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Case Based Analysis on Dal Industry

Case Based Analysis on Dal Industry

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    Dal Industry Study Dal Industry Study Document Transcript

    • Jawar’s Dal Dilemma Team Chanakyas Naga Prabhu N Sathya G NITIE, Mumbai Email: nagaprabhu.n@gmail.com sathyaguru88@gmail.com Ph: 8108345199, 9594530636
    • UDAAN 2012 ASMANJAS Indian Retail Market Indian retail industryis expected to touch Rs 65,000 crore (1) in the year 2011-12. The Indian retailsector is estimated at around Rs 9,00,000 crore, of which the organized sector accounts for a mere 2 %indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organizedretailer. Purchasing powers of Indian urban consumer is growing and branded merchandise in categories likeapparels, cosmetics, shoes, watches, beverages, food & even jewellery, are slowly becoming lifestyleproducts that are widely accepted by the urban Indian consumer. Indian retailers need to take advantage ofthis growth and aimto grow, diversify and introduce new formats, to pay more attention to the brandbuilding process. There is no doubt that the Indian retail scene is booming. The Indian retail scene has witnessed too many players in too short a time, crowding severalcategories. The growth rate of super market sales has been significant in recent years because greaternumbers of higher income Indians prefer to shop at super markets due to higher standards of hygiene andattractive ambience. Here also small, single-outlet retailers dominate the market. Although these retailchains account for only a small share of the total market, their business is expected to grow significantly inthe future due to the growing quality consciousness of buyers for these products . Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3% or US$ 6.4 billion. India is rated the fifth most attractive emerging retail market: a potential goldmine Ranked second in a Global Retail Development Index of 30 developing countries drawn up by Kearney. India is rated the fifth most attractive emerging retail market: a potential goldmine. Food and apparel retailing key drivers of growth. Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households.Organized Retailing of Pulses - Current Scenario India has a large vegetarian population, which is largely dependent upon pulses, wheat and milk asits major source of protein. The size of consumption of pulses in India is around 17.5(2)million MT. In orderto meet such demand, India is dependent upon import of pulses to the extent of 2-3 million MT. Indiaimports its requirements from various countries, such as Myanmar (Urad & Tur), Canada ,Australia andvarious other countries. Organized retailing of pulses is still in its infancy in India. The unorganized retailinghas dominated the Indian landscape so far and small quantity is sold by Kirana stores and modern trade astheir in-store brands. 1 TEAM CHANAKYAS
    • UDAAN 2012 ASMANJAS Global Pulses Production in Retail Sales of Pulses in Indian Retail MT (2010-11) Market 25000 Total : 61.3 million MT 20000 15000 10000 5000 0 2006 2007 2008 2009 2010 Retail Sales in000 tonnes Major Players – Region-wise: Evaluation of Strategies of Bhakti DalsBranding Strategy: Branding is very important in the current retailing formats. The dals arelaunched in an attractive Farm Story pack, with a free recipe booklet which helpsin increased brand visibility and brand recall. Label gives satisfaction to consumers,while farmers are not able to deliver quality products that can create trust.Targeting Strategy: The pulses range has been reasonably priced between MRP Rs85 to Rs100 for a one-kg pack. The smaller SKUs of 500g and 250g help in promoting the product for the first time users. Also it makes the purchase convenient for frequent buyers and nuclear families.Distribution Network Strategy: MKS rural retail outlets and its existing salt distribution network helps to penetrate further in theIndian market in a fast pace. It gives them cost advantage as well as the distribution advantage. Thecompany markets the product in Tier I and Tier II cities through food malls and large retail chains. 2 TEAM CHANAKYAS
