FORE School of Management

Submitted To:

Prof. Hitesh Manocha

Submitted By:

IMG 7 (GROUP NO. 9)

Ankit Goyal 073005

Debpriya De 073012

Mayank Arora 073030

Mitul Kathuria 073032

NandKishore Sharma 073034

Smridhi Khanna 073054

ACKNOWLEDGEMENT

We would like to extend our sincere & heartfelt obligation towards all the personages who have helped us in this project. Without their active guidance, help, cooperation & encouragement, we would not have made headway in the project.

We take this opportunity to express ours profound gratitude and deep regards to our guide Prof. Hitesh Manocha for his exemplary guidance, monitoring and constant encouragement throughout the course. The blessing, help and guidance given by him time to time shall carry us a long way in the journey of life on which we are about to embark.

We are obliged to FORE School of Management also for the valuable information provided by them in their respective fields. We are grateful for their library cooperation during the period of our project.

Thanks & Regards

Ankit Goyal

Debpriye De

Mayank Arora

Mitul Kathuria

Nand Kishore Sharma

Smridhi Khanna

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EXECUTIVE SUMMARY

Our objective of this project is to establish a Marketing Plan which would involve a product within the sector digestive biscuits, in the biscuits industry. The group chose McVitie’s Digestives as the firm on which it would focus its efforts upon.

We have first done a detailed analysis of the Indian Biscuits Industry. It focuses on the past performance of the Industry and also analyses the market trends and growth. Being a new entrant in India’s undisputed market, McVitie’s has seen an impressive growth within the past 5 years, with its year-on-year growth rate being higher than that of the biscuits industry. Mc Vitie’s has biscuits, in the health segment, with various variants. However, the variant in which it has been a global player is that of being the ‘original’ digestive. The group observed that United Biscuits, the parent firm of McVitie’s India, increased the sales of its digestives aggressively, while playing the game defensively but intelligently. This can be observed from the fact that the entry of this new player took the whole industry by storm, forcing other players to venture into the health segment, which was untapped earlier.

We follow it by doing the SWOT Analysis for McVitie’s Digestives. Then it is followed by the description about the Indirect and Direct competitors of McVities. After that we analyze the overall Marketing strategy of the company. Then we focus on the Action Plan of Mcvities which consists of the Product Strategy, Pricing Strategy, Distribution Strategy, Promotional Strategy, and Sales Force Strategy. After that we have stated the Profit & Loss Statement of the brand.

At last we monitor and evaluate the marketing plan of Mcvities using various control points. The group came to a conclusion that the McVitie’s has to strengthen its hold in the health segment of biscuits industry, not only through digestives but also through other variants. The focus of McVitie’s, presently, is on Tier 1 cities and once established in these areas, the firm can look to expand in Tier 2 cities as well, along with building upon its weaknesses such as not-so-good R&D structure and others.

This project report is an effort towards the same.

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TABLE OF CONTENTS

S. No. Contents Page No.

1. Mission of the Company 5

2. Segmentation, Targeting and Positioning 6

3 Identification of the Consumer needs 7

4 PESTLE Analysis 8

5 Industry/ Competitive Analysis 9

6 Market Trends & Market Growth 12

7 SWOT for the company 13

8 Indirect competitors 14

9 Major Competition 15

10 Objectives 16

11 Positioning Statement 17

12 Marketing Strategy 18

13 Product Strategy 20

14 Pricing Strategy 21

15 Distribution Strategy 22

16 Promotional Strategy 23

17 Sales Force Strategy 25

18 Profit & Loss Statement 26

19 Monitoring and evaluation of the Marketing Plan 28

20 References 33

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MISSION

McVitie’s biscuits have been enjoyed the world over since 1850. Baked to perfection, McVitie’s biscuits are made with the finest, wholesome ingredients.

McVitie’s biscuits have been enjoyed by generations for around 160 years. The first ever Digestive biscuit was created by a new young employee, Alexander Grant. The name Digestive was derived from its high content of baking soda as an aid to food digestion. Over one hundred years later the McVitie’s Digestive remains a firm favourite and is the highest selling brand in the everyday biscuit segment.

The McVitie’s vision is to drive long-term sustainability in the business. The core values for McVitie encompass three key areas:

Financial: Delivering superior financial returns every year.

Environmental: Minimizing the impact on the environment.

Community: Engaging with the consumers, employees and local communities to improve and promote health and wellbeing, education, skills development and the support of charities. McVitie is one of the world’s pre-eminent branded snacks businesses. McVitie holds leading and strong positions in its core markets of the Biscuits. Moreover, they have global appeal and a rapidly growing international business unit. McVitie seeks to drive sustainable performance in all it does. This includes delivering consistently on their promise to consumers, serving their customers, developing and engaging actively with their employees, delivering superior financial results to their owners year in year out, minimizing the impact on the environment and interacting constructively with the communities in which they operate. They are investing in the future whilst delivering results today.

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MARKET ANALYSIS

SEGMENTATION

Market segmentation involves grouping the various customers into segments that have common needs or will respond similarly to a marketing action. Each segment will respond to a different marketing mix strategy, with each offering alternate growth and profit opportunities.

