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Ready to market In Indian context

Consumer Behavior

How RTE foods can be


marketed better in India?
Submitted by
Divya Ogoti
FT163020 sec B

Table of Contents
Introduction...............................................................................................2
Challenges in RTE sector in INDIA..............................................................3
Household penetration rate of home appliances in India in 2013.............4
How to surmount the challenges................................................................4
References.................................................................................................6

Ready to market In Indian context

Consumer Behavior

Introduction
Need is mother of invention. The ration that an army had to carry during war days had seen
many changes from the days of revolutionary wars to civil wars .During world war I the
armies had to carry huge ration of food that would last for longer durations. The army had
people from various geographies, cultures. Further the wars lasted for longer durations,
carrying large amounts of food in precarious conditions was a challenging task. Pentagon
(USA) realized that Army needed nutrition as well as variety to satiate their taste buds. And
also the weight of the food ration that an army needed to carry was to be reduced. This
need led to the inception of MRE- Meal, Ready eat which was prepared by the food
processing and packaging technologies available in those days. Then the commercial
potential of the MRE was realized and Ready to eat products made a foray into market
place.
RTE products were introduced in India in 1987, but the concept was not well received and it
was a failure. But in recent times RTE food market has recorded a decent growth in demand
.Many reputed market research organization predict huge growth in this sector in coming
years. According to India Ready-to-eat Food Market Forecast & Opportunities,
2019, the Indian RTE food market is projected to grow at a CAGR of 21.99% during 201419. Ready-To-Eat (RTE) foods market in India is currently worth Rs. 130Cr. And it is
expected to further expand to Rs 2900 Cr. by 2015(Tata Strategic Management Group).
The several reasons which have or would contribute to the growth of RTE food markets in
India are enumerated below:

Development in food processing and packaging technologies


Cold chain and storage technology developments
Increasing population of white collar employees and appreciable growth of women
employees.
Increasing salaries and decreasing time
Diminishing number of joint families and increase in number of nuclear families
where both husband and wife are employed.
Disintermediation
Increasing expectations of convenience and ease of making of food
Diminishing culinary skills
Growing Modern trade

Realizing the growth potential, the Indian companies operating in this sector are:
Public Companies
1.ADF Foods Ltd.
2. ITC Ltd.
3. Kohinoor Foods Ltd.
4. Vadilal Industries Ltd.
5. Venkys India Ltd.

Private Companies
1. Aakriti Foods Pvt. Ltd.
2. Gits Food Products Pvt. Ltd.
3. Godrej Tyson Foods Ltd.
4. Haldiram Manufacturing Company Pvt.
Ltd.
5. Ushodaya Enterprises Pvt. Ltd.
6. MTR Foods Pvt. Ltd.
7. Veetee Fine Foods Ltd

Ready to market In Indian context

Consumer Behavior

Challenges in RTE sector in INDIA

Cultural dimension: Indians are emotionally associated with food. Statements such
as Maa ke haath ka khana , maa ke haath ke laddu explain volumes about the
emotional connect that people have with their food. Mothers care and love are
missing in RTE/RTC and this does not appeal to majority of Indians. Mothers take lot
of pride in cooking and serving nutritious and sumptuous meals to their family and
RTE steals away from them this sense of pride. This attitude refrains people from
buying RTE products

Threat of Substitute is high in RTE sector


o

India is a country of a huge unemployed population. It is easy and economical


to hire a maid/cook who would prepare food at home at ones convenience
rather buying ready to eat meals. Indians believe that food cooked at home is
healthy and safe .Thereby they would rather prefer hiring a cook than buying
RTE packets.

Restaurants, take away facilities and home delivery of food give stiff
competition to RTE products. Websites such as food panda, android aps make
ordering food at home an easy task. Indian would always prefer food which
they believe is cooked freshly rather the food which was cooked long back and
has preservatives to keep it fresh.

Growing health awareness: RTE products are seen with lots of skepticism. The
general belief is that they are unhealthy as they are cooked on an earlier date and
have preservatives which are detrimental to human health. With incidents like
Maggi, this belief is further reinforced in the minds of an Indian consumer. A one
more important aspect is related to Freshness of the food.RTE foods are presumed
to be not fresh and therefore unsafe. Indians usually prefer to consume food on the
same day it is cooked. And also RTE/RTC products are considered to have high salt
content which is again an unhealthy characteristic of these food items

Quantity: The quantity offered in RTE/RTC packets is not sufficient to fill an empty
stomach. Consumer needs to buy more number of packet if he/she needs to have a
complete meal. This option would cost him/her more when compared to an option of
buying a food from decent restaurant.

Variety is the spice of the life and this is very true when it comes to Indian food
platter. There are plethora of varieties and cuisines to choose from. Indians are
spoilt for choices when it comes to food.RTE/RTC products have limited assortment.

Ready to market In Indian context

Consumer Behavior

India is an agrarian economy, raw materials for cooking are easily available
therefore Indians prefer cooking at home.

