Deepak Gupta03 Cargill Internship Report

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SUMMER INTERNSHIP REPORT ON Understanding The Impact On Business By Expanding The Distribution In Mass Market AT INDIA PVT LTD SUBMITTED BY : Deepak Gupta Roll no: N08BM51 PGPBM Marketing & Finance (2008-2010) UNDER THE GUIDANCE OF

Transcript of Deepak Gupta03 Cargill Internship Report

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SUMMER INTERNSHIP REPORT

ON

Understanding The Impact On Business By Expanding The Distribution In Mass Market

AT

INDIA PVT LTDSUBMITTED BY :

Deepak GuptaRoll no: N08BM51

PGPBM Marketing & Finance (2008-2010)

UNDER THE GUIDANCE OF

PROF. INDERJIT SINGH Mr. ALOK GOEL ISB&M, NOIDA ZSM, CARGILL INDIA PVT LTD

Mr. KUNDAN MISHRA ASM, CARGILL INDIA PVT LTD

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To whomsoever it may concern

This is to certify that this project Understanding The Impact On Business By Expanding The Distribution In Mass Market is submitted by Deepak Gupta, the student of PGPBM Batch 08-10 at International School Of Business & Media. This report is compilation of his work done during the period of 15th

April 2009 to 30th September 2009.To the best of my knowledge and belief, this work has not been submitted by anyone else till date. All the data used for analysis in this project has been collected first by hand by the student, during the stipulated time period of the project.I wish Deepak Gupta all the very best in his future endeavors.

Prof. Inderjit Singh

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(Faculty Guide)

Declaration

I, Deepak Gupta, hereby declare that the management project on “Understanding the Impact on Business by Expanding the Distribution in Mass Market” is my original work. The facts and figures used in this project are authentic and reliable as per my knowledge. I am held responsible for the veracity of such facts and figures.

Deepak Gupta

PGPBM BATCH (2008-2010)

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AcknowledgementIt would be prudent to commence this report with an expression of gratitude towards all those who have played an indispensable role in the accomplishment of this project by providing their valuable guidance. I would like to take this opportunity to acknowledge and thank Cargill India Pvt. Ltd. for providing me with this highly coveted opportunity to associate my Summer Internship Project with an organization of worldwide repute.I extend my gratefulness to Mr. Alok Goel, Zonal Sales Manager and Mr. Kundan Mishra, Area Sales Manager for their help and guidance in various capacities which have been extremely proficient in getting the best out of me by sharpening my rough edges from time to time.I am deeply indebted to my faculty guide, Prof. Inderjit Singh whose help, stimulating suggestions and encouragement helped me in all time of research. I am also thankful to all my team members for their stimulating support and co-operation. Last but not the least, I cannot forget the help and co-operation of the employees of Cargill India Pvt. Ltd.My special thanks to my parents without whom it would have not been possible and for everything of what I am today.

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Table of Contents

Executive Summary 6Introduction 7Business Of Cargill 15FMCG In India 20Swot Analysis of FMCG Sector 24

Cargill In India25Edible Oil In India 38

Distribution Channel… 43Hiearchy Structure 45Swot Analysis Of Cargill India Pvt Ltd 46Understanding the Impact on Business by Expanding the Distribution in Mass Market 49Learning 70

Limitations 71Recommendations 72

Conclusions 74Annexures 76

References 80

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Executive SummaryThis Study gives you an overview of the various aspects related to Distribution & Sales Management; with emphasis on customers, competitors, dealers and employees. The study throws some light on the overview of Cargill Foods in India, as well as in the Global Scenario.

Founded in 1865, Cargill is one of the largest international providers of food, agriculture and risk management products. With more than $120 billion turnover and operations spread across 67 countries, Cargill today employs more than 1, 60,000 people across the world and is trusted across for its commitment of nCargillishing people.

In India, Cargill has an access over 1000 towns and 2, 50,000 retail outlets. Since its inception in 1987, Cargill has been a part of Cargill lives with the most innovative and best quality products.

Cargill Refined Oils India imports, refines, sells and markets a wide range of vegetable oils and fats to wholesale trade, industrial and household consumers across India. We own and operate Cargill vegetable oil refining facilities – three are located on east and west coast ports of India, the other is located in western India. Refined Oils India markets a range of refined sunflower, soy, palm, olein and ground nut oils, hydrogenated fats and bakery shortenings under Cargill national brands, Nature Fresh, Gemini, Purita™\, and other region-specific brands.

The Project given was to understand the impact on business by expanding the distribution network. The main objective was to expand its distribution network and to understand its impact. The work was done in stages which were

Analysis of Existing Listed Outlet Discovering the Uncovered Area

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Design a Optimum Distribution Channel For Uncovered Area

Mechanism For Sustainance Of New Productive Outlets

Tracking of outlets

Pre & Post Volume Analysis

IntroductionCargill is an international provider of food, agricultural, financial and industrial products and services. Founded in 1865, the privately held company employs 159,000 people in 68 countries. Cargill helps customers succeed through collaboration and innovation, and is committed to applying its global knowledge and experience to help meet economic, environmental and social challenges wherever it does business.

A Summary of Cargill's History

1865

William Wallace Cargill leaves the family home in Janesville, Wisconsin and becomes the proprietor of a grain flat house in Conover, Iowa. The flat house, a type of warehouse that preceded country elevators, was at the end of the McGregor & Western Railroad line.

1867

W. W. Cargill and his younger brother, Sam, form a partnership: W. W. Cargill and Brother. W. W. moves to Lime Springs, Iowa, where the business constructs a grain flat house and opens a lumberyard.

1868

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W. W. Cargill marries Ellen Stowell in Ossian, Iowa, and moves to Austin, Minnesota, where he builds his first Minnesota flat house. W. W. acquires storehouses to take advantage of the great post-war agricultural and railroad expansion throughout the plains.

1870

W. W. Cargill's business is headquartered in Albert Lea, Minnesota to take advantage of the expansion of the Southern Minnesota Railroad. About this time W.W.'s brother, Sylvester S. Cargill, becomes independent, eventually establishing the Victoria Elevator Company in Minneapolis.

1884

John H. MacMillan, 15 years old, goes to work in his father's bank in La Crosse, Wisconsin. W. W. Cargill & Bro. in La Crosse is formally separated from Minnesota and the Dakotas by the establishment of Cargill Brothers in Minneapolis.

1885

The three Cargill brothers own or control 102 structures in Minnesota and the Dakotas (and smaller holdings in Iowa and Wisconsin) with a total grain capacity of over 1.6 million bushels. By this time, Minneapolis and Duluth are identified as prominent grain centers.

1887

W. W. Cargill forms the Sault Ste. Marie Land Company to take advantage of the growth expected after the Soo Line railroad connected the lock area with Minneapolis. Sam Cargill leaves La Crosse to manage the Minneapolis, Minnesota office.

1890

The Minneapolis operation, under the direction of Sam Cargill, drops the "Cargill Bros." name and incorporates under Cargill Elevator Co.

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1891

Three MacMillan brothers, John H., William D., and Daniel D. move to Fort Worth, Texas, to set up a grain business under the name D. D. McMillan & Sons.

1892

W. W. Cargill & Bro. incorporates as W. W. Cargill Company of La Crosse, Wisconsin. Sam Cargill opens an office in Duluth, Minnesota, and the Cargill Commission Company is formed to trade grain in Duluth.

1903

Sam D. Cargill dies, creating a void in leadership. John H. MacMillan, Sr., moves to Minneapolis from Arkansas to become general manager. W. W. Cargill becomes the sole owner of the La Crosse business after Sam's death.

1908

William S. Cargill is in Montana organizing a development effort that ultimately will involve ranching, land development, the development of the Montana Western Railway, a dam, and the creation of the town of Valier. The project is not profitable and begins to stress the finances of the La Crosse grain business.

1911

A portion of the assets of Sawyer and Austin Lumber Company is sold to raise funds. The mineral rights to the Arkansas land are retained, and eventually leased to American Bauxite Company, generating much needed cash through 1922.

