Dilnoor: Market Entry Strategy/Launch Collaterals

June 22, 2015The beach

Some basic Facts of India’s Rice Market

Market Size

In a country where thousands of rice varieties are grown, branding has come to play a role in both the domestic as well as the export market. The brand is the new mantra for success and Basmati, also known as the 'king of rice', is in the middle of the action. It is the urban affluent and the upper middle class which is gradually warming to the concept of buying branded rice.

The packaged rice market in India was valued at INR 122 billion in 2012, and is growing at a CAGR of over 30% for the past three years.

It is projected to reach INR 333 billion by 2016. Basmati rice dominates the packaged rice market in India with a nearly 75% market share.

However, there are some other varieties present, e.g. Sona Masoori, long-grain, Patna rice, Navarra rice, etc.

India leads globally in the production and export of Basmati rice, but this variety accounts for less than 2% of the total Indian rice production. It is estimated that India produced approximately 4.25 million metric tons of basmati rice which accounts for 75% of the entire global production of this rice type.

Growth Rate & Basmati’s share in packaged rice.

India’s Rice Production and Area under Cultivation

India’s rice production has increased at CAGR of 3.32 percent during 2002-03 and 2013-14. Area under rice cultivation has not increased substantially during 2002-03 and 2013-14.

Brands Target Market

Aroma Fields High

Lal Qilla High

India Gate High & Mid

Kohinoor High & Mid

Daawat Mid

Tilda Mid

Major Brands & Positioning

Major rice millers

Market insights

There are two kind of players in Basmati Market:

•National Brands: their presence is strong in urban areas•Local Players who are competing by trade relationships & price discounts.

Demand – Supply Scenario •There has been a steady increase in the number of national brands with many companies in the food segment and FMCG category entering this category •Certain areas have few dominant local players which have relied mostly on their trade relationship to push their products •The urban consumers who visit modern retailers mostly prefer branded rice •Slowly branded rice is finding acceptance in Tier 2 and 3 towns

Category Value determinants •Price (because of high level of price sensitivity) •Quality •Availability

Marketing Channels As it is a low involvement and highly price sensitive product, channels play a significant role in ensuring - availability and controlling the price

Considering the Segmentation and Target markets as mentioned earlier, 2-channel strategy needs to be adopted Modern retail- includes Supermarkets, Hypermarkets and Large retailers . Traditional channel – In certain localities for easy availability to customers. In the coming years i.e. 2nd or 3rd year Trade margins Trade margins play a significant role in sales as the store keepers tend to push those products. So a higher margin in comparison to the competitors needs to be given to create the initial push to the brand.

Marketing Communications Mix Sales promotion- To create the initial pull towards the brand by offering short term offers Events and Experiences- Sponsoring a Cookery show on TV grabs eyeballs which provides a highly targeted communication . Interactive marketing- Providing innovative recipe ideas using the brand’s rice through its online channel, facebook page, blogs and engaging with its customers . Advertising: Cost effective Localized advertising and promotional activities like In-store promotions and visual display aides.

These activities should help achieve:

•Brand name awareness – measured based on recognition, recall and “top of mind” •Brand loyalty – Segmented into non customers, price switchers, passively loyal, fence sitters and committed and moving them to the next higher level • Improvement in Perceived quality

Summarizing…

•Going for a regional launch and then slowly moving on for a nation wide launch by gauging the response. •Launching a few variants initially and then bringing in the other variants in a phased manner .• High focus on the modern retail channels along with a small traditional channel to complement it .• Trade promotions and discounts are the drivers to sale and less spending on traditional marketing channels like TV and print .

 i.e. Higher emphasis on Below the line activities over above the line as it suits the category under consideration.

What major rice brand are doing online & Offline?

Dilnoor : Insight & Design

Poster/Print Ad

Danglers

Facebook post

Facebook cover

Hoarding/outdoor

Standee

Retail Outlet Board

Thank you