MARKET RESEARCH STUDY

FOR UNDERSTANDING THE

BISCUIT CATEGORY
Report of Findings

May 2021

For Littler Associates

 Background & Coverage
Lohiya Group is the leader in the packaged edible oil category in the Telengana and Andhra Region

Lohiya Group is currently contemplating entry into the Biscuit Category

However before going ahead with the new venture, the client needs an understanding with w.r.t
1) Category of Biscuit/s to launch
2) Inputs for deciding the marketing strategy for biscuits

To this extent the Client wanted to conduct a Channel Research that will provide inputs which will help the client in decision making and
making an entry in to the category

This document outlines the findings of the research study conducted by Littler Associates in February-March 2021
 Distributor-
Research Findings

Objective: How to win in the Distributor

Segment?
Initially we had conducted a Qualitative Research on 27/05/2021 to understand the distributors psychology and to also build the foundation of our
Quantitative research conducted later.

The Quantitative Research participants consisted of 30 respondents all from Kolkata, West Bengal and Telangana. This was done so that the
distributor research is in sync with that of retailers

Both the Selling capacity of

distributors Incentives are Companies keep a They are well
product followed by
before starting important to grow close eye on area’s researched and
inhouse parameters
and extend business distributor and aware of all other
their business as a like extra man
with client. Their reach out to them, brands of biscuit
distributor had huge volume sales
power, extra
so search for products available
prior experience compensates for any
investment in
information from in the market or
in small/local cut in incentives they capital etc. are the
the distributor side any other products
FMCG provide to retailers parameters they
is minimal that are available
look for
companies
 Post the qualitative findings, we had conducted Quantitative Research for Distributors across Kolkata, West Bengal and Telangana

The sample space was chosen divided equally between Telangana and Kolkata. In total there were 30 distributors including both the locations who
undertook the survey.

The research was conducted in a

similar way to understand if the
15 from assumption of handpicked areas
15 from Kolkata,
Telangana from Kolkata, West Bengal would West Bengal
be as same as that of Telangana.
 Experience of % of respondents who reported
respondents as a that their Primary business is
distributors (In Years) distributorship
23% 23%

40%

All of the respondents who fall into the category with

distributorship experience of more than 10 years belong to
this 60% and few of the respondents who is in this business
60% for 4-10 years fall into this category

27% 27%

Yes No
10 to 20 Above 20 4 to 10 1 to 3

Higher
probability to
Why this is More Experience
Better business
grip in area
Good relationship
with retailers
make the product
“run” in the
important? market

*Hold this thought

 Number of godowns Area/Zone (in Sq.Kms) they are
they own responsible for their distributorship
1; 10% 13%
20%

4; 2;
40% 20% On an average
each of these
distributors are
in business with
840 retailers in
their respective
zones

3; 30% 67%
Average 840
1 2 3 4 20-25 25-30 30-35 Median 700
Highest 1300
Lowest 600

It can be said from the observations that these

It is observed that distributors who own at least 2
distributors who own at least 2 godowns, has a reach
god owns have a significant reach and they typically
of 30 Sq. Kms (appx) does business with 840
cover a an area of 25-35sq Kms
retailers on average

The important highlight here again is

“Reach” of the distributor because that is
very important for a company who is
launching a new product.
Number of employees they have
in their business

33
%

Each of the
Out of their total
distributors own
number of
50 10 vehicles
employees, each
% (modal value)
of this
including 4
distributor has 3
wheeler and 2
sales person
6 to 10 wheelers
11 to 20
Above 20

17
%

These are the distributors who are at

least 4 years into the distributorship
business
 Biscuit products
Total turnover of is 32% of the
Biscuits, Tea &
a distributor is total turnover a
Oil
9.5Lkahs Distributor has
per month
Most of the distributors will NOT product in the market
do business with a new brand or product or launch a new

77% said they 53% said they

70% feel for a new 96% said they
would still not feel their
76% said they brand or company, would not like to
risk taking
would not risk they must get it at employ new clients would
distributorship price significantly
push sale brand less than the workforce while provide what I
of a new brand,
in a competitive industry average , in doing business need, if they
even if there are
environment order to take its with a new continue with
price cuts or distributorship brand them
freebies