1922

Julius Hendel joins the Cargill organization and takes charge of the newly established grain laboratory in Minneapolis. The grain lab will become one of the most respected private laboratories in the country. Hendel's laboratory study on flour appears the following year in the North-western Miller.

1926

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A fire in British Columbia destroys the logging camp. Austen Cargill returns to Minneapolis and becomes head of the Cargill Commission Department, focusing his attention on the management of the company's country elevators.

1927

Cargill leases the 1.5 million bushel Superior elevator in Buffalo, New York and another elevator at Port McNicoll, Ontario, beginning its reach eastward. John MacMillan, Jr., marries Marion Dickson.

1999

The University of Minnesota receives $10 million from Cargill to expand the university’s work in the emerging field of microbial and plant genomics.

Cargill launches Strategic Intent, which involves positioning the company so that “by the year 2010, Cargill will be the recognized global leader in providing agrifood chain customers with solutions that enable them to succeed in their businesses.”

2000

Cargill Dow Polymers LLC announces plans to build a world-scale facility in Blair, Neb., that will use corn-derived dextrose to make polylactide (PLA) polymers for fibres, plastic packaging and other products. President Clinton presented the 1999 Malcolm Baldrige National Quality Award to Cargill's Sunny Fresh Foods. Gregory Page becomes president. Warren Staley is elected chief executive officer and chair of the board of directors. McDonald’s honors Sun Valley Thailand with its Sweeney Quality Award, first Asian recipient of the award. The hybrid seed business in North America is acquired by Mycogen Seeds.

2003

Cargill’s earnings surpass US $1 billion for the first time in its history. Cargill adds to its chocolate portfolio with the acquisition of Peter’s Chocolate, a brand dating

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from the 1880s, and OCG Cacao, a European maker of industrial chocolate. Cargill’s global giving exceeds US $22 million.

2004

Cargill Fertilizer and IMC Global combine to form a publicly traded firm, The Mosaic Company. Cargill acquires The Duckworth Group, a UK-based flavour house. Cargill Animal Nutrition has a presence of 163 plants in 22 countries. Cargill announces an agreement to acquire Seara Alimentos, a major Brazilian poultry and pork producer.

2005

Cargill India and Parakh Foods enter into a joint agreement to produce and market vegetable oil. Black River Asset management, a global asset management company, is launched. Ocean Transportation Unit ranked No. 1 in dry bulk freight by Risk magazine (February 2005). Cargill purchases Romanian edible oil producer Olpo, expanding its investment in the Black Sea region. Cargill opens first office in Dubai, United Arab Emirates.

Despite its size, the corporation is still a family owned business; descendants of the founder (from the Cargill and MacMillan families) own about 85% of the company. This means that most of its growth has been due to reinvestment of the company's own earnings, rather than public financing. Greg Page is the chief executive officer of Cargill; he succeeded Warren Staley in mid 2007.

Cargill's quarterly profits crossed $1 billion for the first time during the quarter ending on February 29, 2008 ($1.03 billion); the 86% rise was credited to global food shortages and the expanding biofuels industry that in turn caused a rise in demand for Cargill's core areas of agricultural commodities and technology. It is an INVISIBLE GIANT which is grooming day by day.

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CARGILL PRESENCE

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Africa

Cote d'Ivoire

Ghana

Kenya

Malawi

Morocco

Nigeria

South Africa

Tanzania

Zimbabwe

Asia

Australia China India Indonesia Japan Malaysia Pakistan Philippines South Korea Singapore Taiwan Thailand Vietnam

Middle East

Egypt

United Arab

Emirates

North America

Canada

Mexico

United States of

America

Central America

Bonaire

Costa Rica

Dominican Republic

Guatemala

Honduras

Nicaragua

Europe

Austria Belgium Denmark Finland France Germany Greece Hungary Ireland Italy Netherlands

Poland Portugal Romania Russian Federation Spain Sweden Switzerland Turkey Ukraine United Kingdom

South America

Argentina

Bolivia

Brazil

Chile

Colombia

Paraguay

Peru

Uruguay

Venezuela

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Vision

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Businesses of CargillFive major business segments

Cargill is an international provider of food, agricultural and risk management products and services. We have 75 businesses organized around five major

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segments: Agriculture Services, Food Ingredients and Applications, Origination and Processing, Risk Management and Financial, and Industrial. You will find short descriptions and related links to all of Cargill businesses here:

Expertise

Supply chains, risk management and R&D

Nearly 80 businesses in scores of countries serve Cargill customers and other stakeholders. We partner with farmers, food companies, manufacturers, energy producers and financial providers to create solutions that touch people around the world.

From cocoa to cotton, starches to sweeteners, and ferrous to finance — breadth is a hallmark of Cargill. But as much as customers value Cargill’s breadth of offerings, you also turn to us for expertise and knowledge that cuts across Cargill global businesses.

Core competencies

These are the core competencies you'll find throughout Cargill:

Supply chain management

Risk management

Research and development

Deep knowledge and thought leadership within these competencies has come from deliberate investments over time, and has forged a strong competitive advantage we can share with Cargill customers.

Supply chain management

Moving goods from farm to factory 

Moving massive amounts of raw materials from continent to continent and farm to factory is both art and science. For more than 100 years, Cargill has been shaping

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its supply chain management capabilities to the point where there are few equals in the world in terms of the volume and breadth of materials we move, the numbers of customers we serve, and the significant numbers of partners we team with.  

Optimizing supply chains

Optimizing supply chains through insightful strategy, inventory management, partner collaboration, and radical operations planning has resulted in millions of dollars saved for Cargill customers. In the redesign of a supply chain for a food manufacturer, for example, we were able to reduce inventories by 28 percent. Expert execution of Cargill supply chain management strategies and tactics has led to a wide range of benefits, including:

Improved cost efficiencies

Improved revenues

Faster time to market

Faster product development cycles

Enhanced customer and supplier relationships

Risk management

The steady hand of experience

In today’s volatile markets, Cargill customers look for a steady hand of experience to help them manage their exposure to price risk. For years, Cargill has been identifying, measuring and managing its own exposure to risk. We also offer this service to Cargill customers.

We work with you closely to measure Cargill exposure to risk and quantify Cargill risk tolerance. Then we develop and execute sound strategies that diminish the volatility. By managing Cargill risk as if it were Cargill own, we help you keep costs within an established range and preserve the potential to capture the upside of an opportunity.

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Analytical tools

Cargill has a broad range of analytical tools by which we measure and assess price risk. To be sure, risk management is one of Cargill company’s core capabilities. Every day, we buy and move large volumes of commodities from where they are produced to where they are needed. Cargill ability to provide risk-managed supply chains makes us a reliable supplier to you.

Research & development

Scientific expertise that creates distinctive value

Cargill customers turn to Cargill for Cargill scientific expertise when the challenge is enhancing an existing product, improving process efficiencies, or uncovering a solution that helps them launch a first-to-market innovation.  Cargill goal is to leverage Cargill research and development capabilities to generate distinctive value through new, improved products and innovative ways to reduce costs or both.

Unsurpassed breadth and depth of technical expertiseand resCargillces

Cargill global team includes more than 1,300 research, development, applications, technical services and intellectual property specialists working in more than 200 locations. Together, they provide a spectrum of services encompassing technical service, applications, development, research, intellectual asset management, and scientific and regulatory affairs.

We can provide the people, capabilities and facilities to solve virtually any technical challenge across a range of industry segments, including:

Food ingredients

Meat and other proteins

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Animal and fish feed

Bioindustrial products and biofuels

Leveraging global knowledge across markets

With R&D centers in Europe and North America and applications and technical services professionals in locations across the Americas, Europe, the Middle East, Africa, and Asia, Cargill has a window on the world. Cargill global presence enables us to stay at the forefront of emerging customer needs and solutions and bring important new knowledge to you. In addition, the breadth of Cargill technical expertise enables us to leverage technologies developed in one area to solve customer challenges in others. For example, Cargill deep knowledge of animal nutrition is informing solutions for human nutrition. Cargill ability to immediately tap Cargill technical expertise across businesses and disciplines around the world allows us to leverage Cargill best, most relevant knowledge to solve problems quickly. This access to Cargill’s world of scientific and technical knowledge helps avoid the time and cost of reinventing — and allows you to move Cargill product to market more quickly.

