CONSUMER BUYING BEHAVIOR TOWARDS THE READY TO EAT PRODUCTS WITH SPECIAL FOCUS ON ITC & MTR

Submitted to Panjab University,Chandigarh In partial fulfillment of requirements for the degree of BACHELOR OF BUSINESS ADMINISTRATION 2011-2012

Submitted to: MS. POOJA CHATELY (BBA DEPARTMENT)

Submitted by:MONIKA ARORA 14309000425

KHALSA COLLEGE FOR WOMEN LUDHIANA

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Acknowledgement
The making of any report calls for contribution and cooperation from many others, besides the individual alone. It is the result of meticulous efforts put in by the many minds that contribute to the final report formation. I duly acknowledge my gratitude to each one of them. During the perseverance of this project, I was supported by different people, whose names if not mentioned would be inconsiderate on my part. I would like to extend my sincere gratitude and appreciation to my project guide Ms. Pooja Chately, for extending valuable guidance and encouragement from time to time, without which it would not have been possible to undertake and complete this project. The Project was an enriching experience and taught me various critical factors that influence Ready-ToEat Industry. Additionally, this project helped me in understanding that how actual research is conducted and the various challenges that researches face while conducting a research. I would also like to thank my friends and different people for their support and patience in filling up the questionnaires and hence in the successful completion of the project. Above all I would like to thank the divine intervention who backed me at all the time and provided me enough motivation to accomplish this voyage.

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Table of Contents
Acknowledgement04 Executive Summary..06 Indias Food Processing Industry.07 Introduction.08 Section 1 Background for the Study.09 1.1 Motivation for Study11 1.2 Literature Review.....13 Section 2 Theoretical Reviews.14 2.1 Company Profile..18 Section 3 Research Methodology.37 Section 4 Results and Findings.40 4.1 Observation.47 4.2 Conclusion & Recommendation.....49 Bibliography54 Annexure55

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EXECUTIVE SUMMARY
India has made lot of progress in agriculture & food sectors since independence in terms of growth in output, yields and processing. It has gone through a green revolution, a white revolution, a yellow revolution and a blue revolution. Today, India is the largest producer of milk, fruits, cashew nuts, coconuts and tea in the world, the second largest producer of wheat, vegetables, sugar and fish and the third largest producer of tobacco and rice. Indian Government is providing more infrastructures for this sector. Excise duty is now ZERO % on RTE and 100 % tax deduction for the first 10 years for new units. This allows manufactures to bring down their prices & spreads its flavors to the world. Now the time is to provide better food processing & its marketing infrastructure for Indian industries to serve good quality & safest processed food like ready to eat food. The current project is aimed at gaining a deeper insight of consumer buying behavior towards RTE products, Comparative analysis of two giant FMCG Companies i.e. ITC & MTR and all the issues and problems faced by an FMCG company for branding and popularizing its products. Along with it I consider this project work as the best medium to communicate and share my learning and experiences & constraints faced and learning made during this unforgettable journey.

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INDIAS FOOD PROCESSING INDUSTRY

Indias Food Processing industry is one of the largest industries in the country. It has been ranked fifth in terms of production, consumption, export and expected growth. The Indian food industry is estimated to be worth over US$ 200 billion and is expected to grow to US$ 310 billion by 2015. India is one of the worlds major food producers but accounts for only 1.7 per cent (valued at US$ 7.5 billion) of world trade in this sector this share is slated to increase to 3 per cent (US$ 20 billion) by 2015. The Indian food processing industry is estimated at US$ 70 billion. The industry employs 1.6 million workers directly. Food processing is a large sector that covers activities such as agriculture, horticulture, plantation, animal husbandry and fisheries. The Ministry of Food Processing, Government of India has defined the following segments within the Food Processing industry: Dairy, fruits & vegetable processing Grain processing Meat & poultry processing Fisheries Consumer foods including packaged foods, beverages and packaged drinking water. Although the industry is large in terms of size, it is still at a nascent stage in terms of development. Out of the countrys total agriculture and food produce, only 2 per cent is processed. The highest share of processed food is in the Dairy sector, where 37 per cent of the total produce is processed, of which 15 per cent is processed by the organized sector. Primary food processing (packaged fruit and vegetables, milk, milled flour and rice, tea, spices, etc.) constitutes around 60 per cent of processed foods. In comparison, the organized sector is relatively small, with around 516 flour mills, 568 fish processing units, 5,293 fruit and vegetable processing units, 171 meat processing units and numerous dairy processing units at state and district levels.

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Chapter-1 INTRODUCTION
1. Background for the Study The ready-to-eat (RTE) market in India, currently estimated at Rs. 128 crore (2006) is expected to expand and to reach Rs. 2,900 crore by 2015, according to an analysis done by Tata Strategic Management Group (TSMG). In its analysis, TSMG said that the factors contributing to the growth would be changes like cold chain development, disintermediation, streamlining of taxation, economies of scale on the supply side, coupled with increasing disposable incomes, diminishing culinary skills and the need for convenience on the demand side. When customer needs to eat, the food item pouch is either put in microwave oven to warm it or keep in heated water for a few minutes and then serve to eat. Such ready to eat meals have been especially given to soldiers in army of many countries who require carrying their rations while on war front or while located far away from their main unit. The market for food is simply huge and as of January 2010 estimated to be Rs 5000 billion annually. It is growing for two main reasons: population growth and improvement in consumers spending ability. Major Players in the Ready to Eat Segment MTR Kohinoor Foods ITC Haldiram Tasty Bites

