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Introduction

Britannia Industry, with a legacy of over 100 years, is one of India’s biggest food companies. It
is a top quality trusted brand that manufactures household products like Marigold, Tiger and
NutriChoice etc. Britannia is scattered around several segment portfolio including Biscuits,
Dairy products, Bread and Cakes. Britannia as a widespread distribution channel in India serving
5 million retail outlets. This has resulted in availability of Britannia products in more than half
the Indian households.
The Britannia is present in 60 countries in the world. It has good reach in Middle East, Europe,
Africa, North America and is a market leader in Nepal. ‘One new market a year’ Is the strategic
expansion plan for Britannia and the company is looking for widespread expansion in the coming
year.
Britannia believes in its credo, “Eat Healthy, Think Better”. It became the first zero trans-fat
company in India and was successful in removing 8500 tons of trans fats from its products. The
products of Britannia are composed of essential micronutrients that are nutritious for the body.
The segment of Britannia industry that we would focus on is the Biscuit segment. The market
share of Britannia is 33% in the Biscuit category. From the financial year 2008-18, the company
has grown at an outstanding CAGR of 19%.

Statement of Purpose

Research Design
Data Collection
To collect data for nonlinear regression and perceptual mapping, a survey questionnaire was
floated and 60 sample observations were collected. The questionnaire used rating type scale
where numerical values from 1-10 were assigned to a mix of 6 questions. The surveyors have to
give the rating for 3 biscuit brand namely Britannia, Parle and Mcvities where 1 represented
dislike and 10 represented like.
Secondary data was collected from CapitaLine database for last 10 years and for FY 2007 and
FY 2008 the data was taken from annual reports. Independent variables such as Advertising cost,
distribution cost, processing cost and R&D expenditure were considered which affect the
perceptions of customers, that are based availability of product, taste of product, quality of
product, price of product, health benefit related to product, variety of product and packaging of
product these factor was also the part of questionnaire which was used to collect primary data.
Sampling Design
 Sampling Unit – The survey studied the group of college students and a single student
represented the sampling unit
 Sample size – It was limited to 60 students
 Sampling Method – We selected a simple random sample where 60 observations were
selected in a random manner out of the total observations received.

Analytical Tools
 Nonlinear regression – It is a type of regression analysis in which a nonlinear function is
used to model the relation between independent and dependent variables
 Perceptual Mapping - It is a diagrammatic technique that attempts to visually display
the perceptions of customers or potential customers. Typically the position of a
company's product, product line, or brand is displayed relative to their competition

Part B
Industry: Food processing industry
Segment: Biscuits
Company Selected: Britannia
Dependent variable: Sales revenue
Independent variables selected:
 Total R&D expenditure: This comprises of all spending on research and development of
new products or on modification and improvement of existing products. The continuous
invention of new varieties biscuits make R&D a significant factor for this industry
 Distribution expense: It includes Rent, Distribution Cost and other operating expenses
which contributes to a substantial proportion of operating costs in this industry due to fast
movement of products
 Job work/ Contract/ Processing: This variable explain the cost incurred in processing the
raw materials to make biscuits
 Advertisement cost: It consists of the activities or creating and delivering advertisements
for marketing products or services.it serves to develop awareness and attract consumer
and potential buyers
Analysis of non-linear model:
Non-linear regression models can fit the data on various possible forms such as Logarithmic,
Inverse, Quadratic, Cubic, Compound etc. In our case, we derived the following equation
𝐵𝑟𝑖𝑡𝑎𝑛𝑛𝑖𝑎 𝑆𝑎𝑙𝑒𝑠 = 4235.336 + 2.093 ∗ 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑒𝑚𝑒𝑛𝑡 + 12.511 ∗ 𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔 𝐶ℎ𝑎𝑟𝑔𝑒𝑠 −
10.996 ∗ 𝐷𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠 + 3.085 ∗ 𝑇𝑜𝑡𝑎𝑙 𝑅&𝐷 𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 − .000574 ∗
𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑒𝑚𝑒𝑛𝑡 2 − .000795 ∗ 𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔2 + .00434 ∗ 𝐷𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛2 + .01362 ∗
𝑇𝑜𝑡𝑎𝑙 𝑅&𝐷^2
In our model the relationship of Sales with all independent variables such as advertisement,
processing charges, distribution expenses and R&D expense is quadratic.
The relationship is based on the value of R2 determined from curve estimation. The R2 expresses
how much of the variability of the dependent variable can be explained by the independent
variable we have chosen.
The relationship between “sales” with “distribution expense” is best explained by the Quadratic
equation. The R2 is maximum for cubic equation, but still, we consider quadratic because the
data is not large enough to justify the cubic model correctly. The same reasoning is used for
determining the relationship of R&D expense, Processing charges and advertisement with Sales.
Strategy – Britannia
The Company speeded growth by a three-pronged approach in the Biscuit, Rusk and Cake
category.
 In categories where they are strong the built category relevance to increase penetration
and consumption
 The categories where they are relatively weak the match their competitors
 They focus on innovations in two ways – feeling gaps in the existing portfolio and
making path-breaking, new to market products
The company’s strategies like product innovation require high expense on R&D; increasing
category relevance require advertising expense, building distribution network till rural areas
require expenditure on the distribution channel. Thus, our process of variable selection is in line
with the company’s strategy.d
Summary and Conclusion
The statistical analysis explains that advertising cost, processing cost, R&D cost and distribution
are very impactful on sales.
Our analysis explains that to be the market leader in the biscuits segment of the Food processing
industry. Britannia demonstrates that one has to focus on various parameters such as advertising
(as explained by advertising cost), intangible assets, selling expense and receivables.
Perceptual mapping
𝑆𝑆(𝑎𝑚𝑜𝑛𝑔/𝑏𝑒𝑡𝑤𝑒𝑒𝑛)
Eigen value = 𝑆𝑆(𝑤𝑖𝑡ℎ𝑖𝑛)