Tailoring foods for local tastes and cultures 

Cargill’s strong regional presence enables us to provide customers with the applications and technical services support to create products tailored to local tastes and cultures. Few, if any companies, can provide both global R&D support and regional solutions that we can.  

Understanding both product ingredients and processes

Helping Cargill customers create value includes deep understanding of both product ingredients and product processes. Cargill technical teams include experts whose sole focus is effective and efficient process solutions. Their expertise can help you reduce costs and generate added value.

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FMCG in India Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics packaged food products, soft drinks, tissue paper, and chocolate bars.

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India’s FMCG sector is the fourth largest sector in the economy and creates employment for more than three million people in downstream activities. Its principal constituents are Household Care, Personal Care and Food & Beverages. The total FMCG market is in excess of Rs. 85,000 Crores. It is currently growing at double digit growth rate and is expected to maintain a high growth rate. FMCG Industry is characterized by a well established distribution network, low penetration levels, low operating cost, lower per capita consumption and intense competition between the organized and unorganized segments.

Growth Prospect

Large Market

India has a population of more than 1.150 Billions which is just behind China. According to the estimates, by 2030 India population will be around 1.450 Billion and will surpass China to become the World largest in terms of population. FMCG Industry which is directly related to the population is expected to maintain a robust growth rate.

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Spending Pattern

An increase is spending pattern has been witnessed in Indian FMCG market. There is an upward trend in urban as well as rural market and also an increase in spending in organized retail sector. An increase in disposable income, of household mainly because of in-crease in nuclear family where both the husband and wife are earning, has leads to growth rate in FMCG goods.

Changing Profile and Mind Set of Consumer

People are becoming conscious about health and hygienic. There is a change in the mind set of the Consumer and now looking at “Money for Value” rather than “Value for Money”. We have seen willingness in consumers to move to evolved products/ brands, because of changing lifestyles, rising disposable income etc. Consumers are switching from economy to premium product even we have witnessed a sharp increase in the sales of packaged water and water purifier. Findings according to a recent survey by A. C. Nielsen shows about 71 percent of Indian take notice of packaged goods labels containing nutritional information compared to two years ago which was only 59 per cent.

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Advantages To The Sector

Governmental Policy

Indian Government has enacted policies aimed at attaining international competitiveness through lifting of the quantitative restrictions, reducing excise duties, automatic foreign in-vestment and food laws resulting in an environment that fosters growth. 100 per cent ex-port oriented units can be set up by government approval and use of foreign brand names is now freely permitted.

Foreign Direct Investment (FDI)

Automatic investment approval (including foreign technology agreements within specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing sector except malted food, alcoholic beverages and those reserved for small scale industries (SSI). There is a continuous growth in net FDI Inflow. There is an increase of about 150 per cent in Net Inflow for Vegetable Oils & Vanaspati for the year 2008.

Market Opportunities

Vast Rural Market

Rural India accounts for more than 700 Million consumers, or ~70 per cent of the Indian population and accounts for ~50 per cent of the total FMCG market. The working rural population is approximately 400 Millions. And an average citizen in

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rural India has less than half of the purchasing power as compare to his urban counterpart. Still there is an untapped market and most of the FMCG Companies are taking different steps to capture rural market share. The market for FMCG products in rural India is estimated ~ 52 per cent and is projected to touch ~ 60 per cent within a year. Hindustan Unilever Ltd is the largest player in the industry and has the widest market coverage.

Export - “Leveraging the Cost Advantage”

Cheap labor and quality product & services have helped India to represent as a cost ad-vantage over other Countries. Even the Government has offered zero import duty on capital goods and raw material for 100% export oriented units. Multi National Companies out-source its product requirements from its Indian company to have a cost advantage. India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew apart from being the second largest producer of rice, wheat, fruits & vegetables. It adds a cost advantage as well as easily available raw materials.

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Swot Analysis of FMCG SectorStrengths:

• Low operational costs• Presence of established distribution networks in both urban and rural areas• Presence of well-known brands in FMCG sector

Weaknesses:

• Lower scope of investing in technology and achieving economies of scale, especially in small sectors

• Low exports levels

Opportunities:

• Untapped rural market• Rising income levels, i.e. increase in purchasing power of consumers• Large domestic market- a population of over one billion.• Export potential• High consumer goods spending

Threats :

• "Me-too” products, which illegally mimic the labels of the established brands. These products narrow the scope of FMCG products in rural and semi-urban market.

• Removal of import restrictions resulting in replacing of domestic brands• Slowdown in rural demand• Tax and regulatory structure

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Cargill in IndiaIn India, Cargill has an access over 1000 towns and 2, 50,000 retail outlets. Since its inception in 1987, Cargill has been a part of our lives with the most innovative and best quality products.

Cargill maintains a number of businesses in India, with operations including the handling and processing of a wide range of products, including refined oils, grain and oilseeds, sugar, cotton and animal feed. In addition, Cargill develops flavor systems and operates a value investing business. Our presence in India has been growing since we began a joint venture operation in 1987.

Products & Services

Cargill has activities in the following areas in India:

Animal Nutrition Coal Cotton Flavor Systems Ferrous Grain & Oilseeds Refined Oils Sugar & Sugar Support Centre Trade & Structured Finance

Cargill milestones in India

1987  Cargill Seeds - a joint venture operation - commenced in India.

1994 Cargill starts its fertilizer/crop nutrients operations in India.

1997 Cargill launches its primary sugar and edible oils trading business in India.

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1998 Commences grain and oil seeds business in India.2001  Launches food business under Cargill Foods –

launch of brand “Nature Fresh”.

2003 Cargill acquires the Food Flavors business from Duckworth Group UK, and Duckworth Flavors India becomes part of Cargill India.

Cargill sets up green field edible oil refineries at Kandla and Paradip.

Cargill launches one stop agri-shops – Saathi Krishi Samadhaan Kendras.

2004 Cargill diversifies its fertilizer business into a joint venture with IMC global. Cargill India's DAP business renamed as Mosaic India.

2005 Cargill acquires Parakh Foods with brand "Gemini" and sets up a new Business Unit called Cargill Refined Oils India. This is first business unit with headquarters in India.

Cargill launches Saanjhi Unnati Program in Rajasthan for development of malt barley in active collaboration with the Government of Rajasthan and SAB Miller.

2006 Cargill starts its sugar off shoring business to support the execution activities of Cargill Netherlands.

Cargill sets up CarVal India Pvt. Ltd.

Cargill enters into a joint venture in a project for setting up a green field sugar refinery in South India.

Cargill entered into tolling arrangements with local Soybean crushers in Maharashtra, Rajasthan and Madhya Pradesh.

Cargill enters into a joint venture and subsequently

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owns and leads a shrimp feed manufacturing business in Rajahmundry in Andhra Pradesh. 

2007 Cargill launches cotton trading business in India.2008 An independently managed subsidiary of Cargill,

Black River Advisor India Pvt. Ltd., begins operations in India.

Products & ServicesAnimal Nutrition

Cargill Animal Nutrition develops and markets a broad range of animal feeds and customized animal productivity solutions to commercial producers throughout the world.

CoalWe carry out agency business or support business of our associates. Cargill Coal is one of our fastest growing businesses. We are active across physical and financial markets in both coal and freight—and recognized as a market leader in risk management and logistics.

CottonCargill Cotton merchandises cotton worldwide. Cargill Cotton services growers, ginners, buyers and textile mills worldwide through our network of buying, selling and shipping offices.

FerrousWe carry out agency business or support business of our associates. Cargill India is amongst the largest ferrous exporters in the country, covering the whole of Asia, Middle East, Europe and North and South America.

