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Good Day biscuits-Market Analysis

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  • 1. GOOD DAY BISCUITS Good Day biscuits are a product from Britannia Industries Limited. This brand places itself in the FMCG industry. In India, FMCG is among the top four ranking industries with a net worth of around 15 Billion USD and is growing at a phenomenal rate with the projections of around 100 Billion USD by 2025.Product wise this industry can be divided into: FMCG-Household products such as detergents, mosquito repellants, laundry products, etc. FMCG-Personal care products such as soaps, shampoo, oral and skin care products. FMCG-Food and beverages products include tea, coffee, mineral water, bakery products, etc. (www.pwc.in,2013) Fig.1 (Britannia Good Day advertisement) (www.britannia.co.in, 2013) PESTEL analysis of FMCG Industry: Introduction:
  • 2. The success or failure of an industry is determined by the external and internal factors affecting it along the run. The key is not just to be defensive and defy these factors in order to survive but to use or even manipulate them towards your advantage. Every industry including and especially FMCG industry is effected by the following factors like the political and legal environment of the place they are operating, economical landscape of the landscape, socio-environmental causes and their effects and lastly the technology the time they are existing. These factors are responsible for deciding the fate of the industry and the individual companies it comprises of. Politico-legal: FMCG industry has to follow regulations and laws both nationally and globally pertaining to a wide spectrum of fields like proprietorship, copyrights, safety of products, care of employees and a myriad of other environmental and social constraints. Any case of non-compliance may lead to serious ramifications such as suspension of license or even the imprisonment of personnel. An unseen threat of the modification of government policies both fiscal and political, regulations and duties is always present. There had been cases earlier like the Chinese government penalizing Unilever of $308000 for a mere announcement that the price of their products could rise. Further, owning to the monopoly oriented mindset of European Union, European Commission penalized Unilever along with P&G for the establishment of a price fixing cartel. Trademark rules are less stringent in Asian countries which enable counterfeiters to illegally manufacture goods resembling the original products. The major contributor in this unethical and illegal practice is Pakistan, where even the company personnel found it hard to differentiate between the original and counterfeited products owing to the high precision of the duplication of packaging. Economical: FMCG industry is impacted significantly by the downturn or upturn of global economy. The competition in the FMCG industry grew to an alarming level especially in Western Europe in the year 2012 due to recession. Inflation and economical deprivation rendered people unwilling or even unable to buy certain products which affected the cash flow significantly, however, certain cheap products showed growth in sales. Countries like Indonesia, South Korea, Turkey and Mexico were predicted to be new hubs of global economic development in the near future by Goldman Sach’s chairman. As per research it was inferred that sales of FMCG products in India are more prone to be affected by financial condition of the country as Indian people were found to shift to cheaper products in when inflation took over. Socio-environmental:
  • 3. After years of learning and modification, the FMCG industry in India has been able to gain a higher status in terms of social well being oriented industries. It has gained faith by making products which are safe to use. This industry has also contributed a lot in social welfare activities like World food programs and making pure drinking water available to the masses. Many companies like Unilever and Britannia utilize eco friendly stuffs for the packaging of their products becoming socially responsible and environment friendly companies in the eyes of consumers. Pricing is done keeping in mind the need of the people and their ability to pay. Further, due to the masses becoming more and more health conscious, a rise in the sales of personal hygiene products and healthy eatables is expected in the near future. Technological: Technology plays a key role in FMCG industry. From the manufacturing