Indian Institute of Management, Jammu

Marketing Management - II
Project Report
Tokri
Submitted To:
Prof. Baljeet Singh
Submitted By:
Group 6

CONTRIBUTION TABLE
 MBAID Student Name Contribution
MBA21019 Anjali Panjwani 12.5
MBA21061 Falguni Babhare 12.5
MBA21094 KSS Mythili 12.5
MBA21120 Navpreet Hans 12.5
MBA21153 Pronit Dihingia 12.5
MBA21197 Sidharth Singh 12.5
MBA21211 Surbhi Verma 12.5
MBA21242 Yash Aggarwal 12.5

COMPANY INFORMATION
Company Name: Tokri
Company Address: plot 322, Gurugram, Haryana
Company Website: www.TokriIndia.com
Company Email: mail@TokriIndia.in

INTRODUCTION
In the fast-moving consumer goods industry, people purchase products they need on a regular
basis. FMCG, or fast-moving consumer goods, contains items like shampoo, soap, and coffee,
which are inexpensive. FMCG products are very popular, and the total value of the industry is
estimated at almost $5 trillion.
FMCG segments have been dominating for decades. Several companies, including PepsiCo,
Hindustan Unilever, and P&G, have been dominating the FMCG sector for decades. A rule of
thumb for FMCG products is that they have very thin profit margins, but have high sales
volumes. Different business models are used to distribute FMCG products, such as wholesalers,
retailers, or distributors. Fast-moving consumer goods (FMCGs) refer to goods with a quick
turnaround time. FMCG products include ingredients, toothbrushes, beverages, milk, and most
anything else you can find at a Kirana Store or other dedicated shop.
Products that fall into this category are durable ones, non-durable ones, and services. Durable
items are items that can last for more than three years from the date of manufacture, meaning you
can still consume them afterward. Non-durable items usually only last for a maximum of three
years and generally expire afterward. In addition, services such as repair work also fall under the
FMCG subcategory.
In the FMCG business model, there is a large supply chain that occurs before the product reaches
the consumer. FMCG business opportunities exist at all stages of the supply chain, but there are
basically four types of business plans:
· MANUFACTURERS- A manufacturer is a company that produces products in bulk from
raw materials and sends them for consumption. Manufacturers represent the first segment of
the FMCG business model.
 · DISTRIBUTORS- The distributor is the individual or company who purchases large
quantities of products directly from a manufacturer, such as Nestle, P&G, or ITC, and then
distributes them later to wholesalers.
· WHOLESALERS- Suppliers and wholesalers rarely make a profit margin greater than a
penny, but this part of the supply chain is the most important. Wholesalers purchase products
from distributors and sell them in small quantities to retailers.
· RETAILERS- They are part of the supply chain who purchase products directly from
wholesalers in accordance with demand and sell them directly to the consumers. The retailers
follow the B2C (business to consumer) model. All the other parties are part of the B2B
(business to business) model.
It is widely believed that the FMCG sector has low margins, with margins ranging from 4% to
25%. However, it is important to realize that this segment has the highest volume of sales,
creating a great opportunity.
In this way, we are planning to create an E-Commerce Wholesale Aggregator that will fill the
gap between wholesalers and retailers. The service will provide retailers with a hassle-free e-
commerce platform and increase overall profit margins, while still keeping a small portion for
ourselves.

PRODUCT NAME AND DESCRIPTION

Our product name is TOKRI. It is essentially an E-Commerce Wholesale Aggregator. In E-
commerce wholesale, businesses buy goods in large quantities from manufacturers directly
online, then warehouse them, and resell them. For small retailers, purchasing large quantities
of a product is out of the question. Tokri handles this problem by sourcing a wide range of
products from different FMCG manufacturers, supplying the required quantities to retailers,
and charging a margin of 5% to 6%. The product is sold at a much lower price than the
similar products at other Marts, such as D-Marts. For example, Tokri buys 40,000 units of
ghee and sells 200 units at a profit margin of 6%. This benefit both Tokri and Retailers. As
the product is sold at much lower prices, there is a benefit for the Consumer as well, since the
consumer gets the product at a much lower price.
 MARKET PROBLEM
The aim of our company is to provide leverage to small retailers and small mom and pop stores,
who are our major customers. So, the profit of these small retailers will be our profit and in the
same way their loss will be our loss. Therefore, we aim to address the prominent problems of
these small-scale retailers and go hand in hand with them in attaining profits. The problems faced
by these mom-and-pop stores are as follows:
Problem 1
· Cutthroat competition in FMCG means only the biggest can survive, threatening mom
and pop stores across India.
Problem 2
· Small retailers lack capital to buy in bulk thus leaving them out of the discounts race.
Problem 3
· Large number of small retailers but all unorganized and distributed.
Problem 4
· Mom and pop stores are unable to leverage technology for demand forecasting.

