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Final 32_report


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Final 32_report

  1. 1. Britannia Industries Limited A Report on Tiger Biscuits MAYANK THUKRAL (08P089) SUDHANSHU GARG (08P108) SUPRABH SAMSUKH (08P110)
  2. 2. 1. Executive SummaryThe FMCG market is set to reach to US$ 33.4 billion in 2015. Penetration level aswell as per capita consumption in most product categories like jams, toothpaste, skincare, 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 tobranded products. Growth is also likely to come from consumer upgrading in thematured product categories. With 200 million people expected to shift to processedand packaged food by 2010, India needs around US$ 28 billion of investment in thefood-processing industry.India is one of the largest emerging markets, with a population of over one billion.India is one of the largest economies in the world in terms of purchasing power andhas a strong middle class base of 300 million.Around 70 per cent of the total households in India (188 million) reside in the ruralareas. The total number of rural households is expected to rise to 153 million in2009-10. This presents the largest potential market in the world. With growingincomes at both the rural and the urban level, the market potential is expected toexpand further.An average Indian spends around 40 per cent of his income on grocery and 8 percent on personal care products. The large share of fast moving consumer goods(FMCG) in total individual spending along with the large population base is anotherfactor that makes India one of the largest FMCG markets.In India per capita consumption of biscuits is estimated at a low 1.5 kg, reflecting thehuge potential for growth of the industry. Over 900 million Indians buy and eatbiscuits with varying frequency in any year. The penetration of branded product inthis segment is quite significant, and is valued at Rs 2,500-3,000 crore. None of theother wheat-based segments is as developed as the biscuits industry. The biscuit 2
  3. 3. 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 1.1million tonnes per annum and valued at over Rs 50 billion. The unorganized sectoraccounts for over 50% of the market. The market has been growing at a CAGR of6-7% pa.The present biscuits-bakery sector in India looks like a battlefront. The battle beingled by stalwarts like Britannia and Parle with close competition from other companieslike ITC, Nutrine, HLL Kissan, Kwality and even international brands like Kellogg,Nestle and United Biscuits. 3
  4. 4. Contents1. Executive Summary ............................................................................................ 22. Company Overview ………………………………………………………………….. 53. Product Overview …………………………………………………………………….. 64. SWOT Analysis …………………………………………………………………….. 7 4.1 Strengths …………………………………………………………………………… 8 4.2 Weakness ……………………………………………………………………….…. 10 4.3 Opportunities …………………………………………………………………... 11 4.4 Threats ….………………………………………………………………………….. 125. Competitor Analysis ……………….……………………………………………….. 13 5.1 Analysing strategies and activities of direct competitors …………...………. 15 4
  5. 5. 6. Analysis of Consumer Behaviour ………. ………………………………………... 22 6.1 Survey Methodology ……………………………………………………………. 22 6.2 Demographics of the Respondents …………………………………………... 22 6.3 Details about Family ……………………………………………………………. 24 6.4 Consumption Behaviour ……………………………………………………….. 25 6.5 Buying Behavior ………………………………………………………………… 28 6.6 Brand Awareness ……………………………………………………………… . 31 6.7 Most Liked functionalities ……………………………………………………. .. 33 6.8 Outcomes ………………………………………………………………………... 357. Conclusion ……………………………………………………………………….. .. .. 378. References …………………………………………………………………………. .. 399. Questionnaire used for Survey……………….………………………………….. ... 40 2. Company Overview 5
  6. 6. Britannia Industries Ltd is the leading bakery products company in India with apredominant focus on sale of branded biscuits. The companys history goes back to1892, when it was incorporated in Kolkata under the name of Britannia BiscuitCompany. BIL got its current name in 1979. Four years later, in 1993, the NusliWadia group acquired a stake in BILs parent, Associated Biscuits International Ltd,UK and became an equal partner in BIL with French Major, Groupe Danone.The company is engaged in the business of biscuits, bread, cakes and rusks. Inaddition to the bakery business, Britannia runs its dairy operations through its jointventure Britannia New Zealand Foods Pvt Ltd.It caters to diverse needs and tastes of the Indian consumer across age groupsthrough its optimum range of biscuit brands. Some of its popular brands are -- Tiger,Good Day, Marigold, Milk Bikis, Treat, 50:50, Little Heart, Bourbon, Pure Magic,Snax, Premium Bake and Nutrichoice.The companys strategy of consistently renovating its existing brands and launchingnew ones has helped it garner larger share of the Indian biscuits market every year.Its market share stands at about 35 per cent. It is essentially a biscuit company with90.2 per cent revenues coming from sale of biscuits. The company has a biscuitsmanufacturing capacity of 1,63,500 tonnes per annum, spread over five units locatedat Delhi, Mumbai, Chennai, Kolkata and Uttaranchal. 3. Tiger BiscuitsLaunched in 1997 as a mass-market product, now Tiger constitutes 50% ofBritannia’s market share in organized biscuit sector. Tiger became the largest brandin Britannias portfolio in the very first year of its launch and continues to be so tilltoday. Tiger has grown from strength to strength and the re-invigoration in June 2005has further helped bolster its growth in the highly competitive glucose biscuitcategory. 6