TARGETING

McVitie’s Digestive Biscuits aims to target its customers through the following approach

McVitie’s Digestive is designed specially to target customers who wish to be balance between health and taste.

With its McVitie’s Original Digestive Biscuits, it aims at the following:

Age: From 18 years to 55 years.

Income- With a price of Rs.45/ 250 Grams, Mcvitie’s aims at the high income group, with an annual salary of over Rs. 8 Lacs per Year or above.

It targets the high income group in the urban population of India who are concerned about their health.

McVitie’s is available in different packs and sizes and at different shops.

McVitie’s are distributed through Retailers, online shops and delivery, departmental stores and mall shops like MORE etc.

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DemographicAge (18 years to 55 years)Gender (Male , Female)Income (Rs. 4 Lacs per Year or above)Education (Professionals - Graduates and Post Graduates)GeographicRegions (All over India)City (Class I and Class II cities, Metros)Psychographic Lifestyle (Health Conscious)Personality (Ambitious, Hard Working)Behavioural User Status (Potential Customer and First Time Users)Loyalty Status (Strong)Readiness Stage (Interested)Attutude towards Product (Positive)

Psycho-graphically, McVitie’s Targets working men and women who remain engaged in work and related activities, thus aiming to provide them nutrition between tea breaks.

It targets health conscious people who consider health and fitness important and mandatory.

It has introduced its new products including high fibre biscuits, chocolate biscuits which aim at making it appealing to teenagers who wish to remain healthy, without sacrificing on taste.

McVitie Light Digestive has only 65 kcal per biscuit making it high on fibre, nutrition, health and taste.

POSITIONING

McVitie's is positioned as a healthy biscuit. Worldwide, the brand is positioned based on its "Whole grain" content. Globally, the brand has the slogan "Whole Wheat at Its Heart". 

McVitie's positioning in India is based on two attributes. It focuses on Health (whole grain) and Taste. The brand has adopted the tagline "Taste Ki Nayi Language" translated to "The new language of taste". The present tagline focuses on to ‘Switch to a healthy habit’.

Ever since, McVitie’s has positioned itself as digestive health biscuit which is high on fibre. It is considered as a brand which young and working professionals can relate it. The firm is targeting people who are looking for healthy options. And, to satisfy the sweet pallet urge, it offers an altogether different range of biscuits. Worldwide, the brand is positioned based on its "Whole grain" content. Globally, the brand has the slogan "Whole Wheat at Its Heart".

With Taste being one of the dimensions, it is important to understand that all brands talk about taste at one time or the other. The powerful differentiator for McVities would have been its global image and the quality factor which made it one of the most respected brands in Britain. The brand should project itself as the REAL Digestive biscuit, which invented this product category, instead of being categorized as "The Original".

CONSUMER NEEDS MET

High on Fibre which makes it Effective for digestion Perfect snack between meals. It fills the stomach without unnecessary calories and

Fats Nutritious with health benefits like , it provides 20% of the daily Fibre. No Trans Fats and Additional Colours, thus keeping it purely healthy. A Healthy substitute for other fatty products. Can be coupled with Tea and Breakfast McVities is now being used with a layer of cheese and vegetables, as mini crunchy

burger.

PESTLE FRAMEWORK

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Political /Legal

Mcvities has been in India for years. It serves Biscuits to India under the Brand name of United Biscuits which is a Brand to reckon with. The Government of India has implemented the FSSA which stands for the Foods Safety and Standards Authority of India. Under the FSSA, the products have to undergo a specific level of standard, which has been set by the GOI.

Along with this Stating the Nutritional benefits and the exact quantity of ingredient’s in mandatory. Packaging has also been regulated by the FSSA.

Economic

Today the Indian consumers are more discerning about Quality and Taste, while still considering value for money

Inflation and Price rise is still an issue when it comes to the Indian Market The market for Biscuits is highly fragmented thus increasing the pressure of

competitive prices and a trade of with quality and taste. With large number of people becoming health conscious, the number of

players in the same market is expected to increase sharply. A large section of people still prefer Creamy and sweet Biscuits

Social With more and more people becoming health conscious, there are going to be

a large number of people entering the same market. Consumers are highly concerned about their weight, calories, and intake. Thus it increases the sensitivity of the market.

United Biscuits has a very strong presence worldwide and thus people consider their products of upmost quality and value.

Technological

High quality packaging is gaining importance with each brand trying to make an impact with its packaging .Sophisticated and trendy packaging makes the biscuits attractive.

Large investments in Promotion through Social media, TVs and Advertisements.

Integration of Health, fibre and taste. Increase in mechanization and use of machines for standardised products

Environmental

With the growing environmental concerns, pollution levels and disposal of wastes is of major concerns.

Factories need to be located far away from localities and residential places, thus leading to higher transportation costs.

INDUSTRY/ COMPETITIVE ANALYSIS

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The biscuit market in India is estimated to be Rs 14,000Crore (Year 2012-2013) and the industry is also gearing up to aggressively tap the medium and premium segment within the country over the next couple of years.

Per Capita Consumption of Biscuits in the country is only 1.8 kg, as compared to 2.5 kg to 5.5 kg in South East Asian countries and European countries, and 7.5 kg in USA.