Based on our Psychographic Survey we conducted for distributors

So how do I make sure that the distributor agrees to what I am offering particularly for a new product

Initial
Man Quick
Margin Incentive order
Power Rotation
quantity

And these are all the Pain Points that we would face while negotiating with a
distributor and these were also backed by the Qualitative research we
conducted for distributors
Margin
Competitive based on the product category

Incentive
Target based, but for new product Order Based should be the best way to move ahead
53% said they received incentive of 3-4% and 47% said they received incentive of 4-5%

Order
Quantity Carefully targeted and planned for each distributor so that they accept the contract

Man
Power Company to provide their own sales person to take the order from Retailers and send the bill to
the distributor for delivery

Quick All the transactions are paid in CASH for quick order rotation by the distributor.
Rotation
Assumption: The company is doing ATL marketing (which is required as per the psychographic analysis of both retailers and distributors)

53% said they 53% said they

are more likely are more likely
to do business to do business
with new brand with a new
if celebrities brand if widely
endorse it advertised

Get into customer head and gain significant market share

 LAUNCH LOW
PRICED HIGH
PRODUCTS INCENTIVES
How do I do that?
What order should I propose to the distributor so that
they agree to sell the product? MR.
DISTRIBUTOR
HIGH MARGINS
SELL THE
PRODUCT TO ALL
YOUR
RETAILERS

Mr. Distributor please sell it
to 50% of the total retailers
in your zone
We are providing you If you take order from us of
competitive margin X quantity in between 1st to
4th of a month we will give
you 10% incentive on the
quantity you order

Including 15days of stock

level/inventory
 50% of the retailers in the area
300

Each of these Each of these

Kirana Stores who are only Kirana Stores who are into
distributors have a distributors are into retail business both retail & wholesale
monthly target of in business with business
1000(modal value) 600(modal value)
retailers in their
cartons of biscuits to respective zones
sell
1 Carton 3 Cartons

Total order taken by a distributor then is

This is the data that we have gathered from the
0.77x300x1+0.23x300x3= 438 cartons for the
primary research conducted for Distributors by 1st order for a month
Littler Associates
From the 2nd order additional inventory of
15days is included: 200 cartons

Net:638 cartons on rotation

 70%

Manufacturer Distributor Retailer

Our Job ends at the distributor level. For that we need to take care Payment received in
of few factors: cash by the Order
distributor from the Placed
retailer
• Liquidation support for BBD issue
• Leakage and breakage claim during transport from
manufacturing to distributor hub
Distributo
• Pilferage claim r to
Bill Amount Received
in Cash by the
• 100% transport cost from manufacturer to the distributor Retailer
company
supplied
• Credit incentives as a promotional schemes to facilitate
distributor order bulk Order
dispatched to
Distributor
Hub
Retailer- Research
Findings
 Initially we had conducted a Qualitative Research on 28/04/2021 to understand the channel participants psychology and to also build the
foundation of our Quantitative research conducted later.

The Qualitative Research participants were categorized into 4 channels visa-vis Modern Trade, Local Kirana Stores, Tea Stall and Pan Stall in the
whole of the state of West Bengal. 2 each from these categories were selected and they were invited for a focused 1:1 interview about
approximately 2hrs each. Before we get to the findings of the latest quantitative research below are the quick recap of the qualitative research
findings.

Modern Trade Kirana Stores Tea stalls Pan Stalls

Attitude & Behavior Both wholesale and retail Both wholesale and Retail Retail Only Retail Only

Needs and Triggers Always has to be available for Must be there to be sold as a part Sold as a complement to tea Product used as quick bite
customers. Stocked as per TOT of customer’s monthly basket

Association and Connects Customers footfall is increased, Deals with incentives either from Deals with incentives either from Buys and sells at MRP
they are introduced to new distributors or wholesalers distributors or wholesalers
environments

Search for Information Celebrity endorsements and TV ads, pamphlets, customers, TV ads, customers and word of Other retailers
promotional Ad campaigns word of mouth mouth

Promotion to consumers Discounts and Push-sale Push sale predominantly Push sale As coinage

Resources required to stock Space Space and Investment Investment Investment and Space

Awareness Maximum awareness Maximum Medium Low to Medium

 Post the qualitative findings, we had conducted Quantitative Research for retailers across entire state of West Bengal.

