Mother Dairy

Academic Year

2010-2012

III Semester

Subject: - Product Management

Topic: - FMCG – Ice-cream Industry

Project submitted to

Prof. Nikhil Rao

Group No. 1

Team Members:

Sr No Name Roll No.

1. Kishore Acharya A-1

2. Ankit Dalal A-14

3. Omkar Dalvi A-15

4. Vishal Mankar A-35

5. Amar Poojari A-45

6. Rai Manipat Ray MKt-53

Introduction

Ice cream is a frozen dessert usually made from dairy products, such as milk and

cream, and often combined with fruits or other ingredients and flavours. Most

varieties contain sugar, although some are made with other sweeteners. In some

cases, artificial flavourings and colourings are used in addition to (or in replacement

of) the natural ingredients. This mixture is stirred slowly while cooling to prevent

large ice crystals from forming; the result is a smoothly textured ice cream.

The meaning of the term ice cream varies from one country to another. Terms

like frozen custard, frozen yogurt, sorbet, gelato and others are used to distinguish

different varieties and styles. In some countries, like the USA, the term ice cream

applies only to a specific variety, and their governments regulate the commercial use

of all these terms based on quantities of ingredients. In others, like Italy and

Argentina, one word is used for all the variants. Analogs made from dairy

alternatives such as non-bovine milks or milk substitutes are available for those who

are lactose intolerant, allergic to dairy protein, and/or vegan.

Though India has a low per capita ice cream consumption of 300 ml per

annum, the trend is slowly changing due to a number of reasons. The ice cream

industry in India is worth Rs. 2,000 cr. The industry can be divided into the branded

market and the unbranded market. The branded market at present is 100 million

liters per annum valued at Rs. 800 cr. In 2008-09, in the branded ice cream market,

Amul held the number one spot, with a market share or 38%, followed by Kwality

Walls at 14%, Vadilal at 12% and Mother Diary at 8%. The per capita consumption of

ice cream in India is approximately 300 ml, as against the world average of 2.3 liters

per annum. Vanilla, Strawberry and Chocolate together constitute approximately

60% of the market.

The ice cream industry has traditionally grown at a healthy rate of 12% year-

on-year. The growth in Ice cream industry has been primarily due to strengthening of

distribution network and cold chain infrastructure. Channels such as Mobile Vending

Units have been increasing year on year to reach out to a larger set of consumers.

Besides, consumers also have the choice of trying out varied product offerings from

different brands to keep them excited.

Product Management 2

FMCG market

Ice cream market in India

FMCG are products that have a quick shelf turnover, at relatively low cost and

don't require a lot of thought, time and financial investment to purchase. Everything

from toothpaste to processed foods

and health drinks to body care

products comes from FMCG or

alternatively called as consumer

packed goods. Three of the largest

and best known examples of Fast

Moving Consumer Goods companies

are Nestle, Unilever and Procter &

Gamble.

The Indian FMCG sector is an important contributor to the country's GDP. It

is the fourth largest sector in the economy and is responsible for 5% of the total

factory employment in India and captures a market capitalization of around 60,000

crore rupees .This has been due to liberalization, urbanization and increase in the

disposable incomes and altered lifestyle of the people. The lower-middle income

group accounts for over 60% of the sector's sales and rural markets account for 56%

of the total domestic FMCG demand. FMCG sector is expected to grow by over 60%

by 2011 and by 2015, the sector is predicted to scale up to US$33.4 billion.


Indian summers are synonymous with ice creams. Come summers, and a

number of colorful pushcarts are seen selling the choicest of ice creams in numerous

flavors from the traditional vanilla and chocolate to unusual varieties like Mother

Diary’s Shahi Nazrana. If that doesn’t baffle us then the ice cream range definitely

would, for example the ice cream range for the children would be entirely different

from that for the teenagers or for that matter adults. Or, for those who like to have ice

cream in peace, there are a number of ice cream parlors that are opening shop.