BUSINESS MODEL
Key Partners
Its key partners are as follows-
· FMCG Manufacturers- "In general, manufacturers are the ones who make the products
from raw materials in bulk, then send them for consumption on their side.”
· Logistics companies Gati- “GATI Ltd. is an Indian logistics company offering logistics
services including ground and air freight, warehousing, and supply chain management.”
· DHL- “DHL is an international logistics company providing courier and package delivery
services. It is part of the German logistics giant Deutsche Post, which delivers over 1.6
billion parcels annually.”
Key Activities
· The Company follows a Wholesale Business Model, as a wholesale business model
creates efficiencies for both retailers and wholesalers. Retailers get new, often
complementary, products without investing in R&D, and wholesalers get access to existing
customers without spending money on marketing.
· The Company procures a wide range of products from multiple FMCG manufacturers in
bulk quantity and supplies the necessary quantity to the various retail stores with a margin of
5-6 percent.
· Quality check is ensured for all the products for quality assurance to the retailers and
eventually the end customers. Every type of product and service relies on quality to differ
from the competition. In today's competitive market, quality is one of the most important
features that defines a product.
· The Company operations will be initially in tier 1 cities and gradually expand to tier 2 and
3 cities.
Customer Segments
The Major customer segments are-
· The Mom-and-Pop Stores- Private and family-owned businesses are commonly called
Mom and Pops. These businesses are operated by a family or a small team. They bring in
small sales and generate little profits. The term "Mom and Pop" was originally used to refer
to novice investors.
· Hospitality Business- Often referred to as the hospitality industry or tourism industry, the
hospitality industry encompasses a variety of industries within the service sector, including
lodging, restaurant, event planning, theme parks, air transport, cruises, and more.
Products
Product portfolio will be broadly categorized into 5 categories.
· Staples
· Eatables
· Kitchen cookware
· Beauty Products
· Toiletries
Cost Structure
· Cost of procurement of goods- Procurement is the act of a business buying goods or
services. So, the total cost of buying the goods and services as per the requirement of the
company is known as procurement cost.
· Inventory Costs- A business's inventory cost, also known as the cost of holding inventory,
includes all the machinery needed to hold inventory. It is usually defined as the total
expenses an organization incurs to hold inventory.
· Transportation Costs- Companies incur the costs of moving inventory or other assets from
one location to another. The term essentially means all the costs and expenses associated
with transporting goods from a warehouse to a location outside of the company
Revenue Stream
· 5-6 Percent markup on the goods sold.
· Advertisement revenue through in-app and website Advertisement.
 INDUSTRY ANALYSIS