    • UDAAN 2012 ASMANJASSailing on Customer Confidence: Bhakti Dals are all-natural, farm-fresh produce which are sourced from reputed, MKS-supportedIndian farms, unlike most packaged dals available in retail outlets, which are imported. Hence they offerbetter / reliable quality, hygienic pulses to Indian household winning customers‟ trust.Quality standards: The inherent quality of pulses and the nutrient values of dals are not compromised in BhaktiDalswhich are a result of due care taken in every process — from seed to food. The company buysunpolished pulses from large farmers and wholesale markets and then they are 100% laser-sorted, machine-cleaned so that Bhakti dals are farm-fresh, unadulterated and hygienically processed. Quality Testing is donefor seed quality, packaging and post-packaging making Bhakti Dals a premium quality grain. Learning from Bhakti dalsLeveraging the distribution network: • Edible oil distribution network of ADAL can be used in a similar fashion as that of Salt and soda network of MKS for market penetration.Product Differentiation: • Desired intangible attributes in a food product: Taste, Quality, Health and Value for money. • Bhakti focuses mainly on quality, health and value for money whereas ADAL has scope for focussing on taste factor too.Increasing the depth of Product Mix: Bhakti Dals do not cater the needs of large scale buyers, hotels, restaurants conveniently to a largerextent because the maximum SKU available on Bhakti is 1 kg pack. This can be taken as an advantage forADAL by introducing larger SKUs.Segmentation: Opportunities based on income and demography is not explored as only one product type of eachcategory is available.Procurement: Sourcing is solely dependent on Indian farms which can be risky due to uncertainty in monsoonswhich may hamper the profit margins. So there should be a right mix of imports and Indian farm produce insourcing to mitigate the risks involved and to bridge the demand-supply gap.Brand Leveraging: MKSextended its Bhakti brand of salt to introduce a range of pulses thereby leveraging its brand.DESTINY, SUR, ORGANEEC, SWACH DHANI and PLATINA are the brands under which ADAL sellsits range of edible oil, vanaspati and bakery shortening. As per AC Nielsen ORG MARG „Destiny‟ hasemerged as the highest selling consumer pack brand in India. In line with MKS strategy ADAL may enterthe pulses market by promoting through their more popular brand. 3 TEAM CHANAKYAS
    • UDAAN 2012 ASMANJAS Entry strategiesChallenges like retail differentiation,merchandising mix, supply chain management and competitionfromsupplier‟s brands is the talk of the day.Segmentation:Region wise:Pulse consumption in India differs by region; pulses suchas lentils arepopular in northern India but are notthe pulse of preferencein southern India.As per the market analysis, the pulse consumption pattern is shownIncome wise: As a brand differentiator and tostand ahead of the market the product canbe sourced as two different types fordifferent band of consumers based ontheir buying power and income.Targeting: About 4-5 per cent of pulses sold in India are branded, of which most are regional brands (3). Thisprovides a great opportunity to target the untapped market. In today‟s scenario the demand of the brandedpulses will be mainly driven by o “ Busy Lives Impede An Active Lifestyle” - Individuals who always look out at taste cum health as a prime factor o Individuals who are keen on having a healthy diet& Buy best known brands o Working women who depend on faster cooking as well as healthy food for the family.Brand awareness: With a reach of 1 million retail outlets and 80 million consumers, promotional sample dal packsalong with ADAL edible oil, the company will be able to create the brand awareness. They can promote theproduct further by any of the following techniques o Distributing free samples for a reasonable population to spread the brand value o Sponsor popular regional cookery shows. 4 TEAM CHANAKYAS
    • UDAAN 2012 ASMANJASPositioning: “Investing The Brand with an Ingredient Insight” should be the mantra .Each brand can be positionedconveying the following messages as per the demography‟s in which we market.Strategic group:ADAL should chalk out a broad strategy to take up the business with these insightsBrand Focus: With major chunk of pulses being consumed among the primary categories as detailed, ADALshould concentrate on the priority ones as given below.Sourcing Strategy: As ADAL has a strong international presence through edible oil import and export operations, it canutilize the network for imports of pulses cost effectively which translates to least entry barrier. It leads toassociation and strategic partnerships in the long run.Farmer Growth Initiative: • Identify and take initiatives to leverage upon the strengths of the large section of farmers. • Project taken under the aegis to promote economic scalability of farmers undertaking the pulse production, which would bridge the demand and supply gap in the country. • Public Private Partnerships (PPP) to cultivate and procure the pulses would earn goodwill among the farming community which will strengthen the base for agricultural revolution in the concerned areas. 5 TEAM CHANAKYAS
    • UDAAN 2012 ASMANJASReferences: 1) Global retail consultants KSA Technopak - Challenges & Issues in Retailing of Pulses in India(2011) 2) Economic Times dated 8Jan 25, 2012 on Branded Pulses. 6 TEAM CHANAKYAS