The ice cream market in India is estimated to be around INR 2,000 crores, of which

over 40% belongs to the organized sector growing at about 15% per year. Amul

leads the pack with about 36-38% market share (5% of its total revenues), followed

by Kwality Walls & Vadilal with about 12-14% share each. These players not only

have to fight the small local and cottage industry players, but also the fact that the

Indian cuisine itself offers a large variety of desserts which are still preferred by most

Indians. Due to this reason, the per capita consumption of ice creams in India is

about 300ml per annum, 1.4% of that in US, and 13% of the world average, which

can be seen as a huge opportunity in this sector in India attracting new regional and

national entrants.

However, an issue is the seasonal nature of this industry in India, especially

true for the northern parts of the country. Bulk of the sales happen during the

summer months of April-July, while the sales witness a significant dip during winter

months of November-February. Additionally, the seasonality of events like marriages

affects sales in a big way, although institutional sales provide some cushion. But

what makes the situation worse is low supply of electricity, especially during the high

demand summer months that affects the ice cream stocks. Once the ice cream

melts, it is non-saleable, and drives retailers not to carry enough stocks – not an

optimal situation given the not so favorable situation of cold chain in India.

Half the market is driven by impulse purchase, and rest by family consumption at

home and in-parlour sales. There are niche players in the parlour business, with

Naturals in the west; and then there are premium players like Baskin Robbins and

Gelato.

Brands are coming out with pro-biotic and low fat ice creams targeting the health

conscious consumers, and also new manufacturing processes which reduce air

content in ice creams giving more value for money to the consumers; but the

acceptance for such products is still to be put to a proper test in the market.


What exactly is defined as ‘ice cream’ under the guidelines? The Prevention of Food

Adulteration (PFA) Rules, 1955 define ice cream as “a frozen product that contains

not less than 10% milk fat, 3.5% protein, 36.0% total solids, and 0.5% permitted

stabilizer and emulsifier.”

The basic steps in the manufacturing of ice cream are generally first blending

the ingredients, pasteurization, and homogenization, aging the mix, freezing, and

hardening. Now, during the hardening process, the ice cream mixture is incorporated

with air. This is done to make the product ‘light’ and ‘creamy’. This is necessary as

without air, ice cream would be like frozen ice. Now the ice cream can contain a

considerable quantity of air, even up to half of its volume. This perhaps makes ice

cream a business with high profit margin.

There are several challenges that affect the industry adversely. As mentioned

earlier, the industry players not only face competition from their competitors, but also

from other like foods. Though changing, consumers still consider ice cream as a

dessert and a side item. Moreover, of the ice cream consumption in India, nearly

60% is accounted to by three flavors of vanilla, strawberry and chocolate. And to be

on the safer side, major players tend play around these flavors only. For big players,

regional competition from smaller players is another major issue.

Another major problem faced by the industry players, especially while expansion, is

poor infrastructure such lack of cold storage and in case of rural penetration, even

erratic power supply becomes an issue.

As the industry, evaluation would indicate the competition is significant. The

70,000 participants is a large number but the more serious challenge comes from the

top six national firms; Amul, Kwality Walls, Havmor, Dinshaw, Vadilal and Mother

Dairy. These top six firms dominate the market and essentially control the organized

market. Detail statistics are not available to indicate market share and these six firms

control 40% to 50% of the urban market. Historically MNC’s have not achieved much

success in penetrating the Indian market. There are a number of possible

explanations for this; the relative embryonic and disorganized nature of the market,

excessive government regulation that included excessive tariffs and the restriction

that imported ice cream could only be sold in hotels, and a highly fragmented and

ineffective media.


Take-Home Ice Cream Market in India to 2014 (Ice Cream) is a comprehensive

resource for take-home ice cream market data from 2004 to 2014 and

market/company shares for 2008-09.This report also provides data on expenditure

and consumption as well as key distribution channels, and reveals the leading

companies in the Indian take-home ice cream market.

Features and Benefits:

Identify key market segments by analyzing market size data (value & volume)

for the take-home ice cream market

Design business strategies by gaining insight into quantitative market trends

over 2004-09 and expectations for 2010-14

Identify key companies in the take-home ice cream market in India and design

M&A strategies by analyzing market share data

Predict how consumer preferences will change in the future by analysis of

expenditure and consumption information from 2004 to 2014


Key player

Highlights

The take-home ice cream market in India increased at a compound annual

growth rate of 14.1% between 2004 and 2009.

The dairy-based ice cream segment led the take-home ice cream market in

India in 2009, with a share of 94.6%.