  7. 7. Why Britannia Tiger? • Britannia Tiger is a mass-market product • Tiger is in Glucose biscuit segment which caters to the need of low-price market • Tiger has distribution in metro, suburban and rural sectors • Promotion mix of Tiger is very diverse, viz. celebrity promotion, competitions, emotional pitch etc… • Tiger brand is in the market for last 11 years and it has evolved with changing customer needs • Tiger is the most successful brand in its category 7
  8. 8. 4. SWOT AnalysisSTRENGTH WEAKNESS Contract Manufacturing Model  Brand name tussle Strong brand positioning as a health  Low profit margin force biscuit  Low penetration in sub-urban and Quality Accreditations rural sector Various Tigers Alternative Distribution and Marketing strategies Excise duty holiday Value for MoneyOPPORTUNITY THREAT Cost-control  Increasing Inflation Untapped Market Potential  Bleak near-future industry outlook International Market  Competition Growth Potential  Price sensitive market  Customer behavior shift 8
  9. 9. 4.1 Strengths1. Contract Manufacturing ModelWhat makes Britannia unique amongst its peers is its contract manufacturing model.The company outsources entire production of bread, cakes & rusk sold by it. Around76 per cent of its biscuits are also produced by third party units. This strategy hashelped Tiger brand in catering to growing market needs quickly and at lowest pricepossible.2. Strong brand positioning as a healthforce biscuitTiger as a brand has been a roaring success. Within a year of launch, Tiger Glucoseand Tiger Cashew have, together, achieved a turnover of Rs 100 crore and amarketshare of 30 per cent in the glucose biscuits segment.At the low-end price-points targeting the mass market, Tiger Glucose (Rs 5 for a100-gm pack) and Tiger Cashew Badam (Rs 6 for 75 gm) are positioned ashealthforce biscuits. Consumer research showed that good health is theoverwhelming objective when mothers choose snacking options for their children; italso revealed that mothers are aspirational for their children. So, the selling line forBritannia Tiger was ‘Jam Ke Khao, Kuch Ban Ke Dikhao’ (Eat Lots, BecomeSomething). The proposition repositioned Tiger brand, and brought a contemporaryfeel to the advertising.3. Quality AccreditationsOther than Cremica, Priya Gold and Britannia Tiger, none of the other brandscarry the ISI mark.In a comparative test study done in 2003 by Voice, a voluntary organisation ininterest of consumer education, it was revealed that only the claims of BritanniaTiger as a health product matched the actual content of the biscuit. On the contrary,Parle G, which claimed to have eight per cent proteins, actually has just 6.8 per centof it while Kelloggs had only 6.2 per cent against the claimed 7.4 per cent. 9
  10. 10. 4. Various TigersBritannia has gained market share for its Tiger brand by introducing different variantscatering to all segments of society viz. glucose, cream(Orange, Elaichi, Chocolate,Rose Milk and Kesar), coconut, Chota-Tiger and recently-launched banana variant.Enhancing the portfolio of varieties under the Tiger brand is intended to giveconsumers more reasons to buy.5. Alternative Distribution and Marketing strategiesa) Along with normal distribution, Tiger is also focusing on bulk supplies at railwayplatforms, canteens and BPO offices, thereby increasing its reach across regions.b) Also launched "Chota-Tiger"(smaller packs) with two to three biscuits to facilitatequick eating at consumption avenues. Separate market structure and sales force isdevoted to handle these alternative distribution.6. Excise duty holidayThe combined taxes, central-vat, excise & local taxes used to amount to 26% of totalcost of Tiger biscuit. Recently government gave relief to biscuit industry byexempting the biscuit variants with cost below 100per kg from excise duty. Thismeasure has come as a great relief to Tiger as it falls under the privileged segment.7. Value for MoneyTiger biscuit is positioned at low-end price-points (Rs 5/ Rs10) targeting the massmarket. Tiger biscuit has maintained quality at low prices, maximizing value for thecustomer. Tiger had maintained the same price for its flagship ‘glucose’ brand forseveral years to enhance customer satisfaction.4.2 Weakness1. Brand name tussle 10
