamom Trading
Corporation Ltd., a Government of India undertaking under the Ministry of
Commerce & Industry, the company has undergone various stages of
metamorphosis in ts process of growth and development. Realising the
immense market potential, the company developed from a solely cardamom
trading corporation to become Spices Trading Corporation Ltd. in 1987.
STCL became a wholly owned subsidiary of The State Trading
Corporation of India Ltd., A Government of India Undertaking in 1999.
21
 With globalization and opening up of trade world over, Spices Trading
Corporation Ltd. was renamed as STCL Ltd.
STCL is involved in import, export and domestic trading of a varied
range of products, both agricultural as well as Non-Agricultural. Today,
STCL is renowned as a reliable trading corporation that takes care of the
welfare of its suppliers as well as its buyers.

2.3 Functions and Duties:

STCL Ltd. was initially established in 1982 as Cardamom Trading
Corporation Ltd., a Government of India undertaking under the Ministry of
Commerce. The company has undergone various stages of metamorphosis in
terms of its growth and development. Realizing the immense market
potential, the company evolved from a solely Cardamom Trading
Corporation to become Spices Trading Corporation Ltd. in 1987. With
globalization and opening up of trade world over for agricultural and
nonagricultural products, Spices Trading Corporation Ltd. was renamed as
STCL Ltd in the year 2004.
STCL’s main objective is to extend to the world, the age-old excellence
of Indian spices and other agricultural commodities including onion, wheat,
rice and maize. STCL is involved in imports, exports and domestic trading of
diverse range of products, such as Spices, Agricultural commodities,
industrial inputs and products.
At STCL, the tradition is to maintain not just the best but legendary
quality in its products. STCL is today renowned world over for being a
reliable trading company taking care of the welfare of both its suppliers and
buyers.

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 2.4 Vision:
With the diversified trade outlook, the company would grow from
strength to strength in a sustained manner and achieve the turnover
exceeding Rs.1000 Crores in the coming years and at the same time helping
the growing community to realize better price for their produce and help
them to improve their standard of living.

2.5 Objectives:
2.5.1 Key objectives:
• To ensure the best practices in the domestic and international trading of
spices and other agricultural commodities.
• To process and manufacture spice and agricultural products to
international standards.
• To support, protect, maintain, increase and promote production of Indian
spices and other agricultural commodities as well as their sales/export.
• To effectively participate with government of India as one of their
Strategic Partners in their Agri-based programmes.
• To conduct open auctions and sell agricultural commodities as
auctioneer.
• To undertake and promote Research and Development.
• To harness a diversified portfolio and trade in non agricultural products
like Industrial Goods, Equipments, Components and also the materials
consumed by the industries of Power and Energy, etc.

2.5.2 Corporate objectives:

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 Since centuries, the scent, flavour and quality of Indian spices have
beckoned traders from far and wide. Even today, India continues to be a rich
source of spices and other natural resources. India continues to top the
destination chart of most traders for top quality products at reasonable price.
STCL's main objective is to extend to the world, the age-old excellence of
Indian spices and other agricultural and non-agricultural commodities.
The main corporate objectives of STCL Ltd. are as follows:
· Trading in domestic and international markets of spices and other
agricultural commodities
· To process and manufacture spice and agricultural products of
international standards
· To support, protect, maintain, increase and promote production of
Indian spices and other agricultural commodities as well as their sale/ export
· To effectively participate with Government of India as one of their
strategic partners in Agri-based programs
· To conduct open auctions and sell agricultural commodities as
auctioneer
· To undertake and promote Research and Development
· Adopting a diversified trade outlook to trade in non-agricultural
products like industrial goods, equipments & components, materials
consumed by industries of power and energy and to also trade in other
commercial products
· To carry on domestic and international trade in Iron Ore, Bullion,
Precious Metals, Lime stones, Metcoke, Minerals, polymer, Polyester Yarn,
cotton Yarn, PVC Resins, HMS Scarps and other metal Scraps.