The biscuit industry in India witnessed annual growth as below in the last couple of years

2008-09 - 16%

2009-10 - 14%

2010-11 - 11%

2011-12 - 11%

2012-13 - 09% (April-September 2012)

While the growth rate has been stagnating during last 4 years, it picked up momentum during the 2008-09 mainly on account of exemption from Central Excise Duty on biscuits

2008-09 2009-

102010-

112011-

12 2012-13 2013-

14 E 2014-15 E 2015-

16 E

0

2

4

6

8

10

12

14

16

Biscuit Industry Growth Rate (%)

Biscuit Industry Growth Rate (%)

(Resources - Indian Biscuit Manufacturs’ Association)

IBMA estimates annual growth in the range of 15% to 18% and above in the event of reduction in the rate of VAT on Biscuits to 5%.Imposition of Value Added Tax (VAT) by the State Governments @ 13.5% compared to VAT at 5% or 0% levied on other similar food products has adversely affected biscuit industry.

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2008-09

2009-10

2010-11

2011-12

2012-13

2013-14 E

2014-15 E

2015-16 E

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Biscuit Industry in Crore (Rs.)

Biscuit Industry in Crore (Rs.)

(Resources - Indian Biscuit Manufacturs’ Association)

Pattern of Biscuit Consumption (On Zonal basis) in the country are as below: Northern Zone 25%Western Zone 23%Southern Zone 24%East and North East Zone 28%

Annual Production (Lakh Metric Tonnes)

2008-09 - 17.50

2009-10 - 18.50

2010-11 - 19.00

2011-12 - 20.50

2012-13 - 10.50 (April to September 2012)

(Resources - Indian Biscuit Manufacturs’ Association)

Exports of Biscuit was 14% of the annual production during the year 2010-11 which declined to around 12.5% in 2011-12.

Imports of biscuits into India (mainly high end products) has not shown any significant growth during the last five years and has not affected production/sales by the Indian Biscuit industry.

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Rural-Urban penetration of Biscuit: 

Urban Market: 75% to 85% Rural Market: 50% to 65%

Main Categories of Biscuits are broadly as under:

Glucose, Marie, Sweet and Salty Cream Milk Digestive

Market Share

Marie – Rs. 3500 CroreGlucose – Rs. 3700 CroreCream Biscuit – Rs. 4600 CroreDigestive – Rs. 500 CroreOthers – Rs. 1700 Crore

Sales Figure

MarieGlucoseCreamOthersDigestive

Popular Brands of Biscuits in the country are, Britannia, Parle, Priyagold, Anmol, Sunfeast, Biskfarm, Dukes, Cremica, Priya, Mcvities, Veeramani, Bonn, Bhagwati, Raja, Madhabi, Nezone, Nalanda, etc.

MARKET TRENDS & GROWTH

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Market Share of leading Organized Biscuit Manufacturer (2012-13):

Parle 40%Britannia 38%Sunfeast 12%PriyaGold 5%Others 5%

Market Share

BritanniaParleSunfeastPriyaGoldMcVitiesOthers

(Resource – Economic Times)

Market share of Britannia has declined from 47% (2010-11) to 38% (2012-13). In volume terms in glucose segment, according to MotilalOswal research data, Britannia has seen a drop in market share to 8.6 per cent in the year 2012-13 from 12 per cent in 2010-11. Similarly, ITC has seen a dip in share to eight per cent in 2012-13 from 9.2 per cent in 2010-11. Parle Products has increased in market share (volume) to 79.3 per cent from 75 per cent in 2010-11.

The organized and unorganized sector of the biscuit industry is in the proportion of 70%:30% ratio.

Sales

OrganizedUnorganized

SWOT ANALYSIS

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SWOT analysis can provide a framework for identifying and analysing strengths, weaknesses, opportunities, and threat. This can also provide an impetus to analyse a situation and develop suitable strategies and tactics, a basis for assessing core capabilities and competences. Moreover, this can provide the evidence for, and cultural key to change and a stimulus to participation in a group experience.

Strength

McVities has a Wide Brand offering with markets in plain digestives, bourbons and digestive cream biscuits. It has a strong food hold in Biscuit industry, and high rates of business survival, with 100% growth against the market rate of 70%. 20% of digestive biscuits market share is captured by McVities, with major existing food cluster to build upon.

Weakness

McVities has a geo-graphical concentration in urban areas only, and doesn’t plan or intend to focus on the rural areas. In the urban areas, the target audience is the people belonging to niche category. Products recalls, low exploitation of the Internet and ICT, lack of R&D and fragmented enterprise support are some of the other weaknesses of McVities digestive biscuits.