The leading player in take-home ice cream market in India is Gujarat Cooperative

Milk Marketing Federation Ltd.

Amul Ice cream

For any new player to enter this market, three things are critical:

1) Decentralized manufacturing facilities

2) Efficient cold chain

3) Growing market

Amul Ice Cream was launched on 10th March, 1996 in Gujarat. The portfolio

consisted of impulse products like sticks, cones, cups as well as take home packs

and institutional/catering packs. Amul ice cream was launched on the platform of


‘Real Milk. Real Ice Cream’ given that it is a milk company and the wholesomeness

of its products gives it a competitive advantage.

In 1997, Amul ice creams entered Mumbai followed by Chennai in 1998 and Kolkata

and Delhi in 2002. Nationally it was rolled out across the country in 1999.

It has combated competition like Walls, Mother Dairy and achieved the No 1 position

in the country. This position was achieved in 2001 and it has continued to remain at

the top.

Today the market share of Amul ice cream is 38% share against the 12% market

share of HLL, thus making it 4 times larger than its closest competitor. Not only has it

grown at a phenomenal rate but has added a vast variety of flavours to its ever

growing range. Currently it offers a selection of 220 products. Amul has always

brought newness in its products and the same applies for ice creams.

In January 2007, Amul introduced SUGAR FREE & ProLife Probiotic Wellness Ice

Cream, which was a first in India. This range of SUGAR FREE, LOW FAT Diabetic

Delight & ProLife Probiotic Wellness Ice Cream is created for the health conscious.

Amul’s entry into ice creams is regarded as successful due to the large market share

it was able to capture within a short period of time – due to price differential, quality

of products and of course the brand name.


Market size

Kwality Walls

Kwality Ice Cream is the pioneer in the Indian

ice-cream manufacturing industry and in 1956

became the first company in the country to use

imported technology for manufacturing ice-

cream on a commercial scale. As the ice-cream

industry exploded in India, in 1995 Kwality

Group joined hands with Hindustan Lever

Limited and then there was no looking back. The Indian consumer market was

introduced to “KWALITY WALLS” – the result of a collaboration between global

brand Walls and the leading Indian ice-cream brand Kwality. Though the two giants

eventually parted ways, the collaboration made Kwality a household name and

created deep in roads for the brand in the consumer market.

Today, Kwality is not just a brand – it is the ice-cream associated with the Indian

summer; it’s the first choice in ice-cream for any child or adult during the scorching

Indian summers. Kwality ice-creams are trusted not only for their rich, creamy

flavours, but also for their trusted quality and nutritious food value.


Market share

Values above are in Crores


Amul925

Kwality Walls625Pastonji

125

Vadilal300

Havmor125

Cream Bell75

Mother Dairy325

Market size

Amul Kwality Walls Pastonji Vadilal Havmor Cream Bell Mother Dairy

Brand - Motherdairy

Mother Dairy is Delhi was set up in 1974 under the

Operation Flood Programme. It is now a wholly owned


Amul38%

Kwality Walls25%

Pastonji5%

Vadilal13%

Havmor5%

Cream Bell3% Mother Dairy

13%

Market

Amul Kwality Walls Pastonji Vadilal Havmor Cream Bell Mother Dairy

company of the National Dairy Development Board (NDDB). Mother Dairy markets &

sells dairy products under the Mother Dairy brand (like Liquid Milk, Dahi, Ice creams,

Cheese and Butter), Dhara range of edible oils and the Safal range of fresh fruits &

vegetables, frozen vegetables and fruit juices at a national level through its sales and

distribution networks for marketing food-items.

Mother Dairy sources significant part of its requirement of liquid milk from dairy

cooperatives. Similarly, Mother Dairy sources fruits and vegetables from farmers /

growers associations. Mother Dairy also contributes to the cause of oilseeds grower

cooperatives that manufacture/ pack the Dhara range of edible oils by undertaking to

nationally market all Dhara products. It is Mother Dairy’s constant endeavor to

(a) Ensure that milk producers and farmers regularly and continually receive market

prices by offering quality milk, milk products and other food products to consumers at

competitive, prices.

(b) Uphold institutional structures that empower milk producers and farmers through

processes that are equitable.