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TYPES OF READY TO EAT FOOD Veg Food Aloo Matar Palak paneer Sarso Ka Saag Chana Masala Kadi Pakora Cheese Tomato Dal Makhani Rajma Masala Deserts Gajar Ka Halwa / Sugi Ka Haluaa / Milk Kheer etc. Non Veg Food Chicken Curry Butter Chicken Karahi Chicken Mughalai Chicken Mutton Masala Mutton Korma Karahi Mutton Mutton Biryani

Some Salient Features of RTE Market:

Globalization of Indian food and its culture are the core factors for popularization of ready to eat foods. Retail outlet culture is now growing rapidly in India. Shelf life of these foods is at least 12-18 months. Quality, Taste and Flavor of these foods remains as good as fresh up to the expiry date. More working bachelors staying away from homes. Cost effective in comparison to the Indian cuisine served by the restaurants in foreign countries.

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Motivation for the Study

According to ITC press release on March 2008, Indian RTE market is worth around Rs 80100 crore. The market is somewhat in a stagnant state and the growth is minimal. According to reports by CNBC-TV18, despite gradual duty cuts on Ready to Eat and instant mixes the sector is not doing well and growth is minimal. The concept behind RTE is that urban families are strapped for time and will definitely buy RTE packs to save on cooking time however this doesnt seem to be so because in India people still prefer food cooked and served piping hot by someone else or themselves so people hire cooks instead of buying RTE packs. Hence, this study was undertaken to understand the psyche behind consumers and what factors goes into influencing their buying decision making. This is a dilemma faced by marketers of Ready to eat Industry. Marketing being very close to my heart and strategic marketing is my passion and hence I took up this study to understand the problems that marketers face and what are the different mean which can prove strategically beneficial in overcoming these hurdles.

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Chapter-2

COMPANY PROFILE

ITC is one of India's foremost private sector companies with a market capitalization of over US $ 30 billion and a turnover of US $ 6 billion.* ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its

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nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd, provides IT services and solutions to leading global customers. ITC Infotech has carved a niche for itself by addressing customer challenges through innovative IT solutions. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating.

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ITC employs over 26,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3,96,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value, for the Nation, for the Shareholders.

Vision and Mission

Sustain ITC's position as one of India's most valuable corporations through world class performance, creating growing value for the Indian economy and the Companys stakeholders. To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.

Core values of ITC:

ITC's Core Values are aimed at developing a customer-focused, high-performance organization which creates value for all its stakeholders:

Trusteeship:
As professional managers, we are conscious that ITC has been given to us in "trust" by all our stakeholders. We will actualize stakeholder value and interest on a long term sustainable basis. Customer Focus: We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction. Respect For People: We are result oriented, setting high performance standards for ourselves as individuals and teams.

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We will simultaneously respect and value people and uphold humanness and human dignity. We acknowledge that every individual brings different perspectives and capabilities to the team and that a strong team is founded on a variety of perspectives. We want individuals to dream, value differences, create and experiment in pursuit of opportunities and achieve leadership through teamwork. Excellence: We do what is right, do it well and win. We will strive for excellence in whatever we do. Innovation: We will constantly pursue newer and better processes, products, services and management practices. Nation Orientation: We are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals, we will make no compromise in complying with applicable laws and regulations at all levels.

Definition and Purpose:

ITC defines Corporate Governance as a systemic process by which companies are directed and controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal resources, we believe that the governance process should ensure that these companies are managed in a manner that meets stakeholders aspirations and societal expectations.

Core Principles:
ITC's Corporate Governance initiative is based on two core principles. These are : i. Management must have the executive freedom to drive the enterprise forward without undue restraints; and

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ii.

This freedom of management should be exercised within a framework of effective accountability. ITC believes that any meaningful policy on Corporate Governance must provide empowerment to the executive management of the Company, and simultaneously create a mechanism of checks and balances which ensures that the decision making powers vested in the executive management is not only not misused, but is used with care and responsibility to meet stakeholder aspirations and societal expectations.

ITCs RTE Products Portfolio: ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and staples segments with the launch of the brands Mint-O and Candyman confectionery and Aashirvaad atta (wheat flour). 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC's entered the fast growing branded snacks category with Bingo! in 2007. In just six years, the Foods business has grown to a significant size with over 150 differentiated products under six distinctive brands, with an enviable distribution reach, a rapidly growing market share and a solid market standing.

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KITCHENS OF INDIA Ready To Eat Products from Kitchens of India Keeping alive long forgotten culinary traditions, Kitchens of India presents its range of ready-to-eat cuisines. Each one of these legendary delicacies has been created by the Master Chefs of ITC Hotels, following rare, closely guarded recipes, handed down through the ages, from one generation to the next. These delicacies are now available in imported 4layer retort pouches that keep them fresh for as long as 24 months (Vegetarian) & 12 months (Non Vegetarian and Desserts) from the date of packaging. Bukhara Bukhara, a village in Uzbekistan, was a meeting place for the traders from Asia and Europe. It was also a spot on the fabled Silk Route, a passage commonly used by traders, scholars and nomads. It was on this route that the unique Bukhara style of cooking was born. The Master Chefs of ITC Hotels have whipped up the delectable bite into history with this cuisine from the North-West Frontier Province with a masterpiece like Dal Bukhara.

Dal Bukhara Dal Bukhara is an exquisite culinary treat made from Whole Black Lentils simmered with prized Indian Spices over a coal fire, for long hours on end. Dum Pukht The art of Dum cooking (cooked in its own juices) traces its origin to the times of the Nawabs of Awadh who ruled the Northern Provinces of India during the 18th century. Kitchens of India has currently introduced Mirch Ka Salan in this range.