of products to the packaging and supply, technology holds primary importance. The companies with advanced means of production and supply gain a competitive advantage over their competitors. High level of automation of manufacturing units differentiates companies like Unilever from other players in the market. Hence irrespective of the field of operation, the whole of the FMCG industry is become technology oriented with the establishment of R&D sections. Areas like advanced genomics and nanotechnology have become the most critical aspects. Being a supportive agent, technology also brings some threats with it, for instance advanced technology applications like the internet has made the job of counterfeiting very easy for the malefactors and to protect their goods from replication the companies are deploying high levels of security and complex design in their overall operation. (www.edublogs.org,2012) Britannia Britannia Industries Limited is a food products manufacturing company with its headquarters in Kolkata, India. The two major brands of this company are Britannia and Tiger, the biscuit giants in the country which contribute to about 38% of the total market share. This company is basically involved in the manufacturing of confectionary and dairy products. The history of Britannia Industries goes back to more than a century when it was started in a small house with a primary investment of Rs 295 having the main objective of manufacturing biscuits in central Kolkata. After some time this small unit was acquired by VS Brothers which in 1918 in partnership with an English businessman CH Holmes launched Britannia Industries Limited. In the year 2013, the Britannia factories’ manufacturing capacity is recorded to around 433000 tonnes. The major brands include Tiger, generating 20% of Britannia’s revenue, Good Day, Milk Bikis, VitaMarieGold, 50-50, Pure magic and many more. (www.britannia.co.in,2013)
  • 4. Fig.2 (Different brands of biscuits produced by Britannia Industries Ltd.) (www.britannia.co.in,2013) SWOT analysis: Introduction: A SWOT analysis or SWOT matrix is a diagrammatic tool used to determine the internal and external factors affecting an industry, organization, a venture or even a person. Every company or organization works towards achieving an objective or a “mission”, the SWOT analysis is used to infer various factors which could help or hinder a company from achieving it. A SWOT matrix consists of four heads namely Strengths, Weaknesses, Opportunities and Threats hence the name. The SWOT analysis for Britannia Industries Limited is as under: Strengths SWOT Analysis More than a century old brand along with a huge trustworthy image. Many types of products like biscuits, rusks, dairy products and cakes. Strong and wide network of distribution which penetrates even to the remotest of the areas. Big revenue based market share in biscuits industry. Potential for advertising campaigns. Robust R&D section leading to innovations for health conscious people and patients. For eg. Nutri Choice biscuits and VitaMarieGold
  • 5. Weaknesses Opportunities Threats Stronghold in rural market. Huge expenditure in marketing of products. Dairy segment not so substantial. Similar products made by several other players enabling the customer to change brands. Fast growing economy of India growing the amount of disposable income. Aggressive expansion possible in dairy segment. Potential to expand further abroad. Potency of manufacturing new products in the same line segment. Players offering similar products with lower pricing. Option of buying similar products from local bakeries. Inflation in Indian economy leading to high manufacturing cost. Further inflation may lead to downfall in sales in the near future. (http://www.reportlinker.com,2013) Good Day biscuits: Biscuit products in India flourished slowly and gradually since the non descriptive house in central Kolkata invested Rs 295 in making biscuits but the expansion and growth got backed up by the word exponential with the advent of the tragic World War II, when Britannia Industries agreed into a contract with government to provide huge quantities of biscuits to the military forces.With time biscuit industry flourished and so did Britannia. Britannia became one of the industrial giants of India, and along came the product Good Day Biscuits. (www.britannia.co.in,2013) STP analysis of Britannia Good Day Segmentation Due to its varied ingredients, Good Day biscuits’ customer pool comprises of people of all ages and backgrounds. Further its image of premium biscuits makes it a biscuit that could be served in gatherings and parties. Good day is synonymous to a type of treat that induces happiness in people’s daily life. Targeting As evident from its segmentation strategy, Good day biscuits are targeting to people from all walks of life. May they be elderly parents, young students or just school going kids. Its mass marketing and pricing makes it available to people from every sect and region. Fig. 3 (Mass marketing opted by Britannia creates huge market share)
