A Study on consumer market

for Aurofood
Summer Internship Report

Submitted By:

Sandeep Raghav

07BS3761

Batch=2008-09
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A STUDY ON CONSUMER MARKET FOR

AUROFOOD INDUSTRY

BY

Sandeep Raghav
(07BS3761)
2008-09

(It is to be noted that this report has been developed as the partial fulfillment
of the Project Work under Summer Internship Programme for ICFAI
Business School Chennai)

Chennai

SIP Organization: Littler Associates

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ACKNOWLEDGEMENT

It gives me great privilege to show my deepest sense of gratitude to those people without whom
this project would have never been complete. These people, not only mentored me but they also
made it a point that this project becomes a classy piece of study and its only their creative ideas,
their mentoring, their constructive criticism and guidance that has made the project really
meaningful and a well thought out piece of literature.

To start off, it’s a privilege for me to express my deepest sense of gratitude to Professor. C.K.
Chandrasekhar, my Faculty Guide from ICFAI Business School Chennai {IBS C), my mentor
and undoubtedly the mainstay behind this project. It has been an out and out honor to work under
him. His versatile viewpoint and understanding of the subject matter, his guidance’s, his
constructive criticisms and above all the level of motivation and faith he showed really made me
to stay focused and work logically during the course of the study.

Secondly, this entire live project owes to Mr. Ramachandran, our Industry Guide and also the
Managing Partner of Littler Associates, Sir I would like to thank you for giving us such an
wonderful opportunity to work under you, at the onset of our corporate career, you provided me
with a very dynamic and challenging project and your mentoring and guidance, your viewpoint
towards looking at a particular situation in diversified manner, your constructive criticism really
helped me a lot in understanding the case and working towards it and I will be really honored to
work with you again.

I would also like to thank Mr. Abhishek Roy, My fellow batch mate at ICFAI Business School
Chennai {IBS C) and also my colleague at work who has been a great help during the entire
course of the study.

Thank you all

Sandeep Raghav
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TABLE OF CONTENTS:
DETAILS PAGE NUMBERS
Abstract 4-5

A. Introduction 6-14

A.1. Overview of Indian Fast moving 6-7

consumer goods (FMCG) sector

A.2. Indian Biscuit sector 7-14

A.3. The case 14-15

A.4. Major issues/problems 14-15

A.5 Main objectives and limitation of the 15

study.

B. METHODOLOGY OF THE STUDY 15-17

B.1. Formulation of the Hypothesis 15-16

B.2. Surveys and questionnaire used 16-17

C. ANALYSIS 17-19

C.1. RETAILERS SURVEY 17-18

C.2. CONSUMERS SURVEY 18-19

D. KEY FINDINGS 19-21

E. FINAL CONCLUSION AND 22-25

BUSINESS PROPOSAL
F. ENCLOSURES 26-32

G. BIBLIOGRAPHY 33
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ABSTRACT
Management consultancy is one of the most exciting and challenging areas of dynamic
management decision making and strategy building in the 21st century having a wide spread
scope and application and the area of coverage is also huge. With Modern Management
becoming highly competitive and dynamic, now a days, every problem is different and requires a
unique solution and when it comes to core areas of management consultancy this becomes even
more critical. This entire study entails around a core area of management consultancy; to be
more specific; marketing consultancy or marketing strategy building. Now Marketing strategy
building as a core area of Marketing consultancy is practiced by only few Firms in India and to
my great luck Littler associates is one of such firms which deals in it.In a nutshell, the entire
project deals with a live case on a client Aurofood Industries Limited and their problem child,
True brand of Biscuits. Aurofood Industries, a Pondicherry based FMCG company which is a
100 crore manufacturer of biscuits in the entire Tamil Nadu, is facing several problems over the
last few years resulting in poor sales and reduction in market share. With the severe competition
around, they are finding it a real problem to increase the sales of their biscuits.

The case, in hand, is to assist the client, by providing them a business proposal or rather a
business model through which they can revive their brand.

The entire is a larger picture of a business proposal report which will cover several important
domains of marketing and the lingo will be totally marketing prone.

The main portions of the project covers important concepts from marketing consultancy and
research point of view, also it covers in a logical sequence how a project kicks on covering areas
on problem identification and definition, analysis and conclusion. The readers will really find it
interesting to understand and interpret the links in between different concepts and criticalities
between alternate variables and how to go about solving the same.

Lastly, this has been a very exhaustive study and an honest one too so as to understand the
consumer buying behavior of biscuit segments at Tamil Nadu in the process of providing
Aurofood with an effective business plan so as to revive the true brand of biscuits.
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A. INTRODUCTION

A.1. OVERVIEW OF INDIAN FMCG SECTOR

The Indian FMCG sector is the fourth largest sector in the economy with a total market size in
excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well
established distribution network, intense competition between the organized and unorganized
segments and low operational cost. Availability of key raw materials, cheaper labor costs and
presence across the entire value chain gives India a competitive advantage. The FMCG market is
set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well
as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash
etc in India is low indicating the untapped market potential. Burgeoning Indian population,
particularly the middle class and the rural segments, presents an opportunity to makers of
branded products to convert consumers to branded products. Growth is also likely to come from
consumer 'upgrading' in the matured product categories. With 200 million people expected to
shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment
in the food-processing industry.