PESTLE Analysis
1)Political:- The government policies highly impact the profitability and the revenue of
retail/wholesale/retail cum wholesale companies. Each company must abide by these political
regulations while importing, exporting or selling goods. Especially these days, the surge of E-
Commerce websites has drawn the attention and scrutiny of the government.
Eg:- Stores offering food products will have to compile with the health guidelines established by
the government. E-Commerce retailers will have to abide by the government regulations to avoid
data-breach to avoid consumer trust issues due to misuse of data.
2) Economical:- When the economy is on high rise, the retail store experiences profitability,
since the customers will have a higher purchasing power, which can be an alluring factor for the
investors to invest in retail business.
But when the economy is in decline, the retail industry experiences an overall drop in demand
from the consumer side, while the investors are more cautious about investing in retail. But some
of the retail industries still perform better by exploiting the recession situation by stocking more
of essential products and providing pocket friendly prices to the consumers which acts as a
drawing factor for the consumers and also the investors.
3) Social:- The social factors include the life-style and customs of the consumers which are
influenced by the demography. Retailers can better establish themselves and gain a strong
ground by following the social trends of the locality of their presence and stock goods and
products accordingly.
Retailers can collect data from online customers for stocking products accordingly. They can
observe the products customers are buying, inclined to buy and not inclined to buy.
4) Technological:- The key to better penetration in the current market is evolving and adopting
technological advancements. The Internet has been a boon for the retail industry, not just in
terms of streamlining the services, but also in order to reach out to the audience world wide.
Companies are making an online presence through their tailor made websites and webpages.
They are also offering digital catalogs of their products on these webpages. Customers can shop
online through these webpages and then the purchased products are either shipped to the homes
of the customers or are delivered to the closed pick-up point of the customers.
5) Environmental:- Wide presence of retailers is a bane in itself. It has attracted a lot of
environmental obligations. Major retailers make a large scale usage of plastic and it has come as
a backlash to this sector.
All retail stores need to meet the environmental requirements for consumer and employee safety.
These are set by the government and a company is obligated to abide by these.
6) Legal:- A store needs to meet legislative conditions of the country they are part of before and
after opening their shops on the online or offline or both the platforms. These are standard
conditions. These include labour laws, taxation laws, etc. Once the company expands into the
international market, then it will have to also meet the legal requirements of those countries. A
company can face legal repercussions upon not abiding by these regulations and can also end up
being bankrupt or completely closed.
 COMPANY ANALYSIS
TOWS Analysis

Upon doing TOWS analysis, we identified the strength(s) , weakness(W),

opportunity (o) and Threats(T) of our business. Following the TOWS matrix, we
put strengths and weaknesses under the internal factors and Opportunities and
Threats under external factors.
Internal Factors are the factors which we consider as intrinsic to our business and
these include the strengths and weaknesses. External factors on the other hand are
the factors which are heavily dependent on the external environment of our
business.
Internal strengths of our business are
1. Value Proposition
2. Accessibility
3. Software
Internal weaknesses of our business are-
1. Inability to provide credit line to retailers
2. Customer acquisition cost is high
3. Dependency on external agency
External factors creating opportunities and threats for us are-
Opportunities-
1.Logistics
2.CRM
3. Hassle free buying experience

Threats -
1.Homemade product wave
2.Wholesalers (metro cash and carry)
3.Manufacturers

MAX/MIN Cell

Maximizing Strengths Minimizing Threats

Value Proposition Home made Product wave
Accessibility Wholesalers
Software Manufactures
MAX/MAX Cell

Maximizing Strengths Maximizing Opportunities

Value Proposition CRM
Accessibility Logistics
Software Hassle free buying
 COMPETITOR ANALYSIS

The matrix analyzes the potential and current competition with direct and indirect competitors.
The direct and current competitors are the wholesalers in the market for example UDAAN and
metrocash
Direct and potential competitors can be large retailers that can enter the wholesale business for
example Dmart, Big Bazaar etc.
Indirect and current competitors can be the manufacturers that can directly sell to the retailers
and even to customers.
Indirect and potential competitors can be people who starts making products at home to reduce
their dependencies on the retail market and food chain and hospitality industry which serves the
food needs of the people which will lead to a certain decline in demand for staples and eatables
and thus reduce the sales of the retail stores
 STP Analysis
Segmentation:- The company is involved in the B2B category of dealings, therefore the
segmentation is quite intricate and complex. But broadly the company is looking at need based
segmentation. For conducting the need based segmentation, the company broadly divided the
market based on macro and micro parameters.The former is made of common characteristics that
define the entire market. Micro parameters, on the other hand, are based on differences in
specific buying characteristics.

Targeting:- Post the need based segmentation, the market was divided into a number of
segments. Then the company narrowed down to three specific segments, the targets whose needs
can specifically be catered by the company, i.e., The small/large/Modern trade/general trade
retailers, hospitality industry, and the offices.