24
 2.6 Profits:

During the year under review, the Company earned profit before tax of
Rs.440.96 Millions representing an increase of 143% over the previous year
and profit after tax of Rs.288.45 Millions, which is an increase of 140% over
the previous year. As a result, earning per share has increased to Rs.1923/-
from Rs.800/- of previous year. The trading profit of Rs.515.45 Millions has
also increased by 114% over the previous year’s trading profit of Rs.241.05
Millions. The profitability of the Company has gone-up exceptionally,
surpassing all previous records and as a result, Net Worth of the Company
over the years successively has increased to the level of Rs.512.87 Millions,
thereby enhanced its liquidity position.

2.7 Market Reach:

25
 STCL Ltd. offers a varied and diverse range of products for consumer
across the globe. STCL is reputed in the global market as a reliable buyer
and supplier of quality products and superior service.
The company has established a vast portfolio of clientele in India as well
as other parts of the globe, including countries like China, Japan, Europe,
USA, Middle East, Singapore, Malaysia, Srilanka and Bangladesh.

2.8 Service to growers:

A company places paramount importance on the welfare of its suppliers,
while sourcing, STCL Ltd. Gives preferential treatments to growers, thereby
establishes a benchmark for better realization of their produce.
The company began conducting cardamom auctions successfully
since 1989 against stiff competition from other private auctioneers,
benefitting the growers from helping them realize a reasonable price,
minimizing the exploitation by the private auctioneers.
The company is selling the agricultural inputs namely Fertilizers,
Pesticides and Sprayers to growers at competitive prices, which includes
sales/ distributors of Fertilizers to Tobacco growers under the scheme
sponsored by Tobacco Board, Government of India.
The company is helping the coffee growers in marketing of their
produce by providing updated market information, warehousing, funding at
low cost against stocks, as well as selling.
STCL is also supplying seedling and agricultural implements to
growers in the tribal areas under the Integrated Tribal Development
Programme of The Government of Karnataka.

26
 2.9 Board of directors:

A team of dynamic, forward-looking leaders head STCL Ltd. The team

at STCL is highly motivated and experienced in terms of market standing,
and strives to ensure that the company is collectively moving towards its set
road map.

The Board of Directors include:

Dr. Arvind Pandalai Sri. K. C. Ponnana

Chairman, STCL Ltd. and Managing Director
Chairman & MD, STC of India Ltd. STCL Ltd.

Sri. T. Srinidhi Sri. N. K. Nirmal

Director, STCL Ltd. and Director, STCL Ltd. and
Director, Ministry of Commerce & Director Finance, STC of India
Industry Ltd.

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28
 3.1 Statement of the Problem:
Retail marketing of branded spice products as well as bulk trading of
spices in wholesale markets in Bangalore

3.2 Rationale of Study:

This research brings to light the current status of branded spices market
in Bangalore with respect to consumer perception, retailer’s assumptions and
wholesalers perspective as a whole. This study makes it easier for STCL Ltd.
to enter the spices and its products segment of food industry with its new
brand “Royal Spices”.

3.3 Objectives of the Study:

3.3.1 Primary Objective

The goals of this research are to know the preferences of
consumers, retailers and wholesalers with respect to branded spices market
as well as finding ways for a new spices brand to compete with the existing
brands.
3.3.2 Secondary Objective
To make the retailers and wholesalers curious about the upcoming
spices brand from STCL ltd.

3.4 Hypothesis:
H0- Consumers, Retailers and Wholesalers are ready for accepting a new
brand in spices and its products.
H1- Consumers, Retailers and Wholesalers are not ready for accepting
and encouraging a new brand in spices and its products.

29
 3.5 Sample Design:

3.5.1 Consumers
Sample universe- Women above 15 years
Sample unit- Women who purchase branded spices
Sample size- 100 consumers of branded spices
Sampling technique- Random sampling

3.5.2 Retailers
Sample universe- Retailers of branded spices and its products
Sampling unit- Retailers of branded spices in Bangalore
Sampling size- 20 unorganized and 6 organized retailers
Sampling technique- Stratified random sampling. (Includes convenience
sampling for unorganized retailers)

3.5.3 Wholesalers
Sampling universe- Wholesalers of spices
Sampling unit- Spices wholesalers in Bangalore
Sampling size- 6 spices wholesalers
Sampling technique- Random sampling

3.5.4 Traders
Sampling universe- All traders of spices
Sampling unit- Spices traders in Bangalore
Sampling size- 6 spices traders
Sampling technique- Random sampling

30
 3.6 Data Collection:
Data will be collected primarily by means of interviews with
consumers, retailers, and wholesalers. The data collection is done through
these methods:

3.6.1 Primary
Interviewing consumers through questionnaires
Interaction with retailers and wholesalers
Discussion with traders

3.6.2 Secondary
Websites
Reviews
Books

3.7 Statistical Design:

3.7.1 Graphical method- Bar diagram
Pie chart
Venn diagram
3.7.2 Percentage method

31
32
4.1 Consumer profile:

4.1.1 Gender profile

100% of data is collected from female respondents.