Automatic investment approval (including foreign technology agreements within specified

norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies
(OCBs) investment, is allowed for most of the food processing. The Indian FMCG market has
been divided for a long time between the organized sector and the unorganized sector. While the
latter has been crowded by a large number of local players, competing on margins, the former
has varied between a two-player-scenario to a multi-player one. Unlike the U.S. market for fast
moving consumer goods (FMCG), which is dominated by a handful of global players, India's
Rs.460 billion FMCG market remains highly fragmented with roughly half the market going to
unbranded, unpackaged home made products. This presents a tremendous opportunity for makers
of branded products who can convert consumers to branded products. However, successfully
launching and growing market share around a branded product in India presents tremendous
challenges. Take distribution as an example. India is home to six million retail outlets and super
markets virtually do not exist. This makes logistics particularly for new players extremely
difficult. Other challenges of similar magnitude exist across the FMCG supply chain.
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A.2. INDIAN BISCUITS SECTOR

INTRODUCTION:

In India per capita consumption of biscuits is estimated at a low 1.5 kg, reflecting the huge
potential for growth of the industry. Over 900 million Indians buy and eat biscuits with varying
frequency in any year. The penetration of branded product in this segment is quite significant,
and is valued at Rs 2,500-3,000 crores. None of the other wheat-based segments is as developed
as the biscuits industry. The biscuit segment has developed with large markets of mass
consumption covering over 90% of the overall potential market. The Indian biscuits' market is
estimated to be 1.1 million tons per annum and valued at over Rs 50 billion. The unorganized
sector accounts for over 50% of the market. The market has been growing at a CAGR of 6-7%
P.A.
MAJOR PLAYERS OF THE SEGMENT:
The present biscuits-bakery sector in India looks like a battlefront. The battle being led by
stalwarts like Britannia and Parle with close competition from other companies like ITC,
Nutrine, HLL Kissan, Kwality and even international brands like Kellogg, Nestle, Sara Lee..

Fig: 1 showing the proportionate market share of main players in the biscuit and bakery
segment
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There are two entrenched players in the biscuits market - Parle and Britannia have 85% of the
market share. Britannia is undoubtedly the leader with brands like Tiger, Little Hearts and Milk
Bikis. Britannia's Tiger brand is selling largely in the rural areas which actually constitute 56%
of the biscuit market. But in the Glucose segment Parle G is the market leader. Also players like
HLL and ITC have huge presence in the market. HLL Bistix (biscuit sticks that can be dipped
into flavors like strawberry and chocolate) is indeed an innovation and low-priced biscuits.

The industry can also be divided brand wise into popular varieties such as Parle-G and Tiger,
medium varieties such as Milk Bikis and Super Milk, and premium varieties such as Good Day
and Monaco. The popular varieties account for close to 40 per cent of the total volumes. If the
Marie category is also included in the sweet biscuits category, it will easily account for close to
80% of the industry's total volumes of 7, 75,000 tones. The segment can be further divided into
the sweet and savory. The savory segment includes salt biscuits, and the salt and sweet variety
accounts for the rest. According to ACNielsen and ORG-MARG market research in 2003, the
strength of the Britannia brand is demonstrated by the fact that it stands far above all in this
fiercely competitive market, with over 46 per cent market share. Launched in 1997, Tiger
became the largest selling Britannia biscuit brand in just 4 months of launch.

Parle enjoys a 40% share of the total biscuit market. The Parle biscuit brands, such as Parle-G,
Monaco and Krack jack enjoy a strong imagery and appeal amongst consumers. A comparative
test study done on 12 popular brands of glucose biscuits by an NGO, Voluntary Organization in
Interest of Consumer Education (Voice), has thrown many surprises with Kellogg's and Priya
Gold ranking a poor 10th and ninth while Horlicks and relatively lesser known Anmol capturing
the two slots respectively.

According to Herfindahl Index for the biscuit market, the index value is about 2,500. For the
bread business, in which Britannia and Hindustan Lever are the major players, the value would
be above 5,000. These values contain important pointers. They indicate that the competition in
the branded biscuits segment is relatively intense; reflecting the fact that the Indian branded
biscuits industry has a long history. In the branded breads business, it indicates a lower intensity
of competition (in terms of the presence of organized sector players). However, the values
change dramatically if the unorganized sector which accounts for 50% of the total biscuits
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market is taken into account. Since the market share of the smaller players are widely dispersed
and do not add to the index value, the Herfindahl for the entire industry is close to 1,200
indicating intense competition.