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Mirch Ka Salan An extravagant delicacy made from succulent green chillies, delicately cooked in a thick gravy of roasted peanuts, almonds and sesame seeds.

Mughlai Paneer Fresh cubes of Paneer prepared with khus-khus, ground watermelon seeds and fine onion paste, spiced with coriander leaves and cardamom powder. Dakshin This cuisine reflects the tradition and culture of the southern Indian peninsula. Kitchens of India offers you Chicken Chettinad and Chicken Stew.

Chicken Chettinad Succulent chunks of tender chicken in a dark, spicy paste of curry leaves and freshly ground pepper. Showcasing the distinctive tastes and fragrances of the South.

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Malabari Chicken Stew Tender nuggets of chicken in a mild, coconut gravy. Gharana A pan-Indian cuisine specially created by ITCs Hotels Master Chefs.

Paneer Darbari Soft, fresh and juicy cubes of cottage cheese simmered in an aromatic tomato gravy to create an unforgettable delicacy.

Chicken Darbari
A superb blend of juicy and tender chicken chunks in an aromatic tomato gravy, laced with butter. Murgh Methi Discover the delights of Nawabi cuisine in every serving of Murgh Methi. Tender chunks of chicken, spiced mildly, and simmered for long hours in a gravy of green coriander and fenugreek.

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Paneer Malai Fresh chunks of Paneer, sauted with onions and green peppers, immersed in a creamy tomato sauce. :: 'Kitchens of India' Biryanis By far, one of the most popular delights from the Kitchens of India spectrum, these have been masterfully blended by the Master Chefs following ancient and authentic recipes. These absolutely irresistible dishes have been skillfully cooked under precision and a knack of adding just the right amount of fragrant spices in just the right proportions, so that you can savour the Biryanis exactly as they were meant to be.

Noormahal Biryani Minced tender chicken koftas slow-cooked with saffron flavoured Basmati Rice. From the Royal kitchens of India.

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Bohri Biryani Delicately spiced chicken layered in Basmati Rice, enhanced with exotic dry fruits. A feast fit for the kings.

Yakhni Pulao Succulent chicken chunks marinated in creamy yogurt and cooked in saffron flavoured Basmati rice.

Hyderabadi Mutton Biryani Delicious mutton pieces cooked to perfection with cinnamon flavoured Basmati rice form this Nawabi extravaganza. :: 'Kitchens of India' Desserts Kitchens of India royal, authentic Indian Desserts is the perfect way to make any occasion a celebration. A grand finale to a perfect meal. The Master Chefs of Kitchens of India bring to you a uniquely packaged range of royal desserts prepared from the finest of ingredients. Go ahead, re-live the royal experiences.

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Jodhpuri Moong Dal Halwa This Rajasthani delicacy made from split Moong dal and a generous mix of dry fruits, is served only during the choicest of occasions. Each ingredient is blended with the other in the right proportions by our Master Chefs, to give your taste buds a royal treat after a gourmet meal.

Hazoori Petha Halwa This dessert, perfected in the royal kitchens of Agra is prepared with fresh, grated petha cooked in ghee. Simmered to perfection with milk and khoya, and garnished with raisins, the distinctive flavours of this halwa make it the perfect dessert for any occasion. The Ready-To-Eat range also comprises eleven more dishes and two Combo packs. The dishes on offer currently are Rajma Masala, Navratan Korma, Dal Makhani, Aloo Mutter, Palak Paneer, Pindi Chana, Pav Bhaji, Mutter Paneer, Yellow Dal Tadka, Pongal and Gajar Ka Halwa. Rajma Masala & Basmati Rice and Yellow Dal Tadka & Basmati Rice are available in Combo packs.The unique packaging form, using a retort process, ensures that the original freshness and taste of the recipes is protected without the use of preservatives.

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The history of MTR Foods backs to 1924, when the Maiya family started a small restaurant in Bangalore. In 1951 the restaurant came to be known as Mavalli Tiffin Room as it was situated in the area called Mavalli. It is famous for the owners passion for perfection and the super quality of its south Indian cuisine. The legacy of purity and perfection continues at the eatery, now called MTR restaurant. MTR Foods Ltd is amongst the top five processed food manufacturers in India. We manufacture, market and export a wide range of packaged foods to global market that include USA, UK, Australia, New Zealand, Malaysia, Singapore, UAE, and Oman. MTR is very proud of rich heritage, their tradition of food and hospitality began in 1924 with the establishment of the Mavalli Tiffin Room by the Maiya family in Bangalore, India. This restaurant is a city landmark today people still stand in a quee to savour its unique, completely authentic dishes. Culinary secrets have been protected and handed down over the generation and their food is based on truly authentic recipes from their region of origin. MTRs journey to Indias premier, processed food company has been marked by innovation and the adoption of new technology, every MTR product will be always embody of tradition of unmatched taste, purity and quality.

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MTR The Trusted House Hold Name

100% Natural MTR products are 100% natural do not contains preservatives and use only the finest, most authentic ingredients.

Unparalleled Taste and Flavor Every sector of food divisions Instant mix, Ready to eat Dish, Pickles or Soups, Ice creams all MTR products are known for their mouth watering Home-cooked taste. Uncompromising Quality MTR is ISO 22000 and HACCP certified company. It maintains quality standards from sourcing ingredients to processing and packaging. Technology It uses the latest technology to preserve the quality standards from sourcing ingredients to processing and packaging. Use of Technology award from Defense Food Research Laboratory for Ready to eat products has won the Presidents award. Vegetarianism All MTR products are 100% vegetarian. Mission The mission of the company is to provide authentic Indian food experience to the consumers across the world. Vision The vision of the company is to grow profitably to be 100 million dollar company by 2010 and to be among the top 5 processed food brand in and from India.

