Britannia Final 2007

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A SUMMER TRAINING REPORT

ON

MARKETING STRATEGIES

IN

BRITANNIA INDUSTRY

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT

OF BACHELOR OF BUSINESS ADMINISTRATION (B.B.A)GURU JAMBHESHWAR UNIVERSITY, HISAR

TRAINING SUPERVISOR

MR. J.L. SALUJA

REGIONAL MANAGER

SUBMITTED BY:-

PARINITA MAKKAR

ENROLLMENT NO. 05511242134

SESSION: 2005-2008

GURU JAMBHESHWAR UNIVERSITY

HISAR1


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her

her

her

TO WHOM IT MAY CONCERN

This is to certify that Parinita Makkar, Student of

BBA III year, Jagannath Institute of Mangement

Sciences, Delhi has successful completed her

summer training undergone training from

6/5/2007 to 5/7/2007 and her project title

Marketing Strategies in Britannia Industries

Limited.

We wish her all the best for her future.

her

her

her

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ACKNOWLEDGEMENT

I would like to express my sincere gratitude towards MR. YOGESH

GUPTA (H.R. Manager) who has been a constant source of inspiration

and for his extensive guidance, cooperation and support.

I would like to thanks MR.J.L SALUJA (Regional Manager Britannia)

for never ending and valuable guidance.

Finally, I wish to express my gratitude to all those who have in one way

or other helped me in the successful completion of my project report.

PARINITA MAKKAR

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EXECUTIVE SUMMARY

The bread and biscuits constitutes the largest segments of consumer foods in India.

Both Biscuits and Bread are items of mass consumption in our Country. Almost 2

million tons of biscuits are produced in India each year and consumption is growing

at 10-12 per cent annually. The per capita consumption of biscuits in the country is

about 1.52 kg annually. Contrary to popular belief that biscuits are consumed by the

middle and high income groups, it is actually the only nutritious and hygienic food

product for children, lower income groups and the rural population. Nearly 50 per

cent of biscuits produced are consumed in rural areas and 30 per cent by income

groups earning below Rs 750 per month. Every 100 gm of glucose biscuits roughly

provides 20 per cent of energy, protein and calcium required by an average adult.

So as to explore the opportunities in these sectors, a large no. of companies are trying

to increase their consumer base in these areas. for this they are offering various

promotional schemes in order to make their brand familiar to consumers and to have a

Competitive edge.

Britannia Industries has made a rapid progress in the variety, quality and quantity of

biscuits and baked foods and has become Indias biggest brands and the preeminent

food brand of the country. It is equally recognized for its innovative approach to

products and marketing. The companys offerings are spread across the spectrum

with products ranging from the healthy and economical Tiger biscuits to the more

lifestyle-oriented recently launched MARIE GOLD DOUBLES Having

succeeded in garnering the trust of almost one-third of India's one billion population

and a strong management at the helm means Britannia will continue to dream big on

its path of innovation and quality.

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This project aims at studying the effect of the various Promotional schemes offered

by Britannia during the period of May and June on its overall sale of the products

offered in Promotions. The total increase in sales percentage was also tracked.

The analysis of sale was done for both the months individually and then compared

depicting the effectiveness of these promotions during these months. Comparison was

also made regarding the total stock dispatched in rural market and Urban markets.

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TABLE OF CONTENTS

S.No Topic Page. No.1. INTRODUCTION

About the Industry

Range of Product and Services

Rules and Regulations

1

1

11

12

2. RESEARCH METHODOLOGY

Data sources

Primary data

Secondary data

Research objectives

Questionnaire design / formation

Sample design /sample element / unit

Extent

Time frame

Sampling frame

Limitations of research

23

23

23

23

23

24

24

24

24

25

25

3. COMPANY PROFILE

Strategic clock: Britannia Industries Limited

The Origin of Eat Healthy Think Better

Five Force Model For Britannia

Britannia Supply Chain

Major Consumer Promotional Tools

S.W.O.T Analysis

26

26

30

36

36

40

49

4. DATA ANALYSIS AND INTERPRETATION 64

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5. CONCLUSIONS AND FINDINGS 86

6. RECOMMENDATION 89

7. ANNEXURE 90

8. BIBLIOGRAPHY 93

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CHAPTER - I

INTRODUCTION

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INTRODUCTION

About the Industry

BISCUIT INDUSTRY IN INDIA - AN OVERVIEW

Biscuit industry in India in the organized sector produces around 60% of the total

production, the balance 40% being contributed by the unorganized bakeries. The

industry consists of two large scale manufacturers, around 50 medium scale

brands and small scale units ranging up to 2500 units in the country, as at 2000-

01. The unorganized sector is estimated to have approximately 30,000 small &

tiny bakeries across the country.

The annual turnover of the organized sector of the biscuit manufacturers (as at

2001-02) is Rs. 4,350 crores.

In terms of volume biscuit production by the organized segment in 2001-02 is

estimated at 1.30 million tonnes. The major Brands of biscuits are - Brittania,

Parle Bakeman, Priya Gold,Elite,Cremica, Dukes, Anupam, Horlicks, Craze,

Nezone, besides various regional/State brands.

Biscuit industry which was till then reserved in the SSI Sector, was unreserved in

1997-98, in accordance with the Govt Policy, based on the recommendations of

the Abid Hussain Committee.

The annual production of biscuit in the organized sector, continues to be

predominantly in the small and medium sale sector before and after de-

reservation. The annual production was around 7.4 Lakh tonnes in 1997-98 In the

next five years, biscuit production witnessed an annual growth of 10% to 12%,

up to 1999-00.

The annual Growth showed a decline of 3.5% in 2000-01, mainly due to 100%

hike in Central Excise Duty (from 9% to 16%). Production in the year 2001-02

increased very marginally by 2.75% where in 2002-03 the growth is around 3%.

The Union Budget for 2003-04 granted 50% reduction in the rate of Excise Duty

on Biscuit i.e. from 16% to 8%. The Federation's estimate for the current year

indicates a growth of approximately 8% to 9%.

However the average utilization of installed capacity by biscuit manufacturers in

the country has been a dismal 60% over the last decade up to 2001-02.

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Though dereservation resulted in a few MNCs, i.e. Sara Lee, Kellogs SmithKline

Beecham, Heinz etc entering the biscuit industry in India, most of them, with the

exception of SmithKline Beecham (Horlicks Biscuits), have ceased production in

the country.

On the other hand, import of biscuits, specially in the high price segment has

started from 1998-99, but however, the quantum of imports has not so far

increased alarmingly and has remained at around 3.75% of the consumption of

biscuits in the country in the year 2001-02. However, recent imports from china

industries cheaper verities of biscuit, needs to be examined with cautions,

especially in the context of the price as the low margin based domestic industry,

which is operating at 60 % of the total installed capital. Exports of biscuits from

India has been to the extent of 5.5% of the total production. Export are expected

to grow only in the year 2003-04 and beyond.

Biscuit is a hygienically packaged nutritious snack food available at very

competitive prices, volumes and different tastes. According to the NCAER

Study, biscuit is predominantly consumed by people from the lower strata of

society, particularly children in both rural and urban areas with an average

monthly income of Rs. 750.00.

Biscuit can he broadly categorized into the following segments:

(Based on productions of 2000-01)

Glucose 44%

Marie 13%

Cream 10%

Crackers 13%

Milk 12%

Others 8%.

In recognition of industry's obligations towards the community, being a part of it,biscuit manufacturers supply biscuits to the social welfare agencies in all States

for the benefit of school children, senior citizens and other needy sections of the

society. FBMI Members have always responded positively to our appeal as also

by the Government, to rush truck loads of biscuits to the people affected by

earthquakes, floods, famine etc. Our industry has also participated in supplying

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biscuits to the people of war ravaged Afghanistan and presently to the Iraqi

people, under the aegis of the UN.

As regards the consumption pattern is concerned. surveys and estimates by

industry from time to time indicate the average consumption scenario in the four

Zones have been more or less close to each other, as below:

Northern States: 28%

Southern States: 24%

Western States: 25%

Eastern States: 23%

Though India is considered as the third largest producer of Biscuits after USA

and China, the per capita consumption of biscuits in our country is only 2.1 Kg.,

compared to more than 10 kg in the USA, UK and West European countries and

above 4.25 kg in south cast Asian countries, Le. Singapore, Hong Kong,Thailand, Indonesia etc. China has a per capita consumption of 1.90 kg, while in

the case of Japan it is estimated at 7.5 kg.