According to another study, 'Parle G', which claimed to have 8% proteins, actually has just 6.8%
of it while Kellogg's had only 6.2% against the claimed 7.4%. Only claims of 'Britannia Tiger'
matched the actual content. Only 'Parle G' declared the iron content of the biscuit. Other than
'Cremica', 'Priya Gold' and 'Britannia Tiger', none of the brands carries the ISI mark.

ORGANIZED VERSUS UNORGANIZED SECTOR:

In India, there is a huge unorganized sector. Biscuits market on an average grew at 8% per
annum in the last five years. The rural penetration of the branded biscuits segment is also
significant. Towns with populations of less than a lakh contribute significantly to the industry's
turnover, with some estimates placing it at 40%. However, rural markets largely consume lower-
priced varieties, and it is here that branded biscuits meet with stiff competition from the
unorganized sector. The unorganized sector in the biscuits segment does exert pressure on the
pricing policies of the organized players. But only up to a point since the penetration of brands in
this business even in the rural areas is fairly significant. Therefore, the value for only the branded
business segment is more indicative of the industry's competitive pressures. The same holds
good for the bread segment also. While changes in market shares would only indicate how a
company has fared relative to the industry, the changes in the overall competitive intensity can
be readily reckoned by computing the Herfindahl Index. A decline of this value to below 2,000
in the biscuit segment would indicate that the existing players are not only losing market share,
but that their pricing power is also receding. And, if the value remains constant even with the
entry of several players that would indicate that the hold of the existing players has not
slackened.

The duty structure still favors the unorganized sector. Except for select low-priced varieties, the
excise duty on biscuits is a hefty 16%. However, bowing to pressure from the Federation of
Biscuit Manufacturers of India, 50% of the excise was exempted for biscuits with a maximum
retail price of Rs 5 for a weight not exceeding 100 grams. This effectively reinstated the status
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quo for low-priced biscuits such as Parle-G and Tiger. Overall, it has maintained the potential for
price differentials between low-priced branded biscuits and unbranded biscuits. At the same
time, the differential between low-priced varieties and high-priced varieties appears set to widen.

Biscuit industry in India in the organized sector produces around 60% of the total production, the
balance 40% being contributed by the unorganized bakeries. The industry consists of two large
scale manufacturers, around 50 medium scale brands and small scale units ranging up to 2500
units in the country, as at 2000-01. The unorganized sector is estimated to have approximately
30,000 small & tiny bakeries across the country.

The annual turnover of the organized sector of the biscuit manufacturers (as at 2001-02) is Rs.
4,350 crores. In terms of volume biscuit production by the organized segment in 2001-02 is
estimated at 1.30 million tonnes. The major Brands of biscuits are - Britannia, Parle Bakeman,
Priya Gold, Elite,Cremica, Dukes, Anupam, Horlicks, Craze, Nezone, besides various
regional/State brands.

Biscuit industry which was till then reserved in the SSI Sector, was unreserved in 1997-98, in
accordance with the Govt Policy, based on the recommendations of the Abid Hussain
Committee.The annual production of biscuit in the organized sector, continues to be
predominantly in the small and medium sale sector before and after de-reservation. The annual
production was around 7.4 Lakh tonnes in 1997-98 In the next five years, biscuit production
witnessed an annual growth of 10% to 12%, up to 1999-00.The annual Growth showed a decline
of 3.5% in 2000-01, mainly due to 100% hike in Central Excise Duty (from 9% to 16%).
Production in the year 2001-02 increased very marginally by 2.75% where in 2002-03 the
growth is around 3%.

The Union Budget for 2003-04 granted 50% reduction in the rate of Excise Duty on Biscuit i.e.
from 16% to 8%. The Federation's estimate for the current year indicates a growth of
approximately 8% to 9%.However the average utilization of installed capacity by biscuit
manufacturers in the country has been a dismal 60% over the last decade up to 2001-02.
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Though dereservation resulted in a few MNCs, i.e. Sara Lee, Kellogg, SmithKline Beecham,
Heinz etc entering the biscuit industry in India, most of them, with the exception of SmithKline
Beecham (Horlicks Biscuits), have ceased production in the country.

On the other hand, import of biscuits, especially in the high price segment has started from 1998-
99, but however, the quantum of imports has not so far increased alarmingly and has remained at
around 3.75% of the consumption of biscuits in the country in the year 2001-02. However, recent
imports from china industries cheaper verities of biscuit, needs to be examined with cautions,
especially in the context of the price as the low margin based domestic industry, which is
operating at 60 % of the total installed capital. Exports of biscuits from India have been to the
extent of 5.5% of the total production. Exports are expected to grow only in the year 2003-04
and beyond. Biscuit is a hygienically packaged nutritious snack food available at very
competitive prices, volumes and different tastes. According to the NCAER Study, biscuit is
predominantly consumed by people from the lower strata of society, particularly children in both
rural and urban areas with an average monthly income of Rs. 750.00.

Biscuit can he broadly categorized into the following segments:

(Based on productions of 2000-01)

Glucose 44%
Marie 13%
Cream 10%
Crackers 13%
Milk 12%
Others 8%.