  11. 11. The relation between Britannias major stake holders -- Wadias and Danone, hasturned sour since 2005--06 over the alleged unauthorized use of the Tiger brand byDanone in five countries; viz. Singapore, Pakistan, Malaysia, Indonesia and Egypt.Britannia has filed a case against Danone at Singapore court regarding the same.2. Low profit marginAfter a drop in operating profit margins to 6% levels in 2006-07 from over 11% in theprevious year. The current input prices are still significantly higher than previousyear. Britannia will have to neutralize the adverse impact of the same through acombination of improved realization per pack, operating efficiencies and miximprovement.3. Low penetration in sub-urban and rural sectora) Although Britannia has a large established distribution network, but still there is ahuge unorganized sector(40% of total Indian biscuit market) operating in sub-urbanand rural areas. These regional players mainly eat onto the potential market pie ofTiger biscuits, as it is the brand primarily into mass-market.b) Lion’s share (70%) of Britannia’s revenue comes from metros. Penetration in sub-urban and rural areas is very low.4.3 Opportunities1. Cost-controlCost-cutting measures, especially in the areas of manufacturing, logistics anddistribution, will pave the road for increased profit margins. Rising inflation andincreased input prices have been pushing profit margins for last couple of years. So,employing various strategies to control cost will help in meeting financial objectives.2. Untapped Market PotentialIndias per capital biscuit consumption is still at about 1 kg, as against 2.5 to 3 kg inSri Lanka, 5 kg of europe and 7.5 kg of USA. So, in future we can expect per capita 11
  12. 12. consumption to grow to at least 2.5 kg. This entails to a huge untapped potentialmarket.3. International MarketAlthough britannia exports its various products to countries including the US, Ghana,Seychelles, Singapore, Oman, Saudi Arabia, United Arab Emirates, Qatar, Bahrain,and Kuwait, but Tiger is exported to only Sri Lanka, US and AUS. So, the existingdistribution network can be leveraged to export in these countries.4. Growth Potentiala) The company is investing Rs.130 crore from its internal cash reserves towardscapacity addition. It is also believed to be adding capacities at its contractmanufacturing units at West Bengal, Assam, Pondicherry, Kanpur and Nagpur.b) The company has also been following the inorganic route of expansion quiteactively in the recent past. It made its first international acquisition in March 2007 bybuying 70 per cent stake in Strategic Food International Co LLC, Dubai, a leadingcompany in the biscuits and cookies segment in the GCC (Gulf Cooperation Council)markets.c) Biscuit industry in India in the organized sector produces around 60% of the totalproduction, the balance 40% being contributed by the unorganized bakeries. Withincreased production capacities Tiger will be able to capture part of unorganizedsector.4.4 Threats1. Increasing Inflation 12
  13. 13. Food inflation is in excess of 10 per cent and input-cost inflation will be more severein 2008-09. Inflation will remain the biggest challenge for the next year. Increasingprices of inputs - 20-25% increase in inputs in last 2 yrs. Prices of food grains aresoaring wheat have increased from 650 to 980 per quintal2. Bleak near-future industry outlookThe growth in the biscuit market in India has reflected a decline in the last fiscal. Thiscan be attributed to increasing input prices and rising inflation. Also, oil prices havereached $144/barrel. All these factors indicate that in near-future industry has arough ride ahead.3. CompetitionStrong competition from ITC, Parle, Sara Lee, United Biscuits, Kellogg, and NestleIndia ensures that it does not take its leadership, in the domestic market, for granted.Specifically in Glucose biscuit segment, Tiger faces stiff competition from ParleProducts Parle-G biscuits.4. Price sensitive marketTiger biscuit operates in the low-price segment, which is catering to a very pricesensitive customer. This leads to very low margins and hence very less space forinnovation. Any increase in price can lead to substantial market-shift.5. Customer behavior-shiftBiscuit industry in low-price segment faces stiff competition from other foodscategory viz. namkeen, chips etc. These are also in the low price segment(Rs 5-10category) and have the advantage of lower taxes. VAT on this food segment is 4%while Biscuit segment is levied a VAT of 12.5%. Lower taxes provide for higher profitmargins and stiffer competition in supply chain. 5. Competitor Analysis 13