  • 6. (www.britannia.co.in, 2013) Positioning Good day biscuits are positioned as premium biscuits having a minimal price in the customer’s mind. Something more than a biscuit that’s available at very reasonable price. Further due to its nutrient rich ingredients, it also holds an image of a nutritional product which is something more than just a biscuit which helps moms to consider it as a vitamin and mineral rich product for their kids. 4Ps of Britannia Good Day- Marketing Mix Product Good Day biscuits are placed under “the augmented category”. This category refers to those products which are primarily focused towards exceeding the customers’ expectations. In other words, Good Day is something more than just a biscuit. It has various added constituents like cashew, almonds, butter, chocolate chips and cream available in different packaging and varieties which make it a different product. Due to these constituents it’s liked by people of all age, taste, as well as with all kinds of mindsets, may they be health conscious or taste conscious. This amalgamation of various ingredients has placed Good Day biscuits into the premium class of biscuits. Fig. 4 (Good Day variants)
  • 7. Good Day Butter Good Day Cream and Nuts Good Day Classic Cookies Good Day Choconuts (www.britannia.co.in, 2013) Price As pricing is one of the most significant part of a marketing mix, owing to the fact that this is the only “P” which contributes in the turnover of the company, so pricing shall be done very carefully keeping in mind the need of customers and their willingness to pay the marked price for the product. Good Day has done a tremendous job in this section as it is available in packs of different sizes with varying costs, Rs 10, Rs 20 and Rs 32, which is a reasonable price for a premium product. Place As biscuits are a daily routine products, so they should be available within the vicinity of the customer’s reach i.e. local kirana shops, retail shops, supermarkets, etc. And thanks to the wide distribution channels of Britannia, Good Day biscuits are available even in the remotest of
  • 8. places across the country.There are three trade categories through which Good Day biscuits are provided to the customers. General category: Provision stores, Kirana shops and Stand alone shops. Modern category: Reliance fresh, Food Bazaar and Food World. Institutional category: Hotels, Airlines, IRCTC Fig. 5 (Distribution infrastructure of Britannia Good Day biscuits) (compiled by the author) As depicted in Fig. 5, the distribution network of Britannia is quite robust from the company depot to the customers. There are around 2500 wholesalers, who collect products from manufacturing units and provide it to retailers with a transaction no. of 1.25 crores a month. (www.enteg.com, 2011) Promotion
  • 9. In promotion, the philosophy of Britannia dictates of sharing the cost of promotion with retailers, and the growth of sale by retailers increases the revenue which is again utilized in a similar way across its vast distribution channels. In the core of Britannia’s marketing strategy lies the building of brand image, and reason being its astronomical turn over, a large amount of revenue is invested in brand building creating an army of loyal customers. (Docstoc,2013) Fig. 6 (A snapshot from the television advertisement of Good Day) (www.britannia.co.in, 2013) Main competitors Priyagold Butter Bite Priyagold Butter Bite is a brand of biscuits manufactured by Surya Food and Agro Ltd. It was launched in the year 1992 and Butter Bite biscuits entered the market in 1993, today it holds the position of one of the most favorite brand of biscuits in India. (www.priyagold.com) Product Butter Bite has been able to create and sustain the image of biscuits which are healthy as well as for all age groups. It has also been able to make its name synonymous with low cost premium biscuits, and due the low pricing strategy it has turned out to be the biscuit not only enjoyed in urban but rural areas as well. It’s available in many variants i.e. Butter Cashew, Badam Pista and Premium Butter which are each available in 50g, 100g and 230g packages with minimal pricing. Price Butter Bite biscuits employ the value pricing approach i.e. low cost products with huge market share along with providing good quality. This approach creates huge volume share in the market. Its basic strategy is that of market penetration. These biscuits are available in different