In recognition of industry's obligations towards the community, being a part of it, biscuit
manufacturers supply biscuits to the social welfare agencies in all States for the benefit of school
children, senior citizens and other needy sections of the society. FBMI Members have always
responded positively to our appeal as also by the Government, to rush truck loads of biscuits to
the people affected by earthquakes, floods, famine etc. Our industry has also participated in
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supplying biscuits to the people of war ravaged Afghanistan and presently to the Iraqi people,
under the aegis of the UN.

As regards the consumption pattern is concerned. surveys and estimates by industry from time to
time indicate the average consumption scenario in the four Zones have been more or less close to
each other, as below:
Northern States: 28%
Southern States: 24%
Western States: 25%
Eastern States: 23%

Though India is considered as the third largest producer of Biscuits after USA and China, the per
capita consumption of biscuits in our country is only 2.1 Kg., compared to more than 10 kg in
the USA, UK and West European countries and above 4.25 kg in south cast Asian countries, Le.
Singapore, Hong Kong, Thailand, Indonesia etc. China has a per capita consumption of 1.90 kg,
while in the case of Japan it is estimated at 7.5 kg.In view of the meager per capita consumption
even as penetration of biscuits manufactured by the organized sector, into rural areas in India,
has been very good during the last 10 years, as also in the metro and other cities, small towns etc.
However, in spite of this, the industry has not been able to utilize about half of their installed
capacities.

Biscuit is a comparatively low margin food product in the PMCG (Packaged Mass Consumption
Goods ) sector. The commodity is also price sensitive, as a consequence of which, even when the
Excise Duty was doubled on biscuits in 2000-01 biscuit manufacturers, including the major
brands, were not able hike MRPs to the extend of the steep increase in the Duty. Taxation, both
Central Excise Duty as also State Sales Tax, other miscellaneous levies i.e. turnover tax, local
area tax, mandi taxes, purchase tax, octroi etc etc, has been a major deterrent in the growth of the
biscuit industry. The CII Study Report has identified Biscuit as one of the products that should
treated as "Merit Good for the purpose of liberal tax policy both by the Centre and States.

Besides lack of technology up gradation in manufacturing, packaging etc has also been a factor
affecting our industry, along with inadequate financial credit and support particularly for the
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medium and small scale biscuit units.On the other hand, the Government of India has identified
food processing industries as a priority area to be encouraged for growth and development and
created the Ministry of Food Processing Industries (which was till then a Dept in the Ministry of
Agriculture), headed by an Ministry of State with Independent charge. The Food Processing
Ministry has been rendering yeomen service to the industry, of which biscuit manufacturing is an
important part. The Ministry, with the objective of enabling food processing Industries to
undertake technology up gradation diversification. Expansion as also to set up new units has
formulated scheme of Grants and Financial Assistance.

Other areas of concern to industries of food products like Biscuits include multiplicity of food
laws and their enforcing agencies in the Central and State Governments with overlapping
functions & implementation. At the persistent instance of industry organizations including FBMI
the Ministry of FPI took the initiative in evolving an Integrated Food Act, harmonizing the
existing multifarious legislations enabling better compliance. The Draft Unifled Food Bill 2002
has been prepared and now awaits approval by the Cabinet and the Parliament, which will fulfill
an important need of the industry and pave way for accelerated development and growth. Biscuit
manufacturing as well as other bakery products like Bread etc are agro based industries, with the
major inputs - wheat flour/atta sugar, milk vanaspati/vegetable oil etc all being agriculture
produces.

Industries such as Biscuit are also languishing as they are not able to achieve their potentials for
higher production, in the absence of the concrete food Processing Industry Policy. FBMI in close
coordination with other organizations and apex Chambers, initiated to urge the Govt of India to
formulate a comprehensive Policy Document, for smooth growth and harmonious development
of the industry. The Food Processing Industry Policy, which has been evolved as a result of
various workshops, deliberations and representations by a large cross section of food processing
industries, is yet to be finalized. It is hoped that the Ministry of Food Processing Industries, GOI
would initiate action for implementation of the Policy expeditiously.
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A.3. THE CASE: Aurofood private limited Pondicherry is a 40 years old FMCG company
which mainly deals with three main categories of FMCG variants which are Biscuits, MCP and
Pasta. Aurofood is a market leader in pasta, especially vermicelli and it comprises of
approximately 48% of the total sales of the company as of the figures of july-december 2007.
The biscuit segment comes in the second raking according to sales, Biscuits comprises of around
31% of the total sales of the company; next comes the MCP which comprises of around 21% of
the total sales as of july-december 2007.

Biscuits are more of their front line products manufactured under the brand name of TRUE
biscuits, the total market share in the entire south are about 245 tones, out of which 125 tones in
the entire Tamil Nadu. Whereas the total size of the biscuit segment in Tamil Nadu is about
13’245 tones annually. So Aurofood covers less than 1% of the entire business segment in Tamil
Nadu.