Positioning:- Now the company had to loop in their business customers and for doing so they
needed to strongly position themselves. There are already strong competitors like jio mart and
dmart online in the market, who cater to both B2B and B2C categories. And there are also a
number of other international players like metro. There is already a heavy competition in the
market due to the presence of strong domestic players like jio mart and dmart and also strong
international players like metro and bestprice. Moreover, these companies follow a brick and
click model and the domestic players have got an edge as they can cater to the B2C category
along with the B2B category. To prevent these strengths of these companies from overpowering
the company, it will need a strong positioning strategy.
 4 P’S OF MARKETING

Product

Our product name is TOKRI. It is essentially an E-Commerce Wholesale Aggregator. In E-

commerce wholesale, businesses buy goods in large quantities from manufacturers directly
online, then warehouse them, and resell them. For small retailers, purchasing large quantities of a
product is out of the question. Tokri handles this problem by sourcing a wide range of products
from different FMCG manufacturers, supplying the required quantities to retailers, and charging
a margin of 5% to 6%. The product is sold at a much lower price than the similar products at
other Marts, such as D-Marts. For example Tokri buys 40,000 units of ghee and sells 200 units at
a profit margin of 6%. This benefit both Tokri and Retailers. As the product is sold at much
lower prices, there is a benefit for the Consumer as well, since the consumer gets the product at a
much lower price. Unique offerings of the product are online selling channels of tokri retail ltd. ,
hassle free shopping experience and quality grocery and household appliances.

Price

Pricing refers to the amount of money charged for a product or service; it is also a term referring
to all the values that customers sacrifice in order to gain the benefits associated with having or
using the product. A major determinant of buyer choice has historically been the price. All other
elements of the marketing mix generate costs, while prices are the only ones that generate
revenue. Additionally, price is the most flexible element of the marketing mix. The price of a
product is more flexible than its features or its distribution channel. A major challenge many
marketing executives face at the moment is pricing. Many companies have trouble handling
pricing. The focus of some marketing managers tends to be on other marketing mix elements
rather than pricing.

Smart managers treat pricing as a critical strategic tool for creating and capturing customer
value. Firms' bottom lines are directly affected by prices. A slight percentage improvement in
price can generate a significant increase in profitability. More importantly, as part of a company's
overall value proposition, price plays a crucial role in creating customer value and building
relationships.

There are three major pricing strategies:

❖ Customer value-based pricing

❖ Cost-based pricing
❖ Competition based pricing

In this case, we will use competition-based pricing. We will also use Tokri gift cards and
discount coupons. As it is all about revenue, we believe that the product we are offering delivers
tremendous value to the customers and thus, we can successfully price it.

Place

When we make decisions regarding a place, we are trying to determine where we should sell our
product and deliver our product to the market. Like every other firm, the primary goal is to
always get the products in front of the consumer that is most likely to purchase it. It can be
achieved by placing our product in online stores. This will not only give a vast network but also
a speedy delivery to customers.

Promotion

For the promotion of our product, we need to make four essential decisions

❖ Setting the advertising objectives

❖ Setting the advertising budget
❖ Developing advertising strategy
❖ Evaluating advertising effectiveness
Advertising objectives are specific communications tasks to be accomplished with a certain
target audience during a specific period of time. Our advertising objective is informative
advertising. This is because we are developing a unique and innovative first-of-its-kind product
that requires awareness of the product. We also need to communicate customer value, explain
how it works and build a brand and company image so that our product becomes synonymous
with its genre.

It is most effective to utilize personal selling in developing buyers' preferences, convictions, and
behaviour. It entails a personal encounter between two or more people so that each can learn
from the other needs and characteristics of the other and make quick adjustments.

3 P’s OF SERVICE

People

People are at the top of the "people, process, product" hierarchy for a reason: without them, one’s
company would fail. The marketing mix ingredient of People is being more commonly used
online as technology and AI progress. Thousands of websites now use chat bots to directly
contact users and respond to their requests.

Process

When a client and a business engage, the term "process" refers to the methods, mechanisms, and
flow of activities that take place. With the amount of money spent on online transactions
growing at a rapid pace, the 'journey' of a user entering a website and then purchasing a product
is now more crucial than ever.

Here, we invest significantly in developing more efficient supply chains for better productivity
and last mile deliveries, in high quality materials and in speedy delivery.

Physical Evidence

Any tangible components that facilitate service performance or communication, as well as the
environment in which the service is supplied and where the firm and customer interact. All
tangible representations of the services, such as brochures, letterhead, business cards, report
formats, signage, and equipment, are included in the physical evidence of service. Physical
evidences of Tokri are: -

❖ Infrastructure – office building

❖ Layout of the company’s website, application for the use of product
❖ A physical card of the company
❖ Card swiping and card tap machines for payments.
❖ Fingerprint reading machines.