In view of the meager per capita consumption even as penetration of biscuits

manufactured by the organised sector, into rural areas in India, has been very

good during the last 10 years, as also in the metro and other cities, small towns

etc. However, in spite of this, the industry has not been able to utilize about half

of their installed capacities.

Biscuit is a comparatively low margin food product in the PMCG (Packaged

Mass Consumption Goods ) sector. The commodity is also price sensitive, as a

consequence of which, even when the Excise Duty was doubled on biscuits in

2000-01 biscuit manufacturers, including the major brands, were not able hike

MRPs to the extend of the steep increase in the Duty. Taxation, both Central

Excise Duty as also State Sales Tax, other miscellaneous levies i.e. turnover tax,

local area tax, mandi taxes, purchase tax, octroi etc etc, has been a major

deterrent in the growth of the biscuit industry. The CII Study Report has

identified Biscuit as one of the products that should treated as "Merit Good for

the purpose of liberal tax policy both by the Centre and States.

Besides lack of technology upgradation in manufacturing, packaging etc has also

been a factor affecting our industry, along with inadequate financial credit and

support particularly for the medium and small scale biscuit units.

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On the other hand, the Government of India has identified food processing

industries as a priority area to be encouraged for growth and development and

created the Ministry of Food Processing Industries (which was till then a Dept in

the Ministry of Agriculture), headed by an Ministry of State with Independent

charge.

The Food Processing Ministry has been rendering yeomen service to the

industry, of which biscuit manufacturing is an important part. The Ministry, with

the objective of enabling food processing Industries to undertake technology

upgradation diversification. expansion as also to set up new units has formulated

scheme of Grants and Financial Assistance. Please see www.mofpi.nic.in

Other areas of concern to industries of food products like Biscuits include

multiplicity of food laws and their enforcing agencies in the Central and State

Governments with overlapping functions & implementation. At the persistent

instance of industry organizations including FBMI the Ministry of FPI took the

initiative in evolving an Integrated Food Act, harmonizing the existing

multifarious legislations enabling better compliance. The Draft Unifled Food Bill

2002 has been prepared and now awaits approval by the Cabinet and the

Parliament, which will fulfill an important need of the industry and pave way for

accelerated development and growth.

Biscuit manufacturing as well as other bakery products like Bread etc are agro

based industries, with the major inputs - wheat flour/atta sugar, milk

vanaspati/vegetable oil etc all being agriculture produces.

Industries such as Biscuit are also languishing as they are not able to achieve

their potentials for higher production, in the absence of the concrete food

Processing Industry Policy. FBMI in close coordination with other organizations

and apex Chambers, initiated to urge the Govt of India to formulate a

comprehensive Policy Document, for smooth growth and harmonious

development of the industry. The Food Processing Industry Policy, which hasbeen evolved as a result of various workshops, deliberations and representations

by a large cross section of food processing industries, is yet to be finalized. It is

hoped that the Ministry of Food Processing Industries, GOI would initiate action

for implementation of the Policy expeditiously.

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24. Biscuit Production

According to the production figures of members available upto the calendar year

2003, the total production was 625000 tonnes as against 475000 tonnes in the

previous year. The production of biscuit for the last 11 years is as under:

1993 - 167750 1994 - 1805261995 - 202567 1996 - 222371

1997 - 362000 1998 - 400000

1999 - 425000 2000 - 450000

2001 - 465000 2002 - 475000

2003 - 625000

Note: the production of members of FBMI consist of 50% (approx) of the total

production of biscuit in the organized sector.

Sweet or salty. Soft or crunchy. Simple or exotic. Everybody loves munching on

biscuits, but do they know how biscuits began?

The history of biscuits can be traced back to a recipe created by the Roman chef

Apicius, in which "a thick paste of fine wheat flour was boiled and spread out on

a plate. When it had dried and hardened it was cut up and then fried until crisp,

then served with honey and pepper."

The word 'Biscuit' is derived from the Latin words 'Bis' (meaning 'twice') and

'Coctus' (meaning cooked or baked). The word 'Biscotti' is also the generic term

for cookies in Italian. Back then, biscuits were unleavened, hard and thin wafers

which, because of their low water content, were ideal food to store.

As people started to explore the globe, biscuits became the ideal travelling food

since they stayed fresh for long periods. The seafaring age, thus, witnessed the

boom of biscuits when these were sealed in airtight containers to last for months

at a time. Hard track biscuits (earliest version of the biscotti and present-day

crackers) were part of the staple diet of English and American sailors for many

centuries. In fact, the countries which led this seafaring charge, such as those in

Western Europe, are the ones where biscuits are most popular even today.

Biscotti is said to have been a favourite of Christopher Columbus who

discovered America!

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Making good biscuits is quite an art, and history bears testimony to that. During

the 17th and 18th Centuries in Europe, baking was a carefully controlled

profession, managed through a series of 'guilds' or professional associations. To

become a baker, one had to complete years of apprenticeship - working through

the ranks of apprentice, journeyman, and finally master baker. Not only this, the

amount and quality of biscuits baked were also carefully monitored.

The English, Scotch and Dutch immigrants originally brought the first cookies to

the United States and they were called teacakes. They were often flavoured with

nothing more than the finest butter, sometimes with the addition of a few drops

of rose water. Cookies in America were also called by such names as "jumbles",

"plunkets" and "cry babies".

As technology improved during the Industrial Revolution in the 19th century, the

price of sugar and flour dropped. Chemical leavening agents, such as baking

soda, became available and a profusion of cookie recipes occurred. This led to

the development of manufactured cookies.

Interestingly, as time has passed and despite more varieties becoming available,

the essential ingredients of biscuits haven't changed - like 'soft' wheat flour

(which contains less protein than the flour used to bake bread) sugar, and fats,

such as butter and oil. Today, though they are known by different names the

world over, people agree on one thing - nothing beats the biscuit!

Some interesting facts on the origin of other forms of biscuits:

The recipe for oval shaped cookies (that are also known as boudoir biscuits,

sponge biscuits, sponge fingers, Naples biscuits and Savoy biscuits) has changed

little in 900 years and dates back to the house of Savoy in the 11th century

France. Peter the Great of Russia seems to have enjoyed an oval-shaped cookie

called "lady fingers" when visiting Louis XV of France.

The macaroon - a small round cookie with crisp crust and a soft interior - seems

to have originated in an Italian monastery in 1792 during the French Revolution.

SPRING-uhr-lee, have been traditional Christmas cookies in Austria and Bavaria

for centuries. They are made from a simple egg, flour and sugar dough and are

usually rectangular in shape. These cookies are made with a leavening agent

called ammonium carbonate and baking ammonia.

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The inspiration for fortune cookies dates back to the 12th and 13th Centuries,

when Chinese soldiers slipped rice paper messages into moon cakes to help co-

ordinate their defence against Mongolian invaders.

NutriChoice SugarOut

Sounds like yesterday when people commented that healthy foods meant

"compromising on the taste." NutriChoice SugarOut is the most novel product

range to have been introduced in the market. The product is not just sweet but

tastes great, and yet contains no added sugar.

This is because NutriChoice SugarOut is sweetened with "Sucralose," derived

from sugar, which provides the same sweetness as any other biscuit, without the

added calories of sugar.

This range is available in 3 delicious variants namely Litetime, Chocolate cream,

and Orange cream, targeted towards all health sensitive people. It is also relevant

for consumers with sugar related ailments.

We are sure that you will be pleasantly delighted with its great taste and equally

surprised to know that it has no added sugar.

Don't be taken for a ride when you read "Sugar Free" label on many biscuit packs

marketed in India or abroad. Even with 100% no-added sugar, wheat-cereals in

biscuits have their own natural sugar content. Britannia has chosen to represent

these biscuits with "No Added Sugar" claim, as there is no added sugar in the

processing of NutriChoice SugarOut.

Nutri Choice Digestive Biscuit

Nothing can be more difficult than making small efforts in our daily life towards

healthy and active living. 24/7 we are engrossed in our busy schedules; skipping

meals, missing walks, along with inadequate sleep and frequently eating-out, all

take a heavy toll on our health.

At least with the new and improved NutriChoice Digestive Biscuit, we have one

less thing to worry about. Made with 50% whole-wheat and packed with added

fibre (10% of our daily dietary needs), these delightfully tasty biscuits are

amongst your healthiest bites of the day.

In your next visit to a shop just look out for its Golden-green international carton

pack.

Try one and you'll know that you've made one smart choice - NutriChoice.