Opportunities

There is a huge potential in the emerging markets like India, and this is evident from its growth, which is higher than that of the average market growth since the launch of digestives biscuits. Another opportunity for the firm can be to increase its Sourcing from Low Cost Countries, thereby increasing the profitability. There is also a growing demand in the snacks and savoury market, which can be looked over by the firm in future. Due to healthy market environment, the firm can also look for diversification& expansion in the already existing variants and new products, respectively. With just 5 years of operations in India, and not-so-good R&D, the firm can further look for development in technology

Threats

Global Economic Slowdown & Highly Competitive Environment are some of the most damaging threats for the firm, which is at a nascent stage in India. The Strict Government Regulations can also act a barrier to the firm’s future prospects. The latest recommendations on saturated fat and added sugar announced by the respective government agency urge industry to continue on the reformulation quest. There have been Threats from Indirect Competitors as well

INDIRECT COMPETITORS OF MCVITIES

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Quaker Oats

Strengths:· Established brand and having lots of oats product line.· Quaker Oatmeal can help lower your total cholesterol, and LDL ("bad") cholesterol, and that can help keep your arteries clean and healthy.

Weaknesses:- Not all like oats products because of the taste.- Most of the Quaker product is only targeting on young adult consumer

Kellogs Cereals

Strengths:· Famous and establish corn flakes brand.· The price is affordable and good in quality.

Weakness:· The packaging designed is not attractive compare to other brands.· The company’s reliance on single products.

Fibre Breads

Fibre breads are associated with qualities such as good taste, freshness, trust and reliability. In a highly competitive market

Strengths:· Easily available.· Cheap and yet it is rich with whole grains that can consist of vitamins and minerals.

Weakness:· Short life span.

Nutritious drinks (Horlicks, Bournvitaetc)

Strengths:· Rich in vitamins and zinc.· Easy to make.

Weakness:· Expensive for malted milk drinks.

MAJOR COMPETION

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BRITANNIA INDUSTRIES LIMITED

Major Brands: Good Day, Tiger, Marie Gold, 50- 50, Choco - Chips, Choco - nuts, Little Hearts , Bourbon, Nice Time, Pure Magic, Milk Bikis, Jim -Jam, Cream Treats, Time Pass etc. In the health segment, Britannia has products like NutriChoice Oat Cookies, NutriChoiceRagi Cookies, NutriChoice Health Starter Kit, NutriChoice 5 Grain, NutriChoice Sugar Out&NutriChoice Digestive Biscuits.

Strengths: Britannia is currently the market leader in the organized biscuit industry. Well defined and appealing advertisements highlighting the core value of “energy

and health”. They have 6 power brands which contribute towards 80% of their sales. Well diversified portfolio of biscuits and innovative concepts of smaller size

packets. Only biscuit company to have removed trans-fat from all its recipes, catering to a

market with sensitive needs.

Weaknesses: Increase in input costs in putting pressure on the prices. Stiffer competition from other players in the segment.

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OBJECTIVES

Year 1 Year 2 Year 3 Year 5 Year 5

Targeted CAGR 100% 80% 60% 60% 55%

Targeted Revenue Rs 200 Crore

Rs 380 Crore

Rs 576 Crore

Rs 921.6 Crore

Rs 1428.48 Crore

Expected growth rate of digestive biscuits market

60% 40% 30% 30% 25%

Expected size of digestive biscuits market

Rs 800 Crore

Rs 1120 Crore

Rs 1456 Crore

Rs 1892 Crore

Rs 2365 Crore

Targeted Market Share

25% 34% 39.5% 48.6% 60.40

McVitie’s Digestive Biscuits will have a three-point objective:

To maintain a CAGR well above the industry growth rate over the next five years.

To achieve a market share of over 60% within the digestive biscuits market in India in the next five years.

To achieve gross sales revenue of over Rs 2300 crores by 2019.

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POSITIONING STATEMENT

“To health conscious customers who look for a tasty yet healthy snack, McVities Digestive Biscuits are a perfect blend of taste and health, providing 20 % of a day’s

fibre in a tasty and crispy manner, making it the most preferred high nutrition biscuit.”

It has positioned itself as a perfect blend between health and taste. It positions itself as a semi- sweet biscuit with 33% wheat, which makes it way healthier than other sweet biscuits.

The Perceptual Map

McVities Original Digest -ive Biscuits

Cremica Digestive Biscuits

Britania Nutrichoice Digestive Biscuits

Britania Nutrichoice 5 Grain

High

on

Ta

ste

Low on Nutri-tion/Health

Hig h on

Tast e

Low on Nu-trition/ Health

High on Nutriton/ Health

Low

on

Ta

st e

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MARKETING STRATEGY

Mcvities have crafted correct strategy to enter Indian biscuit market i.e. “Get hold in one niche and then expand”. Mcvities Digestives are popular among health conscious customer. McVities Digestive Biscuits always Positions themselves as a healthy biscuit, which is high on fibre. It targets consumers of Urban India, between the age of 18-55 years. McVities, since its inception, has focused on a mix of “Health” & “Taste”. Its Unique Selling point (USP) is its ability to provide a perfect blend of taste and health. Their products are made up of wheat, which makes it high on fibre and nutrition.

4 P’s OF McVities

Product

McVities Digestive Biscuits are baked with whole wheat flour and the finest wholesome ingredients. With high level of dietary fibre, it is considered as one of the best snack in between meals. While other biscuits are made up of sugar and contain high levels of cholesterol & Hydrogenated fats, McVities Digestive is sugar free & has no Hydrogenated Fats. They are crispy, without any artificial flavours.

Mcvities proves to be a favourite snack with a tossing of cheese, chocolate, jams & butter.

