MARKETING TERM PAPER-1

PRODUCT: SUNSHINE BISCUIT

TAGLINE: TASTE IS IN YOUR HAND

EXECUTIVE SUMMARY Bakery industry in India is the largest of the food industries with an annual turnover of about Rs. 3000 crores. India is the second largest producer of biscuits after USA. The biscuit industry in India comprises of organized and unorganized sectors. Bread and Biscuits form the major baked foods accounting for over 80% of total bakery products produced in the country. The quantities of bread and biscuits produced are more or less

the same. However, value of biscuits is more than bread. The industry has traditionally been and largely continues to be in the unorganized sector contributing over 70% of the total production. Bakery products once considered as sick man’s diet, have now become an essential food items of the vast majority of population. Though bakery industry in India has been in existence since long, real fillip came only in the later part of 20th century. The contributing factors were urbanization, resulting in increased demand for ready to eat products at reasonable costs etc.

The bakery units are unevenly spread among States. These are mainly concentrated in the States of Maharashtra, West Bengal, Andhra Pradesh, Karnataka and Uttar Pradesh. Industrially advanced States like Maharashtra And West Bengal have veryLarge number of bakery units. The per capita consumption is very high in industrialized States like Maharashtra and West Bengal. The Biscuits are becoming quite popular in rural areas as well. Nearly 55% of the biscuits are consumed by rural sector. The higherconsumption of biscuits in rural area could be attributed to its position as a snack, longer shelf life and better taste which is liked by different cross sections of population. There is no marketing problem as every shop is a market for wafer biscuits. Bakery products still remain the cheapest of the processed ready to eat products in the country. The production of Bakery products has increased from 5.19 lakh tonnes in 1975 to 18.95 lakh tonnes in 1990 recording four-fold increase in 15 years. Among the bakeryproducts, biscuits occupy an important place as they contribute over 33% of total products processed. Over 79% of the biscuits are produced by small scale sector consisting of both factory and non-factory units. The growth rate for bakery products is estimated at an average of 9.8% per annum. The demand for bakery products willcontinue to increase in future. Our investment in this industry initially is 50 crore rupees. In this two partners are investing 25-25 crore rupees each. Out of these 50 crore for brand promotion, advertising 5 crore rupees.

A) Competitor: Generally all organizations have competitors in the market. A particular Organization always comprises with other same business and according to Market share we clarify the brand of product is giving more challenge to my product.

B) Category

C) Category Analysis

1) Aggregate Market factor

Category Size:

Biscuits market in India : Rs 9,000-crore (Rs 90-billion)

• Rural-urban penetration of Biscuit :•Urban Market : 75% to 85%

•Rural Market : 50% to 65%• Per capita consumption of Biscuits :•INDIA 1.8 kg,•South East Asian Countries 2.5 kg to 5.5kg•USA 7.5 kg

Category Growth

The biscuit industry is been experiencing steady growth of 14-15% annually.The growth rate for bakery products is estimated at an average of 14-15 per annum. The demand for biscuit products will continue to increase in future. The estimated growth rate of 14-15% is on the lower side considering the present potentiality of bakery products, particularly in rural areas, where about 70% of the population lives.

Stages in product life cycle & Sales cyclist:

Seasonality:

The sale of biscuits is there for all over the year there is no particular season in which sales will decrease but some annual reports says in summer the biscuits sales will grow 4-5%.

Profits:

Profit margin for distributors is 4% and for retailers is 10-12%.

2) Category factor

Threat of new entrantsBargaining power of buyersBargaining power of suppliersThreat of substitutesCurrent category rivalry:- Our main rivals are SUNSHINE-G and Britania

Rivalry among existing competitors

High concentration of rivals e.g. Starbucks and local chains

Static market growth

High fixed costs

Perishable products (food and drink)

High competition Among existing players

Porter’s Five Force model

Suppliers`Basic commodities : Wheat, Sugar.Increasing price

Customer Many biscuit from low to moderate Range, Like of bakery product

New EntrantsCapital Sensitive:Manufacturing,Advertising,Distribution network,

SubstituteTraditional Indian homemade snacks, Bread, Package SnacksBakery product.

HIGH LOW

Threat of new entrants (Medium +)

Large capital requirements required to build chain of stores

Favourable locations are already occupied

Economies of scale in distribution and raw ingredients (lower per unit costs due to the experience curve)

Threat of substitutes (Medium +)

Large choice of alternatives with similar products e.g. energy drinks, cakes, biscuits, ice-cream, chocolate

No switching costs

Bargaining power of suppliers (Low)

Vertically integrated businesses with only commoditised raw ingredients

Large number of suppliers to choose from and low switching costs

Bargaining power of buyers (Low)

Buyers are fragmented and numerous

Although there are no switching costs for the buyer the food and drink market is part of the fabric of society

Environmental Factor:

i) CULTURAL FACTORS: Culture is the most fundamental determinant of a person wants and behavior. Values, perceptions, preferences, and behavior are the main variable under culture of an individual. Each culture contains sub-culture like nationality, religious group, geographical area, and linguistic divisions etc.

ii) SOCIAL FACTORS: A consumer behavior is also influenced by social factors such as the consumer reference group family and social roles and status.

iii) PERSONAL FACTORS: A buyer decision is also influenced by his or personal characteristics, notably the buyers age, lifestyle, occupation, economic circumstances etc.

iv) PSYCHOLOGICAL FACTORS: a person buying choice is also influenced by four major psychological factors such as motivation, perception, learning belief and attitudes.

v) POLITICAL FACTORS: Political factors play a major role like they will keep some taxes, and they will restrict to start a new business and some political factors like separation of states also (Telangana and Andhra issues) will keep buyers far from the products.