Now the problem with Aurofood is that the company once used to market leaders in biscuits are
now pushed hard down by the competitors so much that the sales figures are going down ; and
the competition is now so huge that virtually whatever Aurofood does, the competitors can just
do it without much efforts because of their huge market size. The idea is to provide Aurofood
with a proper business plan which can aid in bringing more profitable results.

A.4. MAJOR PROBLEMS FACED BY AUROFOOD:

For cutting competition, price of the biscuits has been set marginally less under competition. The
packaging of true biscuits is simple not much eye catch and is in line with the standard
packaging of main players.

Well distribution has been a major problem of TRUE biscuits. This is because of the fact that
compared to the scale of distribution networks or channels of other players, the distribution
network of Aurofood is quite miniature, also there has been a packaging and quality problems
among the users.

From the gross profit margin analysis of the SKUs of TRUE biscuits, it can be ascertained that
certain SKUs of biscuits are contributing very less (Tiffin contributing 0%, checkmate 1%,
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Hycount 1%, Glucose 1%). Such lesser proportions are actually lessening down the revenues by
5-6% due to incurring variable costs.

A.5. THE OBJECTIVE OF THE STUDY:

The main objective or the core purpose of the study is to provide a business plan which will aid
Aurofood in reviving its position in the biscuit segment and to make the company more
profitable in the long run.

A.6. LIMITATIONS OF THE STUDY:

1. Time constraints: The entire schedule of this project report is over a period of merely three
weeks, so time is a genuine constraint which limits the scope and also the scale of the study.

2. Data constraints: lack of adequate and accurate data is another major limitation of the study.

B . METHODOLOGY OF THE STUDY:

B.1. FORMULATION OF A HYPOTHESIS:

Generally, a hypothesis is defined as:

• a proposal intended to explain certain facts or observations;

• a tentative theory about the natural world; a concept that is not yet verified but that if true
would explain certain facts or phenomena; "a scientific hypothesis that survives
experimental testing becomes a scientific theory"; "he proposed a fresh theory of alkalis
that later was accepted in ...
• guess: a message expressing an opinion based on incomplete evidence,

Now, in this specific study the main issues on which the hypothesis can be formulated are:
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• What are the reasons that are mainly leading to the downfall of true biscuits,
• What are the critical decision areas or the areas that need to be taken care in order to
revive the brand,
• Who are the main consumers of True biscuits and what are the buying behaviors of the
consumers,
• What is the visibility of true brand among retailers and consumers, where exactly true is
losing itself among the competitors,

Having understand the above problem the null hypothesis can be framed as follows,

Null Hypothesis, True brand is losing its acceptance among the buyers because of lesser
visibility in the retail outlets, as a result of which brand presence is getting adversely
affected;

So the alternate hypothesis will be True brand is accepted well among the buyers because of
more visibility in the retail outlets, as a result of which brand presence is increasing,

It is to be noted that the key words or phrases in the null hypothesis are Acceptance among
Buyers, Visibility in retail outlets, and brand presence, Now if we form an equation it can be
easily said that positive combination of acceptance among the buyers and Visibility in the
retail outlets is directly proportional to the brand presence i.e.

Visibility in the retail outlets + Acceptance among the buyers α Brand presence of True

B.2. SURVEYS AND QUESTONNAIRE USED:

Now for judging the level of visibility in the retail outlets a retailer’s survey needs to be done
following a structured questionnaire which will provide the service levels, marketing
strategies and level of distribution penetration of true in the local market.

Next for judging the acceptance of true among the buyers, a consumer survey needs to be
undertaken following a structured questionnaire aiming at understanding the consumer
buying behavior, their tastes and preferences, their attitudes and perception towards biscuits.
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C. ANALYSIS

C.1. RETAILERS SURVEY:

The retailer survey has been done following a structured and a uniform questionnaire which
comprises of the following details:

PART A: General Questions on shop name, Owner name, shop category, location etc.

PART B: Questions regarding the available varieties of Biscuits n the shop, and the
various categories of biscuits kept n the shop.

PART C, whether the retailer deals in true or not,

PART C-1: If the retailer deals n true biscuits, then questions were regarding
Varieties, sales and service levels of true biscuits.

PART C-2: If the retailer does not deal n true biscuits but deals in other true products,
then questions regarding why the retailer doesn’t deals in true,

PART C-3: If the retailer does neither deals in true biscuits and other true products,
then questions regarding the awareness, past dealings etc has been put forth n the
questionnaire.

It is very essential to understand the fact that in this entire study three possible retailer types has
been covered:

Type 1, retailer who deals in true biscuits,

Type 2, retailer who does not deals in true biscuits but deals in other true products like
true vermicelli, sooji etc.