Have all the goodness of wheat High fiber content Crumbly texture, original flavour and satisfying nature

Price

McVities Original Digestive Biscuits has 3 sizes – 100 grams, 250 grams and 500 grams. Their price is being INR 18, INR 45 & INR 90 respectively. With the 100 grams pack, it aims at acquiring new customers by giving them an opportunity of trying the product at a low price of Rupees 18.

Its Pricing is lower than its immediate competitor- Britannia NutriChoise Digestive Biscuits which sells at Rs. 50 for a 250 grams pack. As the market for digestive biscuits is relatively new, Mcvities has an advantage over Britannia’s Digestive biscuits for consumers trying McVities (due to lower price) before Britannia.

Weight (gm) INR

100 18

250 45

500 90

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Place

McVities focuses on the urban market in India. Its strong distribution network allows it to offer a competitive price in the market. McVities Digestive Biscuits supplies to all Kirana shops and departmental stores like Big Bazar, MORE etc, thus creating high availability in the market.

Available in more than 250 towns across the country Uses its own distribution network Supplies to all renowned retail stores and kirana shops

Promotion

McVities has been investing huge amounts in developing campaigns for promotion and awareness of its product.

Advertising - Its brand ambassador is Bollywood Health Freak- Miss Bipasha Basu who focuses on health and exercising. Their latest advertisement shows an office scene where colleagues having biscuits other than McVities are shown as having “Maida” and thus gaining weight. While Bipasha Basu is shown as a healthy & energetic lady with a fit body, who eats McVities Digestive Biscuits. The advertisement focuses on the nutritional value of the biscuit- namely its ingredients (Bran, wheat etc). The tag line is “What’s in your Biscuit?”

Social Media - McVities uses Facebook and Twitter campaigns to promote its products. It has a fan following of over 2.3 Lac Indians on Facebook. They organise a number of contests where you can give in your recipes. This section is called as the “Recipe with McVities” and attracts a large degree of interaction amongst its consumers. On Twitter too the fan following is high with contest being organized frequently. The latest one talked about answering questions on McVities in the best possible manner. On social media, it involves the following activities:

o “Recipe of the week”o “Healthy Tuesday”: a health tip is given every Tuesdayo “Wacky Wednesday”: They share jokes pertaining to the biscuits/ingredientso “Travelogue” contests: Cash prizes and awards are given to the lucky winners of

the contests

Cross Promotion - Cross promotions with reputed brands such as piggybacking with Kelloggs or HUL's Taaza has also helped increase the brand's visibility. Its tie up with HUL has been one of the most successful tie up, rewarding it with high sales and greater visibility.

Sales Promotion - McVities offered a number of sales promotion techniques including giving out free plastic bowls with its 500 Gram biscuits.

PRODUCT STRATEGY

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Product Development System

Mc Vitie’s product development system has allowed the firm to come up with new and better products on a consistent basis. It is structured, yet has afforded enough room for the company's engineers and researchers to realize their best product-development ideas. The product and development system is based around research and development (R&D) management, a system of producing new products and services. The R&D system of Mc Vitie’s India is not so good, but given the rise in its demand; popularity & credibility, there is a huge opportunity for the firm to improve upon it.

Product Line

A company's product strategy can be based on a diversified product line. Product diversification can be be achieved by having similar products that are slightly modified to better suit different customer groups.

United Biscuits offers nine variants under the Mc Vitie's umbrella including oats, cookies, fruit- based cookies, bourbon, marie and cream biscuits. Mc Vitie’s has a varied product line under the digestives market with Mc Vities Digestives being the flagship brand of the firm. With content such as Whole-wheat flour and no artificial flavours or colors, along with high fibre, the biscuit was given up a thumbs-up by those who loved their biscuits to go with heir tea.

The Mc Vities butter cookies is another line of product which, apt for the name, just melts in the mouth and is crispy & yummy. They are also rich in calcium and has no trans-fats again. The product was perceived as, just like its tag, Simply Butterlicious.

Hobnobs, with the goodness of natural honey, oats and whole-wheat is another line of Mc Vities which is considered healthy and yummy. Mcvities introduced the wonderful recipe of hobnobs in 1984. Since then it has perfected the art of baking a delightful oats biscuits complete in its goodness of natural ingredients. The main content of the Hobnobs are Oats, for a healthy heart; Whole-wheat, for a strong and fit body and Honey, for overall health. The public perception of the product was very positive with the belief that they can have biscuits, which are super delicious & healthy, anytime of the day. The cream biscuits are also very appreciated by those who are cream biscuit buffs and also looking for a healthy option.

PRICING STRATEGY

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One of the challenges for McVitie's Digestive is pricing. With the price of Rs 45/250 gm pack, the biscuit lies in the premium range segment and a large portion of people may not be able to afford it. Some of the popular biscuits in the country are in the range of Rs 15-20 for a 200 gm pack. However, it has to be noticed that though the firm is in the premium range, it is affordable as the target audience is SEC A and A+ categories. Biscuits are an important part of a family's monthly basket and a product that is consumed daily. But, at the end, it will be a matter of making healthier choices.

Price objective The pricing objective is to sustain the sale of our product and earn profits while acquiring a substantial market share.

