Eastern Condiments

Group 10
Eastern’s Performance in Kerala
In Kerala over the period Eastern Performed significantly well, for the following
reasons
• Kerala is one of the key revenue generator for Eastern.
•Eastern Condiment has competitive advantage in Kerala, which helped them to
cut costs while procuring the raw materials.
•Having own distribution network, helped them to achieve targets.
•Setting up manufacturing units in Kerala itself helped them manage their
inventory better and reduce the transportation costs.
•No Big player in Kerala helped them to dominate the market.
Key Performance Metrics
● Eastern Market share had increased from 28% in 2003 to 47% in 2007 and
62% in 2011.
● Revenue had increased significantly over the period from 274 million in
1991 to 2782 million in 2011.
● Kerala is the main contributor of revenue for eastern and Operating profit in
kerala is better when compared to other states.
● Incentive for kerala sales person is just 1% compared to 3% other states
 Strategy that drove the Kerala performance
● Eastern being Large player with deep pockets, during harvest season itself it would
procure raw materials at lowest price possible. And during off season it would charge
slightly above the commodity prices.
● Due to which the eastern prices used to be slightly higher than the unbranded
products.
● Which led to customers shift from unbranded products to eastern.
● Eastern trucks would show up at retailers shop every week at scheduled time, which
helped retailers better manage their inventory and helped to push the products.
● Implementing the 11 week call model, which was very effective.
Is Karnataka good choice for expansion
● For a well established company like Eastern, it is always a good option to expand the
business in other parts
● The product quality is good. So it will be a success if they took care of distribution
● Since the competitor was only having veg products, it was a potential market for
eastern non veg products
● Karnataka constitutes 30% of malayalis. This is the best market outside kerala. Also
many of the distributors in Karnataka were malayalis
Performance in Karnataka
● Performance in karnataka did not go well as expected
● The reason for this is because of the distribution was not strong enough
● There were no manufacturing units in Karnataka. So the inventory was higher
compared to that of Kerala’s.
● MTR, a big brand was already present in Karnataka.
● The top management was not efficient in Karnataka
● Stock thefts were there in Karnataka as they did not have their own distribution
network
Performance in Mumbai
● As the Karnataka distribution was not successful, in Mumbai they had a tie up with
Mahindra for transportation.
● Again the performance was low
● This was because the have to pay rent to the transport even if it is not used
● Supply and inventory management was difficult
● Managing operation was also difficult because of the distance between Mumbai and
kerala
● Attrition rate was very high
Future plans in Karnataka
● To tackle the performance of distribution network in Karnataka, the made the
following changes
● Salesperson will share the profit of the company. It was 10%
● They came with their own vehicle
● This increased the performance
● Also it eliminated the product theft