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Strategy In terms of principles Launch all products under MTR market branch. Operate only in categories in a market where MTR is among top three plays in that category. Operate only in value added foods market. When commodity driven processed foods market like teal oils. Sell only vegetarian products under MTR branch. Set industry standard for hygiene and Food safety. Us the route of organic growth as well as acquisitions.

Quality Policy MTR is an ISO 22000 and HACCP certified company. At MTR Quality is a way of life, Hazard analysis and critical control point (HACCP), developed by the Codex alimenturious commission is a global food safety standard. MTR has successfully met the stringent requirements for this certification. Our facilities are equipped with the latest systems. MTR Foods Pvt Ltd is committed manufacturing and marketing food products of high quality, hygienically processed. Using state of the art technology with the following objectives Creation of the MTR brand synonymous with quality and food safety. Continuous improvement by total committed participation by all. Satisfying the changing needs of consumers for total delight.

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MTR Products Profile: Soups, Ready To Eat, Frozen Foods, Rice Meals, Spice Powders, Instant Sweet Mixes, Instant Snack Mixes, Ice Cream Mixes, Masala Powders, Chips & Crispies, Vermicelli, Papads, Pickles, Ice Creams. Soups - Babycorn & Spring Onion, Spicy Tomato, Mixed Vegetable, Simply Tomato, Mulligatawny, Spinach & Carrot. Ready To Eat - South Indian, North Indian, Snacks etc. Frozen Foods - Combo Meals, snacks, Parathas etc. Rice Meals - Bisibele Bhath, Rajma Chawal, Diet Delite, Rasam Rice, Jeera Rice, Sambar Rice, Lemon Rice, Tamarind Rice, Masala Rice, Tomato Rice. Spice Powders - Turmeric Chilli, Coriander Jeera, Black Pepper. Instant Sweet Mixes - Gulab Jamun, Badam Burfi, Badam Feast, Chocolate Burfi, Kaju Burfi, Vanilla Burfi, Vermicelli Payasam. Masala Powders - Instant Sambar Mix Sambar Powder, Instant Rasam Mix Rasam Powder, Madras Sambar Powder, Madras Rasam Powder, Pav Bhaji, Potato Sagu, Pulao Puliogare, Chutney Powder, Bisibele Bhath, Vangibhath.

Products Portfolio: Some of the most popular RTE products of MTR are briefly discussed as follows: Avival: Mixed vegetables cooked in a hearty coconut sauce a traditional delight from Kerala. Kesaribhath: Cream of wheat cooked with nuts and flavored with saffron to make a divine dessert. Kharabhath: Cream of wheat cooked with vegetables and aromatic Indian spices to make a delicious, light savory.

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Pongal: A delectable combination of lentils and rice, seasoned with peppercorns and other spices.

Alu Muttar: Baby potatoes and green peas in a delectable curry. Pav Bhaji: A rich combination of potatoes and vegetables cooked in the popular Mumbai style.

Vegetable Pulao: A delicious, wholesome medley of rice, vegetables and spices.

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Chapter-3 OBJECTIVES OF THE STUDY

To study the market penetration of Ready-To Eat food. To study the consumer perception of Ready-To-Eat foods. To identify the buying pattern of Ready-To-Eat (RTE) packs. To identify the factors influencing buyer behavior of RTE packs.

Research Problem
This Study deals with the Ready to eat Industry in India. The study also aims at understanding the factors influencing buying decision making of the RTE products. The factors under consideration are advertising, price, Product, Value proposition etc.

Scope of the Study

The project is a study of the factors affecting consumer buying behavior of Ready to Eat Meals in India. The study is undertaken to understand all the negative and positive perceptions about the Ready to Eat products. In the study I have highlighted the following points: Percentage of people aware about RTE & have purchased it; Percentage of people buying an RTE product on monthly basis vs. emergency basis; Critical areas where communication is required to draw a change in the perception/attitude of customers towards RTE segment; SOPs for preferring RTE products by the people as an option when needed;
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Range of

ITC and MTRs RTE products available in the market

and their

awareness amongst the people; Comparative analysis of ITC and MTR products (RTE) on the basis of certain parameters i.e.; taste & preferences, price, quality, availability etc.

Limitations of the Study

For a generic study like this where the consumers are spread across a wide area of Delhi and shortage of time, the sample size taken was very limited i.e. 60. Lack of firsthand knowledge of conducting research.

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Chapter-4 REVIEW OF LITERATURE

The ready to eat meal industry consists of two categories, frozen ready meals and canned ready meals. The market for ready meals in India increased at a compound annual growth rate of 13.7% between 2003 and 2008.The canned ready meals category led the ready meals market in India, accounting for a share of 60.3%. Leading players in Indian ready meals market include ITC Limited, Al Kabeer Group of Companies and Orkla Foods. The ready to eat foods have gained momentum in Urban India where even women are working and there is time crunch to cook. The market for RTE industry is NRIs and bachelors. The Indian food processing industry has changed considerably in recent years to adapt to the demands and lifestyles of domestic consumers, particularly the growing middle class. This is also due to the rapid expansion of the retail distribution system replacing mall stores and wet markets with modern supermarkets, superstores and convenience stores. Dairy products, deli products, snack foods, ready-to-eat and ready-to-prepare meals are currently the most rapid growth product categories in the domestic market.