Graph 4.1.a depicts the table of gender profile 4.1

4.1.2 Occupation profile:

Table 4.1.2 indicates the occupation profile

Occupation No. of respondents

Service 44
Self employed 13
Home maker 34
Student 9

33
 Graph 4.1.2.a depicts table the occupation profile 4.1.2

Inference:

Majority of the respondents are in service followed by homemakers/

housewives and other occupation.

4.1.3 Preferred buying places:

Table 4.1.3.A enumerates convenient Kirana shops that are preferred by

the consumers.

Kirana shops
Closer to home 84
Anywhere 16

Graph 4.1.3.a represents the data provided in the table 4.1.3.A

34
 Inference:

Majority of consumers visit Kirana shops that are closer to home rather
than buying anywhere.

Table 4.1.3.B enumerates customers buying at various organized retail

outlets

Organized retailer No. of respondents Percentage

Big Bazaar 31 23.3
Food World 42 31.6
Namdhari Fresh 22 16.5
More. 15 11.3
Nilgiris 14 10.5
Subhiksha 4 3.0
Others 5 3.8

Graph 4.1.3.b represents the data given in table 4.1.3.B

35
 Inference:
Majority of consumers visit Foodworld and Big bazaar followed by the
other retailers.

4.1.4 Purchase of groceries for the family

Table 4.1.4 represents the family member doing the purchase of

groceries

Self 60
Self and Others 18
Others 20

36
 Self 60 18 20 Others

Venn diagram 4.1.4.a depicts table 4.1.4

Inference:
Majority of respondents do buy the groceries by themselves.

4.2 Retailers profile:

4.2.1 Unorganized Retailers

Data collected from various areas of Bangalore, representing various

numbers of SKUs displayed and floor space is given in table 4.2.1.A.

No. of SKUs Floor Space

<5 5-7 >7 Below 100- Above
100sq ft 250sq ft 250sq ft
6 9 5 9 8 3

Table 4.2.1.A Number of SKUs and floor space

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 4.2.2 Organized Retailers
There was no structured questionnaire for organized retailers. Data is
collected through discussion with the following organized retailers by
visiting to either their respective head offices and interacting with the
procurement department and/ or interviewing the store managers.
1. Food world
2. Namdhari fresh
3. More.
4. Reliance
5. Subhiksha

4.3 Wholesalers and Traders:

Data is collected on a random basis from wholesalers of branded

spices and traders of spices in Bangalore, particularly in Yeshwanthpur area
for wholesalers and old and new Taragpet area for discussing with traders.
There was no structured questionnaire for wholesalers and traders. It was
more of a general discussion.

38
39
 5.1 Consumers:
Consumers were met in person or interviewed over phone to fill in the
questionnaire which is provided as annexure.
5.1.1 Visit to retail outlets:
Weekly 56
Fortnightly 25
Monthly 19

Table 5.1.1 indicates frequency of visit of consumers to the retail outlets

Graph 5.1.1.a depicts table 5.1.1

Interpretation:
Majority of consumers visit to retail outlets on weekly basis.

5.1.2 Buying frequency of Spices and its products:

Monthly 26
Ad hoc 74
Table 5.1.2 indicates the buying frequency of spices and its products.

40
Graph 5.1.2.a represents table 5.1.2
Interpretation:
Majority of respondents buy spices and its products on ad hoc basis.

5.1.3 Brand decision:

Pre decided 45
On floor 60
Table 5.1.3 indicates the consumer behavior of choosing a brand.

40 5 60

Venn diagram 5.1.3.a represents the table 5.1.3.

Inference:

41
 Many consumers decide on floor about the brand to be bought. Few
consumers pre decide about the brands of some spices and decide on floor
about others.