The sample space was chosen and divided into two sectors: Rural and Urban. The target was to understand and get insights about profile of the
two demographics. Further, in each sector we had chosen 3 different channels visa-vis : Local Kirana Stores, Tea Stalls and Pan Stalls. With a
minimum of 30 respondent per channel and total sample space of 180 minimum respondents.

The entire Quantitative Research was done based on 184 respondents

10 Rural Zones 12 Urban Zones

of West Bengal The research spread across 10 of West Bengal
rural zones and 12 urban zones of
West Bengal. Thereby receiving
very rich demographically spread
responses which can be paralleled
to Telangana
• 100% store’s sales mix is
primary retail business
• 73% replenish their stocks from
whole-sellers
• 27% replenish their stocks from
distributors
• The rural survey is done across 8
Kirana Stores- different rural locations
Rural Area • There are appx 4 respondents
30 Respondents per location in this survey
• Average Total time taken to
survey per respondent is 40 mins
 The brand of biscuits they Breakup per month of orders as a
stock and their distribution percentage of total orders by all
across all respondents together (In Kgs)
Others
12% Britannia
18% Greater than
Cadbury 170
Priya
2%
1%
Haldiram 150-170
3%
Pran 130-150
3%

110-130
Unibic
6%
90-110
Biskfarm
18% 70-90

50-70

ITC/Sunfeast
18% 30-50
Anmol
6%
Less Than 30
Parle
13% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Britannia Biskfarm Anmol Parle ITC/Sunfeast Unibic

Pran Haldiram Priya Cadbury Others

• Biskfarm, Britannia and ITC each has an 18% each of the total number of • <30kgs dominated the quantity being ordered i.e. 45% of the total number of
orders across all the respondents orders across all the responses
• This is followed by 13% Parle and 12% Bakery biscuits (termed as others) • 50-70Kgs was the 2nd highest
• Only appx 2% of the total number of orders across all the responses claimed
they order between 130-150kgs
Breakup per day of quantity of biscuits
Breakup of incentive received as a Breakup of margin received as a
sold as a percentage of total by all
percentage of total respondents together percentage of total respondents together
respondents together(in Kgs)

3%
Greater than
6
5-6%
27% 3%
4-5%

3-4%

2-3% Less than 1

67%
1-2% 97% 1-2%
2-3%
Less than 1
Greater than 3
Less than 5 5-10 10-15 15-20 0% 5% 10% 15% 20% 25% 30%

• 70% of the total respondents claimed they
sell between 5-10kgs/day of biscuits per
day in their region
• 27% of them said that they sell between
10-15kgs/day
• While only 3% said they sell between 15-
20kgs/day
• 28% of the responses across all biscuits put
together said that they receive an incentive
>6%
• 26% said they receive 5-6%
• 14% said they received 4-5%
• 17% said they received 3-4%
• 13% said that they receive a margin at the
end by selling a packet of biscuit of any
given quantity, between 2-3%
• 97% said that they receive >3%
• 53% store’s sales mix is primary retail
business Kirana Stores- • The urban survey is done across 7
• 47% store’s sales mix is in both retail and Urban Area different rural locations
wholesale 30 Respondents • There are appx 4 respondents per location
• 10% replenish their stocks from in this survey
Distributors and Wholesalers • Average Total time taken to survey per
• 23% replenish their stocks from respondent is 50 mins
Distributors and other Retailers
 The brand of biscuits they Breakup per month of orders as a
stock and their distribution percentage of total orders by all
across all respondents together (In Kgs)

4% 3% Britannia
Greater than
170
27%
15%
7% Biskfarm 150-170 8%
Anmol
7% Parle 130-150 11%
ITC/Sunfeast 110-130 4%
6% 15% Unibic
90-110 2%
Pran
2% Haldiram 70-90 13%
7% Priya
50-70 7%
Cadbury
8%
Others 30-50 8%
Patanjali
15% Less than 30 20%
12% Raja
0% 5% 10% 15% 20% 25% 30%