The current scenario

The ready-to-eat (RTE) market in India, currently estimated at Rs. 128 crore (2006) is expected to expand to reach Rs. 2,900 crore by 2015, according to an analysis done by Tata Strategic Management Group (TSMG). The report also highlights that the RTE market in India has remained under-penetrated owing to factors such as consumers penchant for freshness, low affordability and the Indian housewifes preference for home-cooked food. According to data in the reports, packaged foods in India have grown at about seven per cent a year between 2000 and 2005, with RTE foods being the fastest-growing, at a CAGR

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of 73 per cent. the factors contributing to the growth would be changes like cold chain development, disintermediation, streamlining of taxation, economies of scale on the supply side, coupled with increasing disposable incomes, diminishing culinary skills and the need for convenience on the demand side.

Market
There is a huge untapped market opportunity arising due to rapid demographic shifts in income, urbanization, and proportion of urban working women in India. The industry needs to concentrate on broadening the market and increasing penetration amongst Indian consumers. The analysis also pointed out that industry players would have to significantly improve their price competitiveness with respect to other options such as domestic help, eating out and ordering in, available to the Indian consumer. Besides price consideration, the product range offered by industry players will have to be strengthened. Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organization. Apart from being known for its dairy products, Amul has ventured into the ready-to-eat industry and includes Processed Cheese, Pure Ghee, Shrikhand, Nutramul and Mithaee Gulab Jamuns among its offerings. The traditional Indian Sweet-Maker from a small set up has transformed into a full fledged processing food industry and taking its wares beyond the domestic frontiers to the Western World. Offers packaged Bhel puri chats such as Sev Puri, Chana Masala, Samosa, Pakoras, Alu Tikki, Pao Bhaji, Gol Gappa, Dhokla among others Aashirvaad and Kitchens of India products from the ITC stable of India include a wide assortment of ready to cook foods and dishes ranging from Bukhara (Uzbek recepie) to Murgh Methi and other exoctic cuisines and includes "regular" Biryanis, Curry Pastes and dishes. ITC's Flagship brand 'Kitchens of India ' has begun to carry this exotic taste of Indian cuisine beyond the shores of India . Connoisseurs of Indian food in the US, UK, Switzerland, Bhutan, Bangladesh, Hongkong, Tanzania, Canada and Australia now have the opportunity to taste these delicious recipes.

AMUL

HALDIRAM S

ITC

KITCHENS OF INDIA

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Amongst the top five processed food manufacturers in India, the company claims to "market and export a wide range of packaged foods to global markets" that include USA, UK, Australia, New Zealand, MTR Malaysia, Singapore, UAE and Oman. MTR foods currently comprises twenty-two delicious and completely authentic Indian curries, gravies and rice. Recently, on Aug 1, 2008, ITC Foods has drawn up plans to extend its Kitchen of India brand to frozen foods. ITCs Branded Packaged Foods business continues to expand with sales growing by 23% over the previous year. Apart from the development costs of new products, the business has had to contend with the recent economic slowdown and severe cost increases in input commodities including wheat, vegetable oil, maize and skimmed milk powder, in addition to the soaring fuel prices. Having acquired reasonable scale in a relatively short span of time, the business is progressively focusing on consolidating the portfolio in certain categories, improving market servicing and driving supply chain efficiencies. As per the latest data the market share of these major players of RTE industry has been segregated as:

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The retort processed foods do not require rehydration or cooking and can be consumed straight from the pouch with or without pre-warming, depending upon the requirement of the users and the weather conditions. These foods meet the specific needs of convenience, nutritional adequacy, shelf stability, storage, distribution to the centers and have become very popular after the year 2002. Some of the mouthwatering dishes in retort pouches include sooji halwa, upma, chicken curry, mutton curry, fish curry, chicken madras, chicken kurma, rajma masala, palak paneer, dal makhnil, mutter paneer, potato-peas, mutter mushroom, vegetable pulav chicken pulav, and mutton pulav, etc. The pioneer introduction of retorting technology has made the sale of Ready-to-Eat food products commercially viable with great taste.

Under-serviced
At the moment, the regional cuisine and non-vegetarian cuisine markets are relatively under-serviced with concentration on the vegetarian North Indian meals. Pankaj Gupta, Practice Head-Consumer & Retail, Tata Strategic, said, According to our analysis, India provides an attractive opportunity for both Indian and international players with a mix of demand and supply side changes. If consumer demands of affordability, availability and enhancing acceptability are met, the RTE foods market has the potential market size of 2,900 crore by 2015 from its existing Rs. 128 crore.

Challenges
The Rs 130 crore markets have stayed stagnant over the past three years. That's because in India people still believe in cooking and serving food. Additionally, The RTE foods have to compete with restaurants, cooks and consumers penchant for cooking. Over and above, the pricing is higher range which has made it an occasional purchase item rather than regular buying.

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CHAPTER-5 RESEARCH METHODOLOGY RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to research purpose with economy procedure. Research design is the conceptual structure within which research is conducted. There are three types of research design. The research design adopted here is descriptive. I have made use of secondary data collection and also primary data collection. Steps in the research: Collection of data pertaining to Ready to eat market and identifying the research problem; Collection of data from secondary data related to the research problem; Primary data collection using Questionnaire targeting a sample size of 60 people.