5.1.4 Purchasing pattern

Chilly Chilly Coriander Turmeric Garam Sambar Rasam Chicken Mutton Fish
Amount Powder Flakes Powder Powder Masala Powder Powder Masala Masala Masala

10 g 1 3 0 6 9 2 0 2 0 0

50 g 3 37 18 15 14 2 11 3 3 3

100 g 35 36 34 59 19 17 17 23 11 16

250 g 42 10 45 19 46 35 38 28 34 31

500 g 10 4 8 0 12 30 25 10 13 12

1 kg 9 0 0 0 0 8 7 1 1 1

Graph 5.1.4.a represents the data in table 5.1.4

Interpretation:

42
 Graph 5.1.4.b
Majority of consumers claimed that the preference of consumers in
buying chilly powder is towards 250g, 100 g packs followed by the rest.

Pie chart 5.1.4.c

Many consumers prefer 100g and 50g packs of chilly flakes are more
popular for buying than the others.

43
 Pie chart 5.1.4.d
Many consumers claim that coriander powder is preferred in 250g and
100g packs followed by other sizes of packing.

Graph 5.1.4.e
Majority of the respondents prefer 100g packs of turmeric the most for
picking at one purchase rather than the other amounts.

44
 Graph 5.1.4.f shows that packs of 250 and 100g of Garam Masala are
preferred for buying over other amounts of packages.

Graph 5.1.4.g
Majority of respondents claimed that they buy Sambar Powder of 250g
and 500g packages over the other amount of packages.

45
 Pie chart 5.1.4.h
Many respondents claim that they buy Rasam Powder of 250g and 500g
packages rather than other amount of packages.

Graph 5.1.4.i
Many respondents claim that 250g and 500g pachages of Chicken
Masala are preferred for buying followed by others.

46
 Pie chart 5.1.4.j
Majority of respondents prefer 250g of Mutton Masala rather than other
packages.

Graph 5.1.4.k
Majority of consumers claim that they prefer Fish Masala of 250g packs
followed by 100g and 500g packages.

47
 5.1.5 Preferences:

Factor Most Moderately Preferred Moderately Not

preferred preferred not preferred preferred
Price 54 36 3 3 4
Quality 43 34 18 5 0
Packaging 1 26 42 34 1
Advertising 0 1 33 36 31
Retailer's 2 3 9 24 62
recommendation
Table 5.1.5 depicts the causes of consumer preferences

Graph 5.1.5.a depicts table 5.1.5

Interpretation:
Favourable price is the factor that is most preferred in a Brand of
spices according to majority of consumers and gets the first preference.
48
Quality is moderately preferred, securing second place in preference list.
Packaging is preferred third, followed by advertising and retailer
recommendation.

5.1.6 Factors for trying a new brand:

Preference Retailer's Advertising Word Price Display at
ranking recommendation of comparision the place
mouth at the point of
of purchase purchase
Most 46 32 7 10 7
preferred
Moderately 15 36 17 14 15
preferred
Preferred 14 15 15 35 27
Moderately 17 9 18 23 31
not
preferred
Not 6 6 42 16 27
preferred

Table 5.1.6 gives data about the factors that influence the consumers for
trying out a new brand.

49
 Graph 5.1.6.a represents the data given in table 5.1.6

Interpretation:
Majority of consumers believe that for a new entrant, retailer’s
recommendation plays the most influencing role on customers, followed by
advertising, and price comparison at the point of purchase. Word of mouth
and display at point of purchase are the least drivers for consumer to
purchase a new brand.

5.2 Retailers:

According to retailers, criteria for a brand to move are:

50
 Qualit Advertis
y ing
Market
accepta
nce Price Packin
g
Brand
name Tast
e

5.2.1 Unorganized retailers:

Graph 5.2.1.1.a depicts table 5.2.1.1

51
 5.2.1.1 Number of SKUs maintained in the retail stores visited is
enumerated in table 5.2.1.1

No, of SKUs No. of

respondents
1 0
2 2
3 5
4 0
5 5
6 4
7 0
8 2
9 0
10 2

Interpretation:
Majority of stores visited had 3-5 SKUs.