• Biskfarm, Britannia and ITC each has an 15% each of the total number of
orders across all the respondents
• This is followed by 12% Parle, 8% Anmol & 7% Unibic, Priya, Cadbury
• 27% said they order more than 170kgs, these are all who has both retail and
wholesale as sales mix
• <30kgs dominated the quantity being ordered i.e. 20% of the total number
of orders across all the responses
• 70-90Kgs, 13% respondents reported the same
• Only appx 2% of the total number of orders across all the responses claimed
they order between 130-150kgs
Breakup per day of quantity of biscuits Breakup of incentive received as a Breakup of margin received as a
sold as a percentage of total by all percentage of total respondents together percentage of total respondents together
respondents together
Greater than 6 1%
1-2%
5-6% 2% 2-3%
3%
Greater than 3
23% 27%
4-5% 17%

47%
3-4% 31%

23% 5-10 2-3% 26% 70%

7% 10-15
15-20 1-2% 24%
Greater than 60
0% 5% 10% 15% 20% 25% 30% 35%

• 47% said that they sell >60kgs/day
• 23% of the total respondents claimed they
sell between 5-10kgs/day of biscuits per
day in their region
• 23% of them said that they sell between
10-15kgs/day
• While only 7% said they sell between 15-
20kgs/day
• 1% of the responses across all biscuits put together
said that they receive an incentive >6%
• 2% said they receive 5-6%
• 17% said they received 4-5%
• 31% said they received 3-4%
• 26% said they received 2-3%
• 24% said they received 1-2%
• 70% said that they receive a margin at the
end by selling a packet of biscuit of any
given quantity, between 2-3%
• 27% said that they receive >3%
• 3% said 1-2%
 Other findings:
Customers ordering for door step delivery of monthly baskets typically order 2 types of biscuits:

Exotic biscuits Normal biscuits

• Biscuits like Dark Fantasy, • Biscuits like Cream Cracker, Thin

Bourbon, Oreo Arrow root, 50-50 etc.
• While ordering customers • These biscuits specifically for door
specifically have their set of choice step delivery from Kirana stores are
of brand sold as a commodity
• These biscuits are ordered in small • Retailers have a very high power of
quantity Push-Sale in this case
• These biscuits are also ordered in
large quantity
• 100% store’s sales mix is primary retail
business
• 83% replenish their stocks from whole-
sellers and Distributors both
• 17% replenish their stocks from
Wholesalers only
• The rural survey is done across 10
Tea Stalls- different rural locations
Rural Area • There are appx 3 respondents per
31 Respondents location in this survey
• Average Total time taken to survey per
respondent is 30 mins
 The brand of biscuits they stock Breakup per month of orders as a Breakup per day of quantity of biscuits
and their distribution across all percentage of total orders by all sold as a percentage of total by all
7%
respondents together (in Kgs) respondents together (In Kgs)
23% Britannia
Biskfarm 8% 5-10 5-10; 77%
23%
Anmol
24%
Parle
Sunfeast/ ITC
Unibic 68%
3%
Pran
22%
1% Others Less than 5;
Less than 5 23%
17% Jaya

Less than 30 30-50 50-70

2% 2%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Breakup of incentive received as a percentage of Customer footfall time in a month as a

total respondents together percentage of the total
Greater than 6% 9% • 100% of the respondents have
5-6% 0% recorded that their highest selling day
is Sunday
4-5% 10% 28%
36% • 100% of the respondents have
3-4% 2% recorded that their highest footfall day
is also Sunday
2-3% 59%
36% 1-10 • All of the respondents have a margin
1-2% 4% 10-20 >3%
20-30
0% 10% 20% 30% 40% 50% 60% 70%
• 100% store’s sales mix is primary retail • The rural survey is done across 6
business Tea Stalls- different rural locations
• 71% replenish their stocks from whole- Urban Area • There are appx 5 respondents per
sellers and Distributors both 31 Respondents location in this survey
• 29% replenish their stocks from • Average Total time taken to survey per
Wholesalers only respondent is 35 mins