Other components that act as physical evidence of the company include 24/7 support to retailers,
best possible quality of goods provided to the customers, Eco-friendly packaging of goods that
are to be delivered, and most importantly the webpage is designed in such a way that it is not
only easy to navigate but is also user friendly.
 GTM
What:
Tokri is an online aggregator platform that aims to protect the margin of small and medium mom
and pop stores by aggregating their demand and leveraging economies of scale.

Who:
Our company’s ideal customers are mom and pop stores from tier 1 and tier 2 cities in the initial
days of our launch, where the concentration of mom and pop stores is high.

Where:
The problem statement of our company is rescuing the small scale mom and pop stores from cut
throat competition they face due to supermarkets which are eating away their profits/market
share. These small scale retailers being our major customer, their loss is equivalent to our loss.
Therefore, our company follows a B2B model, where we sell to small scale mom and pop stores
of tier1 and tier2 cities. This being a new business model, blue ocean strategy will be applied
where the demand will be huge and competition will be nil.

How:
Our approach to bring about brand awareness in the initial days of launch is to directly
communicate the value proposition of the company to the mom and pop stores and to use social
media to enable brand visibility. We plan to have a door to door marketing campaign by
specifically visiting the most popular shop in the area and try to make him our partner.
 CUSTOMER RELATIONSHIP MANAGEMENT

❖ We will implement a door-to-door advertisement strategy the companies’ sales and

marketing personnel will communicate our product and benefits of our service to the
retailer in the areas that we are trying to capture the market

❖ Use of social media for broader reach will be of great benefit as it will help in reaching
out to a bigger potential consumer base with very less costs. Social media marketing
campaigns will be scheduled during off business hours to increase CPM (cost per
thousand impressions)

❖ Using of lead generation tactics is another tactic for adoption: target persona, every
potential customer is different and creating relevant content will help in customer
acquisition

❖ Use of Data analytics tool such as Tableau will be adopted to learn who are the new
businesses, the existing business with a single supplier, existing business with multiple
suppliers

❖ The company will establish a helpline centre for retailers providing 24/7 support with
issues related to various business processes such as inventory, pricing, delivery etc.

❖ A dedicated accounts manager will be appointed for the retailers within a locality. A
dedicated accounts manager is essential as it will help in effective communication of the
 issues the retailers face with the company and will also lead to issue resolution within a
short span of time

❖ Providing a flexible payment method, discounts for long time partners and issuance of
goods on credit will help in establishing a long term and robust relationship

❖ Providing free training workshops: Training can be provided for Inventory management
that will help the retailers to manage the inventory in a more efficient manner, training
can be provided for efficient logistics management, advertising tactics can be taught for
better promotion and implementing CRM for retailers which will help the retailers to
retain customers thereby maintaining and growing their sales

This plan will convert our first 100 customers and help in retaining them and expand the
customer base henceforth.
 PERFORMANCE AND CONTROL (SALES ESTIMATION)

Delhi Population is estimated at around 20 Million ( 2 crores ). The retail market size is around
1200 billion US Dollars in India which is estimated to grow to 1750 billion USD by 2026 (India;
Deloitte; India Brand Equity Foundation; Retailers Association of India)

The Market share of retail consumption of major metro cities is given below in the graph

The Company will first establish its operations in Major metro cities starting from Delhi. Delhi
Market share is 5.8 percent therefore the retail market in Delhi NCR is around 69.6 Billion USD.
Using Market growth Analysis of METRO CASH and UDAAN (B2B aggregator) the market
share of retail consumption market is estimated to be at 15 percent in the first year with annual
growth rate estimated at 12 percent.

First Year Sales revenue therefore is estimated at 10.44 billion USD with a 12 percent annual
growth rate.

This is an estimation of the Annual sales revenue that the company will generate in the first 3
years

Year Sales Revenue

1st Year 10.44 Billion USD

2nd Year 11.69 Billion USD

3rd Year 13.09 Billion USD

 REFERENCES

http://www.statista.com.iimjlibrary.remotexs.in/statistics/1137321/india-retail-
consumption-share-by-city/

http://www.statista.com.iimjlibrary.remotexs.in/statistics/935872/india-retail-market-size/