Interaction resulted in the following findings:

• Faster moving brands are MTR, Everest, Shakti, Badshah
• Criteria for a brand to move are market acceptance, brand name, quality,
consumer acceptance, taste, advertising, pricing, packing, etc.
• Mode of procurement of branded spices is either through company
agents, or distributors.
• The promotional activities are carried out in the stores like posters, bills
and other advertising materials. These promotional materials are provided by
the company itself. Lucrative seeming brands are also promoted by retailers by

52
recommending. Generally 6-12% over the selling price is provided to retailers
as their margin.
• Influenced by dealers or distributors to entrust a new entrant and
providing it a shelf space.
• Factors that are expected from a new brand of spices are attractive and
standard packaging, effective advertising, and timely response from company
besides good margin. Some retailers said that they display the new brand for a
particular period of time and continue selling it if it makes them a considerable
turnover. Usually 5% more margins will be set for new entrant compared to the
existing ones in the retail chain. Retailers did not deny influence through the
incentives that are periodically given by the company itself. As suggested by
most of the retailers, sufficient promotional materials by the new entrant would
make the brand stick and survive in their respective store.

53
5.2.2 Organized retailers:
General observations:

5.2.2. A Procurement of spices and related products in leading organized

retail chains:

Vendors Franchisi
ng

5.2.2. B Promotional activities:

Tag ads,
Posters,
Handbills,
Free hampers,
Try samples

54
5.2.3 Individual discussions:

Food world
There are 28 retail outlets of Food world in Bangalore. Spices like
any other product, is procured through vendors into their retail chain who
are 5 in number presently. About 150 stock keeping units (SKUs) of
branded spices are maintained whole through the retail chain. Margin in
case of spices is as high as 40%. Selection of a new brand is done by
deciding upon the packaging, wherein usually brighter colored
transparent or translucent packing with standard size is preferred. The on
floor advertises regarding spices are tag ads on TV, posters and Hang
bills. Promotional activities are free hampers and try samples that are
provided by the company.
More.
Till date 100 supermarkets have been rolled out spanning Pune,
Mumbai, Ahmedabad, Delhi, Vizag, Bangalore, Vijayawada and
Chennai.
In this retail chain, private labels play a major role in whole spices
and even in ground spices to a certain extent. Except national brands,
state brands are bought directly through franchising. It has one point
supply through traders. Margin markdown method is followed to
calculate terms of buying. New brands are allowed in the chain after
assurance about their quality, credibility, scheduled supply, payment
terms, and etc. Thereon, returns determine the longevity.

55
 Namdhari fresh
This retail chain has separate wings for the procurement of spices
and related products. New products are introduced after being reviewed
by their new product up gradation team. Total number of SKUs is around
20. For a new entrant, company should enter into terms and conditions
and then is provided space in the outlets. The promotional activities are
carried on in stores which are provided by the company itself.
Subhiksha
It is a retail chain which is basically consumer driven. This chain
of 780 outlets whole through India usually demands 22% margin to the
well known and established brands where as it charges a margin of upto
40% to other brands depending upon their market penetration.
Promotional materials and activities are solely provided by the respective
company.
Reliance fresh
Private labels are most evident. Has more than 11 stores in
Bangalore alone. Total numbers of SKUs that are maintained in the chain
in Bangalore are around 10-15. Billing is done on MRP basis.
Procurement wing takes care of the buying of newer brands that enter in
market. Promotional activities are TV tag ads, hang bills and other
hampers that are provided by the respective company.

56
 5.2.4 SWOT analysis of “Royal spices” brand from STCL Ltd. reaching
consumers through organized retailers:
Strengths:
• STCL Ltd being renowned in its international trade, can use its long built
brand image.
• Intrinsic complexity of managing a lengthy supply chain is cut short.
Weakness:
• Being a new entrant in processed spices and blends, positioning and
consumer perception has to be newly constructed.
Opportunities:
• Organized retailing in India has a huge scope because of the vast market
and the growing consciousness of the consumer about product quality and
services. A study conducted by Fitch expects organized retail whose share is
more than 6% currently, to capture 15%-20% market share by 2010.
• Eye-catching display has proven to influence purchase. 27% of the
respondents have opinioned that display is a preferred factor for trying out a
new brand.
Threat:
• Private labels owned by organized retail chains are evident in respective
store outlets at lower price than national brands attracting price conscious
consumers.