• 100% of the respondents reported that selling

qty/day is from 5-10Kgs
• All reported that margin received per pouch of
biscuit is >3%
The brand of biscuits they stock Breakup per month of orders as a Breakup of incentive received as a
and their distribution across all percentage of total orders by all percentage of total respondents together
respondents together
6; 4% 1%
4%
Greater than 6%
Britannia
Biskfarm
26; 19% 4-5%
Anmol 20%
28; 20% Parle
Sunfeast/
ITC 3-4%
5; 4% 24; 17% Unibic
Pran
Less than 30 2-3%
5; 4% Priya Gold
Others 30-50
7; 5% Raja 50-70
21; 15% 1-2%
6; 4% 75% 70-90
10; 7% 0% 5% 10%15%20%25%30%35%40%45%50%
• 100% store’s sales mix is primary
retail business
• 100% replenish their stocks directly
from other retailers
• The rural survey is done across 12
Pan Stalls- different rural locations
Rural Area • There are appx 3 respondents per
31 Respondents location in this survey
• Average Total time taken to survey per
respondent is 20mins
The brand of biscuits they stock and Breakup per day of quantity of biscuits Breakup of incentive received as a percentage of
their distribution across all sold as a percentage of total by all total respondents together
2%
respondents together
3-4% 8%
24%
25%
2-3% 9%
23%

1% 1-2% 8%
14% 22%
77%
7% 5% Less than 1% 76%
Less than 1
1-2
0% 10% 20% 30% 40% 50% 60% 70% 80%
Britannia Biskfarm Anmol Parle Sunfeast/ ITC
Unibic Pran Others Jaya

• 100% respondents reported that they all order biscuits less than
30Kg per month
• All the respondents reported that avg total quantity of biscuits sold
per day is <1kg
• There is no specific date or time of month/day where biscuits sell
is high or low, its pretty much same every day
• 68% reported that 50% of their customers buy at least 1 biscuit
packet and 32% reported that 5-60% customers but at least 1
biscuit packet
• 100% store’s sales mix is primary
retail business
• 100% replenish their stocks directly
from other retailers
• The rural survey is done across 12
Pan Stalls- different rural locations
Urban Area • There are appx 3 respondents per
31 Respondents location in this survey
• Average Total time taken to survey per
respondent is 20mins
The brand of biscuits they stock and Breakup per day of quantity of biscuits sold as a Breakup of margin received as a
their distribution across all percentage of total by all respondents together percentage of total respondents together
6; 4% (In Kgs)

26; 19%
28; 20%

26%
5; 4% 24; 17%
48% 52%
5; 4%
7; 5% 74%
21; 15%
6; 4% Less than 1%
Less than 1
10; 7% 1-2%
1-2
Britannia Biskfarm Anmol Parle Sunfeast/ ITC
Unibic Pran Priya Gold Others Raja

• All respondents reported that their order qty/month is

<30Kgs
• 81% respondents reported that 60-70% of their customers
are likely to buy at least 1 packet of biscuit on stall visit
• The rest 19% claimed that 50-60% of their customers are
likely to buy at least 1 packet of biscuit on stall visit
 Weights
Ability to take
Ability to Push Capacity to Sell Capacity to stock Degree of Influence on risks and
Sale biscuits Biscuits customers promote new Total
brand of biscuit
15% 30% 30% 15% 10% 100%
Kirana Stores 10.05 25 27 9.5 4.80 76.35
Tea Stalls 9.3 12 12 10.35 2.58 46.23
Pan Stalls 9.53 7 6 10.08 2.78 35.38

Channel Score

76.35% 46.23% 35.38%

Kirana Store Tea Stall Pan Stall

** In Rural Regions it is observed that Wholesalers holds a significant influence over the market. For example in the region of Diamond Harbor, West Bengal almost each and every
Retailer stocks through Wholesalers and Wholesalers are the one who takes control of which product is to be sold and which is not, they have high degree of influence in product
promotion
• For a new product it is recommended strongly to not sell the product at a low price
• All the lucrative schemes given on the new product should be least

30%

Retailer would never keep a new product unless he makes a margin which is at least competitive or
even slightly higher than market average

This margin is provided by the Distributor to the retailer which has a greater influence on the market
Thank You