Flavor Systems

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We bring a customized and consumer-tested approach to creating advanced flavors and flavor systems for beverage, dairy, ice cream, confectionery, bakery, food service, and pharmaceutical markets.

Grain & Oilseeds

Cargill’s Grain & Oilseed business in India sources, trades, processes and distributes grain and oilseeds. The main bulk products handled are wheat, corn, oilseeds, barley and sorghum, as well as vegetable oils and meals.

Ocean Transportation

We carry out agency business or support business of our associates. Cargill Ocean Transportation offers customers a number of ocean freight solutions across all dry market segments and tankers.

Refined Oils

Cargill Refined Oils India imports, refines, sells and markets a wide range of vegetable oils and fats to wholesale trade, industrial and household consumers across India.

Sugar & Sugar Support Centre

Based in Gurgaon, Cargill sugar India is involved in the origination, transporting, storage and exporting of raw, plantation white sugar. 

Trade & Structured Finance

Cargill's structured finance team designs and structures a broad range of customized financing solutions in domestic and foreign currency in relation to various commodities.

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Cargill Refined OilsCargill Refined Oils India imports, refines, sells and markets a wide range of vegetable oils and fats to wholesale trade, industrial and household consumers across India. We own and operate three vegetable oil refineries located at Paradeep (Orissa), Kandla (Gujarat) and Kurkumbh (Maharastra). Cargill Refined Oils India has been operating within India since 2005 and employs more than 750 people.

Major Refining Capabilities

Our refineries are unique in technology and refining capabilities and adhere to stringent specifications for maintenance of product quality, oil stability and food safety. The qualities found within our operations are unparalleled in India:

Best and latest refining technology, which has been tested and improved across various refinery set-ups within the global Cargill network?A team trained by international experts and on international platforms run these refining capabilities and is fully equipped to produce the best product in the country.

Standards of quality have been set keeping the international and Indian requirements in mind. These standards incorporate the best of both worlds and meet the highest levels of quality.

Specifications that not just ensure superior quality but also high stability without addition of preservative chemicals. No oil that does not meet these specifications is ever packed or shipped.

Hands free treatment with no direct human touch on the product itself due to fully automated refining technology. This has led to a very clean and hygienic environment and a better and safer product.

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Cargill Refined Oils Brands NatureFresh Acti-Lite

NatureFresh Purita

NatureFresh Oliante

Gemini

Nature Fresh Acti-Lite refined oils always ensures that you stay light and active. Now its verified! With added DMPS (a permitted antioxidant as ingredient), lab results have shown that food cooked in Nature Fresh® Acti-Lite refined oils, absorb less oil as compared to food cooked in ordinary oils. So now we can indulge in our favorite foods without guilt, knowing that you have the trusted quality of Cargill. Nature Fresh is available in refined soybean and refined sunflower oil.

DMPS: Dimethyl polysiloxane

Benefits of DMPS:

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Food remains crunchy for a longer period of time.Oil does not burn that fast.

Lesser lather while frying.

Retains the original taste.

Does not let oil evaporate.

Oil does not change its color even after frying.

Nature Fresh Acti-Lite Refined Oils are made using lightness Integrated Technique (LITE), which ensures that consumer, gets the lightest oil that is easy to digest. The oil is refined in the technologically advanced processing plants to ensure that the best attributes of the oil are preserved for your health.

Nature Fresh Acti-Lite Refined Oils now comes with fortified with the goodness of Vitamin A, D and E.Nature Fresh is available in refined soyabean and refined sunflower oil.

The low absorption results have been tested and verified by two renowned government laboratories. Lab studies have proven that food cooked in Nature Fresh Acti-Lite refined oil with DMPS absorbs less oil as compared to food cooked in ordinary oil.

“Consumer Voice”, a government funded voluntary organization working towards consumer education and awareness announced Nature Fresh Acti-Lite along with Gemini as the best quality and healthiest sunflower oils in the country.

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Gemini refined cooking oils retain the freshness of the oil from the time it is packed to the time it reaches the consumer. This is possible by the unique Freshness Intact Technique- a unique packaging technology that preserves the benefits of the oil.

Cooking oil starts loosing its freshness after refining or during storage and packaging as well as due to air contact.

To get oil that has its freshness intact, only Gemini Refined Cooking Oil uses FIT technology. Using this technology, the oil after refining is stored under controlled atmosphere right through packaging. Also when it is packed, a protective shield of nitrogen is created above the oil, inside the pack. This ensures that Gemini Refined Oil retains its freshness unlike any other refined oil. When we cook our food in FIT empowered Gemini Refined Oil, the food remains fresh for longer period of time.

Gemini now comes fortified with the goodness of vitamins A, D and E.The level of fortification in Gemini Refined Oils ensures that it fulfills 40% of daily human requirement of Vitamin A, 16% of Vitamin d and 15 % of Vitamin E.Available in refined soyabean, sunflower, kardi, groundnut, cottonseed, filtered groundnut, mustard oil and vanaspati. Gemini is the largest selling edible oil brand in Maharashtra and is a leading brand in South India.

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With its granular white colour, Cargill’s Vanaspati is considered unique. It remains white even when melted and does not darken the food on frying. Moreover, it imparts the perfect golden brown colour to your samosas, pakoras and jalebees.

Cargill’s Vanaspati has the ideal hard texture to suit your cooking reqirements.Along with a granular structure, our vanaspati has the best product appeal which delights the consumer andshines like ice.Cargill’s Vanaspati is made at a melting point of maximum 41 degree C. this temperature is decided keeping in mind the health benefits and melting points that human body can digest.

Improved Hydrogenation Techniques are used to deliver the best product with Lower Trans Fatty Acid content per 100g of fat, maintaining the hardness and grains. This ensures a quality that has no contamination and best raw materials go into making vanaspati.

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NatureFresh Purita is renowned for its purity and taste. With a pungency level of 0.27%, which is higher than the highest AGMARK standard of 0.25%, NatureFresh Purita is the best oil for cooking your favorite fried dishes. NatureFresh® Purita ensures that your family is full of vigor and health.

Mustard is used as multipurpose oil. So whether it be cooking or pickling, mustard oil is prefered across.

NatureFresh Purita Pure Mustard Oil is considered as one of the healthiest edible oils. It has the lowest amount of saturated fatty acids and a high amount of monomustard and polyunsaturated fatty acids, that are considered good for a healthy heart.Mustard oil has an ideal ratio, close to 10:1 of Omega-3, which is known to prevent cancer of the colon and stomach and Omega-6 Fatty Acid composition (Linolic and Alpha Linolic Acid respectively), which are essential for health and metabolism.Many research studies recommend mustard oil as the best oil for Indians. It contributes to a lower risk for heart attack, almost half in comparision to any other oil.A good mustard oil has a strong flavour and aroma, which is known in the market as pungency or jhanjh. Higher the pungency better is the oil.

Cargill uses “Grade A” seeds to extract the best quality mustard oil, which ensures the highest level of pungency.

Cargill nurtures more than 200 million olive trees in Spain and brings the goodness that makes cooking food, a truly exotic delight.

“ The most exotic olive oil from Spain”

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Presenting another gem from the NatureFresh stable – NatureFresh Oliante, the most exotic olive oil from the land of Antequera in Spain.

In an era where anything and everything is commercialized, the olives of Antequera continue to preserve their absolute communion with Mother Nature that has existed for centuries. NatureFresh Oliante comes from the olive trees over 600 years old. The oil takes three years of patient processing and what you get is the healthiest and most exotic olive oil.

The handpicked olives that go into the making of NatureFresh™ Oliante remain almost unaffected by time, true to their age and barely touched by modern technology. Nurtured in such a land makes NatureFresh Oliante truly exotic.

With four processing locations in Spain, Cargill produces more than hundred thousands of olive oil every year, which makes Cargill the largest producer in the world. In fact, it is 5 times bigger than the closest second.

The process that begins at Antequera in Spain, with nurturing of olive trees and ends when the olive oil is packaged, is fully owned and managed by Cargill.