5.3 Wholesalers

57
 Wholesaling of branded spices is generally carried out through
dealers or distributors. Discussion with the convenient sampled
wholesalers resulted in following findings:
Products are seldom pushed into the retail chain. It is a pull based
selling chain though higher margins play an important role in influencing
the retailers. Usually wholesalers’ margin is calculated on billing price.

Computerized and standard packing, reputation, well maintained

quality and good terms of trade are the factors that they look for in a new
entrant.

5.4 Traders:
Interaction with traders was carried on to know the flow of spices into
Bangalore market. The annexure 5.4 provides the details of the traders of
whole spices.

58
59
 6.1 The following are the various recommendations:
6.1.1 Non cost intensive methods:
1. Packing should be attractive with translucent cover, bright colored
graphics and hologram for proving it genuine.
2. Standard amount of packaging will be easily approved by the consumers.
3. Rear side of packing should contain a small advertise suggesting other
products with a tag like “Try our other products…” with their picture.
4. To capture the segment of health conscious consumers, the medicinal
value or the uniqueness of whole and ground spices can be mentioned on the
front side of the package. For example,
• Cardamom, Cumin: For good breath.
• Clove; improves digestion and acts as a mouth freshener.
5. Approaching the potential dealers of branded spices and entering into
long term contracts. Credit terms and payment period should be flexible with
both wholesalers and retailers until brand penetration is satisfactory. Credit
terms could be extended for a few days till the first consignment of product is
sold as it encourages the wholesalers and retailers and heeds belief.
6. Offering franchising to organized retailers.
7. Providing a social outlook on packing about the authenticity of company
being a part of government, oriented towards the welfare of farmers, or
mentioning the part of the penny in consumers’ pay that reaches the ultimate
producers- the farmers. This is no cost publicity for evoking a brand loyalty
among a niche segment of consumers who have an obligative mindset towards
the welfare of the society. Hereby we can also create awareness among the
retail giants that it also becomes a sign of esteem to push a product into their
retail chains that has social concerns.

60
 6.1.2 Cost intensive methods:
1. Launching up with good media support and wide publicity about the
launch. Initial television advertizing campaign should be strong.
2. Publicity materials like hand bills and posters to retailers should be
provided. Eye catching display space should be worked out with retailers such
that consumers cannot afford miss a glance on the publicity materials every
time they visit retail outlets.
3. Special introductory offers and hampers for unorganized retailers.
4. Organic packaging for products like turmeric powder will carry a health
conscious and environmental friendly image. As turmeric powder being a
lasting product, a little high price for this special packing and organic product
would hardly make a difference in the minds of consumers.
5. Becoming media partners for reality shows in regional channels, and
advertising more on the festive days and holidays. Sponsoring blended spices
to programmes related to cooking in regional channels will prove a mind game
creating belief among consumers about taste.
6.2 The following are the various suggestions:
1. Raw materials for processing can be best sourced based on convenience
• APMC yards
• Directly from farmers
• Through contract farming
• From the traders in convenient places near processing units
• Futures trading and commodity markets
2. Flexible pouches, gusseted and zippered bags, specialty boxes can also
be used for packing.
3. Mentioning about the special properties of spice on the packing.

61
4. Certain products like chilly powder, pepper powder of various brands
hardly differ in taste. Consumers will have a mentality to just pick up a
convenient pack of any brand. To bring a brand consciousness, try giving a free
sample of blended spices like sambar powder, or any masalas with products
that cannot be differentiated with differing brands. This proves worthy in two
ways. Firstly, the consumers pick up the whole spices and ground spices
because of the free sample that they are getting, secondly, this method lets them
taste the blended flavour of the free sample that is given.
5. Work out tie ups with existing hotel chains as they need to maintain taste
and quality intact and do not often change the brand that is used for spices and
its products.
6. A responsive and active consumer cell for responding to queries,
suggestions and complaints of consumers would help building a brand image
by protecting the welfare of consumers.
7. Feedback forms can be kept in organized retail outlets to understand
consumers better.

62
63
 7. Conclusion:

The research covered a random sample of 100 consumers of spices and

its products as a part of consumer survey. Interactions with organized and
unorganized retailers, wholesalers and traders were carried out to understand
the pulse of branded spices, its products as well as wholesale markets in
Bangalore. The end results can be summarized as follows.

- Majority of consumers visit to retail outlets on weekly basis.