At Mother Dairy, processing of milk is controlled by process automation whereby

state-of-the-art microprocessor technology is adopted to integrate and completely

automate all functions of the milk processing areas to ensure high product quality/

reliability and safety. Mother Dairy is an ISO 9001:2008 (QMS), ISO 22000:2005

(FSMS) and ISO 14001:2004 (EMS) certified organization. Mother Dairy has

Certificate of Approval from Export Inspection Council of India also. Moreover, its

Quality Assurance Laboratory is certified by National Accreditation Board for Testing

and Calibration Laboratory (NABL)-Department of Science and Technology,

Government of India.


Mother Dairy markets approximately 2.8 million liters of milk daily in the markets of

Delhi, Mumbai, Saurashtra and Hyderabad. Mother Dairy Milk has a market share of

66% in the branded sector in Delhi where it sells 2.3 million liters of milk daily and

undertakes its marketing operations through around

14,000 retail outlets and 845 exclusive outlets of Mother Dairy.

The company’s derives significant competitive advantage from its unique

distribution network of bulk vending booths, retail outlets and mobile units. Mother

Dairy ice creams launched in the year 1995 have shown continuous growth over the

years and today boasts of approximately 62% market share in Delhi and NCR.

Mother Dairy also manufactures and markets a wide range of dairy products that

include Butter, Dahi, Ghee, Cheese, UHT Milk, Lassi & Flavored Milk and most of

these products are available across the country.

The company markets an array of fresh and frozen fruit and vegetable products

under the brand name SAFAL through a chain of 400+ own Fruit and Vegetable

shops and more than 20,000 retail outlets in various parts of the country. Fresh

produce from the producers is handled at the Company’s modern distribution facility

in Delhi with an annual capacity of 200,000 MT. An IQF facility with capacity of

around 75 MT per day is also operational in Delhi. A state-of-the-art fruit processing

plant of fruit handling capacity of 120 MT per day, a 100 percent EOU, setup in 1996

at Mumbai supplies quality products in the international market. With increasing

demand another state-of-the-art fruit processing plant has been set up at Bangalore

with fruit handling capacity of around 250 MT per day.

Mother Dairy has also been marketing the Dhara range of edible oils for the

last few years. Today it is a leading brand of edible oils and is available across the

country in over 2,00,000 outlets. The brand is currently available in the following

variants: Refined Vegetable Oil, Refined Soybean Oil, Refined

Sunflower Oil, Refined Rice Bran Oil, Kachi Ghani Mustard Oil and Filtered

Groundnut Oil. Mother Dairy has also launched extra virgin Olive Oil under the

Daroliva brand


Lic Lolly DrinkingWaterButterCow

Ice -CreamCurdMilk

MOTHERDAIRY PRODUCT

SWOT Analysis of Mother Dairy Ice-Creams

Strengths: -

1) Established company with a sound foundation

2) Government owned and supported

3) Good Quality products and wide product range

4) Experienced employees

5) Established and recognized sister brands like Safal, Dhara, Chillz etc


6) Strong Market presence in Delhi and northern regions of the country

Weaknesses: -

1) Not ventured into other parts of the country as quickly as competitors

2) Lack of ready infrastructure in other parts of country

3) Brand is not well recognized in ice-cream segment in Southern parts of country

4) Products priced higher than competitors

5) Factory is too far away from the market

6) Supply is frequently low

7) Lack of Manpower

Opportunities: -

1) General slack in the market due to non-peak season allow for growing at par with

competition

2) Competition has become passive due to elevated status

3) Better technology available to reduce costs

4) New systems can be applied to reduce time and cost, giving a competitive

advantage


4’ p of marketing

Threats: -

1) Emergence of new private players

2) Competitors employing newer systems

3) Competitors have better distribution network

The term “marketing mix” was coined in the early 1950s by Neil Borden in his

American Marketing Association presidential address. This is one of the preliminary

knowledge every marketer must have and is considered to be the basics of every

marketing theory, which emerged henceforth.


The basic major marketing management decisions can be classified in one of the

following four categories, namely Product, Price, Place (distribution)

and Promotion.