In an era, where anything and everything is commercialized, olives of Antequera continue to preserve their absolute communion with the Mother Nature that has existed for centuries.

The handpicked olives, which go into the making of NatureFresh Oliante, remainalmost unaffected by time, truly to their age and barely affected by the modern technology. Nurtured at such a land makes NatureFresh Oliante truly precious and miraculous.

Each bottle of NatureFresh Oliante, be it Extra Virgin Olive Oil, Pure Olive Oil or Pomance Olive Oil, brings the magic of Olive alive.

VariantsExtra Virgin Olive Oil is the highest of olive oil. To bring out the delicate flavour in the first press, a panel of Cargill experts judges the olive for the taste, mouth feel and aroma to bring you NatureFresh Oliante Extra Virgin Olive Oil.

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Pure Olive Oil comes from the refining process of olive oil named “Lampante” and is added with a percentage of Extra Virgin Olive Oil. Pure Olive Oil is good for all kinds of high heart cooking.Pomance Olive Oil is a blend of Extra Virgin Olive Oil and refined Pomance Oil. This oil is a very good baking and frying medium.

What’s more, Gemini now comes with the nutritional fortification of Vitamins A, D and E. The benefits of vitamins ensure that your family stays healthy and fit. Available in refined soybean, sunflower, groundnut and cottonseed, filtered groundnut and mustard oils and vanaspati, Gemini is now the largest selling edible oil brand in Maharashtra.

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Presence of Cargill in India

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Edible Oils in IndiaIndia is the largest importer of edible oil and the third largest consumer (after China and Europe). Of the total 5.0-5.5 million tons of vegetable oils imported by India annually, 1.3-1.5 million tons is soyabean oil, imported mostly from Argentina, Brazil and United States, nearly 3 million tons of palm oil is purchased from Malaysia and Indonesia. Palm oil imported into India is used in various forms-consumed directly as “palm oil” after refining, used in the manufacture of vanaspati, for blending with other vegetable oils, raw oil and kernel oils for industrial purposes. Per Capita consumption is around 10 kg/year. Palm and Soyabean oil account for half of the total edible oil consumption in India followed by Mustard and Groundnut Oil.

The share of raw oil, refined oil and vanaspati in the total edible oil market is estimated as 42%, 48% and 10% respectively (Department of Food and Public Distribution, GOI). India has close to 9% of global oil seeds production, making it the largest producers of oilseeds in the world. Over 40% of the total volume of the edible oil sold in India being imported in 2005.

Market share of edible oils in India

Oil PercentagePalm oil 38Peanut 14Sunflower 8Soyabean oil 21Rapeseed 13Cotton 6

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List of Edible Oil players in India

Fortune Adani Wilmar Limited.NatureFresh, Gemini

Cargill India Pvt Ltd, USA

Dalda Bunge India Pvt.Ltd.,USASaffola, Sweekar, Parachute

Marico Ltd, India

Sundrop Agro Tech Foods Ltd(ConAgra Foods)RR Primo RR Oomerbhoy Pvt.Ltd.Dhara Dhara Company Ltd, NDDB Campus, AnandPanghat Mawana Sugars Ltd.Tilsona Recon Oil Industries Private LtdFigaro Consumer Marketing (India) Pvt. LtdShalimar's Classic Basmati

Shalimar Agro Tech Pvt

PalmGold Active

Sarda Agro Oil Ltd.

Ruchi Gold Ruchi Infrastucture Ltd

In edible oil The Adani-Wilmer owned Fortune brand was India’s number one edible oil in 2006 according to A C Neilson Retail Audit 2006. Fortune, which is present as a refined soyabean oil, sunflower oil, groundnut oil and mustard oil is said to have a market share of 19% in the entire edible oil market.

Marico Industries have a market share of 13 % with brands like Saffola and Sweekar together.

Salient features of Indian Oil Sector

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1) Demand increasing due to population growth and income increase.2) Domestic production of oilseeds/oils is not adequate to meet the

demand3) Lower yield4) Fluctuating production of oilseeds5) Low capacity utilization of processing units6) Obsolete technology/processing inefficiency7) High import dependence about 40%8) Speculative nature of trade

Future of edible oils in India

Demand Drivers Macroeconomic factors :Population growth, per capita  income, purchasing  power, oilseeds crop Other factors : Prices - domestic/  international, Availability - oil, oilseedsInfluence of branded  products - `health’ messageGrowing preference for convenience foods. 

Key Success Factors Raw material sourcing :  focus on improving yields,  getting better quality oilseeds , ensuring regular supplies - through symbiotic relationship with farmer

Branding essential for success (Vanaspathi - Dalda, Oils - Sundrop)

Better distribution network to improve reach

Efficiency in operation - to become price competent and withstand overseas competition

Proposed Future trading in edible oils will help curtail price volatility and lend knowledge - based assistance to farmers of eliminate unofficial markets.

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Future In the next five years, the market for 

-  edible oils will grow by 8% to 12.65 million MT - vanaspathi  will grow to 1.5 million MT 

Business concerns Free imports, low import duties and slump in global prices  - lead to `dumping’Domestic industries of edible oils and vanaspathi affected - low realisation  and idle capacities in oil and vanaspathi industries Production slippages have also forced importsExcessive (cheap) imports of oilseeds - led to  unremunerative prices, locallyHence, farmers have shifted to other cash cropsIncreasing health awareness - impact of oils and vanaspathi  usage on individual’s cholesterol  levels

Consumption Pattern of Edible Oils in India India is a vast country and inhabitants of several of its regions have developed specific preference for certain oils largely depending upon the oils available in the region. For example, people in the South and West prefer groundnut oil while those in the East and North use mustard/rapeseed oil. Likewise several pockets in the South have a preference for coconut and sesame oil.  Inhabitants of northern plain are basically hard fat consumers and therefore, prefer Vanaspati, a term used to denote a partially hydrogenated edible oil mixture. Vanaspati has an important role in our edible oil economy. Its production is about 1.2 million tonnes annually. It has around 10% share of the edible oil market. It has the ability to absorb a heterogeneous variety of oils, which do not generally find direct marketing opportunities because of consumers’ preference for traditional oils such as groundnut oil, mustard oil, sesame oil etc. For example, newer oils like soyabean, sunflower, ricebran and cottonseed and oils from oilseeds of tree and forest origin had found their way to the edible pool largely through vanaspati route. Of late,

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things have changed. Through technological means such as refining, bleaching and de-odouraisation, all oils have been rendered practically colourless, odourless and tasteless and, therefore, have become easily interchangeable in the kitchen. Newer oils which were not known before have entered the kitchen, like those of cottonseed, sunflower, palm oil or its liquid fraction  (palmolein), soyabean and ricebran.  These tend to have a strong and distinctive taste preferred by most traditional customers.    The share of raw oil, refined oil and vanaspati in the total edible oil market is estimated at 35%, 55% and 10% respectively.               

( In lakh Tonne)

Oil Year (Nov.- Oct.)

Production of Oilseeds

Net availability of edible oils from all domestic sources

Consumption of Edible Oils (from domestic and

import sources)

2000-2001 184.40 54.99 96.76

2001-2002 206.63 61.46 104.68

2002-2003 148.39 46.64 90.29

2003-2004 251.86 71.40 124.30

2004-2005 243.54 72.47 117.89

2005-2006 279.79 83.16 126.04

2006-2007 242.89 73.70 115.87

2007-2008 297.55 86.54 142.62

Source: (i)   Production of oilseeds : Ministry of Agriculture

(ii) Net availability and consumption of edible oils: Directorate of Vanaspati,                                                     Vegetable Oils & Fat.

Distribution Channel of Cargill India Pvt.Ltd.

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(C&F)Depot

Super Stockiest Distributer

Wholesaler

Retailer

Consumer

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The end-users of the products are: households and institutional buyers [catering/hospitality/processed food/snacks] set-ups. Cargill has set up a strong distribution network of Company Distributors and super stockists for its retail operations. This chain helps to tap even the small retailers/traders and thus increases their reach.