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Treat Fruit Rollz

All kids who have relished the yummy creamy treasures of Britannia Treat in

exciting flavors, have yet another reason to celebrate! Britannia Treat launches

the amazingly yummy Treat Fruit Rollz!! These tasty soft rolls are filled with

real fruits and provide a healthy yet mouth-watering treat to the kids. Fruit Rollz

comes in four masti fruit flavours - Juicy Apple, Strawberry Surprise, Tangy

Orange and Delicious Dates!

Want to know a little secret? They make the best tiffin treats! So during snack

time what better than to munch on the delicious and healthy Fruit Rollz and

discover the yummy fruit flavor from within the shells. Keeping up with

Britannia's platform of 'taste bhi, health bhi', Fruit Rollz is indeed a yummy

snacking option for kids, while keeping the Moms assured about the goodness

provided by the fruit filling.

So go on and treat yourself to the lip-smacking snack!

New Britannia Milk Bikis

Milk Bikis, the favourite growth partner of Kids, now brings greater value and

delight to all with its new product and pack design. Recently re-launched in its

existing Southern & Eastern markets, and extended across India, the new Milk

Bikis is all set to add excitement and appeal to nutritious food. Whoever said

that good food needs to look dull and boring, will just have to take a look at

Milk Bikis.

With a unique and attractive honeycomb design and an enhanced product

experience, the new biscuit prompts the Kids will love it reaction amongst

mothers. The milk goodness in the recipe is now enhanced with SMART

NUTRIENTS 4 vital vitamins, iron and iodine, proven to aid mental and

physical development in growing kids. The premium packaging, besides

appealing to kids, also ensures that the biscuits remain fresh and crisp.

So, whether its breakfast time or snack time at school, rest assured that kids will

look forward to munching these crunchy, milky biscuits which even helps in their

development. And yes, adults wont be far behind in reaching out for a pack!

Britannia 50-50 Pepper Chakkar

The launch of the latest 50-50 variant left everybody guessing "What it eez?"

From TV ads, radio, outdoor and in-store display materials to events, a website

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and SMS and email blasts, traditional and new media were blended

synergistically to create excitement and curiosity about the unique taste of the

biscuit. The tangy and distinctive pepper flavoured biscuit, that's thin and crispy

and more like a snack, caught the imagination of a younger audience craving

something to nibble on. The 50-50 Pepper Chakkar launch is truly a case of

leveraging the marketing mix to best advantage.

Britannia profits up 125 % in Q2; growth momentum continues

Mumbai, October 23rd, 2007: Britannia Industries Ltd. (BIL), one of Indias

leading food Companies, reported sales of Rs. 6,588 MM for the quarter ended

30th September 2007, reflecting 20% growth over the corresponding quarter last

year. Net Profit for the quarter at Rs. 485 MM was more than double for the

corresponding quarter last year of Rs 212 MM.

For the half year ended 30th September 07, revenue grew 19.6% to Rs. 12,356

MM, while net profit at Rs 846 MM was 64.6% higher than last year.

Commenting on the performance, Ms. Vinita Bali, Managing Director, said,

We continue to build on the growth momentum of last year. We have added 340

basis points to our margin through higher price realization as well as innovation.

The increase in profit has been achieved despite the continuing and

unprecedented increase in prices of key commodities like flour, oils & dairy

products.

During the quarter, the Company launched Treat Choco Gelo, an extension of

the Treat franchise with double masti of chocolate & caramel and also

introduced a range of premium indulgence cookies under Pure Magic brand.

Investment in Advertising and Sales Promotion has been increased by 50% to

fuel the innovation led growth.

Range of Product and Services

Products

The major products offered by Britannia industries are the following:

BiscuitsGood day, marie, marie vita , milk bikies , cream treat, little hearts ,nice,

cream crackers ,time pass, tiger, tiger mast cream, 50:50, 50:50 maska chaska and

many more

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1. Brand Name: GoodDay and Marrie from Britannia are stable and are the most

established brand in biscuit segment being equated for biscuits for long time. Now the

brand has taken a dent though among the present generation with competitors coming

up with more powerful advertising campaigns and offering more variety.

2. Styling & Packaging: Britannia offerings have the innovative designs and

packaging as compared to what is offered by the competitors. As it's a variety

seeking product the styling and packaging helps in getting more customers.

3. Quality: Britannia name is associated with quality. The offerings fromBritannia

are of best quality when it comes to taste and hygiene. Under it's mission

statement "eat healthy think better"

Rules and Regulations

CENTRAL EXCISE DUTY ON BISCUITS

In the Union Budget 2000-01, the Finance Minister who had imposed a 100%

increase in the rate of Excise Duty on biscuit from 8% as a part of the rationalisation

of CENVAT and introduction of single rate of Duty did not offer any concesison on

the Budget for 2001-02. On the other hand the 50% exemption to small packs was

withdrawn. During these years and in 2002, the Federation submitted strong

representations to the Union Finance

Minister seeking relief in the Excise Duty on biscuits, giving biscuit special treatment

that it deserves on account of the exceptional nature and sensitivity to price increase.

The Federation submitted its Pre- Budget Memorandum for 2002 demanding at least

50% Excise Relief.

It is a matter of great satisfaction that the Govt. has, after 3 years, acceded to our

demand and grated reduction in Excise Duty (from 16% to 18%) in the Union Budget

for 2003-2004.

INTEGRATION OF VARIOUS FOOD LAWS

The Food Processing Industry have been experiencing the adverse affect of

multiplicity of various Acts/ Rules and Regulations for food standards under the

Prevention of Food Adulteration Act Standards of Weights & Measures Act, Food

Products Order, the Meat Products Order, the Bureau of Indian Standards & MMPO,

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etc. affected the Food & Food Processing Sectors. They need to be modernised &

converged.

As a consequence of various representations of industry, the Govt. of India has

decided to set up a Group of Ministers (GOM) to propose legislation and other

changes for preparing a Modem Integrated Food Law and related regulations. The

Ministry of State for Food Processing Industries is the Nodal Ministry to coordinate

the bill.

Our federation submitted its recommendations and suggested to placed before the

Group of Ministers, covering the broad frame work required for the food legislation

as well as specific issues such as:

The main objectives of the new Integrated Food Laws & its structure

Methodology of development of Standards

Provisions of Labelling

Acceptance of a basic list of additivesMatters relating to GMP, GHP & HACP

Issues related to Codex

Procedure for sampling& launching of Prosecutin

Grading of violations according to the nature of discrepancy.

Recent Changes / Amendments

Prevention of Food Adulteration Rules The Ministry of Health & Family Welfare,

Govt. of India vide its Notification No. GSR 908 (E) Dt. 20.12.2001 has provided for

printing of statutory symbol on all products containing vegetarian ingredients. The

notification came into effect from 20 June 2002. As members may be aware the Govt.

has earlier amended PFA Rules vide notification No. 245(E) Dt.4.4.2001 provided for

statutory printing of the symbols of food packages containing non vegetarian

ingredients. This notification has already come into effect from 4 October 2001.

Our Federation along with apex organizations such as CII & CIFTI have represented

to Hon'ble Union Minister for Health and Family Welfare seeking extension of a

minimum period of 6 months for implementation of the notification, particularly on

account of hardships in printing vegetarian symbol in advertisements. A delegation

from the industry met the Secretary, Ministry of Health and Family Welfare and

apprised him of the hardships faced by industry. Further follow up is in hand.

Standards of Weight and Measures (PC) Rules 1977

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The Standing Committee on Food Standards has decided that the following issues be

referred to Technical Committees to look into all aspects and to make

recommendations to the Standing Committee:

(i) Revision of First Schedule as regards tolerance (maximum permissible error.)

(ii) Deletion of Rule 11 (a) and the Fourth Schedule for declaration of words "when

packed" with net quantity declaration on packages.

At our request the representatives of industry have been included in the Technical

Committee for each zone. Members of the Technical Committees will be visiting the

factories of manufacturers for ascertaining the position regarding industry's plea for

not reducing the maximum permissible error in weight.

BUREAU OF INDIAN STANDARDS

The Meeting of the Bakery Confectionery and Nutritious Supplements Sectional

Committee of BIS was held on 1 March 2002. The Draft standards for biscuit were

discussed. FBMI submitted its suggestions on various issues including classificationof biscuits into 5 categories sweet /semi sweet, crackers, cookies and speciality

biscuits. It has also been suggested that separate standards should be evolved for

wafers. FBMI has also represented that proposal for Peroxide value should not be

included in the standards for biscuits and there should not be any requirement of

checking biscuits for micro biological parameters. Supporting data received from

members on total plate count, coliform count, E coli and stapylococcus aureus, etc.,

have already sent to the Bureau of Indian Standards showing that bacteria cannot

remain alive at the temperature at which biscuits are baked.

