AN INCREASINGLY AFFLUENT INDIA IS

HARDER TO IGNORE

SUBMITTED TO,
INTERAVION

PRESENTED BY,
MR. ANIL WANARSE PATIL,
ROLL NO.-R08PGDM044
INDIAN INSTITUTE OF PLANTATION MANAGEMENT ,BANGALORE.
 INTRODUCTION
CASE SUMMERY
The case study illustrate that , ‘Huge potential for any kind of business is
hidden in middle India.’ Some facts, opinion, figures showing the
potential are as follows
Ø Today India is 26% urban & 74% rural, in 2046 it would be 2% rural &
98% urban (Samu, ISB).

Ø Indian urban growth story has been driven by metros, but this is now
moving beyond metros in to smaller towns. (Ashok Rajgopal, media
partner at Ernst & Young).

Ø In India 51 districts have at least one town with a population more than
500,000, together they have twice market potential of 4 metros. (RK
Swamy,BBDO-guide,market planning.)
CONT

Ø The ratio of spending to earning is higher in tier 2 towns

(Nagpur, Jaipur, Surat) than it is in the metro.(NCAER).

Ø Higher % of the rich is in middle India than in some metros.(crorepati

density of Haryana in 2004 is 280.)

Ø As consumption is to be concerned metros constitute 30% of the total

consumption market, rest urban & rural constitute 70%.

Ø Of the 80 million household that constitute the middle class , only 25

million are in Tier 1 cities, close to 55 million belong to smaller town.
CONT .
Ø Case study explains TWO effects

EFFECTS

DHONI BUNTY AUR BABLI

CONT ..
DHONI EFFECT
Ø Dhoni from small town of Ranchi in Eastern India.
Ø Got one of its flashier success in recent time.
Ø This effect identifies phenomenon where rapidly
growing small town of India are taking centre stage.
Ø This research highlights
§ Growing affluence level
§ Increased awareness due to media penetration
§ Improved physical connectivity.
§ Significant changes in consumption pattern.
CONT .
BUNTY AUR BABLI
Ø Popular name of small town of India.
Ø There is a sense of urgency, excitement, & confidence as
they reach ahead.
Ø Hence, they are the future market.
Ø This effect attempts to understand attitude and behavior
of youth in Tier 1 & 2 cities.
Ø Some characteristics of BUNTY behavior -
1. High confidence in their abilities.
2. Reemergence of Gandhian values.
3. Pride of being Indian.
 CLASSIFICATION OF CITIES

METROS HIGH GROWTH EMEGING CITIES POTENTIAL

CITIES CITIES
MUMBAI PUNE NASHIK AURANGABAD

DELHI JAIPUR NAGPUR PATNA

BANGALORE LUCKNOW GOA RAJKOT

HYDERABAD KOCHI KANPUR MEERUT

CHENNAI AHMEDABAD SURAT BHOPAL

KOLKOTA CHANDIGARH AGRA SONEPAT

LUDHIANA MYSORE VIJAYAWADA

CONT ..

Ø By seeing this points we can say that there is a immense

potential for company like INTERAVION to grab
Indian middle market.
Ø Certain major cities are shown here having particular
characteristics.
QUESTIONS ?
1. WHAT IDENTIFIES THE DIFFERENCE BETWEEN
TIER 1 & TIRE 2 CITIES IN TERMS OF -

A. Demand of Frozen processed products.

B. Demand of chicken Frozen/chilled.
C. Demand of imported/exotic fruits & vegetables.
ANS -
A. Demand of Frozen processed products –
Following parameters identifies the actual difference-
Ø AWARNESS
Ø PRICE SENSITIVE
Ø FRESHNESS
Ø FARMING IMPACT
Ø HEALTH ASPECT
 IDENTIFIES THE DIFFERENCE
DEMAND OF FROZEN PROCESSED PRODUCTS