Hierarchy Structure of Cargill India Pvt. Ltd .

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Swot Analysis of Cargill India Pvt.Ltd.

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Chairman

Director

National Sales Manager

Regional Business Manager

Zonal Sales Manager

Area Sales Manager

Senior Sales Officer

Sales Officer

Trainee Sales Officer

Interim Sales Representative

Distributor Salesman

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Situation being analysed: During the Summer Interns Project in Cargill India Pvt.Ltd.

Criteria

Advantages of proposition?

Capabilities?

Competitive advantages?

USP's (unique selling points)?

Resources, Assets, People?

Experience, knowledge, data?

Financial reserves, likely returns?

Marketing - reach, distribution, awareness?

Innovative aspects?

Location and geographical?

Price, value,

StrengthsProduct Quality.

Distribution network.

Financial strength.

Highly educated people in the organisation.

Friendly atmosphere (everybody has the freedom to take decisions instantly).

Low operational costs.

Weaknesses Growth expectations not achieved.

Lack of big W.D.

Dependence on the other big market players’ policy in the edible oil industry.

Lack of proper co-ordination among the first-level ground employees.

Price fluctuations in other big brands causes price fluctuations in the home brand.

Lower scope of investing in technology and achieving economies of scale especially in the small sector.

Criteria

Disadvantages of proposition?

Gaps in capabilities?

Lack of competitive strength?

Reputation, presence and reach?

Financials?

Own known vulnerabilities?

Timescales, deadlines and pressures?

Cashflow, start-up cash-drain?

Continuity, supply chain robustness?

Effects on core activities, distraction?

Reliability of data, plan

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quality?

Accreditations, qualifications, certifications?

Processes, systems, IT, communications?

Cultural, attitudinal, behavioural?

Management cover, succession?

Philosophy and values?

predictability?

Morale, commitment, leadership?

Accreditations, etc?

Processes and systems, etc?

Management cover, succession?

Criteria

Market developments?

Competitors' vulnerabilities?

Industry or lifestyle trends?

Technology development and innovation?

Global influences?

New markets,

Opportunities

Focus on rural penetration.

Relaunch of NatureFresh atta.

Focus on 3-tier cities.

Increasing disposable income & Growing consciousness for healthy oil could well lead to high sales of

Threats

Local brands in the edible oil industry.

Increasing demand for “khulla tel”.

Government Tax Policy & regulation

"Me-too” products, which illegally mimic the labels of the established

Criteria

Political effects?

Legislative effects?

Environmental effects?

IT developments?

Competitor intentions - various?

Market

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vertical, horizontal?

Niche target markets?

Geographical, export, import?

New USP's?

Tactics: eg, surprise, major contracts?

Business and product development?

Information and research?

Partnerships, agencies, distribution?

Volumes, production, economies?

Seasonal, weather, fashion influences?

packaged edible oil.

Can expand its business in other FMCG products

brands.

Competitors must be eyeing on similar opportunities

demand?

New technologies, services, ideas?

Vital contracts and partners?

Sustaining internal capabilities?

Obstacles faced?

Insurmountable weaknesses?

Loss of key staff?

Sustainable financial backing?

Economy - home, abroad?

Seasonality, weather effects?

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Understanding The Impact On Business By Expanding The Distribution In Mass Market

Terms and Terminology Used…..1) Beat- The route list containing the names of the retail outlets that are

being visited on a particular day.2) Super Stockist- A stockist provides a local delivery point for the

manufacturer/marketer. They store the products, break bulk, and distribute to the distributors and retailers. With greater no. of retailers now seeking credit from the retailer, efficient management and collection has become a vital part of the stockists’ job.

3) Carrying & Forwarding Agents- Carrying & Forwarding agents work on a commission basis. He acts as a risk reducer for the company as he takes care of every risk involved in storing of goods in depot.

4) Distributer- A distributor provides a local delivery point for the manufacturer/marketer. They store the products, break bulk, and distribute to the retailers and wholesalers.

5) Wholesalers- A wholesaler purchases his stock of goods from the distributors and sells them to the retailers.

6) Sales officer- The sales head of a certain territory who manages and co-ordinates the sales within that particular territory.

7) ISR- Interim Sales Representative. Employees of the company and on the payroll basis. They carry out the sales operation in a particular territory.

8) DSM- Distributor Sales Man. Employees of the company but not on the payroll of the company. They also carry out the sales operation in a particular territory.

9) CP- Consumer Pack. This includes all the types of packing like 1 ltr pouch, 5 ltr and 15 ltr jar excluding the tin packings.

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10) BP- Bulk Pack. This includes commercial packing like 15 ltr & 15 kg

tins.11) Primary Sales- Sales of goods from the depot of the company to the

super stockist or the distributors.12) Secondary sales- Sales of goods done from the distributors or super

stockist to the wholesalers or retailers.13) Productive outlets- Outlets selling products of Cargill India Pvt. Ltd.14) Unproductive outlets- Outlets not selling products of Cargill India Pvt.

Ltd.15) Sales Call- Visiting the respective outlets on a specified beat to take

their respective orders.

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Project Objectives

Storming Exercise: - Increasing the distribution network Of West Delhi by increasing the reach to the retail outlets and making the product available to the retail counters.

Design an optimum distribution channel for new area development: - To develop a new area and cover it fully requires an optimum distribution channel to channelize the products of the company thereby enhancing the visibility of the product.

Mechanism for sustenance of new productive outlet: - New outlets should be sustained so that the drooping of sales could be avoided. The mechanisms used were regular visit, supply mapping, aggressive promotions etc.

Tracking of outlets: - Listed and new outlets were being tracked by maintaining a record and calculating the average sales per outlet.

Pre & Post Volume Analysis: - analysis of the sales volume pre and post of our project.

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Distribution Network Of West Delhi

1 Sales Officer 1 Super Stockiest 12 Distributors 4 Interim Sales Representative(Isr) 7 Distributor Salesman(Dsm)

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METHODOLOGY

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Analysis of Existing Outlets……. . Revised the list of each beat

The first step towards our objective was to know where we actually stand today. Initially we had 39 beat in West delhi. So every day I had to visit each beat with respective dsm or isr. Firstly one has to check the list whether the entire store listed are correct or not. One more thing was very important was to add the newly opened retail outlets to the list and eliminate the retail store which closed their business or store which doesn’t sell the refined oil any more. So a revised new beat list was prepared after visiting all the beats of West Delhi.

Analysis of revised beat list

After making the revised beat list the total number of outlets and total distribution was found. Total number of outlets of West Delhi was 1804 and distribution came to be 1393. Now have to make a plan to make the unproductive counters productive by analysis of each beats. Beat having more unproductive counters have to be aim first. Understanding buying behavior and the problem faced by Dsm or Isr in converting the unproductive counters and then come up with a solution.

Attempt for converting unproductive counters

The main objective of the project was to increase the distribution that is to increase the total number of productive outlet. So after analyses of each beat I had the information of number of unproductive outlets in each beat. So there was a each day plan for every Isr and dsm. Plan was divided into three steps. First step was that every day Isr or dsm have to attempt for converting the unproductive counter into productive in their regular beat. For new productive counters they were given an extra Schemes benefit like power of

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reducing the rate from 5 Rs to 10 Rs per box, cash display on 5 litres jar of Nature Fresh Acti lite and Nature fresh Sunflower oil and credit facility in case required. And then also if Isr or Dsm was unable to convert some outlet into productive then they must write down the name of that outlets and the problem they faced. For second step of plan I can go with him and give a brief presentation on Nature Fresh and Gemini. As the main strength of our product is the quality of product which we offer, the brand name NATURE FRESH. So the brief presentation emphasized more on its quality and benefits which we offer at affordable price and how our products differentiate from other competitors. I tried my best in persuading the shop owner to sell our product. But then also if I was unable to convert that outlet then there comes step 3rd of our plan. Third plan included a full team visit to that outlet for making sure that outlet must sell our products.