D) Company and competitors analysis: I found many products which can be compared with our Biscuit. As a conclusion I found that particularly in my provided area our biscuit is really doing well and its performance is on surprising level. During the field work and after intensive study it was found that main competitor of SUNSHINE biscuits is BRITANNIA as the market leader.In my provided area the share of the market is as follows.BRITANNIA 48%PRIYAGOLD 20%PARLE-G 16%PURE FOOD 8%OTHERS 8%When we compared with other businesses then we follow the quality, price,distribution system, promotional strategy etc. of the competitors our biscuit in thisarea is doing well.

DEPTH for SUNSHINE: 8 Different packs 16.5G, 38.5G, 60.5G, 82.5G, 99G, 209G, 313.5G,

418G, 825G hence depth of SUNSHINE is 9. Two variants: SUNSHINE Magix having two flavours choco & cashew &

comes in only 1 size 75gms hence depth 2. SUNSHINE Milk Shakti has no flavour & comes in one size of 150gms.

So depth of SUNSHINE is 8+2+1=11

DIFFERENTIAL ADVANTAGE RESUOUCE ANALYSIS: The capacity of the project is 50 tonnes of biscuits per year.The company's strategy has been to attract new consumer segments and widen its consumer base with its well packaged low priced offerings. SUNSHINE's success has also come from its formidable.

Critical success factorsRural and certain semi-urban markets are mainly captured by small manufacturers. This note primarily suggests entering this market. Apart from domestic customers, there is a vast market at bus and taxi stands, railway stations, weekly hats or bazaars, highway eateries or dhabas and melas or fairs. A small delivery vehicle can take care of destinations located in the vicinity of about 50-60 km. Attractive margins to traders/retailers will be crucial.

Manufacturing process

The process is conventional and easy. Wheat flour along with other ingredients is mixed with water and dough is prepared. Then it is kept at a normal room temperature for about couple of hours to allow proper fermentation. Then it is placed in biscuit moulding trays and these trays are placed in oven for baking. After requisite baking, trays are taken out, cooled and biscuits are packed. The process flow chart is as under:

FUTURE: Even though the SUNSHINE is new market in the segment, others are also trying to capture the chunk of market share. In future we are trying to adopt new strategies and targeting more rural market for better growth and profits.

CUSTOMER ANALYSIS: All age groups are our customersApart from domestic customers, there is a vast market at bus and taxi stands, railway stations, weekly hats or bazaars, highway eateries or dhabas and melas or fairs. A small delivery vehicle can take care of destinations located in the vicinity of about 50-60 km. Attractive margins to traders/retailers will be crucial.

sunshine is consumed by people of all ages, from the rich to the poor,living in cities & in villages.• While some have it for breakfast,•For others it is a complete wholesome meal.•For some it's the best accompaniment for tea,•While for some it's a way of getting charged whenever they are low onenergy.sunshine company practices mass marketing for sunshine which appeals tomasses. It is a product liked by everyone and does not cater only to aspecific group or part of the whole market. Thus it is mass production,mass distribution and mass promotion of sunshine for all buyers.Consumer psyche and SUNSHINE• sunshine is consumed by people of all ages, from the rich to the poor, living in cities & In villages.• While some have it for breakfast, for others it is a complete wholesome meal.• For some it's the best accompaniment for chai• While for some it's a way of getting charged whenever they are low on energy.

Planning and assumption:

Companies are increasing by pursuing market beyond their borders. When they

enter other countries they must follow the tradition of that country and also theymake plan for local market that which type of product has more demand and howcan it run in the marketPromotional StrategyUnder the market strategy promotional idea is very important. Organization provides some schemes or rebates to retailers or consumers. They make advertisement according to convenient of the people and the feature of the product. So on the basis of marketing strategy a organization runs in the market. It is several types of which makes helpful to increase sales and turnover of the organization.Objectives and Supporting market programme:

Marketing strategy is a set of objectives, policies and rules that leads thecompany's marketing efforts. It is the marketing approach to accomplish thebread objective of the marketing approach to accomplish the bread objective ofthe marketing plan. The various process of marketing strategy are given below.1. Selecting largest markets segmentation2. Positioning3. Product4. Price5. Place6. Promotion7. Research and development8. Marketing research

Apart from domestic customers, there is a vast market at bus and taxi stands, railway stations, weekly hats or bazaars, highway eateries or dhabas and melas or fairs. A small delivery vehicle can take care of destinations located in the vicinity of about 50-60 km. Attractive margins to traders/retailers will be crucial

Budgets:Total investment 50 crores(two partners capital investment

25-25 each)Land and Buildings 3 croresMachinery 10 croresFurniture 50 lakhsSalaries 25 lacks P/MAdvertising and promotion 14 croresOther expenses 2 croresRaw material 10 crores

Bank 5 croresCash in hand 5 croresOutstanding and prepaid Expenses 25 lakhs.

________TOTAL 50 crores

________

Monitors and control:Secondary data has been taken from journals, papers, case studies, project reports, from internet.

Conclusion: After going thick on the thing, now time is to make a complete picture. While making a product a SKU (Stock Keeping Unit) of the shop retailers think about the GMROI (Gross Margin Return On Investment) and they promote the brand which provide them highest. They expect return in the form of profit margin, company schemes, window display and references of the shop. Among these, company schemes make the differences and are the highest source of motivation after profit margin. Retailing demands a constant push from the company. Marketer needs to use advertising and brand building strategies to address thediscerning buyers and retail push to in different buyers. The manufacturer shouldunderstand consumer behavior because retailers can't help quality and price. It isonly up to dealers said it is demand they sell Britannia 42% agree that at retailshop it is brand popularity, which determine the purchase of biscuit.