PARAMETERS TIER- 1 TIER - 2 /3

More aware about frozen processed
AWARNESS products.
More income so more purchasing
INCOME power, demand is more. More
frequently the are going for Frozen
products
Giving more attention towards
HEALTH hazards aspects of frozen processed
ASPECT product.
Mostly people are job oriented , in
HECTIC LIFE family both husband & wife do the
job , so, many times they go for
frozen processed products which are
ready to eat.
Not that much aware, bec
traditionally bound.
Generally not going for such
type of products, bec- of middle
income level.
They are also health conscious
towards processed products.
Not so, The demand is
ultimately less of frozen
processed products.
B. DEMAND OF CHICKEN – FROZEN/CHILLED.
PARAMETERS TIER - 1
AWARNSEE High awareness level , hence
demand is high .
PRICE Less price sensitive
SENSITIVE
FRESHNESS Generally they are going for
Frozen chicken.
FARMING Non Agri. Business .
IMPACT Automatically consumption
of frozen chicken is more &
hence demand is more .
HEALTH They feel comfortable with
ASPECT frozen chicken eating,
TIER – 2 & 3
Degree of awareness is low.
More price sensitive
Generally they are going for
fresh cut chicken, so, demand
is less.
Almost 70% people they are
doing Agriculture diversified
farming . Domestication of
poultry commonly followed
by them.
They feel that because of
package somewhat problem
will be there.
CONT .
PARAMETERS TIER - 1 TIER – 2 & 3

HEALTH ASPECT They feel that no problem Not so. Mostly they try
with such type of food for freshly cut chicken.
bec- packed ,& more Hence here demand of
nutritious. frozen chicken is less as
compare to tier 1.

CULTURE These people are not that More culture conscious

much culture conscious ,as BRAMHIN strictly
avoid the chicken.
OCCOSIONALITY At week end most of the Not so,Occosionally they
people going for alcohol , are going for stated
youth also making factors.
celebrations at week end
so demand in the hotels is
more for frozen chicken.
 C. DEMAND OF IMPORTED/EXOTIC FRUITS
& VEGETABLES
Ø Exotic fruits & vegetables- Collection crops of Asian
origin.(China, Hong-Kong, Singapore).
Ø Various fruits & vegetables are –
§ SUPERFRUIT
§ STRAWBERRY
§ RED CABBAGE
§ YELLOW FLESHED SEEDLESS WATER MELON
§ BIMAL FRUIT
§ BOX SHAPED WATERMELON
§ BLACK TOMATO
§ CHERRY TOMATO
§ APRICOT
 IMPORTED/EXOTIC FRUITS & VEGETABLES

RED CABBAGE YELLOW FLESHED SEEDLESS BIMAL FRUIT BOX SHAPED

WATER MELON
WATERMELON

§APRICOT
§BLACK TOMATO
CHERRY TOMATO
DEMAND OF IMPORTED/EXOTIC FRUITS & VEGETABLES

PARAMETERS TIER - 1 TIER – 2 & 3

Generally they are going Generally income is
INCOME for exotic F&V even medium, but do not
though it is costly ,because changes the habit of eating
high income. food.

Value which follows the They are following this

GANDHIAN VALUE Gandhi principles. Here it parameter . More demand
is low ,bec of modern era. give s to the SWADESHI
F&V.

WAProud to be an Indian Not so. Here they have great desire

LKING ON WIDE SIDE to express towards
unknown things ,they can
also follow these products.
CONT ..
PARAMETERS TIER - 1 TIER – 2 & 3
LITERACY More literacy rate Less literacy rate ,not
among people, because that much familiar with
of that they are familiar exotic F&V.
with exotic F&V,

MEDIA Also bec- of media Not that much media

exposure peoples are exposure.so,ultimately
aware about products of demand is low.
exotic origin.

NUCLEAR FAMILY No influence of family Influence of family

members. So easily they members, hence, less
can eat it. demand for exotic F&V.
 2. HOW LOGISTICS WILL BE DIFFERENT FOR TIRE 2 &
TIER 3 CITIES AS COMPARE TO TIER 1 CITIES ?