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Discovering the Uncovered Area……..

After preparing the revised beat list there was a need to know the uncovered area of West Delhi. So with the help of whole team of West Delhi and road map, we highlighted the uncovered areas which need to be covered. The main area which was discovered as uncovered or partially covered of West Delhi was Mohan Garden, Om Vihar, Chander Vihar, Nawada, Hastal Village, Uttam Nagar, Sitapuri, Chanakya Place, Indra Park, Bindapur Matiyala Road, Rajapuri, Vikaspuri.

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Design a Optimum Distribution Network for Uncovered Area……. .

Listing of outlets

The First step towards designing the distribution network for uncovered area is to know that how much potential particular market has. So to know the potential, the listing of retail outlets was done. Total new Listing done in uncovered area was of 780 shops.

Restructuring & Designing the beat Plan

After listing down the new outlets, a route map was design and then new beats was made of about 35 to 45 stores. Total of 780 new retail outlets was divide in 20 new beat according to the beat route designed. Some old beats was also restructured to include new stores which was listed. Basic idea behind making a beat plan was to know the actual potential of the uncovered area. Secondly how many new beat we have got and how much more manpower we will be needed to cover that beat.

Assigning the Distributer

As now we know the potential of the uncovered area, now we have to focus on the main aspect of distribution that is Who will provide regular supply to that area. To ensure better supply, distributer must be the one who is locally aware of that area, must have a good creditworthiness. We made two new distributers Achiever Sales Corporation and Jai Ambe Enterprise to cover new area. Out of 20 new beat we gave 14 beats to Achiever Sales Corporation, 5 beat to Jai Ambe Enterprise and 1 beat to the old distributer Himmatram & Co.

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Recruitment

To cover 20 new beats we recruited 3 Distributer Sales Man (Dsm). Each Dsm will cover 6 beats and 2 beats will b covered by the distributer himself.

Launching of Product

As the area was uncovered earlier there was a need to make aware about the product to the shop owners. Now we have beat plan, manpower and distributer to ensure regular supply. Therefore a launching exercise was done. In launching exercise a team was made of 3 to 4 person. Work of this team was to visit each retail outlet and give a brief presentation of the company and its products. Major emphasize in presentation is given to the quality of our product, benefits and how our product differentiates itself from our competitors. One person makes sure that posters and danglers of the product are pasted and hooked properly in order to increase visibility of our product. Launching exercise by a team has very much importance as the first visit of company to the retail outlet makes the shop owner think differently and we can persuade him easily to sell our product. Team visit has more impact on the shop owners than a single salesman going to convert the first sales call into productive call. In the area of Mohan Garden, Om Vihar, Chander Vihar we got great success in terms of productivity of about 70 to 80 percent at the time of launching. The main reason for our success in this region was that no refined oil company’s distribution had a direct service to this area. Direct service was available to selected big outlets only and rest of other outlets depended on wholesale market. Therefore success ratio was high as we are assuring our regular service and supply direct to their shop without any mediator like wholesalers.

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Mechanism For Sustenance Of New Productive Outlets……. .

Once an outlet started selling Nature Fresh or Gemini, now its very important to take necessary steps for making them to sell our product regularly. So we have to set a mechanism for sustenance of these new productive outlets.

Regular Visit :-

Main aspect for sustenance of new productive outlet is the regular sales visit of Dsm or Isr to that outlet. In an FMCG company, visits to retail outlets are weekly, thereby continuing a good relation with a particular outlet.

Supply Mapping :-

If the salesman goes regularly and takes order from X retailer. And due to some problem with that X retailer, the distributer doesn’t supply the order. So there must be some proper mechanism to check, whether the order received is supplied on time or not. The respective Dsm or Isr must check regularly from the distributor that the order taken by him for each beat is supplied or not. If not then he should try to find out the problem and try to come up with a solution.

Aggressive Promotion :-

If our product visibility is increased, the end consumer will get to know our product better. It creates a demand from the consumer side which will force the retailer to sell our product. Therefore chances of the sustenance of the new productive outlets go very high. There are many ways to increase visibility. Some Major ones which are used by the company are T V

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Commercials, Print ads, Hoarding, Posters & Danglers, Standee cut out, In Shop branding, Road shows, Car Screens etc.

Trade promotion: The Company will have to offer lucrative trade promotion schemes, in order to push primary sale. These include incentives to stockists for pushing the sale of oil. At the retail level, the following trade promotion measures may be adopted:

Schemes such as, a certain percent off on the quantity purchase.A 15 ltr tin free with every Rs 50,000 purchase.Shop Displays

Apart from these, WindowShelf space may be purchased outright.

Consumer Promotion: Some of the consumer offers that could be introduced are:

Free gifts like pen, soaps etc., on return of oils wrapperMoney Savers

The Company can announce consumer “contests” (with proof of purchase) with attractive prizes, supplemented by an advertisement campaign.

New Schemes :-

Launching of our product in any new outlets and then to sustain them required some new schemes offered to the shop owners with some cash display benefits and other offers. We can offer free gifts with bulk purchase, cash display benefits like 25Rs off with the purchase of 5 ltr or 15 ltr Jar packing provided if they keep that jar in the most visible place of the shop. This helped us to push our product into the market creating the visibility of our product that we wanted and the retailer will get price benefits. At present company is going with a Quantity Purchase Scheme(QPS) with a name CARGILL RETAILORS LEAGUE 2 in which if a retailor purchase a product of cargill, he will get a some run allocated according to the product.

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And after 3 months the retailor will get the prize corresponding to the run he scored in three months.

Tracking Of Outlets……. . As per the specific beats, beat list were maintained containing all the outlets in that particular beat. We had to list all the outlets in our specified territory along with the monthly sales. Herein we calculated the average sales per outlet and found out which outlet was lacking sales and which were still unproductive. Thereby we differentiated outlets in category A, B and C depending on their sales.

After converting unproductive retail outlets to productive once, there is a need to track these outlets. We should know how many new productive counters became our regular customers and how many counters didn’t purchase then after. So a tracking sheet was prepared to track the weekly sales of all counters. Then after monthly new outlet analysis exercised was done in order to know how many new outlets have become regular customer of our product. Below is the sample sheet of new outlet analysis exercise

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TOTAL SALES OF NEW OUTLETS WERE 95465 Litres

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This chart help us to know about total sales of new outlets of different territories. This is necessary for Cargill to track the sales of newoutlet and to know how these new outlets are performing to improve sales of NATUREFRESH.

Pre & Post Volume Analysis……..

Initially West Delhi had 1804 outlet listed out of which distribution was with 1393 outlets and the average sale earlier was around 120 Metric Ton. But after completion of the project the total distribution increased by 53.27% and Average monthly sale by 35%. So we can see that the project was successful in raising overall sales.

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Per Dealer Off Take(PDO) is the monthly average sale of all retail outlet divided by the total number of productive outlets.

PDO (per dealer offtake) Before = Total Sale of All Retail Outlet/Total Number Of Productive Outlets

= (120000/0.910) liters/1393

= 94.66 liters/dealer.

PDO (per dealer off take) After = (162000/0.910) liters/2135

= 83.38 liters/dealer.

So we can deduce that after increasing our distribution, our per dealer outlets is reduced. So something needs to be done to increase PDO After to the level of PDO before.

Suggestions For Increasing Post PDO1) In every beat A class counter should be pointed out and special benefits or tie up could be set up.

2) Leakage problem should be taken care of and the retailers should be full compensated for their loss due to leakage.

3) There must be regular surprise visit of higher officials to check the ground realities in the market.

4) There should be separate person in the market whose only job must be merchandising. He must make sure the product is visible in the outlet and postors and danglers are properly pasted and attached at a proper place.

5) There should be proper feedback for the retailers AS WELL AS customers whenever any scheme is introduced for the retailers & customers they should be made aware of it. Sales representatives should be given guidelines to intimate each and every retailer of his area about the schemes.