Type 3, retailer who does not deals neither in true biscuits nor in other true products,

Also ample care has been taken in covering the various categories of shops, and brands of
biscuits sold n the shops in respect to the shop category.
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NUMBER OF RETAIL SHOPS COVERED: 130

C.2. CONSUMERS SURVEY: No. of subjects covered: 40

Consumer’s survey, on the other hand, has been done mainly to judge the buyers behavior
towards purchasing and judging the credibility of a biscuit brand. The survey again has been
done following a structured and a uniform questionnaire having the following main components:

1. PART A: General questions seeking the name, family status, financial background of the
consumer,

2. PART B: Specific questions about which brand of biscuits the consumer mainly consumes,

3. PART C: Questions regarding consumption habits and consumption occasions of the

consumer as in who, when, why and how consumes biscuits in the family,

4. PART D: Questions regarding the Purchase habits and Purchase occasions of the consumer
as in who, when, why, how and for whom purchases the biscuits n the family,

5. PART E: Questions regarding the Types of brands consumed by the family, the most
preferred brand, and the awareness regarding brands like true.

6. PART F : Lastly and most importantly, question seeking leads about the judgments,
perceptions, attitudes of the consumer behind purchasing a certain brand, the idea here is to trace
the following things:

• Who are the main buyers of True biscuits

• What is their buying behavior behind buying true biscuits
• What is their perception about True as a brand
• What categories of Buyers purchase true, i.e. are they conventional buyers, repeated
buyers or innovators who likes buying true products.
• Simply putting what s the brand salience of true biscuits in the mind of consumers.
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FINDINGS

FROM RETAILERS SURVEY:

1) Most of the shopkeepers are aware about True but they hesitate to keep true in their shop
because of no demand in the market.
2) The most simple and famous answer by shopkeeper was that nobody comes for TRUE,
customer asks for Britannia and other well known brands.
3) The supplier service is low in comparison with other brands because of no demand.
4) Only very few shopkeeper keep large number of varieties of TRUE biscuit in their shop.
5) Most of the shopkeeper doesn’t want to keep TRUE in their shop but they keep because
of maintaining different varieties in their shop.
6) Only large departmental store keep no. of varieties of TRUE in their shop.
7) According to shopkeeper most of the customer doesn’t know about TRUE.
8) Only in some areas availability of TRUE is good.
9) According to findings of survey most of the shopkeeper doesn’t recommend TRUE to the
customer.
10) TRUE is lacking in marketing and promotional activities according to shopkeeper.

FINDINGS FROM CONSUMER SURVEY:

Before going to the main elements and observations of this exploratory survey, it is very
pertinent to talk about the content and the context of the survey. Now, content wise, it
was more of an one-to-one interview kind of survey than a typical questionnaire based
survey where significant questions regarding the following areas were asked:

Introductory and general questions regarding the identity, background, family,
status of the consumer, THEN came the more deeper or rather the more related
questions which comprises of the following main headings:

Consumption Occasions, questions judging ,who, when, where, how and why the
consumer consumes biscuits;

Purchase Habits, Questions judging who, when, how and where from buys
biscuits in the family;
 20

Preferred brands, questions judging the most preferred brands of the biscuits;

Attitudes, brand images/judgments/relatedness of the consumer with the brands.

Talking about the context, the survey has been conducted over a period of seven days, taking
into consideration the need for a diverse background, or, in simple terms the variety of
consumers according to age, demographics and financial background. So, out of the thirty
four consumers surveyed, care was taken about the fair mix of people from different levels,
different classes of the society.

OBSERVATIONS AND MAIN FINDING

The following observations came out from the survey:

Most of the families observed consume biscuits quite frequently in a month and
also in considerably larger volumes.

There were more consumption occasions as a result of which purchase occasions
were also more.

Behind every consumer buying behavior, a strong brand presence could be felt,
the fact that about approx 75% of the subjects identified themselves with
Britannia proves the fact even more. Most subjects admitted the strong brand
presence of Britannia, the quality and the variety of biscuits, and also the fact it is
been there for a long long time are some of the main reasons for them to try out
Britannia.

Most of the families preferred branded biscuits than non branded or local biscuits,
True, sadly was not even in the frame.

Almost 90% of the subjects in the study had one common consumption occasion
in the form of having Marie along with tea, and Britannia and Parle e were mostly
preferred.

Kids and guests were the two mostly seen consumers among the families that
were surveyed.
 21

Most of the families gave a lot of important to the quality and the brand presence
in the sense that JO DIKHTA HAIN, WOHI BEEKTA HAIN ☺ and since
Britannia is a very old company in that sense also there was a huge connection.

Regarding purchasing habits, Women of the family stood the 1st place in
purchasing biscuits, and then men.

Most families agreed to the fact that there were not many as such purchasing
occasions for biscuits, simply biscuits are a necessity, when there was need rather
demand they went for purchasing the biscuit.

Sun feast is the most strongly raising brand. Sunfeast is almost present in every
shop and takes second place after Britannia in terms of availability.

Most of the people doesn’t know about the TRUE brand and are not aware of
various varieties of TRUE. Hardly they seen any advertisement or any
promotional activity by TRUE.