‘LOGISTICS IS THE CONNECTIVE TISSUE THAT MAKES THE GLOBAL ECONOMY

WORK.
For the difference we have to consider following
PPARAMETERS
Ø GEOGRAPHY & PHYSICAL INFRASTRUCTURE.
Ø PROXIMITY TO SUPPLIERS & CUSTOMERS.
Ø ROAD FACILITY.
Ø DISTANCE FACTOR.
Ø SERVICE.
Ø CANTAINER SIZE.
Ø DISTRIBUTION PATTERN.
Ø TRANSPORTATION COST.
Ø MAINTAINANCE COST
CONT .
PARAMETERS TIER - 1 TIER – 2 & 3
GEOGRAPHY & PHYSICAL Good Geography & Not that much developed as
INFRASTRUCTURE. physical infrastructure as compare to tier 1.
availability of plenty of
resources in tier- 1
PROXIMITY TO SUPPLIERS Here mainly concentrated Scattered population.
& CUSTOMERS. population ,so one No traffic, so well
DC(Distribution centre) functioning of logistics.
can serve purpose of huge
customer base. But here
traffic curfews & zonal
restrictions reduces the
functioning of logistics.

ROAD FACILITY Good quality, which Poor quality, so affect life

increases the efficiency of span of vehicle.
vehicles.
CONT .
PARAMETERS TIER - 1 TIER – 2 & 3
Vehicles has to cover less Vehicles has to cover more
DISTANCE FACTOR. distance distance

Easily done ,bec- availability Sometimes very difficult to

SERVICING of tools & techniques in such manage it.
cities.

Generally small size Big size containers are

CANTAINER SIZE. containers are used useful for bulk
transportation.

Direct to retailers Indirect, 1st it goes to

DISTRIBUTION primary DC & then
PATTERN. distributed to final
destination.
CONT .
PARAMETERS TIER - 1 TIER – 2 & 3

Less transportation cost , More transportation cost

TRANSPORTATION bec concentrated location. ,bec- more distance.
COST. (Bangalore to Bangalore) (Nagpur to Aurangabad)

MAINTAINANCE COST Less, as less functioning More , due to distance &

more functioning.
3. WHAT APPROACH DO YOU PROPOSE FOR LOGISTICS
COMPANY TOWARDS TIER 2 & 3 CITIES

HUB & SPOKE

SYSTEM
APPROACH

LOGISTIC
JIT APPROACH MODEL

TRADITIONAL
METHOD
OVERCOME
APPROACH
1. LOGISTIC MODEL APPROACH
COLD STORAGE
SOURCE
(FUEL +ELECTRICITY)

TRANSPORTATION
RETAIL DISPLAY
( FUEL)

REPLENISHMENT
CUSTOMER
(FUEL + ELECTRICITY)
 2. JIT APPAROCH

Just In Time approach –

Final produce reach to the customer each time &
every time. Delivery of produce here is very important.

3. TRADITIONAL METHOD OVERCOME APPROACH

Ø Previously in Tier 2 & 3 cities of fruit & vegetables produce

transferred by traditionally like, Tractor, Truck, Bullock cart etc.
Ø Due to traditional transportation F&V loss occur more,to reduce
this & to maintain proper cold chain new method should be
follow.
CONT ..
v Various containers are-
1. REFRIGERATED CONTAINER
2. REFRIGERATED TRUCKS
3.FREEZER TRUCKS
These vehicles should be equipped with -
Ø Data logger to record the temp. & out-cut
thermostat to maintain the temperature.
Ø Reverse logistics approach

(Aftermarket consumer survey) .

 3. HUB & SPOKE SYSTEM APPROACH

v It would be utilized for the distribution of perishable

commodities.
SHIPMENT PRIMARY HUB
Transport
to the final
destination
.
1. Road
2. Rail 3. Water ways
 EXAMPLE

PUNE + NASHIK

HINTERLAND HINTERLAND

SOLAPUR JALGAON

SANGLI NAGPUR
SATARA AURANGABAD

MUMBAI Where produced can be consumed or Exported.

 CONCLUSION

v India is second largest producer of fruits (45.5 million

ton) & vegetables (90.8 million ton) contributing 10.5%
& 14.5% of the total world production respectively.
v However , in stark contrast, Rs. 55,600 crore worth of
these , including grain & pulses are lost due to poor post
harvest management of which inadequate or near non
existent cold chain logistics & storage is the biggest
contributor.
v As far as potential is to be concern affluent middle India
is harder to ignore & now it seems that it is directly
related with core management principles applied by
various cold chain logistics players in the corporate war.
THANK YOU