Product: It is the tangible object or an intangible service that is getting marketed

through the program. Tangible products may be items like consumer goods

(Toothpaste, Soaps, Shampoos) or consumer durables (Watches, IPods). Intangible

products are service based like the tourism industry and information technology

based services or codes-based products like cellphone load and credits. Product

design which leads to the product attributes is the most important factor. However

packaging also needs to be taken into consideration while deciding this factor. Every

product is subject to a life-cycle including a growth phase followed by an eventual

period of decline as the product approaches market saturation. To retain its

competitiveness in the market, continuous product extensions though innovation and


thus differentiation is required and is one of the strategies to differentiate a product

from its competitors.

Price: The price is the simply amount a customer pays for the product. If the price

outweigh the perceived benefits for an individual, the perceived value of the offering

will be low and it will be unlikely to be adopted, but if the benefits are perceived as

greater than their costs, chances of trial and adoption of the product is much greater.

Place: Place represents the location where a product can be purchased. It is often

referred to as the distribution channel. This may include any physical store

(supermarket, departmental stores) as well as virtual stores (e-markets and e-malls)

on the Internet. This is crucial as this provides the place utility to the consumer,

which often becomes a deciding factor for the purchase of many products across

multiple product categories.

Promotion: This represents all of the communications that a marketer may use in

the marketplace to increase awareness about the product and its benefits to the

target segment. Promotion has four distinct elements: advertising, public relations,

personal selling and sales promotion. A certain amount of crossover occurs when

promotion uses the four principal elements together (e.g in film promotion). Sales

staff often play a major role in promotion of a product

So how does a marketer strategize to attain success in a marketing program,

using these 4 P’s?



Brand Personality

A set of human characteristics that are attributed to a brand name. A brand

personality is something to which the consumer can relate, and an effective brand

will increase its brand equity by having a consistent set of traits. This is the added-

value that a brand gains, aside from its functional benefits. There are five main types

of brand personalities: excitement, sincerity, ruggedness, competence and

sophistication.

Available outlines

1. Rationale of Visual Branding

2. Creating a Brand Personality

3. Company types: Originals & Professionals

4. Company types: Wanters & Dreamers

5. Fighting fragmentation

6. The comprehensive idea of Visual Branding

7. Business professionals and designers

8. Visual Branding & business

So what is the main difference between identity and personality? Lets set the record

straight: of course they are not complete opposites, like Mars and Venus. It has to do

with a fundamentally different approach. Identity as a term refers to background and

facts in most languages. Your identity is about characteristics you share with others,

like the country and culture you come from, your race, your religion, and facts, like

the place where you live.

In communication it mostly refers to your true inner self - as a company or a brand.

To quote Kapferer: “Having an identity means being who you are, following your

own, determined, but individual path”. Be who you are. This is the paradigm of

identity.

The concept of brand personality combines inside-out and outside-in; identity and

image. A personality has it’s roots in the identity but is strongly externally focused. It

is not ‘be who your are’. Personality is: Become who you should be.


In the words of Carl Jung: “Personality is the supreme realisation of the innate

idiosyncrasy of a living being. It is an act of courage flung in the face of life, the

absolute affirmation of all that constitutes the individual, the most successful

adaptation to the universal conditions of existence, coupled with the greatest

possible freedom of self-determination.”

[C.G. Jung, 1875-1961]

In psychology, three elements are defined as a part of personality:

-private personality (thoughts, feelings, fantasies, ambitions, talents)

-public personality (how you want others to see you)

-attributed personality (how others see you)

The private personality overlaps identity; the public and attributed personalities

indicate the external aim and nature of personality.

Identity -> Personality

In historic perspective, the shift from identity to personality was organic and logical.

Identity-based thinking was a logical reaction to marketing-based thinking. Forgive

me for dropping names, but in many dynamic processes, I use the theory of dialectic

development of the German philosopher Georg Hegels to explain the developments

that took place: thesis -> antithesis -> synthesis. It also applies in this matter: the

thesis is marketing (outside-in), the antithesis is identity (inside-out), the synthesis is

personality.

This is an ongoing process that, fortunately, never stops. I am curious to see what

will come next.



Brand Equity:


Brand Equity:

Brand Repositioning is changing the positioning of a brand. A particular positioning

statement may not work with a brand.