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OFFER OF GRANT FOR FOOD PROCESSING INDUSTRIES

The FBMI along with other organizations of industry had requested the Ministry of

Food Processing Industries to revise its assistance for promotion of food of

processing industry. Accordingly the Ministry has offered grants unto Rs. 25 lakhs or

25% of the Capital cost for setting

up / expansion / modernisation of units in all sectors of food processing industries.

The Ministry is also presently revising its outline of assistance under the schemes of

10 th Plan. The information has been circulated to members vide No. FB 1nd 7 52 Dt.

1.2.2002.

SALES TAX / VAT ON BISCUITS

As members are aware, though the Empowered Committee of Finance Ministers fixed

the minimum floor rate of Sales Tax on biscuits at 8%, various State Governments are

levying Sales Tax on Biscuits in the range of 8% to 16%.

The Sales Tax regime is proposed to be replaced with Value Added Tax (VAT) from1 April 2003. The Federation has already represented that biscuits being a nutritious

snack food product predominantly consumed by the consumers from the lower strata

of society should be included in the list of goods at the minimum level of VAT.

Representations have already been sent to Chief Ministers and other officials

concerned in Punjab, Haryana, UP, Karnataka MP and Kerala. Many States such as

Himachal Pradesh, Delhi, Arunachal Pradesh, Kerala have however, deferred

introduction of VAT. The trading communities in Delhi, Tamil Nadu, etc. have

resorted to agitations against levy of VAT. As far as biscuit is concerned, it is learned

that VAT @ 12.5% is proposed to be levied by many states. FBMI has therefore,

urged States to fix the rate of VAT on biscuits at the minimum level of 4% meant for

items of mass consumption.

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FOOD SAFETY AND QUALITY

The Ministry of Health and Family Welfare and the Ministry of Food Processing

Industries have formed different Sectoral Groups in ordesr to facilitate formulation of

a proper and efficient Food Safety Programme towards implementation of GMP ,

GHP and HACCP in the food industry, either under law or voluntary.

In the Group on Bakery products sector, FBMI has been made the Convenor of the

Group with AIBMA, Society of Indian Bakers and Britannia Industries Ltd as

members. The meeting of the Sectoral Groups was held on 20 June 2002 at Nirman

Bhawan New Delhi. The President, FBMI attended the meeting. Subsequently, FBMI

has submitted its objections 1 suggestion to the Ministry of Health, Govt. of India,

and the text of which is given in Arnnexure- A.

FOOD PROCESSING INDUSTRY POLICY

As the members may he aware, the Ministry of Food Processing Industry is presently

undertaking the formulation of a comprehensive Food Processing Industry Policy.Our Federation has submitted its views / suggestions for appropriate incorporation in

the Policy, the text of which is given in Annexure B

TRAINING PROGRAMME IN BISCUIT MANUFACTURE

With the objective of imparting Training to the personnel in the biscuit industry as

also to prospective entrepreneurs, FBMI in collaboration with its members and other

organizations, conducts training programme in

Biscuit Manufacture for the last two decades. The XIII Training Programme was

organized at CFTRI Mysore on 28 to 30th August 2001. The XIV Training

Programme has just concluded at the Resort Country Club, Gurgaon, Haryana, from

25th to 28th March 2003. M/s Britannia Industries Ltd and Parle Products Ltd

cosponsored both the Training Programmes.

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FOOD REGULATORY MEASURES AN OVERVIEW

During the period underreport, there has been various proposals for

changes/amendments in the important Food Law affecting our industry, such as PFA

Act/Rules, Standards of Weights & Measures (Packaging Commodities) Act/Rules,

etc.

Some of the important issues in this area of Food Laws and follow up action by FBMI

are given below :-

Packaged Commodities Rules Standards of W & M Act

The Dept of Consumer Affairs (Director of Metrology), Govt. of India, proposed

mandatory printing of 1st point price, in addition to MRP, for food products like

biscuit etc. Our Federation submitted objections to the said proposals, as there has

never been any grievance from consumer forums against the biscuit industry and this

would on the one hand add to the cost of packaging/printing and on the other hand

would only create confusion for the consumers without any benefit. The proposal hasbeen kept in abeyance.

Similarly, our Federation on its own and through apex organizations, effectively

pursued and objected to the proposed amendment in the Standards of Weights &

Measures (PC) Rules, for making 50% reduction in the present Maximum Permissible

Error in weight of biscuit (Tolerance Limit), on the ground that various factors such

as atmospheric/environmental changes affect moisture, temperature, and

consequently affect the weight of biscuit, at both the manufacturing, marketing/retail

levels, and hence the present Tolerance Limit should be maintained. The Sub-

Committee of the Committee on Food Standards, constituted sub grounds of experts

in various Zones/States to review the issue with representatives of industry, to visit

biscuit units and recommend their view points on Tolerance Limit, together with

another proposed amendment of discontinuing with the proviso of printing When

Packed on the packages of biscuit and other food products, which was also objected

to by our Federation by representations and meetings in the Sub Committee of the

CFS. Expert from our membership participated in this process through CIFTI. At the

time of this Report, the issues involved are under consideration/ review by the

Committee on Food Standards (CFS).

Approval of Additives

The list of various additives needed for making Biscuit is required to be approved by

the Standing Committee on Weights & Measures. The Committee has held various

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sittings in this connection. FBMI has represented on he Committee for scrutinizing

various additives for which various food processing industries have sought approval.

Prevention of Food Adulteration Act / Rules

Members reported various instances where the PFA authorities in the States are

adopting penal action, even in cases of very minor offences / errors under the PFA

Rules. FBMI suggested that such minor errors etc should be compounded, avoiding

prosecution, harassment and resultant losses to biscuit units. This issue has also been

referred to CIL and CIFTI for further follow up.

Introduction of HACCP/GMP/GHP

The Govt. of India (Ministry of Health), has formulated proposals to introduce the

concepts of Hazard Analysis Control Convention Procedures (HACCP), Good

Manufacturing Practices (GMP) and Good Hygienic Practices (GHP), as a step

towards eventual adoption in the various states in accordance with the International

Codex Alumnus, in the context of trade terms and regulatory, measures under theWTO regime.

After discussions with FBMI and other organizations, the Dept of Health constituted

Sectoral Groups on various categories of food processing industries. The Sectoral

Group on Bakery Products consisted of FBMI, as Convener and FBMI and SIB as

members. After detailed deliberations, the Federation submitted our comments and

suggestions, highlighting the hardships that the biscuit units would face in the event

of statutory enforcement of HACCP/GMP/GHP.

The Federation suggested that the concepts of HACCP etc should be made voluntary

in the first two/three years, keeping in view the ground realities in the bakery sector

and due to the fact that the implementation of HACCP/GMP/GHP may be beyond he

financial and technical capabilities of majority of the biscuit manufacturers and

compulsory introduction of these regulations would adversely impact the viability and

may lead to closure of a large number of bakeries in the country. FBMI, after detailed

deliberations by the Executive Committee, suggested to the Govt. of India that, in the

first instance projects for imparting training to the Managers/Executives and

workforce in the bakery industries should be organized so as to create awareness and

knowledge on these complex regulatory aspects and educate the personnel in the

industry on various aspects of HACCP etc. FBMI has proposed to organize such

Training Programs and Workshops, in collaboration with the Dept of Health, Govt. of

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India. Specific project application has since been submitted by FBMI, which is

Convener or the Sectoral Group on Bakery Industries a mentioned above

Federation is glad to inform members that the government of India has accepted our

suggestion and as desired by the Ministry of Health, Govt. of India, a four day

Training Programme / Workshop on HACCP/GMP/GHP will be held as per the

following programme:

Day & Dates

Venue

Wednesday 28 January

to Saturday, 31 January 2004

National Institute of Biology

A-32, Institutional Area Sector 62

Noida- 201 302 (GB Nagar, UP)

Unified Food Laws Need for

As members are aware, the food processing industries, including Biscuit / Bakery

segment, are subjected to and administered by a large number of statues i.e. PFA

Act / Rules, Weights & Measures Act, Packaged Commodities Rules, MMPO /

FPOA orders under Essential Commodities Act / Rules, Agmark, BIS etc. There are

much multiplicity of implementing / enforcing Agencies / Departments for watch one

of these Acts and Rules, both at Central and State levels. Unfortunately, many a time

there are instances of overlapping and even contradictions between such Agencies /

Departments. PFA Act / Rules are recipe based, and focus on prosecution / penal

action, even for minor / technical errors etc. which are also different in the States.