DemandOur product is catering to high income market segment consumers who want a balance between health and taste.Therefore, the consumer will be ready to pay a high price for a product which can offer them both taste and quality.

Competitor’s price mixThe major competitor of our product is Britannia Nutrichoice Hifibre biscuit. It is made with 50% whole-wheat and packed with added fibre i.e. 10% of our daily dietary needs.It is priced at Rs 20 for 100gm and Rs 50 for 250gm.

Pricing methodWe have to set the price of our product between the Price Ceiling and Price Floor for our product.(Assumption: Price Ceiling is the maximum value the competitors offer because if prices go beyond it, then the demand will fall. Price Floor is the break-even price for our product because if we set our price below this price, then we will incur losses.)We have to use Going-rate Pricing Method in which price of a product is based upon competitor’s prices. Also, as McVities is relatively a new brand in the Indian market as compared to Britannia so the price must be lesser than Britannia’s product until it gains a brand image and a substantial share in the Indian market.

Final priceBased on the above analysis, the price of Rs 18 for 100gm, Rs 45 for 250gm and Rs 90 for 500gm is aptly set.

DISTRIBUTION STRATEGY

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The distribution network of McVitie’s Digestive Biscuits will have three tiers as listed below:

1. Manufacturing Units: There will be a manufacturing unit with an adjoining storage depot in each of the major geographical zones, north, south, east and west, preferably near Delhi, Chennai, Mumbai and Kolkata to supply the distributers in the respective zones.

2. Wholesalers/Distributers: There will be 4 wholesalers in every tier 1 city and 1 wholesaler in every tier 2 city.

3. Retailers: McVitie’s products are available in around 80000 stores across the country. Our objective will be to take the number up to around 150,000, with greater focus on tier 1 and tier 2 cities.

Tier 1 Cities

Tier 2 Cities

Tier 3 Total

Manufacturing Units Planned 4 0 0 0

No. of Distributers/Wholesalers targeted

32 60 0 92

Number of Retailers planned 60000 60000 30000 150000

PROMOTIONAL STRATEGY

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Manufacturing Unit of McVitie’s Biscuits

Wholesalers/Distributers

Retailers

Customers

Objective

To create awareness of the McVities digestive biscuits, among the consumers and to position them in the minds of the premium segment people, who are looking for enjoying the biscuits, with health and nutrition as the primary motive of purchase.

Communication Design

The main aim of the parent firm United Biscuits, is to create awareness about the product in the target segment. With United Biscuits starting its operations in India in 2009-10, it has to integrate all the marketing communication channels such as, events & experiences, TV, print, social media, and the PR to create awareness about the new product. McVitie's Digestive is using print, electronic media along with several on ground activities to reach out to its target audience, and has doubled its marketing spends for 2013. It is available in more than 250 towns across the country. The most logical way to promote this product successfully and efficiently is with the methodology of using Television Advertisements, leveraging social media like Youtube, Facebook etc. and most importantly promoting through events and experiences to create brand related interactions with customers.

1. The firm can set up kiosks in the premium segment malls such as, Ambience mall, DLF Promenade and many more to give information about the product.

2. It can promote the create awareness and hype about the product by conducting contests etc at the kiosks so that more people gather to see and, henceforth, taste the product. This would also lead to generating a press release about the product.

3. Creating a Gartner Hype can be effectively done by using video advertisements and teasers on TV, Youtube and Facebook.

4. Discussions, in order to reach out to the customers efficiently, should also be initiated by the company itself on their various social media pages and accounts.

5. The advertisements should focus more on presenting the factual information about the advantages of Mc Vities digestives over the digestives of other brands. These advertisements can be aired on entertainment; sports channels; and news channels.

6. Another important aspect is the PR management. As the product lies in the premium segment, it is the product reviews and recommendations on the internet that would lead to higher selling of the product. Also, the level of credibility is high in case of advertising by PR hence as a new premium product PR can be termed as the backbone of the marketing in case of products such as Mc Vities digestives.

Communication Mix

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After analyzing the promotion strategy we can now decide upon prioritization of the communication channels so as to increase the maximum consumer reach. Out of the total budget of advertising and promotion the following breakup can be devised:

27%

40%

10%

23%

Communication mix

PRTV Social mediaEvents

SALES FORCE STRATEGY

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Sales force of a company is the lifeline in its distribution channel. Sales managers must be able to craft strategy and communicate it to the sales team in order to win the right kind of business and achieve growth targets for the business.

McVities have a sales force of approximately 200 employees and a marketing group of 40 employees in India. It is available in more than 250 towns across the country.

Each sales force works with a sales support staff responsible for establishing trade channel and customer management strategies.

They generally sell their products on an order-by-order basis and do not enter into long-term contracts to supply the products.

To create brand awareness, build customer loyalty and stimulate demand for their product, they devote substantial resources to marketing the McVities Digestives.

They are using the advertising route to promote the popularity of their product and create awareness in the market. They advertise the McVities Digestives through television, radio and print media and in the last three years, they have done four television campaigns.

McVitie's Digestive is also using electronic media along with several on ground activities to reach out to its target audience.