  14. 14. Brand competitors are defined as competing brands of products which can satisfythe consumer’s wants almost equally as each other.For Britannia’s Tiger brand, the main competitors are Parle, ITC and Priya Gold.Other small brands in the biscuits industry are Cremica, Dukes, Bakemans, Anmol,and Sobisco. Apart from these products from biscuit segment, other snacks likeChips and Namkeens also serve as alternative products that satisfy the needs of thecustomers and eat into the potential market of Britannia Tiger.Analysing competitors’ presence in the current market on some parameters, viz.Market share, brand awareness, brand reach, marketing expenditure and growth;following observations are made. A glance at the Market share of different competitors, in the organized biscuitsegment in Indian consumer market, will tell us that Britannia is the market leaderwith 38% market share closely followed by Parle. Volumes in 2006 Britannia 19% Parle 5% 38% ITC 7% 31% Priya Gold OthersParle G scores over Britannia Tiger and other products in Brand Awareness amongconsumers. This observation is based on the sample survey done by our teamduring the preparation of this report. 14
  15. 15. In brand reach Britannia scores much above other products in the biscuit marketwith a reach to 3.3 million stores, as against Parle’s reach to 1.8 million and ITC’sreach to 1.5 million stores. 4 3.3 Reach (in millions) 3 1.8 2 1.5 Britannia 1 Parle 0 ITCITC has the highest Marketing expenditure when compared to both Britannia andParle. ITC spent Rs 117 crores in 2004-05 under marketing expenditure head, whileBritannia and Parle spent Rs 100 crores and Rs 50 crores, respectively. 15
  16. 16. Apart from the above comparisons, on comparing growth of Biscuit sector, whichgrew at a CAGR of 7% in last 5 years, with that of other snack categories like Chips(15-20%) and Namkeens (35%); it can inferred that Namkeens and chips are eatinginto a huge potential market of Britannia Tiger.5.1 Analysing strategies and activities of direct competitors:Parle Products has been Indias largest manufacturer of biscuits and confectionery,for almost 80 years. It is regarded as maker of the worlds largest selling biscuit,Parle-G. It is also a host of other very popular brands like krackjack, Monaco, Hide &Seek, Parle Marie, Digestive Marie etc. in biscuit segment and Melody, Mango Bite,Poppins etc. in confectionery segment. The Parle name symbolizes quality, nutritionand great taste to Indian customers. With a reach spanning even the remotestvillages of India, the company has seen a great growth since its inception. While to 16
  17. 17. consumers its a beacon of faith and trust, competitors look upon Parle as anexample of marketing brilliance.Many of the Parle products - biscuits or confectioneries, are market leaders in theircategory and have won international acclaim such as the Monde Selection, since1971. Parle products play the low price game at all varieties of biscuits from glucoseto cream. Essentially, Parle plays a high volume, low margin game. With a 40%share of the total biscuit market and a 15% share of the total confectionary market inIndia, Parle has grown to become a multi-million dollar company. According to ORG-MARG reports, Parle G commands a good 65 per cent market share in the domesticbiscuit market. One of the most popular products of Parle Group is Parle-G. It has ruled the biscuits market for over 65 years. The glucose biscuits category in India is estimated at Rs 15 billion. The Parle G brand faces competition from Britannias Tiger brand of biscuits. But being the largest selling glucose biscuit brand has not made Parlecomplacent. The Mumbai-based low-profile biscuits major have always tried to seesome more scope in the category. It has wisely built more `social equity for itslargest selling brand, Parle G, by giving scholarships to poor children from WestBengal & Tamil Nadu. Its corporate equity was weak in these States compared toBritannia. With academics being a priority in these States, it has strengthened theequity of its corporate brand in these parts by using these tactics.There was a time when the biscuit maker was threatened, when Britannias Tigermade an entry into the glucose segment a couple of years ago. Today, in spite ofbigger FMCG majors such as ITC and HLL muscling their way into the category,Parle is not exactly on shaky ground. Besides, the category is fast expanding and itsgrowth in the sluggish FMCG industry has helped the company hold on to itsdominant position. While competing new and global players in this segment, Parlefound that there are distribution gaps in the eastern and southern markets 17
  18. 18. (compared to the North and the West), and it enhanced its distribution channel inthese parts.Protecting the turf of its largest-selling glucose brand, Parle has also decided torestrict its line extensions to avoid diluting its equity. While it has extended Parle G toa more premium variant (Magix), it has deleted the Parle G tag for its Milk Shaktibrand and brought it under the generic Parle name.Reacting to the competition in the biscuits segment, it took on Britannias brand ofGood Day cookies. Parle Products introduced two new cookie variants under itschocolate chip cookie brand — Hide & Seek. Sporting flavours such as Butter andCashew Badam. Hide & Seek till then existed as a single chocolate chip cookiebrand at the premium end of the market.Good Day, for the first time, will have a challenger brand at the national level. In fact,cookies, which generally have high butter content, are manufactured by a host ofregional players (mainly the local bakeries) and the big national players will have tofight for their share in this segment from the unorganised local players.Considering that the biscuits category has been growing rapidly at nearly 8 per cent,Parle has decided not to focus on its confectionery brands. In spite of having certainstrong confectionery brands such as Poppins, Mango Bite, Melody and Kismi, Parlerealises that it cannot get the margins in this category compared to its biscuits. 18