For instance, Dettol toilet soap was positioned as a beauty soap initially. This was

not in line with its core values. Dettol, the parent brand (anti-septic liquid) was known

for its ability to heal cuts and gashes. The extension's 'beauty' positioning was not in

tune with the parent’s “germ-kill” positioning.

The soap, therefore, had to be repositioned as a “germ-kill” soap (“bath for grimy

occasions'') and it fared extremely well after repositioning. Here, the soap had to be

repositioned for image mismatch. There are several other reasons for repositioning.

Often falling or stagnant sales is responsible for repositioning exercises.

After examining the repositioning of several brands from the Indian market, the

following 9 types of repositioning have been identified. These are:

1. Increasing relevance to the consumer

2. Increasing occasions for use

3. Making the brand serious

4. Falling sales

5. Bringing in new customers

6. Making the brand contemporary

7. Differentiate from other brands

8. Changed market conditions.

Decision to consolidate brand position as “The Taste of India ” in 1995

Umbrella Branding Strategy for its products

Amul’s Response to challenges

Launched Amul Ice Cream 1996 with the tag ‘Real Milk. Real Ice Cream’

Challenging Cadbury

Occasion Based products –

“Nuts ‘bout u…”

“Kite Bite”

“Amul Rejoice”

Challenging the Premium Ice Cream Brands


Brand Repositioning:

Value for Money ..

Impulse Buying (Dollies for kids, teens and couples) to Sophisticated products (Party

Packs etc.)

Digital Advertising

Amul Cyber Store

Amul in Social Networking

Amul Indulges in Second Life marketing – Advergaming

Laws of Branding

Product Management 25Laws of Branding:

“The 22 Immutable Laws of Branding How to Build a Product or Service into a World-Class Brand by Al Ries”

The Law of Expansion“The power of a brand is inversely proportional to its scope.When you put your brand name on everything, that name loses its power”

The Law of Contraction“A brand becomes stronger when you narrow its focus.A powerful branding program always starts by contracting the category, not expanding it.”

The Law of Publicity“The birth of a brand is achieved with publicity, not advertising.The best way to generate publicity is by being first – the first brand in a new category”

The Law of Advertising“Once born, a brand needs advertising to stay healthy.Brand leaders advertise their leadership. Leadership is the single most important motivating factor in customer behavior”

The Law of the Word“A brand should strive to own a word in the mind of the consumer”FedEx = Overnight deliveryKleenex = TissueXerox = CopyThe Law of Credential

“The crucial ingredient in the success of any brand is its claim to authenticity. Customers are suspicious. Coke – “It’s the real thing”

The Law of Quality“Quality is important, but brands are not built on quality alone.Sometimes expressed through a higher price and accompanying feature that seems to justify the price”Rolex wrist bandsMontblac “fat” pens

The Law of the Category“A leading brand should promote the category, not the brand”

The Law of the Name“In the long run, a brand is nothing more than a name.The difference between brands is not in the products, but in the product names – the perception of the names”The Law of Extensions


“The easiest way to destroy a brand is to put its name on everything”

The Law of Fellowship“To build the category, a brand should welcome other brandsHealthy competition brings more customers to the category”

The Law of Generic“One of the fastest routes to failure is giving a brand a generic name. (National……, General……, Nature’s…….)Hard to differentiate a generic-named brand from competition”

The Law of the Company“Brands are brands. Companies are companies. There is a difference”

The Law of Sub brands“What branding builds, sub branding can destroy”

The Law of Siblings“There is a time and a place to launch a second brand”A&E > History Channel

The Law of Shape“A brand’s logo should be designed to fit the eyes – both eyes.Horizontal shape provides maximum impact”

The Law of Color“A brand should use a color that is the opposite of its major competitor’s”

The Law of Borders“There are no barriers to global branding. A brand should know no borders.Crossing a border often does add value to a brand. The perception of where the brand comes from can add or subtract value”

The Law of Consistency“A brand is not built overnight. Success is measured in decades, not years”

The Law of Change“Brands can be changed, but only infrequently and only very carefully”

The Law of Mortality“No brand will live forever. Euthanasia is often the best solution”

The Law of Singularity“The most important aspect of a brand is its single-mindedness.A brand is a singular idea or concept that you own inside the mind of the prospect. A brand is a proper noun that can be used in place of a common word”


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Mother Dairy

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