Sales Force Structure

United Biscuits still have only one brand (McVities) in India despite being here for over three years. They have rolled out sub-brands under variants like digestive creams and bourbons because they are testing a 'no added sugar' variant. In many markets, they sell brands like Jacob's crackers and Twiglets snacks. But in India, right now, they are measuring the scale to go into many more stores. Therefore, their sales force consisted of few teams which consistently focus on the primary product i.e. McVities Digestives and dedicated to support the major customers of the brand.

They have a field sales operation responsible for supporting wholesalers and their customers at a local level.

They also have a brand management team responsible for developing brand strategies, new products and product-line extensions and for marketing activities, such as advertising, sponsorship programs and consumer public relations.

According to Jayant Kapre, president, United Biscuits - Their job is to pull the right levers. The Indian team has been working very hard at merchandising. They're slowly building consumer preference. Advertising has really worked for McVities. Biscuit is more competitive than most food categories. But they're finding that consumers are accepting new products faster. Digestive Market is still less in India, but the good news is that the category exists in every single market.

India is a very large country and McVities is relatively new. Therefore, they don’t have any plans to expand into rural India. They're going to stick to a dense urban population range

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till they're confident of penetrating distribution deeper. There's still so much growth to go after in urban markets. The sales have crossed 100 crore within four years which is very good. India is a strategic market for United Biscuits, the largest in Asia and the sales force is growing year by year according to the consumer demands and productivity of the product.

PROFIT & LOSS STATEMENT

(Amount in Rs. Crores)

2014 2015 2016 2017 2018IncomeSales Turnover 200.00 380.00 575.00 920.00 1430.00Excise Duty 3.00 5.70 8.63 13.81 21.47Net Sales 197.00 374.30 566.37 906.19 1408.53Other Income 1.95 3.70 5.60 8.96 13.92

Stock Adjustments 0.37 0.69 1.05 1.68 2.61

Total Income 199.31 378.69 573.02 916.83 1425.07ExpenditureRaw Materials 124.25 236.07 357.22 571.55 888.39

Power & Fuel Cost 1.83 3.49 5.27 8.44 13.12

Employee Cost 5.04 9.57 14.48 23.17 36.01Other Manufacturing Expenses

17.70 33.64 50.90 81.44 126.58

Selling and Admin ExpensesMiscellaneous Expenses 35.60 67.63 102.34 163.75 254.52

Preoperative ExpCapitalisedTotal Expenses 184.42 350.40 530.21 848.34 1318.62

Operating Profit 12.94 24.59 70.69 59.53 92.53PBDIT 14.89 28.29 81.33 68.48 106.45Interest 1.32 2.52 7.24 6.09 9.47PBDT 13.56 25.77 74.09 62.39 96.98Depreciation 2.00 3.81 10.94 9.22 14.33Other Written Off 0.00 0.00 0.00 0.00Profit Before Tax 11.56 21.96 63.14 53.17 82.65Extra-ordinary items 0.10 0.19 0.55 0.46 0.72

PBT (Post Extra-ord Items) 11.66 22.15 63.69 53.63 83.37

Tax 3.45 6.56 18.85 15.87 24.67

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Reported Net Profit 8.21 15.60 44.84 37.76 58.69

Total Value Addition 60.17 114.33 328.69 276.79 430.23

Preference DividendEquity Dividend 3.57 6.78 19.49 16.41 25.51Corporate Dividend Tax 0.61 1.15 3.31 2.79 4.34

Per share data (annualized)Shares in issue (lakhs) 41.95 79.71 229.18 192.99 299.97

Earnings Per Share (Rs) 0.69 1.31 3.75 3.16 4.91

Equity Dividend (%) 14.92 28.34 81.49 68.62 106.66

Book Value (Rs) 1.88 3.58 10.29 8.66 13.46

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MONITORING, EVALUATION AND CONTOLLING THE MARKETING PLAN

It is the task of management to ensure that the marketing plan is carefully monitored, evaluated and controlled. Typical controls involve setting standards of performance, evaluating actual performance against standards and, if the deviations are intolerable, taking corrective action. Marketing planning can be seen as a cycle, which begins with clear objectives that set out what the marketer intends to achieve, and ending with a feedback mechanism in order that the objectives can be evaluated, a course of corrective action can be taken (if there are deviations from plans) and the organization can monitor its usage of resources.

Figure: The planning execution and control cycle

Marketing controls

Marketing control involves setting a desired standard, measuring deviations from the standard and taking the appropriate action. In many cases the standard is expressed in terms of budgets and any substantial deviation from budget is investigated. Since not all deviations are significant, parameters are set for “allowable” deviations and only those exceeding these parameters are investigated. There are four types of marketing control: the annual plan control, profitability control, efficiency control and strategic control.

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Figure: The different levels of marketing controls

Type of Control

Prime Responsibility Purpose of Control Approaches

Annual plan control

Top managementMiddle management

To examine whether the results are being achieved

Sales analysisMarket-share analysis Sales-to-expense ratiosFinancial analysis Attitude tracking

Profitability control

Marketing controller

To examine where the company is making and losing money

Profitability by product territoryCustomer group tradeChannel order size

Efficiency control

Line and staff managementMarketing controller

To evaluate and improve the spending efficiency and impact of marketing expenditures

Efficiency of sales forceAdvertising sales promotion distribution

Strategic control

Top managementMarketing auditor

To examine whether the company is pursuing its best opportunities with respect to markets, products, and channels

Marketing effectiveness rating instrumentMarketing audit

Table: Types of marketing control

Marketing plan control

The purpose of the annual plan control is to ensure that the company achieves the sales, profits and other goals established by the marketing plan. It is, therefore, an operational control plan. This type of control applies to all levels of the organization and the process.