Data collection Methodology: The sources of data used in this project report are both primary and secondary data. Primary data Primary data consists of original information gathered for specific purposes at hand. These are gathered for a specific purpose or for a specific research project. Primary data was collected online as well as manually. A survey questionnaire was made on Google Documents and the link was mailed to the sample. Additionally, to the sample that were not net savvy printouts of the questionnaire was distributed and the result was compiled.

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Secondary data Secondary data consists of information that already exist and that were being collected in the past for some other purposes. Secondary data used in this study were collected from external sources like books, blogs, wiki etc. Some websites which were really helpful are www.slideshare.com, www.scribd.com. Sample design The sampling technique used for survey was a non-probabilistic convenience sampling. The sample size was chosen keeping in mind the target market for RTE segment, Hostel/paying guest, Individuals working & living in nuclear families and bachelors between the age group of 18-40. Tools & Techniques Data was collected with the help of questionnaire. The questionnaire is of structured nondisguised type. The questions are of mixed type. It can be found in the Annexure. For online survey, questionnaire was prepared using third party tool (www.docs.google.com), email for filling questionnaire was send to potential respondent and response was collected on the third party site on which questionnaire was prepared. The third party tool made data reliable owing to the self-reported demographic attributes of the respondents.

Sample Size The total number of respondents was 60 of the total 102 approached. The age group in which the sample lied is 18-40.The occupation of this sample size was a healthy mix of self employed individuals, working people and students. The respondents included 17 people from Hostel/Paying guest which form a large chunk of the target market for RTE foods.

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CHAPTER-6 RESULTS AND FINDINGS

1. Given a normal week, Meals are cooked at home
Particulars Someday All days Week days Week ends Never %age 0% 66% 15% 7% 12%

Given a Normal Week, Meals (i.e. Lunch & Dinner) Are Cooked At Home
7% 15% 66% 12%0% Someday All Days Week Days Week Ends Never

INTERPRETATION:

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The pie chart below depicts a typical Indian household mentality of cooking food at home almost on all days (66% of respondents). It was followed by 15 % of respondents cooking on week days.

2.

On days when meals are not cooked at home, how do you Manage? Particulars We pick up a ready to eat packet We order food from a restaurant We visit a Restaurant Respondents 12 34 29

We visit a Restaurant We order food from a restaurant We pick up a ready to eat packet 0 10 12

29

34

20

30

40

Interpretation:

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When the meals are not cooked at home the most favorable option that consumers feel is ordering food from the restaurant. The percentages here might add up to more than 100 as respondents were allowed to chose more than one option.

3.

Have you heard about RTE meals?

Yes No

Interpretation As it can be seen from the above pie chart the sample was aware of the RTE packs hence the responses were fair and true to their experience.

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4.

Have you ever purchased Ready to Eat Meals? Particulars Yes No %age 87% 13%

Have You Ever Purchased Ready To Eat Meals?

Yes
13%

No

87%

INTERPRETATION 87% of the respondents have used the RTE meals and have given their rating based on their usage and their experience. From this we can conclude that RTE has penetrated sufficiently in the Indian Urban market.

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5.

You picked up Ready to eat pick Particulars While shopping for monthly grocery items Separetely during emergency %age 68% 32%

You Picked Up Ready to Eat Pack

While shopping for Monthly Grocery items Separately during Emergency
32%

68%

INTERPRETATION: 68% of the respondents said that RTE packs are part of their monthly grocery shopping and not emergency purchase. Even for emergency purchase the 32% is quite a huge number. Kindly take note that the sample for this question are the one who has purchased RTE packs as seen in the previous question.

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6.

How did you come to know about the ready to eat? Particulars TV Commercials Word of Mouth Display at Malls Other No. of Respondent 31 9 27 0

0 Display at Malls 9 TV Commercials 0 10 20 31 30 40 27

INTERPREATATION Majority i.e. 31% of people come to know about RTE products through TV commercials followed by displays at different malls i.e. 27%

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A Ready to Eat Pack saves lot of time and effort in cooking (all figures in %):

Strongly Agree Agree Neither Agree or Disagree Disagree Strongly Disagree

14 42 04 00 00

INTERPRETATION: The above graph shows that the ready eat food products save lot of time and efforts in cooking.

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A pack of Ready to eat has sufficient quantity (all figures in %):

Strongly Agree Agree Neither Agree or Disagree Disagree Strongly Disagree

04 25 13 15 03

Interpretation: Most of the respondents agree that the pack of ready eat food products have sufficient quantity that satisfied the person.

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A Ready to Eat pack is easily available whenever I need it (all figures in %): Strongly Agree Agree Neither Agree Disagree Disagree Strongly Disagree 16 31 or 10 03 0

INTERPRETATION: Most of the respondents agree that the pack of ready eat food products are available everywhere

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I dont see any sort of health problem due to the consumption of RTE:

Strongly Agree Agree Neither Agree Disagree Disagree Strongly Disagree

02 13 or 22 19 04

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INTERPRETATION: Most of the respondents agree that the pack of ready eat food products have sufficient quantity that satisfied the person.

I think a Ready to Eat (RTE) is value for money (all figures in %): Strongly Agree Agree Neither Agree or Disagree Disagree Strongly Disagree 01 20 25 09 05

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INTERPRETATION: Most of the respondents neither agree or disagree that ready eat food product value for money.

I think The RTE meal is not tasty as freshly cooked food (all figures in %):

Strongly Agree Agree Neither Agree or Disagree Disagree Strongly Disagree

14 27 11 06 02

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Interpretation: Most of the respondent agrees that RTE meal is not tasty as freshly cooked food.