Similarly, in the Standards of Weight & Measures Act and PC Rules, there have been

plethoras of amendment, and proposals for more restrictions on the food processing

industries including Biscuit and this has resulted in unavoidable hindrances in the

development and growth of the industries.

It is in this context that our Federation in close coordination with CIFTI, CII, FICCI,

PHDCCI urged he Government to evolve a single Integrated Food Law,

encompassing the existing legislations mentioned above, with main focus on

development and promotion of the Food Processing, Agro Based industries in the

country, paving way for creation of large employment generation, consumption of

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varied types of safe food products of good quality, at reasonable prices benefiting

consumers particularly those in the lower and middle segments of the society. Exports

and better capacity utilization also need to be encouraged in the proposed Integrated

law, which would also result in higher productivity and better revenue for the Central

and State Governments.

As a result of such concerted efforts and presentations by organizations of industry,

including AIMBA the Government constituted the Justice Venkatachalam Committee

to review the entire gamut of the existing Food Laws and to recommend the ways ad

means and basis for unifying these Acts / Rules and regulations into an Integrated

Food Law (Act). After due consideration of all aspects and by inviting suggestions

from Govt., Industry and Commerce as well as consumers and other important

sections of the community at large, the Committee submitted its report containing

detailed suggestions / recommendations on the imperative need for integrating theexisting multiple food laws.

Accordingly, the Govt. formed a Group of Ministers with the Ministry of Food

Processing Industries as the nodal point and this comprehensive exercise has resulted

in the Draft Food Bill 2002 presented to the Group of Ministers. The said Draft Food

Bill 2002 has been formulated to provide for the production, manufacture,

processing and sale of safe and suitable food systematic and scientific development of

food industry, introducing new technologies, imparting new inputs of market

dynamics, and to create an enabling environment for innovation and value additions,

ensuring high degree of objectivity and transparency and to provide for the

establishment of a Food Development an Regulatory Authority of India an the

Council for Food Standards and for matters connected therewith or incidental thereto.

In addition, a Draft Prevention of Food Adulterations (Amendment) Bill, 2002 has

also been prepared and disseminated for further deliberations. The relevant excerpts

from the preamble of the Draft Food Bill, 2002, along with the Concept Note on the

Draft PFA (Amendment) Bill 2002 is given Annexure-C.

Our Federation, jointly with other apex industry organizations, is continuing follow

up with a view to achieving introduction of the Integrated Food Act.

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FOOD LAWS A REVIEW OF THE SCENARIO

The year under report witnessed controversial development relating to allegations

against certain food processing industries such as mineral / drinking water, soft

drinks, etc. regarding contents of pesticides, heavy metals, etc, leading to constitution

of a Joint Parliamentary Committee (JPC) and issuance of a Draft Notification by the

Government of India stipulating permissible contents of pesticides, heavy metals, etc

in various food products. FBMI interacted with the Government and with the apex

organizations of industry. The Executive Committee discussed these developments in

detail, in the context of the manufacturing process involved in the biscuit industry.

Weights & Measures Act (PC) Rules

The Ministry of Consumer Affairs, Govt. of India initiated action to reduce the

existing Maximum Permissible Error (Tolerance Limit) in weight of biscuit, by 50% .

The Federation represented against the proposal and actively participated in the Sub-

Committee constituted by thy Government under the Chairmanship of the Director,Legal Metrology, Ministry of Consumer Affairs. As a result, the proposal to amend

tolerance limit has been deferred.

Prevention of Food Adulteration Rules

The Ministry of Health, Govt. of India issued a Draft Notification on the list of

approved additives. The Federation submitted its objections/suggestions and also

tendered oral evidence before the Standing Committee. Further follow up action is in

hand.

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CHAPTER - II

RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

Data sources

To determine the appropriate data for research mainly two kinds of data was

collected namely primary & secondary data as explained below:

Primary data

Primary data are those, which were collected afresh & for the first time and thus

happen to be original in character. However, there are many methods of collecting

the primary data; all have not been used for the purpose of this project. The ones

that have been used are:

Questionnaire

Informal Interviews

Observation

Secondary data

Secondary data is collected from previous researches and literature to fill in the

respective project. The secondary data was collected through:

Text Books

Articles

Journals

Websites

Research objectives

The first & foremost step in any research work is to identify the problems or

objectives on which the researcher has to work on. There are two types of

objectives met in this study, as explained below:

MAJOROBJECTIVE

To analyze the existing marketing practices, its effectiveness and recommendmeasures to improve the marketing practices in the organisation.

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MINOROBJECTIVES

To study the frequency of marketing, marketing methods and their effects on

the trainees and recommend certain measures for improvement.

To understand the present practices enforced in respect of marketing at the

personnel department and recommend any changes if necessary.

To take feedback and analyze the level of satisfaction amongst the customers

in respect of marketing activities and suggest alternatives.

Questionnaire design / formation

Questionnaire: - A questionnaire consists of a set of questions presented to

respondent for their answers. It can be Closed Ended or Open Ended

Open Ended: - Allows respondents to answer in their own words & are difficult to

Interpret and Tabulate.

Close Ended: - Pre-specify all the possible answers & are easy to Interpret and

Tabulate.

Sample design /sample element / unit

The Company has a total strength of 96 officers and 403 workers. In order to take

a reasonable sample size and not to disturb the functioning of the organisation, a

sample size of 20% of the total strength of the Company has been taken in order

to arrive at the present practices of marketing in the Company.

Accordingly, 20 officers and 40 workers have been selected at random from all

the departments of the organisation and feedback forms (questionnaire) have been

obtained. The data has been analysed in order to arrive at present marketing

practices in the organisation.

Extent

Where the survey should be carried out?

I have covered entire residential area of Delhi city for the survey

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Time frame

when the survey should be conducted?

I conducted my survey for 8weeks from 14 may to 13h July

Sampling frame

The main statistical tools used for the collection and analysis of data in this

project are:

Questionnaire

Pie Charts

Tables

Limitations of researchThe following are the limitations of the study:

The sample size was small and hence the results can have a degree of

variation.

The response of the employees in giving information was lukewarm.

Organizations resistance to share the internal information.

Questionnaire is subjected to errors.

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CHAPTER III

COMPANY PROFILE

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COMPANY PROFILE

Strategic clock: Britannia Industries Limited

The story of one of India's favorite brands reads almost like a fairy tale. Once

upon a time, in 1892 to be precise, a biscuit company was started in a nondescript

house in Calcutta (now Kolkata) with an initial investment of Rs. 295. Thecompany we all know as Britannia today. By 1910, with the advent of electricity,

Britannia mechanised its operations, and in 1921, it became the first company

east of the Suez Canal to use imported gas ovens. Britannia's business was

flourishing. But, more importantly, Britannia was acquiring a reputation for

quality and value. As a result, during the tragic World War II, the Government

reposed its trust in Britannia by contracting it to supply large quantities of

"service biscuits" to the armed forces.

As time moved on, the biscuit market continued to grow and Britannia grew

along with it. In 1975, the Britannia Biscuit Company took over the distribution

of biscuits from Parry's who till now distributed Britannia biscuits in India. In the

subsequent public issue of 1978, Indian shareholding crossed 60%, firmly

establishing the Indian-ness of the firm. The following year, Britannia Biscuit

Company was re-christened Britannia Industries Limited (BIL).Four years later

in 1983, it crossed the Rs. 100 crore revenue mark.

On the operations front, the company was making equally dynamic strides. In

1992, it celebrated its Platinum Jubilee. The Wadia Group acquired a stake in the

company and became an equal partner with Groupe Danone in Britannia. The

subsequent year saw sales cross a landmark 100,000 tones of biscuits or 1 billion

packs of100g.

In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think

Better" - and made its first foray into the dairy products market. In 1999, the

"Britannia Khao, World Cup Jao" promotion further fortified the affinity

consumers had with 'Brand Britannia'.

Britannia strode into the 21st Century as one of India's biggest brands and the

pre-eminent food brand of the country. It was equally recognised for its

innovative approach to products and marketing: the Lagaan Match was voted

India's most successful promotional activity of the year 2001 while the delicious

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Britannia 50-50 Maska-Chaska became India's most successful product launch.