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Figure: The annual plan control process

Sales analysis

Actual sales can be compared to sales targets and budgets and an analysis of any variance between the two would be carefully examined. Sales analysis centers interest upon the relative contribution of different factors to a gap in sales performance. Say, for example, that the managing director of the Mcvities is told by the marketing manager that sales are up half a million units on the target and that revenues are five percent above budget, this would be cause for celebration. Or would it? Before answering this question the managing director would wish to look at these figures a little more analytically.

Although sales have exceeded expectations, but if the planned price was not achieved and so the product made a lower contribution than expected. In this case the price mechanism would need investigating as would the estimates of market share. Whilst the Mcvities recorded an increase in sales of ten percent, the market as a whole was twenty percent above target. Seen in this light, there is more cause for concern than for celebration.

Market share analysis

Market share analysis shows how well the organization is doing vis-a-vis competitors. The first step is to determine market share, either by absolute measures (overall market share) or relative to main competition (relative share), or to leading competitor (relative to market leader share). The second step is to analyze market share movements.

Market expense to sales ratio

The marketing expense to sales ratio is used to ascertain whether the organization is spending too much or too little on marketing in order to achieve its sales goals. The marketing expense to sales ratio can be made up of a number of components such as sales force size to sales, advertising to sales, sales promotion to sales, marketing research to sales and sales administration to sales. The monitoring procedure involves determining an acceptable level (or standard) and by using a variety of charting devices (control chart or expense to sales deviation chart) look at actual to budgeted expenditure.

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Customer attitude tracking

Whilst most of the control techniques described so far have been quantitative in nature, customer attitude tracking studies give qualitative information. The main customer attitude tracking measures are complaint or suggestion schemes, customer panels or customer surveys. These can be very useful in revealing what customers feel about the organization, its products, services and behavior towards society as a whole.

Profitability control

Besides annual plan control, Mcvities needs to measure the profitability of its various products, territories, customer groups, trade channels and order sizes. This information will help management determine whether any products or marketing activity should be expanded, reduced or eliminated.

Marketing profitability analysis

This consists of starting from the target profit plan and then applying the control measure - marketing profitability analysis. Assume the manager of a line of baked products is setting his/her annual plan. Further assume that it is believed that:

Demand conditions will be the same next year as this year There will be no change in marketing strategy The price set will reflect only changes in input costs and not competitive activity The manager's interest is in making “satisfactory” not “optimal” profits.

In theory the manager should devise a plan intended to optimize the sales response function. A sales response function forecasts the likely sales volume during a specified period associated with different levels of one or more marketing mix elements. Typically he/she should assess the sales which would be generated by ever increasing amounts of marketing expenditure until the point of diminishing returns is reached.

Efficiency Control

If the profitability analysis reveals that the company is earning poor profits in connection with certain products, territories or markets, the question is whether there are more efficient ways to manage the sales force, advertising, sales promotion and distribution in connection with these poor performing entities.

Sales force efficiency

Average number of calls per salesperson per day Average sales call time per contact Average revenue per sales call Average cost per sales call Percentage of orders per 100 sales calls Number of new customers per period Number of lost customers per period Sales force cost as a percentage of total sales.

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Advertising efficiency

Difficult as it is, the marketer should try and track the following:

Advertising cost per thousand buyers reached overall, for each media category, and each media vehicle

Percentage of audience who noted, saw/associated, and read most for each media vehicle

Consumer opinions on the advertisement content and effectiveness before/after measures of attitude towards the product

Number of inquiries stimulated by the advertisement Cost per inquiry.

Sales promotion efficiency

Track should be kept of each sales promotion campaign and its impact on sales:

Percentage of sales sold on the offer Display cost per $ sales Percentage of coupons redeemed Number of inquiries resulting from the demonstration.

Distribution efficiency

This will enable the marketer to search for economies in distribution. Measures are mainly taken through statistical/operational research methods:

Inventory control Warehouse location Transportation methods - optimum routing, scheduling, loading, unloading.

Monitoring and control enables marketing management to address two vital questions: are resources being used effectively and is there a better way of using them? In answering these questions much waste can be removed from marketing activities and functions.

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REFERENCES

Books

“Marketing Management” by Philip Kotler

Websites

1. www.unitedbiscuits.com

2. www.thehindubusinessline

3. www.indianmirror.com/indian-industries/biscuit

4. www.britannia.co.in

5. www.parleproducts.com

6. www.biscuitfederation.com

7. business.mapsofindia.com/india-industry/biscuits

8. businesstoday.intoday.in/story/parle-diversifies-from-biscuits-tosnacks

9. articles.economictimes.indiatimes.com

Research Papers

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1. Kainth (2010) “Indian Biscuit Industry” India

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