Wilk’s lambda (λw): is a percentage of total variance in the data set which is not explained by the
variance among the groups.
𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒(𝑎𝑚𝑜𝑛𝑔/𝑏𝑒𝑡𝑤𝑒𝑒𝑛)
λw = 1 − 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 (𝑡𝑜𝑡𝑎𝑙)

for two group to be significantly different, eigen value should be greater than 1 and Wilk’s
lambda should be less than 0.5.
In two discriminant analysis, cutoff value is zero.
Q1. Identify the discriminant functions that distinguish consumer preference for biscuits.
Two discriminant functions identified are: -
Z1= 0.507 ∗ 𝑞𝑢𝑎𝑙𝑖𝑡𝑦 + 0.131 ∗ 𝑡𝑎𝑠𝑡𝑒 + 0.027 ∗ 𝑝𝑎𝑐𝑘𝑎𝑔𝑖𝑛𝑔 + 0.025 ∗ 𝑝𝑟𝑖𝑐𝑒 + 0.211 ∗
𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑡𝑦 + 0.193 ∗ 𝑣𝑎𝑟𝑖𝑒𝑡𝑦 − 0.467 ∗ ℎ𝑒𝑎𝑙𝑡ℎ 𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠 − 1.548
Z2 = 0.057 ∗ 𝑞𝑢𝑎𝑙𝑖𝑡𝑦 + 0.212 ∗ 𝑡𝑎𝑠𝑡𝑒 − 0.325 ∗ 𝑝𝑎𝑐𝑘𝑎𝑔𝑖𝑛𝑔 + 0.492 ∗ 𝑝𝑟𝑖𝑐𝑒 + 0.237 ∗
𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑡𝑦 − 0.141 ∗ 𝑣𝑎𝑟𝑖𝑒𝑡𝑦 + 0.162 ∗ ℎ𝑒𝑎𝑙𝑡ℎ 𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠 − 1.121
Canonical Discriminant
Function Coefficients
Function
1 2
Quality .507 .057
Taste .131 .212
Packaging .027 -.325

Price .025 .492


Availability .211 .237
Variety .193 -.141
Health -.467 .162
Benefits
(Constant) - -1.121
1.548

Q2. State the classification accuracy and the statistical significance of the discriminant functions.
Number of Misclassified cases: 5
Misclassified case number: 27, 70, 101, 134, 136
Classification accuracy- 97.2%
Acceptability of the discriminating function using Eigen value and Wilk’s lambda- The eigen
values and Wilk’s lambda for both the function Z1 & Z2 are greater than 1 and less than 0.5
respectively. This means that both the groups are significantly different. Therefore, Z1 & Z2 are
both acceptable.

Eigenvalues & Wilks' Lambda

Wilks' Chi-
Function Eigenvalue Lambda square df Sig.
1 5.285a .050 519.838 14 .000
a
2 2.156 .317 200.005 6 .000

Q3. Identify the constituent attributes of each function. Label each of them based on their
characteristics.
Ans

Structure Matrix
Function
1 2
Quality .586* .026
Health - .209
Benefits .509*
Variety .381* -.059
Availability .204* .175
Price .065 .801*
Taste .250 .305*
Packaging .079 -
.116*

Based on the above table results, we identified the attributes for each function. We looked at the
absolute values of attributes and assigned an attribute to that function for which its absolute
value was higher.
Constituent attribute to each function
Z1 : quality, health benefits, variety, availability
Z2 : price, taste, packaging
Based on the characteristic’s attributes of each function the label assigned are:
Z1 : convenience
Z2 : value for money
By looking at the eigen value of the two functions: convenience (5.285) & Value for money
(2.156) it is interpreted that convenience is more valued than the value for money.
Q4. Draw a perceptual map with the discriminant functions as the axes. Plot the brands on this
map based on their centroid scores on each function. On the same map, depict the attributes as
vectors based on their correlations to each function.
Ans.

Q5. Interpret the map to create positioning statements for each brand as per consumer
perceptions. Justify your answers.
Ans.
Functions at Group
Centroids
Function
Brand 1 2
Britannia 2.726 -
1.100
Parle .128 2.058
Mcvities - -.958
2.854
Britannia is high on convenience because Z1 value is higher than Z2 . Britannia has strong
distribution network which complements the availability of their products. Britannia has
presence in different biscuits segments which enhances their variety in product. Britannia is also
perceived best in quality because of the consistency in the product quality has created a positive
perception in consumer minds. However, the brand is perceived to be expensive because Parle’s
Parle G is taken as the benchmark in the rural market therefore the Britannia brand is perceived
expensive.
Parle is neither good nor bad in terms of convenience because of its limit pricing strategy it has
diluted the concentration of many of its ingredients which has impacted its quality significantly.
However, availability of Parle products is strong. Overall it is neither good nor bad in
convenience.
Parle is the best value for money brand because of its flagship products and company’s effort to
offer better taste at lower prices.
McVities is not considered as convenient brand because of the lower availability of products
which is due to poor presence in rural market. Also, companies focus on the digestive biscuits
creates an impression of less variety offerings in minds of consumer. Due to these reasons it is
not considered as convenient brand. Brand is not perceived as value for money because of the
higher prices of the biscuits compared to the taste.

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