In 2002, Britannia's New Business Division formed a joint venture with Fonterra,

the world's second largest Dairy Company, and Britannia New Zealand Foods

Pvt. Ltd. was born. In recognition of its vision and accelerating graph, Forbes

Global rated Britannia 'One amongst the Top 200 Small Companies of the

World', and The Economic Times pegged Britannia India's 2nd Most Trusted

Brand.

Today, more than a century after those tentative first steps, Britannia's fairy tale

is not only going strong but blazing new standards, and that miniscule initial

investment has grown by leaps and bounds to crores of rupees in wealth for

Britannia's shareholders. The company's offerings are spread across the spectrum

with products ranging from the healthy and economical Tiger biscuits to the

more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the trust

of almost one-third of India's one billion population and a strong management at

the helm means Britannia will continue to dream big on its path of innovation

and quality. And millions of consumers will savour the results, happily ever after.

Mission:

To make every Third Indian a Britannia Consumer.

The Indian population today is over 1 billion. Of these, economic data suggests

that one third can afford products in the price range that we operate i.e. Re. 1 incase of Tiger Tikki to Rs. 120/- in case of the 1kg Milkman Dairy Whitner.

The company has to constantly endeavor to capture the entire market of this

target population. The key to success is once again through very high levels of

commitment to the roles and the goals of the organization. The company needs to

constantly strive to excite the consumer through whatever they do

Vision:

To Dominate the Food and Beverage Industry and Triple Turnover and Operating

Income.

The vision states that the company not only needs to lead but to dominate the

industry. This implies that the company needs to be the preferred choice of the

consumer in every product category that it operates in. The preference of

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consumers will come through excellent products and excellent service to the

trade and to the end consumer

Values :

The Britannia values are those guidelines that help the company to add value to

the life of the consumer.

Horizontal Empowerment

Business Efficiency for Healthy

Laddering Energize your Body and Mind.

Business Structure :

This figure describes the Britannias overall Business structure in all the four

major regions of the Country. This describes how the four zones are connected to

each other.

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The Origin of Eat Healthy Think Better:

Britannia -the 'biscuit' leader with a history-has withstood the tests of time. Part

of the reason for its success has been its ability to resonate with the changes in

consumer needs-needs that have varied significantly across its 100+ year epoch.

With consumer democracy reaching new levels, the one common thread to

emerge in recent times has been the shift in lifestyles and a corresponding

awareness of health. People are increasingly becoming conscious of dietary care

and its correlation to wellness and matching the new pace to their lives with

improved nutritional and dietary habits. This new awareness has seen consumers

seeking foods that complement their lifestyles while offering convenience,

variety and economy, over and above health and nutrition.

Britannia saw the writing on the wall. Its "Swasth Khao Tan Man Jagao" (Eat

Healthy, Think Better) re-position directly addressed this new trend by promisingthe new generation a healthy and nutritious alternative - that was also delightful

and tasty.

Thus, the new logo was born, encapsulating the core essence of Britannia -

healthy, nutritious, optimistic - and combining it with a delightful product range

to offer variety and choice to consumers.

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F&B Specials

In India per capita consumption of biscuits is estimated at a low 1.5 kg, reflecting

the huge potential for growth of the industry. Over 900 million Indians buy and

eat biscuits with varying frequency in any year.

The penetration of branded product in this segment is quite significant, and isvalued at Rs 2,500-3,000 crore. None of the other wheat-based segments is as

developed as the biscuits industry. The biscuit segment has developed with large

markets of mass consumption covering over 90% of the overall potential market.

The Indian biscuits' market is estimated to be 1.1 million tonnes per annum and

valued at over Rs 50 billion. The unorganised sector accounts for over 50% of

the market. The market has been growing at a CAGR of 6-7% pa.

The present biscuits-bakery sector in India looks like a battlefront. The battle

being led by stalwarts like Britannia and Parle with close competition from other

companies like ITC, Nutrine, HLL Kissan, Kwality and even international brands

like Kellogs, Nestle, Sara Lee and United Biscuits.

There are two entrenched players in the biscuits market - Parle and Britannia

have 85% of the market share. Britannia is undoubtedly the leader with brands

like Tiger, Little Hearts and Milk Bikis. Britannia's Tiger brand is selling largely

in the rural areas which actually constitute 56% of the biscuit market. But in the

Glucose segment Parle G is the market leader. Also players like HLL and ITC

have huge presence in the market. HLL Bistix (biscuit sticks that can be dipped

into flavours like strawberry and chocolate) is indeed an innovation and low-

priced biscuits.

The industry can also be divided brand wise into popular varieties such as Parle-

G and Tiger, medium varieties such as Milk Bikis and Super Milk, and premium

varieties such as Good Day and Monaco. The popular varieties account for close

to 40 per cent of the total volumes. If the Marie category is also included in the

sweet biscuits category, it will easily account for close to 80% of the industry's

total volumes of 7,75,000 tonnes.

The segment can be further divided into the sweet and savoury. The savoury

segment includes salt biscuits, and the salt and sweet variety accounts for the

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rest.

According to ACNielsen and ORG-MARG market research in 2003, the strength

of the Britannia brand is demonstrated by the fact that it stands far above all in

this fiercely competitive market, with over 46 per cent market share. Launched in

1997, Tiger became the largest selling Britannia biscuit brand in just 4 months of

launch. It crossed the Rs1 billion sales mark in its very first year.

Parle enjoys a 40% share of the total biscuit market. The Parle biscuit brands,

such as Parle-G, Monaco and Krackjack enjoy a strong imagery and appeal

amongst consumers. A comparative test study done on 12 popular brands of

glucose biscuits by an NGO, Voluntary Organisation in Interest of Consumer

Education (Voice), has thrown many surprises with Kellogg's and Priya Gold

ranking a poor 10th and ninth while Horlicks and relatively lesser known Anmol

capturing the top two slots respectively.

According to Herfindahl Index for the biscuit market, the index value is about2,500. For the bread business, in which Britannia and Hindustan Lever are the

major players, the value would be above 5,000. These values contain important

pointers. They indicate that the competition in the branded biscuits segment is

relatively intense, reflecting the fact that the Indian branded biscuits industry has

a long history. In the branded breads business, it indicates a lower intensity of

competition (in terms of the presence of organised sector players). However, the

values change dramatically if the unorganised sector which accounts for 50% of

the total biscuits market is taken into account. Since the marketshare of the

smaller players are widely dispersed and do not add to the index value, the

Herfindahl for the entire industry is close to 1,200 indicating intense competition.

According to another study, 'Parle G', which claimed to have 8% proteins,

actually has just 6.8% of it while Kellogg's had only 6.2% against the claimed

7.4%. Only claims of 'Britannia Tiger' matched the actual content. Only 'Parle G'

declared the iron content of the biscuit. Other than 'Cremica', 'Priya Gold' and

'Britannia Tiger', none of the brands carries the ISI mark.

In India, there is a huge unorganised sector. Biscuits market on an average grew

at 8% per annum in the last five years. The rural penetration of the branded

biscuits segment is also significant. Towns with populations of less than a lakh

contribute significantly to the industry's turnover, with some estimates placing it

at 40%. However, rural markets largely consume lower-priced varieties, and it is

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here that branded biscuits meet with stiff competition from the unorganised

sector.

In contrast to biscuits, the size of the organised sector for breads is quite small. It

consists of Modern Foods and Britannia, which do not account for even 10% of

the industry's total volumes. Significantly, Modern Foods was recently taken

over by Hindustan Lever. This is expected to provide a fillip to the organised

sector's expansion into the unorganised sector's domain.

Being a perishable product, the bread industry faces numerous challenges. The

lack of a modern well-developed retail network to address these challenges come

with the distribution of a perishable product. It is this factor that gives local units

that produce on a small-scale a distinct advantage - evidently accounting for a

predominant share of the total industry, especially in the rural markets.

The unorganised sector in the biscuits segment does exert pressure on the pricing

policies of the organised players. But only up to a point since the penetration ofbrands in this business even in the rural areas is fairly significant. Therefore, the

value for only the branded business segment is more indicative of the industry's

competitive pressures. The same holds good for the bread segment also. While

changes in market shares would only indicate how a company has fared relative

to the industry, the changes in the overall competitive intensity can be readily

reckoned by computing the Herfindahl Index. A decline of this value to below

2,000 in the biscuit segment would indicate that the existing players are not only

losing market share, but that their pricing power is also receding. And, if the

value remains constant even with the entry of several players that would indicate

that the hold of the existing players has not slackened at all.