Large departmental store is the only place where they can know about TRUE
biscuits, because in Kiranas or in provisional stores either visibility is not so much
or nobody recommends TRUE, that’s why TRUE is out of reaches for consumer.

TRUE vermicelli still popular in market but Bambino is the leader.

During the survey only very few people had knowledge about TRUE.
 22

CONCLUSION AND BUSINESS PROPOSAL

From the analysis and observations, it can be seen that True Brand of biscuits at todays
date is in a volatile situation because of the following reasons:
a. The visibility of the brand in the local retail shops of Tamil Nadu is much lesser n
comparison to other brands.
b. Most of the consumer prefers Britannia and Parle over other brands, and the
awareness of True is almost not there.
c. The service level of true with respect to other companies has been down and there
has been several quality related issues too.
d. Lastly true, as a brand has lessened its brand loyalty, brand attractiveness and
brand image among the customers has also decreased over the years.

Having known all the above problems of True, let us visualize this case under the limelight of
marketing, taking into account the various pros and cons of the case:

MARKETING STRATEGIES: In lieu of competition, if we have to analyze the case, we can

categorize True as a market follower in a market in which the market leader s are Britannia and
Parle , Market challengers are ITC and Market niches can be McVities and certain other brands.
 23

Now what needs to be understand here is that Britannia, Parle being the Market leaders
determines the price, quality and variability in the segment, whereas Mcvities because of its
unique selling proposition has been able to create a market on its own which the leaders have not
been able to resolve. Whereas Brands like True , with lesser capacity and limited corpus are in
nowhere in between, Because of the sheer power and penetration by the leaders, The company
has lost a major chunk of its market Share and is in the verge of getting whitewashed now.

Taking from another Marketing point of view, the positioning aspect of the true brand, now the
term positioning is the act of designing the company’s offering and image to occupy a distinctive
place in the mind of the target market. Now having said that True is actually suffering from
confused positioning as it has not been able to identify its target market.

Besides all this the company is having problems in distributing its products also because of the
huge power stroke, brand stroke of the competitors the distribution is also lesser. Lastly over the
years with more and more quality issues, packaging problems and all true has lost its brand
loyalty by leaps and bounds as unlike Britannia not many people can identify itself with the true
brand.

BUSINESS PROPOSAL: Now after coining all the possible reasons for the downfall of the
brand, let us look at the plus points of true:

Firstly, the company is a forty year old one and is well spreaded among the major cities
of South.

The Brand True is an old brand and is still popular in certain parts of Tamil Nadu,

Certain SKUs like Niche, Elaichi are still market leaders in their own segment.

Now there can be two ways for True to look at the above issues, rather two approaches,

 REACTIVE APPROACH: Now a reactive approach can be further building on the strengths
the company has, despite of going for new areas. This makes sense as the company has certain
products which are market leaders and selling quite well. Two important things need to be done
here, firstly identify the core areas of improvement and secondly ascertain the strategies in line
with the core areas of improvement. The man strategies true can follow is :
 24

 Cut down on unnecessary SKUs keeping only the most selling SKUs.
 Increase the volume and the marketing of the most selling SKUs.
 Cut down unnecessary sales force, and then increase the compensation of those who deserve to
stay with the company.
 Special Attention must be taken about the quality and the packaging of the product, as if the
product is a telling one other communication tools will automatically be successful.
 Go for selective distribution of the product, create a customer grievance handling and monitoring
cell which will keep track of the customer grievances and will be n constant touch with the
retailers where true is kept.

• PROACTIVE APPROACH: Modern marketing always calls for a proactive approach as

companies now a day’s always needs to be two step ahead of the competitor. When everything
is going wrong, the idea is to dismantle competitors by doing Out of the box thinking which
includes bringing innovative products, effective marketing and positioning of the product in
such a way that competitor is not able to ape in the short run. The idea is to create a Niche in the
market, or, a space in the market that will be untouched by the competitors. Aurofood can
follow the below mentioned strategies in this case:
• A fully fledged and independent R & D Department which will do adequate market research and
bring out innovative products which other companies have never launched.
• Identifying the adequate cost and revenue centers is again very important. Lessening the dull
SKUs and unwanted part of the sales force will aid in re engineering of the entire process.
• Identifying the exact target market and establish a well communicable product campaign.
• Taking proper attention to increase the quality of the biscuits, eye catchy pack sizes which appeal
to masses.

…………………………….************……………………..
 25

F. ENCLOSURES

RETAILER QUESTIONNAIRE

PART-A
A.1.Shop.Name…………………………………………………………………………………

A.2 Owner Name……………………………………………………………………………….

A.3.Contact No.………………………………………………………………………………...