I will surely use RTE curry if ready to eat rotis are also made available (all figures in %):

Strongly Agree Agree Neither Agree Disagree Disagree Strongly Disagree

02 17 or 15 18 08

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Interpretation: The above graph shows that most of the respondent are disagree if ready to eat rotis are also made available

I know that RTE packs are manufactured at best quality standards (all figures in %):

Strongly Agree Agree Neither Agree Disagree Disagree Strongly Disagree

02 17 or 33 06 02

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INTERPRETATION: Most of the respondents neither agree or disagree with above statement that RTE packs are manufactured at best quality standards

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Consumer prefer a brand because of the taste Because of the advertisement Schemes Easy availability in the market Attractive packaging Status symbols Rate according to the quality.

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CHAPTER-7 FINDINGS
56 respondents i.e. 93 % of respondents believe that RTE meals are a time saving option for cooking. The marketers should use this as their USP to the advertising and positioning should be done on these lines. Only 29 respondents feel that RTE packs have enough quantity and 18 feel they dont and the rest have no opinion on this matter. Its a mixed reaction and response. The general conclusion that can be drawn is that people dont feel the quantity is enough for the money they are spending. Some verbatim to support Quantity should be good. 47 respondents i.e. 78 % of the respondents feel that the RTE packs are easily available when needed. This shows the commendable distribution network established by RTE marketers. 23 respondents feel that RTE packs are not good for health while only 15 respondents feel otherwise which is concerning statistics for the RTE companies. When a product is considered harmful for health its reliability decreases and brand value loses. Same is the case for RTE. This could be one of the reasons why in spite of efforts taken by companies the growth in RTE segment is stagnant. Well, this is very critical factors as lot of respondents commented one the health factor of RTE. Some Verbatim to support this, Ready-to-eat meals, though a time-saving option, are sometimes viewed with suspicion by many because of the usual concerns associated with packaged food., If the manufacturers can repose confidence by eliminating all doubts in the consumers' minds and assure them that these products are not a health hazard, then the consumption may increase, Should have more nutritional values, use of less preservatives, MEALS contains lots of unsaturated fats. 21 respondents feel that RTE packs are value for money while only 14 people feel they are not while the rest 25 respondents did not agree on either. Some verbatim to support the observation, although they are good enough for eating but they are make it more Healthy...RTE

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almost on oar sometimes costlier than food from restaurants with respect to price. So it doesnt make sense to me. 41 respondents feel that RTE meals are not tasty as homemade meals and only 8 people feel otherwise. This depicts unique characteristics of Indian household which always believes that homemade foods are more tasty and nutritious. As the results suggest 38 people are not sure whether ready to eat meals are manufactured under best quality standards. If the manufacturers can repose confidence by eliminating all doubts in the consumers' minds and assure them that these products are not a health hazard, then the consumption may increase.

Do you remember any of the Ready to Eat brands? Maggi was the most mentioned name. It has top of the mind recall. The other mentioned names were MTR, ITC, Top ramen, Gits, Haldiram, Chings ready to eat Chinese dishes, Knor soup ACT popcorn etc. *When we asked the respondent to rate between ITC and MTR on an average, maximum credits were given to MTR i.e. 9, while ITC managed to get only 7 points out of the ratings of 10 based on multiple parameters viz. taste, brand recognition, past experience, advertisement, Childrens preference and availability.

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Conclusion and Recommendations

CONCLUSIONS
On the basis of findings made, we can safely conclude that: Price- Indian consumers are highly price sensitive. For any new product they judge the product based on their price and more or less the repeat purchases are impacted by price factor. Same is the case with Ready to Eat foods. More over ITC and MTR products are closely priced, yet the demand for the same can be increased amongst the mass by reducing the prices; Value proposition RTE foods should be perceived as a value proposition by customers. Value proposition means it should be able to save lot of time and money with sufficient quantity to act as a full meal. Value for money - Consumers should perceive RTE packs as Value for money i.e. they should feel the money they spent on it is well spent and not wasted. This is where repeat buying can be induced. If consumers see RTE as a Value for money option they wont look for other options like ordering from restaurant or going to a restaurant. Quantity and taste of food - Indians are voracious eaters and the family size is also large. And Indians are used to eating a 3 full course meal on any day. Hence the quantity packaged in the RTE packs should be sufficient. And that is where the buying decision will come into play if the quantity is insufficient to fulfill the entire family then defiantly they wont consider buying it again. The food should also tickle the taste buds of consumers. As per the taste is concerned Maggie dominates the market followed by MTR and then ITC in RTE segment. Easy availability - The biggest competitor for RTE foods are restaurants which are easily available geographically and accessible with the option of doorstep delivery. Hence RTE has to be made available in such way that it can be easily accessible by the consumers during normal shopping as well as during emergencies. While
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conducting the research it came to the notice that MTR products are readily available in the market, where as ITCs Products are scarcely distributed in the market. Branding: Although almost respondents were aware of the RTE products, but when they were asked to recall some popular brands, they could not mention any other name except Maggie. So, branding and abundant awareness generating efforts should be taken by these companies to broaden their target market, Past Experience: It was a crucial parameter in judging the respondents preference towards prominent brand like ITC and MTR. Altough MTR managed to get some favorable responses but some respondent had a tough experience with ITC products. Childrens Preference: When it comes to make the decision as to which brand should be bought, the decision rests upon the children and it was found that majority of households purchases the brand demanded by the children. And their demand is largely guided by catchy advertisements shown on the TV.