The duty structure still favours the unorganised sector. Except for select low-

priced varieties, the excise duty on biscuits is a hefty 16%. However, bowing to

pressure from the Federation of Biscuit Manufacturers of India, 50% of the

excise was exempted for biscuits with a maximum retail price of Rs 5 for a

weight not exceeding 100 grams. This effectively reinstated the status quo for

low-priced biscuits such as Parle-G and Tiger. Overall, it has maintained the

potential for price differentials between low-priced branded biscuits and

unbranded biscuits. At the same time, the differential between low-priced

varieties and high-priced varieties appears set to widen.

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The toughest competition for estabilished players is coming from the

unorganised market. This market is indeed interesting to study.

Strategy quotient for B1L:

Cost leadership:

It is a cost leader in its industry except in cheese and glucose biscuits where it

lags behind Amul and Parle respectively. The company has undertaken

modernization program in order to improve productivity. To focus resources,

rationalization of brands and packs has been undertaken and the existing brands

have been clustered into more cost efficient portfolio through a process of brand

concentration.

Economies of scale:

BIL is adding capacity at regular intervals depending upon the economic

environment It has the advantage of being able to source raw materials and even

packaging at cheap rates because of large scale of operations.

Britannia is a starBCG as shown below:

The BCG growth-share matrix shows that Britannia is a STAR BCG, being a

market leader in a high growth market

42

* BILHIGH

MARKET GROWTHRATE

LOWRELATIVE MARKET

SHARE HIGH


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FIVE FORCE MODEL FOR BRITANNIA

43

COMPETITORS FORCE

(Major MNCs likely to diversify andget into related business of Britannia

SUPPLIERS FORCE

(Very large number less

of bargaining power

BRITANNIAPARLEBAKEMANSREGIONAL

BUYERS FORCES

(more quality suppliers,

so conscious and pricesensitive

SUBSTITUTES FORCES

Household snacksBakery biscuits

Fast food


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BRITANNIA SUPPLY CHAIN

Supply chain Describes a longer channel stretching from Raw materials to

components to final Products that are carried to final Buyers.

Britannia Supply Chain include Authorized wholesaler, Superstockists, RPDs,

UPDs and Retailers. The Raw Materials are converted into finished goods in the

Production Units or Factories. From factories the finished goods are then sent to

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the Regional Depots or the Mother Depots. From here the stock reaches the

Warehouse for distribution to the Authorized Wholesaler. From Warehouse or

Depots the Stock either reaches the Superstockists or the Authorized

Wholesalers. From Superstockists the stock goes to either UPDs or RPDs from

where it finally reaches to the markets of Rural India. The Authorized

Wholesaler buy goods from Company and from them the Stock goes to the

Retailers. Retailers sell Company Products to the End Consumers.

The Sale of the Stock from Depots to Authorized Wholesaler constitute Primary

Sale while the Sale of the Stock from Authorized Wholesaler to Wholesaler

constitute Secondary Sale.

Different rural markets have different set of Superstockists (SS) which further

have RPDs (Rural preferred Dealers) and UPDs (Urban preferred Dealers)

under them. These UPDs are the dealers of very small regions only which are

considered rural only and are not completely urban.

Sales Promotion

Sales promotion, a key ingredient in marketing campaigns, consists of a diverse

collection of incentive tools, mostly short term, designed to stimulate quicker or

greater purchase of particular products or services by consumers or the trade."

In marketing, sales promotion is one of the four aspects of promotion. (The other

three parts of the promotional mix are advertising, personal selling, andpublicity/public relations.) Sales promotions are non-personal promotional

efforts that are designed to have an immediate impact on sales. Sales promotion

is media and non-media marketing communications employed for a pre-

determined, limited time to increase consumer demand, stimulate market demand

or improve product availability. Examples include:

coupons

discounts and sales

contests

point of purchase displays

rebates

free samples (in the case of food items)

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gifts and incentive items

free travel, such as free flights Sales promotions can be directed at either the

customer, sales staff, ordistribution channel members (such as retailers). Sales

promotions targeted at the consumer are called consumer sales promotions.

Sales promotions targeted at retailers and wholesale are called trade sales

promotions.

Purpose of sales promotion.

Sales-promotion tools vary in their specific objectives. A free sample stimulates

consumer trial, whereas a free management-advisory service aims at cementing a

long-term relationship with a retailer.

Sellers use incentive type promotions is to attract new triers, to reward loyal

customers, and to increase the repurchase rates of occasional users. Sales

promotions often attract brand switchers, who are primarily looking for low

price, good value, or premi-urns. Sales promotions are unlikely to turn them into

loyal users. Sales promotions used in markets of high brand similarity produce a

high sales response in the short run but tittle permanent gain in market share. In

markets of high brand dissimilarity, sales promotions can alter market shares

permanently.

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http://en.wikipedia.org/wiki/Customerhttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Wholesalershttp://en.wikipedia.org/wiki/Customerhttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Wholesalers


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MAJOR CONSUMER PROMOTIONAL TOOLS

Samples: Offer of a free amount of a product or service delivered door to

door, sent in the mail, picked up in a store, attached to another product, or

featured in an advertising offer.

Coupons: Certificates entitling the bearer to a stated saving on the

purchase of a specific product: mailed, enclosed in other products or

attached to them, or inserted in magazine and newspaper ads.

Cash Refund Offers (rebates): Provide a price reduction after purchase

rather than at the retail shop: consumer sends a specified "proof of

purchase" to the manufacturer who "refunds* part of the purchase price

by mail.

Price Packs (cents-off deals): Offers to consumers of savings off the

regular price of a product, flagged on the label or package. A reduced-

price pack is a single package sold at a reduced price (such as two for the

price of one). A banded pack is two related products banded together

(such as a toothbrush and toothpaste).

Premiums (gifts): Merchandise offered at a relatively low cost or free as

an incentive to purchase a particular product. A with-pock premium

accompanies the product inside or on the package. A free m-tht-mail

premium is mailed to consumers who send in a proof of purchase, such as

a box top or UPC code. A self-liquidating premium is sold below its

normal retail price to consumers who request it.

Frequency Programs: Programs providing rewards related to the

consumer's frequency and intensity in purchasing the company's products

or services.

Prizes (contests, sweepstakes, games): Prizes are offers of the chance to

win cash, trips, or merchandise as a result of purchasing something. A

contest calls for consumers to submit an entry to be examined by a panel

of judges who will select the best entries. A sweepstake asks consumers

to submit their names in a drawing. A game presents consumers with

something every time they buy-bingo numbers, missing ietterS-which

might help them win a prize.

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Patronage Awards: Values in cash or in other forms that are

proportional to patronage of a certain vendor or group of vendors.

Free Trials: Inviting prospective purchasers to try the product without

cost in the hope that they will buy.

Product Warranties: Explicit or implicit promises by sellers that the

product will perform as specified or that the seller will fix it or refund the

customer's money during a specified period.

Tie-in Promotions: Two or more brands or companies team up on

coupons, refunds, and contests to increase pulling power.

Cross-Promotions: Using one brand to advertise another noncompeting

brand.

Point-of-Purchase (POP) Displays and Demonstrations: POP displays

and demonstrations take place at the point-of-purchase or sale.

MAJOR TRADE PROMOTIONAL TOOLS

Trade allowances: short term incentive offered to induce a retailer to

stock up on a product.

Dealer loader: An incentive given to induce a retailer to purchase and

display a product.

Trade contest: A contest to reward retailers that sell the most product.

Marketing programs: dealer employees are trained in selling the

product.

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Sales Promotion Strategies

There are three types of sales promotion strategies: Push,Pull, or a combination

of the two.

A push strategy involves convincing trade intermediary channel members to

"push" the product through the distribution channels to the ultimate consumer via

promotions and personal selling efforts. The company promotes the product

through a reseller who in turn promotes it to yet another reseller or the final

consumer. Trade-promotion objectives are to persuade retailers or wholesalers to

carry a brand, give a brand shelf space, promote a brand in advertising, and/or

push a brand to final consumers. Typical tactics employed in push strategy are:

allowances, buy-back guarantees, free trials, contests, specialty advertising items,

discounts, displays, and premiums.