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6) Being all the companies are ISO 9001 company, it is not good for the reputation company that it is getting complaints about the products related to quality. More emphasis should be laid on the quality to avert such circumstances.

7) Regarding the introduction of new products, the company should go for aggressive marketing. There is a lot of potential in Soya Refined oil segment, but retailers are not even aware of our product.

8) Whenever any consumer oriented scheme is introduced, the scheme should be directly targeted to that person who actually uses i.e., house wives.

9) Non monetary incentives should be also given to the retailers in each and every city. They should be given glow sign boards and other sales promotional materials. This will boost up their spirits.

10) MRP problem during the days of rising prices should be taken care. In this situation if retailers are getting the products on a price higher than the MRP they can’t sell it more than the MRP. So this problem should be looked after carefully.

Suggestion Of The Retailers & Customers1) Leakage problem should be looked after and the replacement of the leaked packets should be given to them.

2) The company should reduce the cost of their products and the margin of the retailers should be increased.

3) There should be proper channel of information, whenever any scheme is introduced by the company for the retailers, they should be properly informed about the scheme.

4) In the same way, whenever any scheme is introduced for the consumer there should be at least a print advertisement if T.V. advertisement is not possible.

5) Other incentives should also be given to the retailers like glow sign boards etc.

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Problem Faced By Retailer

1) Low margin: - Most of the retailers complained that they get very low margin in all the products of ABCL as compared to its competitors that’s why unable to sell the local brand.

2) Leakage problem: -The retailers also complained about the leakage problem faced by them in the cartoons of Ginni and no replacement, but other companies are giving them full replacement of leakage packages.

3) Feed back problem: - The retailers also complained that they get very less feedback from the company, like whenever any scheme is introduced by the company, they are not even made aware of the schemes.

4) Quality problem: - The retailers also said that sometimes the quality of soya oil is low they have face problems regarding their image.

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5) MRP Problem: - Retailers also complained that in the days of rising prices, sometimes it happens that MRP of ginni products is less than the price at which they have purchased it from the distributor.

6) PROBLEMS related to new products: - They complained that sometimes they are even unaware of company’s new products.

Learning

Managerial capabilities as we had to manage the salesman who accompanied us as well as the shop owners.

Convincing capabilities.

Knowledge of how an FMCG company works at the ground level.

How sales can be enhanced.

Team management skills.

Leadership skills.

Analytical approach towards data analysis regarding sales.

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How to cover an untapped market where complete reach was not there previously and then sustaining the sales in the specified territory.

How to carry out the daily operations in rigorous pressure.

How to increase product visibility.

Limitations Of Project1. Low Print & Media advertisements made us difficult to convince retailer to

buy our product.2. Time limitation was a big concern.3. General awareness of the product and company was low.4. Excessive price fluctuation in oil market.5. Convincing to the retailer in low income residential area was a tough task as

they were very less health conscious.6. Some dispute between the distributor and retailer were unsolved.7. Excessive dependence on price strategy of competitor market leader in oil

segment.

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Recommendations

1. In every beat A class counter should be pointed out and special benefits or tie up could be set up.

2. The company should go for regular Print & Television Commercial Ads to regular reinforce the consumer demand and to gain consumer confidence.

3. The company should try to make stronger Distributor who has a very good hold in the market and has a strong financial backup.

4. Leakage problem should be taken care of and the retailers should be full compensated for their loss due to leakage.

5. The company should also emphasis on rural areas as there growth opportunities are very high.

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6. There should be separate person in the market whose only job must be merchandising. He must make sure the product is visible in the outlet and posters and danglers are properly paste and attached at proper place.

7. There must be regular surprise visit of higher officials to check the ground realities in that market.

8. There must be a new system set up where smooth coordination between consumer pack team and Commercial Pack team must be established.

9. Paper work should be reduced and more IT must be used in Sales & distribution channel.

10.There should be proper feedback for the retailers AS WELL AS customers whenever any scheme is introduced for the retailers & customers they should be made aware of it. Sales representatives should be given guidelines to intimate each and every retailer of his area about the schemes.

11. Whenever any consumer oriented scheme is introduced, the scheme should be directly targeted to that person who actually uses i.e., house wives.

12.Non monetary incentives should be also given to the retailers in each and every city. They should be given glow sign boards and other sales promotional materials. This will boost up their spirits.

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ConclusionsProviding food product is a not everyone cup of tea. You can not compromise in it and if you will try for it you will not be able to sustain in the market for a long time. FMCG companies have to worry to provide that product which is not only fulfilling the rules and regulation of government but also satisfy the customer. Cargill’s products do exactly that and that is why it is chosen by CONSUMER VOICE. Consumer VOICE- a government funded voluntary organization that works towards consumer education and awareness, conducted a laboratory test on seven well-known brands of refined sunflower oil. After testing them on all possible parameters like colour, adulteration, rancidity and fatty acid profile, NATUREFRESH Actilite and Gemini, brands from the house of Cargill, were rated as the best quality and healthiest refined sunflower oils in the country.

But still it is very tough for NATUREFRESH to become no 1 in very near future because of the typical mind set of Indian consumer. To achieve this positon Cargill first wanted to increase its product availability in the market and it did by the expansion of coverage area. Now company is working on advertisements which are telecasting in most of serials. Now CARGILL is actually trying to Re

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launch NATUREFRESH by the advertisement and change slogan “TASTE ME YUMMM AUR 5 LITER FAT BHI KUM”.

Most of the Indian families used oil in their daily food 90% of them use Mustard oil in curries. But because of change in purchasing power Indian families are also conscious

About their health and now want to use refined oil also to protect their liver. Most of the companies are trying to do something new and find that thing which help customer to be healthy and fit.

For this Cargill is using DMPS (a permitted antioxidant as ingredient). Lab results also have shown that food cooked in NATUREFRESH Acti-Lite refined oils; absorb less oil as compared to food cooked in ordinary oils so these are some kea Characteristics of NATUREFRESH which make it a better product than its competitors.

It was a very big opportunity for any management student to work in such a big giant of a very huge industry. The project was excellent and the learning was more than that. Cargill gave full freedom and ask to perform like a manager. It was great to get the knowledge how to manage a territory in an industry like FMCG.

Learning was also valuable because meeting and working with such a big people of industry itself a big experience. The project was basically based on opening of new outlets but it consist so many things in it which I learnt like how to manage people? How get maximum output from the people? And how to make a balance in sales.

NATUREFRESH was a very good product and it gave me knowledge that if a company’s product is good then it do not have to worry for things and competitors. Cargill gave me understanding that for any FMCG company it is very necessary that first it should make it base work very strong and then it should go for marketing or advertisement.

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Cargill’s business strategy is also very good. Like my project Cargill is also doing the same project of expansion of new stores in whole north to increase its visibility and sales. It was good to have your product in most of the because it is known saying in Hindi “JO DIKHTA HAI WO HI BIKTA HAI”

Annexure1This is summary of total targeted outlets and target achieved in West Delhi.

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Annexure2This is the sample Beat list prepared by me for database collection.

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A Type of Questions asked to the retailers to get the idea of market

Do you know NATURE FRESH?

Do you know about Cargill?

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Do you have NATURE FRESH?

How many brands of edible oil you have in the shop?

Which brand demand is high in the market?

Which type of packing do you sell more?

Why don’t you have NATURE FRESH in the shop?

Why so long you don’t have NATURE FRESH in your shop?

What do you expect from company?.

Such questions were very helpful for me and company to know about the different

market and then we used to give a brief presentation on our company and its

brands. It was also necessary to make strategies according to the market to market.

References• www.cargill.com • www.cargill.co.in • www.adaniwilmer.com • www.economywatch.com/sector-watch/ fmcg -giant.html • www.business-standard.com/ india /... fmcg ...in- india /333156/

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• http://www.financialexpress.com/news/packaged-edible-oils-to-

capture-50-market/275762/• fcamin.nic.in • www.marico.com • www.atfoods.com • www.ruchisoya.com • Marketing Management –Phillip Kotler

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