Demography divide could also explain the less popularity of RTE products among
consumers. Many people still dont have a refrigerator though it is no longer
considered as a luxury item. And a very small percentage of population owns a
microwave oven. Statics about the penetration of household items in India tells us
that majority of households do not have fridge. So once we open ready to eat or
ready to Cook (RTC) packets they need to be refrigerated and as many dont owe
one they usually dont buy RTC packet. And some of these items needs to be cooked
in microwave. Though some of RTC products have an option to cook in pressure
cooker, still a majority number of RTC baked items need a microwave.
Household penetration rate of home appliances in India in 2013

RTE/RTC is considered to be a product of modern trade. Most of the mom and pop
stores, kirana stores do not have these items on their shelves. So ease of buying is
less.

How to surmount the challenges


Theory of reasoned action model can be employed to bring about normative and
subjective changes in a consumer to bring about behavioral change in a person.
o Attitudinal changes: Through advertisements firms operating in RTE/RTC
sector should bring about a positive outlook about these products.
Characteristics like ease of making, time saving aspect, natural ingredients
and 0% preservatives used can be highlighted in ad to increase the consumer
base. Changing beliefs about these product is the key to the success.
o

Eliminate Negative cues: Many consumers are concerned about the impact on
health by consuming such products. The ads could be designed so as to show

Ready to market In Indian context

Consumer Behavior

that many people have found these products useful and healthy and majority
cannot be wrong. This would increase social compliance and increase in
buying behavior of these products.
By working on subjective norms, behavioral changes can be effectively brought about
in consumers.

Behavioral learning model states that consumers could be taught a certain


behavior.Via classical conditioning one can habituate reluctant consumers to buy
regularly. Small trial packets/free samples can be attached with other eatable
products ,once consumer is accustomed to taste and idea , free samples are no
longer needed.

India is a price sensitive nation. It is important that the quantity received at the set
price should be perceived as satisfactory. The pricing of these products can be
revisited by firms. To suit to the different consumer need, RTE packets should be
made available in different sizes and weights.

In one of the MC Cains ad we see Karishma Kapoor talking about a problem and
then solving it using MC Cain products. This approach could be extended to other
ranges of products as well. In this ad the focus was to solve a problem of making a
quick snacks. Working population has a problem of time. They are usually short of
time. The ads could be so designed to convey how RTE products solve this particular
consumer problem. The RTE/RTC items should be positioned as UTILITARIAN
products, giving it a hedonic appeal would refrain major chunk of population from
buying it.

Affect, emotions can be used to increase heart share. The ads could show the care
that is gone in making these packed foods. Many pickle ads show that pickles are
prepared as a mother would have prepared them. Some of them show mother
approving the product. Reminiscent ads which shows these food items smell and
taste reminds one of the mothers food

Creating experiences: People go to restaurant for experience. If it could be


successfully conveyed that by using wide range of these products one can create
similar experience at home ,it would do wonders for the product

Ready to cook has an advantage over RTE that, it gives the consumer the control of
end product. So more products to be deigned in such a way that consumer feels
that he/she has a role in cooking.

Additionally to all above suggestions, most importantly the firm needs to improve the
quality and range of product.

Using natural ingredients, natural preservatives and new technologies to be


employed for processing and preparing these packed food.

Unlike maggi not getting into any controversies and adhering to quality standards

Ready to market In Indian context

Consumer Behavior

Market research would help in identifying status quo and also future course of
actions. It could also help in identifying which new varieties to be introduced and
which all varieties can be removed from the shelves.

Distribution channel need to be concern of focus as well. Modern trade is restricted to


urban areas. Increasing the reach of these products to kirana stores by effective and
improved value chain is the need of the hour.

More products so as to be deigned that they can be easily made in a pressure cooker
or by just dipping the pouch in hot water bowl.

With proper marketing mix, positioning strategies and right advertisements RTE/RTC sector
can register high growth and substantial market share.

References
http://ssijmar.in/vol3no3/vol3%20no3.10.pdf
https://www.scribd.com/doc/54673928/A-Dissertation-on-Consumer-Buying-BehaviorTowards-the-Ready-to-Eat
http://articles.economictimes.indiatimes.com/2014-07-11/news/51354835_1_ruralhouseholds-rice-consumption-villages
http://www.statista.com/statistics/370635/household-penetration-home-appliances-india/
http://www.slideshare.net/ResearchOnIndia/ready-to-eat-market-in-india-2010-sample
https://www.linkedin.com/pulse/ready-eat-foods-marketing-better-way-india-samer-akhter
http://www.fnbnews.com/Top-News/Indias-ready-to-eat-sector-projected-to-grow-at-22between-14--19
http://timesofindia.indiatimes.com/life-style/food/food-reviews/A-7-question-ready-to-eatchallenge/articleshow/44746464.cms
http://www.tsmg.com/media-and-press-releases/219-ready-to-eat-foods-market-inindia.html