A.4.Location……………………………………………………………………………………

A.5. Category of Shop

a) Chain Store b) Large Departmental c) Pharmacy d) Bakery e) Kirana

f) Kiosk g) Provisional Store

PART-B
B.1. What brands of biscuits do you sell?

a) TRUE® b) Britannia c) Parle d) Sunfeast e) Other

B.2. Rank the brands in order of sales………………………………

B.3. Variety of biscuits stocked

a) Marie b) Cream c) Bourbon d) Salted e) Glucose

f) Milk g) Other

B.4. Any imported Brand of Biscuits?

 26

C. Do you deal in TRUE® Biscuits?

a) Yes c) No
PART-C-1

[If answer to C. is a)- YES]

C1.A What Varieties of TRUE® Biscuit do you have?

a) Marie b) Cream c) Bourbon d) Salted e) Glucose

f) Milk g) Other

C1.B Rank the above varieties in order of volume of sales …………………………………….

C1.C Trend of TRUE® in comparison to other brands

a) Higher b) Lower c) Equal

[In case answer to C1.C is a) Higher]

M1. Why TRUE® is selling more?

a) Demand b) Service c) Margin

[In case answer to C1.C is b) Lower]

L1. Reason for lower sales of TRUE®?

a) Demand b) Service c) Margin

PART-C-2

[If answer to C. is b)- No.]

C2.a Do you deal in other TRUE® Products?

a) Yes b) No

If yes, then name of products ……………………………………………………………………

……………………………………………………………………………………… [If No,

proceed to C-3]
 27

C2.b. Why don’t you deal with TRUE® biscuits?

a) Inadequate Demand b) Poor Service levels c) Inadequate Margin

d) Quality issues and delayed settlement

PART-C-3

[If answer to C. is b)- No. and answer to C2. a), is b)- No]

C3 a. Are you aware of the TRUE® brand?

a) Yes c) No

C3.b. If answer to above is a)- Yes, Why don’t you deal with TRUE® biscuits?

a) Inadequate Demand b) Poor Service levels c) Inadequate Margin

d) Quality issues and delayed settlement

C3.c. Were you selling TRUE® biscuits in the past? (If this is not indicated in answer to earlier
question)

a) Yes c) No

C3.d. If yes than why have you stopped?

a) Inadequate Demand b) Poor Service levels c) Inadequate Margin

d) Quality issues and delayed settlement

Note: Probe clues for preference for any one variety of TRUE ® biscuits.
 28

Greetings

Observations and QUESTION NO A1, A2,

PART A
introductory questions A3, A4, A5, A6

General questions on biscuit QUESTION NO B1, B2,

PART B brands B3, B4,

PART C, DISPOSITION TO TRUE® BRAND OF BISCUITS

PART C1 DEALER IN PART C2 YES HE DEALS IN TRUE® PART C3 NOT A DEALER IN

TRUE® BISCUITS PRODUCTS BUT NOT BISCUITS TRUE®

Question no C1.a, C1.b,

C1.c.,
Question no C2.a,
Question no C3.a, C3.b,
C2.b C2.c etc
C3.c, C3.d etc

Sale is Sale is
Higher lower

M1, M2, L1, L2, L3

M3 ETC ETC

DEPENDING ON THE RESPONSE

 29

CONSUMER QUESTIONNAIRE:

Name………..………………………………………………………………………………...........

Occupation………………………………………………………………………………………….

Address…………………………………………………………………………………………….

1) Age

a) <15 b) 15< 25 c) 25<40 d) 40<60 e) 60<

2) Who generally do shopping (Food Products) in your family?

a) Father b) Mother c) Children d) Yourself e) Other

3) Who is the main consumer of biscuit in family?

a) Children b) Elders c) Guests

4) Which brand of biscuit do you like?

a) Parle b) Britannia c) Sunfeast d) True e) Other

5) Why do you like this particular brand of biscuit?

a) Quality b) Taste c) Brand d) Price e) Packaging

6) If you don’t like True biscuit then the reason?

a) Quality b) Taste c) Brand d) Price e) Unawareness

7) Any particular reason for which you attract most towards a biscuit brand?
 30

a) Quality with less price

b) Quality with great taste
c) Advertising
d) Brand Ambassador
e) After Promoting by Shopkeeper

8) If you like True Biscuit, then which type of variety you like most?

a) Cream
b) Marie
c) Glucose
d) Vita milk
e) Other

9) How do you find availability of True biscuit in your area?

a) Very Good
b) Good
c) Poor
d) Very Poor
e) Not at all

10) What is the source of information about True Biscuit?

a) Shopkeeper
b) Friend
c) T.V
d) Newspaper
e) Other

Any Suggestion……………………………………………………………………………………..
 31

BIBLIOGRAPHY:

 Marketing Management and Contemporary practices, 3rd Edition, Philip Kotler.

 Business Research Methods, Cooper and Schindler, 3rd edition.

 ICMR publications on Biscuit sector.

 Management consultancy: A Guide to the Profession, Milan Kubr.

 http://www.biscuitfederation.org , the Indian Biscuits federation official Website.

 http://business.mapsofindia.com/india-industry/biscuits.html Article on Indian

Biscuit segment.