- Majority of respondents buy spices and its products on ad hoc basis.
- Many consumers decide on floor about the brand to be bought. Few
consumers pre decide about the brands of some spices and decide on floor
about others.
- Brand loyalty in case of blended spices is found to be strong and doesn’t
flip often.
- Favourable price is the factor that is most preferred in a Brand of spices
according to majority of consumers and gets the first preference. Quality is
moderately preferred, securing second place in preference list. Packaging is
preferred third, followed by advertising and retailer recommendation.
- Majority of consumers (46% of respondents) believe that for a new
entrant, retailer’s recommendation plays the most influencing role on
customers, followed by advertising, and price comparison at the point of
purchase. Retailer’s recommendation is found to be strongly influencing the
consumers visiting the kiran shops. Word of mouth and display at point of
purchase are the least drivers for consumer to purchase a new brand.

64
- Factors that are expected by retailers from a new brand of spices are
attractive and standard packaging, effective advertising, and timely response
from company besides good margin.
- A new entrant in branded spices and its products should concentrate on
cost effective sourcing, processing, packaging, positioning, trade terms and
policies with dealers, distributors and retailers besides maintaining quality,
taste and image.

65
 Bibliography

Books:

Marketing Management by Kotler et al.

Agmark Grade Specifications For Spices-I-Spices Board.

Agmark Grade Specification For Spices-II- Spices Board.

Websites:

www.thehindubusinessline.com

www.webindia123.com

www.indianetzone.com

SLCL website

Spices board website

Websites of leading spices brands

Reports, projects and others:

CII report on retail scenario of India

Projects on marketing

Recent magazines

66
 Annexures

Consumer Questionnaire (specific to female respondents)

1. Name:

2. Area:

3. Age group:

□ 15-19
□ 20-24
□ 25-34
□ 35-44
□ 45-54
□ 55-64
□ 65+

4. Qualification:

Graduate Post graduate Professional

5. Profession:

Service Self employed Housewife

6. Where would you prefer to buy groceries at?

□ Kirana shops

Closer to home Anywhere

□ Organized retailers

67
 Big Foodworld Namdhari More. Nilgiris Reliance S-Mart
Bazaar Fresh

7. Who does the purchase of groceries?

□ Self

□ Any other, specify…

8. How many times do you visit the retail shop in a month?

Weekly Fortnightly Monthly

9. How do buy spices and its products?

Monthly Ad hoc/ Need

based

10.Your brand preference is…

Pre decided Decided at the point of

purchase

11.What is your purchase pattern at a time:

Packing 10 50 100 250 500 1 kg

(weight) gm gm gm gm gm

Spice products
Chilly powder
Chilly flakes
Coriander powder
Turmeric powder
Garam masala
Sambar powder
68
 Rasam powder
Chicken masala
Mutton masala
Fish masala

12.Preference is because of (Please rate in the order of priority):

Parameters Price Quality Packaging Advertising Retailer’s
recommend
Priority rating ation
1
2
3
4
5

13.What are the factors that influence you to try a new brand (Please rate in the
order of priority):
Parameters Retailer’s Advertising Word of Price Display at
recommend mouth comparison place of
ation at place of purchase
Priority rating purchase
1
2
3
4
5

14.Any other information, you would like to provide…

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Interaction with retailers:

Sku’s of spices maintained:

Margin:

Criteria for the brand to move:

Which brands move faster?

Why?

What do u look in a new brand:

Promotions:

Weekly turnover due to spices:

Mode of procurement:

Tie-ups:

70
 Information related to spice traders:

Trader Name of shop Contact

Srinivas (private label Pure soapnut works, #56, 9845944306
named ‘Nisarga ‘is old taragpet.
owned by this trader)
Rajendra prasad Raghu trading company, 080-22870685
old taragpet
Vivek Anjanadri traders, #281, 080-41695000
old taragpet
Ramakrishna Sri sindhur traders,#29, 080-65907290
old taragpet
Balaji Sudha traders, #299/1, old 080-41323399
taragpet

Spices inflow into Bangalore wholesale market:

Spice Source
Turmeric Sangli, Erode
Jeera Gujarat
Pepper Cochin
Cloves Imported
Cassia Tamil nadu
Cardamom Tamil nadu

71