  • 10. packaging with prices ranging from Rs 5 to Rs 19.Retailers get the margin of 12% while distributors get 4%. Place Because of its robust network, Butter Bit biscuits are available in the remotest parts of the country with 200 wholesalers and 50000 retail outlets. Factories are strategically placed and manufacturing units are present in rural areas as well. Further more than C&F agents and depots supply goods to this vast distribution network. Promotion Its promotional platforms range from TV commercials to print ads in newspapers to pamphlets and flyers. It’s promotion targets kids and elderly people. With its tagline “Haq Se Maango”, it has targeted people from all walks of life. Sunfeast Sunfeast biscuits are a product of ITC and were launched in the year 2003 in various flavors and packaging. Product Sunfeast biscuits are available in several flavours i.e. Sunfeast glucose, regular Marie, orange Marie, butterscotch and many more. Main strength of Sunfeast biscuits is its large variety, from glucose to cashew and honey, from crispy cashew to butter, it’s available in many variants which creates a vast consumer base for it. Place Thanks to Indian Tobacco Corporation’s already established vast distribution network, Sunfeast harnessed this potential right from the day of its launch with the brand available in about 2 million outlets. ITC tapped its potential of marketing its brand of biscuits from the big malls to the pan-beedi shops and accrued a huge market share. Promotion Right from day one, Sunfeast has covered its spots in corners of newspapers, the rear of buses and the television networks. In one of its ads it showed a world made up of cream targeting kids. It also, through its ads, made mothers realize the benefits of whole wheat for their children. In the year 2005, Sunfeast hired famous celebrities like Shahrukh Khan and Sania Mirza for their brand promotion.
  • 11. Price Cream biscuits from Sunfeast are available at Rs 10 for 100 grams. The whole wheat biscuits targeting kids is available at Rs 4 for 100 grams, Rs 3 for 75 grams and Re 1 for 19 grams. Sunfeast orange cream and butterscotch cream are both available at Rs 10.Sunfeast Marie light is available at Rs 19 (400 grams) and Rs 13 (200 grams) mostly targeting housewives. (www.authorstream.com,2013)
  • 12. References: 1. Authorstream (2013) ‘Marketing ITC’ (online) (cited 2013).Available from <URL: http://www.authorstream.com/Presentation/moarss-379409-final-ppt-4-marketing-itceducation-powerpoint/> 2. Brittania (2013) ‘Zindagi Mein Life’ (online) (cited 2013) Available from <URL: http://www.britannia.co.in/companyoverview_overview.htm> 3. Business Standard (2007) ‘Battle-scarred Britannia on expansion spree’ (online) (cited 6 October 2007).Available from <URL: http://www.businessstandard.com/article/companies/battle-scarred-britannia-on-expansion-spree107100601031_1.html> 4. Docstoc (2009) ‘Britannia Marketing Mix’ (online) (cited 27 September 2009).Available from <URL:< http://www.docstoc.com/docs/12162808/BRITANNIA-Marketing-Mix> 5. Edublogs (2012) ‘PEST analysis of FMCG Industry’ (online) (cited 9 December 2012).Available from <URL: http://biztutor.edublogs.org/tag/pest-analysis-of-fmcg-industry/> 6. Enteg (2011) ‘Customer Success Stories-Britannia Industries’ (online) (cited 2011).Available from <URL: http://www.enteg.com/newsletter/custom_britannia.html> 7.Priyagold (2013) ‘Priyagold biscuits” (online) (cited 2013). Available from <URL: http://www.priyagold.com/prod01bbpremium.html> 8.PWC (2013) ‘The Indian FMCG Sector’ (online) (cited February 2013).Available from <URL: https://www.pwc.in/en_IN/in/assets/pdfs/rc-publications/innovation-in-fmcg.pdf> 9. ReportLinker (2013) ‘Britannia Industries Limited’ (online) (cited September 2013).Available from <URL: http://www.reportlinker.com/p0548973/Britannia-Industries-Limited-BRITANNIAFinancial-and-Strategic-SWOT-Analysis-Review.html> 10. The Economic Times (2011) ‘Parle-G World’s No.1 selling biscuit’ (online) (cited 3 March 2011).Available from <URL: http://articles.economictimes.indiatimes.com/2011-0303/news/28650799_1_parle-products-parle-g-glucose-biscuit>