A pull strategy attempts to get consumers to "pull" the product from the

manufacturer through the marketing channel. The company focuses its marketing

communications efforts on consumers in the hope that it stimulates interest and

demand for the product at the end-user level. This strategy is often employed if

distributors are reluctant to carry a product because it gets as many consumers as

possible to go to retail outlets and request the product, thus pulling it through the

channel. Consumer-promotion objectives are to entice consumers to try a new

product, lure customers away from competitors products, get consumers to "load

up" on a mature product, hold & reward loyal customers, and build consumer

relationships. Typical tactics employed in pull strategy are: samples, coupons,

cash refunds and rebates, premiums, advertising specialties, loyalty

programs/patronage rewards, contests, sweepstakes, games, and point-of-

purchase (POP) displays.

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Sales Promotion Strategies used by BIL

The role of promotions for BIL is especially important in this highly fragmented

and competitive market. Today, the company prides itself on communication that

is innovative, yet constantly able to strike a chord in the consumers hearts and

minds. Britannias promotion have virtually redefined consumer expectations

from this category.

To reach out to the consumers, BIL has been using both PUSH and PULL

STRATEGIES i.e. implementing Trade Promotions using Push Strategy and

COMSUMER PROMOTIONAL OFFERS using Pull Strategy. This shows they

are using combination of two.

In Push Strategies company is promoting their products through retailers to the

consumers by providing various kinds of incentives to them.

In Pull Strategies they are attracting more and more number of consumers or

pulling large number of consumers by giving gifts and incentive items to them.

In this Sale Promotion, BIL has successfully implemented both its PULL as well

as PUSH strategies. Through these Promotion they have increased their total

Sales thereby increasing their consumer base and also they have increased their

total number of UPDs and RPDs .

So to implement the above two Promotional strategies they have employed two

schemes i.e. six Promotional offers for consumers and a Sales contest called

MERA RPD MAHAAN for both UPDs and RPDs in the months of May and

June in regions of Uttar Pradesh and Rajasthan. In this way company is getting

the benefits of both the schemes. Basically company have used the stratagies to

enhance the sale of newly launched products.

PAST PROMOTIONS IN BRITANNIA

To reach out to the Indian consumer, Britannia has successfully leveraged India's twoprime passions - cricket and movies. Britannia addressed these platforms in a manner

true to its unique innovative style. It capitalized on every Indian's dream to watch a

cricket World Cup match and created the 'Britannia Khao, World Cup Jao' contest in

1999. It based itself on instant gratification. The entire consumer needed to do was buy

packs of Britannia biscuits, scratch a lucky card and win an all-expenses paid trip to

England to watch a World Cup match. This promotion was so successful that it set a

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trend that has got every company scrambling for tickets to take their consumers for the

World Cup. This promotion was repeated successfully in 2002/03 with the destination of

choice being South Africa. Taking the success further was the promotion of 'Britannia

Khao, Cricketer Ban Jao' that was fuelled by the need of every Indian to be a part of the

passion called cricket. Britannia followed it up with another unique promotion, a vehicle

that dealt with India's other passion - movies. A promotion called 'Britannia Lagaan

Match' that revolved around a movie called Lagaan was based on a cricket match. This

promotion gave the consumer a chance to interact with the film stars and also get to play

cricket with them. The match had over 40,000 spectators and made the headlines of

leading newspapers and news channels. Britannia promotions have proved to the

marketing world that promotions per se need not be only tactical but could also be

strategic - used as a tool to further brand equity.

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Consumer Promotional offers

What is a consumer promotional offer ?

To promote products to consumer, company devises some scheme like discount on

MRP, giving freebies with product etc.

How Consumer promotional offer products differ from normal product without

offer ?

The product is marketed under some scheme.

The packaging is different from normal product.

The freebies procurement & logistics planning is additional activity.

The production centers may be different from regular production centers.

The distribution strategy may be different from regular one.

Britannia Industries Ltd. Planned to launch six promotional offers in the month of

May and June 2006.

Complexities involved were promotional offers limited to some region of our country

and rest of country was on normal product.The promotional offers were limited to

Uttar Pradesh and Rajasthan.

Objectives :-

To deliver right SKU & Gift item to right place in right time.

To achieve internal customer satisfaction level to 95%.

And to increase the consumer base for newly launched product.

Marketing Department decides to run promotional offers on brands with following

objectives.

To penetrate market with greater share of business.

To leverage Britannia brand by having association with some other known

brand.

To counterattack competitors strategy.

The consumer promotional offers are based on the principle of elasticity of demand.

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Following consumer promotional offers were conceptualized for May and June 2006.

SAP CODE SKU DESCRIPTION PROMOTIONAL OFFER REGION

91340 50:50 150G 60 FP CBB FREE PC 50G Free PEPPER CHECKER 75G

UTTAR

PRADESH

RAJASTHAN

91344 TIGER KESAR KULFI 100G 96PP CBB 'CHTK' Free ONE SPINNER

UTTAR

PRADESHRAJASTHAN

91345 TIGER ROSE MILK 100G 96PP CBB 'CHTK' Free ONE SPINNER

UTTAR

PRADESH

RAJASTHAN

91346 TIGER ORANGE CREAM 100G 96 PP CBB 'CHTK' Free ONE SPINNER

UTTAR

PRADESH

RAJASTHAN

91347 TIGER ELAICHI CREAM 100G 96PP CBB 'CHTK' Free ONE SPINNER

UTTAR

PRADESH

RAJASTHAN

91350 TIMEPASS CLASSIC S.150G 54 PP (F)PC 50G Free PEPPER CHECKER 75G

UTTAR

PRADESH

RAJASTHAN

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Executing promotional offers

The activities considered so far was implementation of promotional offers constitutes

tracking the weekly sales of the promos in UTTAR PRADESH and

RAJASTHAN

UTTAR PRADESH is divided into three regions i.e.

Eastern UP

Western UP

Central UP

After tracking the weeks sales, as per the target, I used to make calls to

respective Territory Sales Incharge regarding the sales in their given region

and also asking problems they are facing,if any, regarding the stock

availibity.

Then making calls to respective RPDs and UPDs to get their daily sales.

Checking the RPDs and Upds if they are billed or not for particular SKU.

Setting the Superstockists Contribution as per the regions population under

that Superstockist.

Also to calculate the total sale per week and then calculating the Rural sale

and Urban Sale for each SKU in each region that is Eastern UP, Western

UP,Central UP and Rajasthan

After that if any of the RPD or UPD does not reach their target then ask

them to do that, otherwise they would no more be in the list since they not

making any profit for the company.

Finally calculating the monthly sales report which constitutes total sale of all

the SKUs, rural sale percentage and Urban sale Percentage with overall

percentage of all the four regions

PROMOTION IN RURAL MARKET

MERA RPD MAHAN CONTEST

Mera RPD Mahan contest was a dealer incentive contest which was designed for

the dealers of the Rural market. This contest was designed to motivate the RPDs

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and UPDs to reach their Sales target of 35,000 and 50,000 respectively. This

contest was held in the month of May and June.

The details of this contest are as follows:

Period May- Jun'06

Scope RPDs in all SURE Territories

Criteria Sales target achievement for the incentive period

Targets for the period to be set by the SO/ ASM in

consultation with the RSM Minimum swing of 40% in

May and June'06 MA sales over Jan-Mar'06 MA sales

To qualify the RPD must have minimum current sales

of Rs.30000 PM or the Target sales should be a

minimum of Rs.30000 PM.

Mechanics

1 Top RPD to be selected as the "Mera RPD Mahaan" per RPD PSM PJP.

This RPD to get a gift article worth Rs. 3000/- (Nokia Mobile Phone Proposed

All other RPDs to get a gift article worth Rs. 500/- or cash if preferred

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Eligibility

At least four bills in month

Achieve Targets i.e. 40% over monthly average

Last billing by 26th of every month

Executing Mera RPD Mahan Contest

Weekly Sales of RPDs and UPDs were tracked for both the months of May

and June.

The no. of RPDs and UPDs has been tracked for the month of April and then

their total no. in the months of May and June has been tracked and the total

Percentage increased in their number due to this contest has been analysed.

Those RPDs and UPDs which have not met their Sales target in the first

month of the Contest i.e. in the Month of May were called and were asked for

their failure to reach the Sales target and were asked to reach the target in the

second month of the Promotion.

The total sale in all the four regions were calculated for the month of April,

May and June and were compared.

SWOT ANALYSIS

STRENGTHS

High brand equity; consumers and dealers of mass market brand regards

Britannia as a Company, which delivers quality products

Britannia possesses an extensive and powerful distribution system

Britannia possesses a dedicated and highly experienced sales s

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Britannia Final 2007

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