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RECOMMENDATIONS

As per my study the following recommendations could be utilized by the companys manufacturing and marketing Ready to Eat Meals: As is seen from the survey the major concern for consumers is the health aspect. They have a perception that these RTE meals are not manufactured under good conditions. Secondly, they also feel that Ready to eat meals is not good for health. Hence marketers have to touch upon this point. The advertising, communication and promotion should revolve around this point. Packaged foods are relatively new to India hence proper awareness have to be created by companies. Indian Households are averse to outside food and they feel only home cooked food can provide the taste and quality. This is a big hurdle for the RTE industry and the efforts should be taken to improve the quality of the food by using better manufacturing, and packing methods. 41 respondents feel that RTE meals are not tasty as homemade meals and only 8 people feel otherwise. This is states that need to be changed. The ready to Eat marketers should bank upon its strengths i.e. time saving, effort saving and easily available option. The promotion, Packaging should revolve around these characteristics as we all know in the traditional Indian urban family time is less. People crave to spend time with their family after hard day at work. However, various limitations like cooking food etc hamper this. RTE should consider this as their positioning strategy. The pricing strategy should be designed in such a way so as to be competent with the restaurants rate. People do not mind spending more if it saves time. However they will spend only a reasonable hike in price. If there is a lot of difference between the restaurant price and RTE price they would go for the former. In the previous section its is seen that the consumers came to know about RTE packs from Television Ads and display at malls and the word of mouth was virtually nil. This proves that two promotion methodologies were very effective. The third and the
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most important as far is food products is concerned word of mouth is where marketers should work on. This can only happen if the consumers are satisfied with their experience and will they give a positive word of mouth feedback to their relatives and friends. This is the most effective form of communication when it comes to something edible as Indian consumers tend to trust people who have already sued it rather than advertisement. As per the research conducted and results obtained ITC has been knocked out by MTR as taste was concerned. Majority of people mentioned that MTR products are tastier than ITCs products. Therefore ITC must improve its product taste to maintain its dominance in the market. ITC should redesign its marketing strategy and should ensure adequate availability of its products in the market as it was found during the research that they are not available on demand; ITC must design some attractive advertisement especially targeting the children in order to increase the demand for their products in the market.

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BIBLIOGRAPHY BOOKS Kothari, C.R, Research Methodology, Second Edition, New Delhi, Wishwa Prakashan, 1990 WEB-RESOURCES http://www.statusa.gov/mrd_a.nsf/vwNoteIDLookup/NT0003CA62/$File/X_413629.PDF? OpenElement http://www.tsmg.com/media-and-press-releases/219-ready-to-eat-foods-market-inindia.html http://www.indianfoodindustry.net/ http://www.thehindu.com/2007/10/24/stories/2007102454651900.htm http://www.oppapers.com/essays/Ready-To-Eat-Food-Industry/198352 http://www.hinduonnet.com/thehindu/mp/2004/06/10/stories/2004061000130300.htm http://www.thehindubusinessline.com/2003/11/24/stories/2003112400740300.htm http://www.marketresearch.com/product/display.asp?productid=2552630&SID=63229650463567436-409318558 www.marketresearch.com www.hindubusinessline.com www.marketingpractice.blogspot.com www.garamchai.com Other References Market Research Report, Ministry of food processing Industries CS Market Research Report, Food additives, India

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Annexure Dear Respondents, Hello, I Am Monika from B.B.A-3 rd. I am preparing a survey on Consumer Preference Towards Ready to Eat Food in Ludhiana City. Kindly help me in my Research by filling the questionnaire. Name: Contact Number: Address: Gender Age Group Occupation MALE FEMALE

18-25

26-40 Service Self Employed Housewife Retired/Other

41-55

Above 55

1. Given a normal week, meals (i.e. lunch & dinner) are cooked at home for All Days Week Days Week Ends Never 2. On days when meals are not cooked at home, how do you manage? (Select more than one if applicable) Visit a Restaurant Order food from a restaurant Pick up a Ready To Eat Packet 3. Have you heard of Ready to Eat meals? YES NO

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4. Have you ever purchased Ready To Eat meals? YES NO

5. Do you remember any of the READY TO EAT brands? 1. __________ 2. _________ 3. _________ 4. __________

6. You picked up a Ready To Eat pack While shopping for monthly grocery items Separately during emergency 7. How did you come to know about the Ready To Eat Packs? one if applicable) TV Commercials Display At Malls Word Of Mouth Other Sources (Please Specify) _____________ 8. Kindly rate your opinion on the following parameters:STRON GLY AGREE A Ready To Eat Pack saves a lot of time and effort in cooking A pack of Ready to eat has sufficient quantity A Ready To Eat Pack is easily available whenever I need it I dont see any sort of health problem due to the consumption of RTE NEITHER AGREE/N OR DISAGRE E (Choose more than

AGREE

DISAGR EE

STRONGLY DISAGREE

(a) (b) (c)

(d)

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I think a RTE pack is (e) value for money I think the RTE meal is not as tasty as freshly (f) cooked food I know that the RTE Packs are manufactured (g) at best quality standards I will surely use more RTE Packs if ready to eat rotis are also made (h available 9. Rank the following reason behind choosing any brand? a) Taste e) Economical b) Advertisements c) Schemes d) Availability

10. Please ranks ITC & MTR ready to eat products on a scale of 1-10 as per following parameters are concerned: ITC MTR a) Taste b) Brand Value c) Past Experience d) Childrens Preferences e) Availability f) Brand Recognition (While Purchase) 11. Any suggestions or comments on Ready to Eat Meals:

12.

Which ready to eat food you prefer? (a) Vegetarian (b) Non-Vegetarian

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