  19. 19. In 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose,Marie and Cream Biscuits. The mascot Sunny reinforces the emotional aspects ofthe brand. ITC is comparatively late entrant into the biscuits market. But the lateentrant is already on the podium in the third place with as much as 7 per cent of themarket in terms of value. There was a ‘business synergy consideration’ in ITC’sdecision to enter into biscuits market. ITC was already value-adding to wheat with itsbranded atta presence. By entering the biscuits segment, it could also improve itsbottom-line further.Before entering the segment, ITC dug into market research. Research revealed thatthe category had gaps which ITC could settle into. Findings revealed that consumerswished to taste new and innovative products. That was precisely what thecompetition had not done in a big way. The biscuits industry had witnessed littleinnovation; Glucose was Glucose and Marie was still Marie. In 2003, ITC launchedSunfeast with six ranges. But it was a calculated risk. ITC stuck to categoryfavourites like Glucose, Marie and Bourbon cream. Along with that, it also launchedinnovations such as orange-flavoured Marie, Marie light and butterscotch-flavouredcream biscuits. In 2004, Sunfeast followed this up with the launch of Sunfeast MilkyMagic. It has then launched the Sunfeast Snacky and Sunfeast Golden Bakes. 19
  20. 20. For biscuits, distribution and visibility are extremely important as its partly an impulsepurchase product. Sunfeast has been fortunate in this respect as ITC already had agood understanding of distribution channels due to its tobacco business. Thecompany used its existing network of convenience stores -- the companys name forthe hole-in-the-wall pan-beedi shops -- for Sunfeast. Not content with the existingresources, the company also looked at grocery stores and other retail formats. Thebrand is now available in nearly 1.8 million outlets while Britannia has a presence innearly 3.3 million outlets and Parle is available in 1.5 million outlets.In April 2005, Sunfeast launched its major campaign. It signed on Hindi film actor,Shah Rukh Khan as its brand ambassador. For promotions in southern states,Sunfeast has signed Tamil super star Surya as a brand ambassador. The companyhas been spending 35-40 per cent of its turnover from the biscuits segment onadvertising and promotions. Going by that number, ITCs annual marketing spendsare estimated to be in the region of about Rs 115-120 crore (Rs billion). Priya Goldspent close to Rs 45-50 crore (Rs billion), nearly 10 per cent of its turnover onmarketing. Even market leader Britannia with spends of Rs 100 crore (Rs billion)(2004-05) spends about 10 per cent of sales on marketing.As far as pricing is concerned, Sunfeast look at a two-pronged strategy; highmargins in cream variants and volumes from the Marie and Glucose segments. Thebiscuit consumer is willing to pay more only when he sees a clearly differentiatedproduct. Hence companies have little choice in terms of pricing. Industry barometer 20
  21. 21. AC Nielsen has indicated that both Parle and Britannia are losing market shares toITC. According to the AC Nielsen retail sales audit, both Britannia and Parle havelost volumes while there is an increase in volume of Sunfeast. But, to catch the largemarket share of Britannia & Parle, Sunfeast may have to drop its prices and this willsqueeze its margin even lower.Priyagold is a biscuit brand of Surya Food & Agro Ltd., started in Oct. 1993. Thecompany has an installed production capacity of 300 tonnes per day and thecapacity utilisation stands at 60 per cent at present. The Priyagold biscuit range isbeing produced in the plants located in Noida, Lucknow, Surat, Nadiad andFaziabad. The company has very good presence in northern part of the country.After establishing itself in the northern part, the company has now started to spreadits wings in southern part also and thus, making a direct competition with Britannia &Parle.The Priyagold brand has seen good growth in the non-glucose biscuit segment,which, according to industry estimates, accounts for 30 per cent of the overallbiscuits market. Several multinationals have expressed interest in either buying outor forging strategic alliances with the company to tap the ever growing IndianBiscuits Market. Priyagold currently has 23 varieties of biscuits and it has plans toincrease it by foraying into salty biscuits. It spends close to Rs 45-50 crore (Rsbillion), nearly 10 per cent of its turnover on marketing. The company has alsostarted tapping foreign market by exporting Priyagold biscuits to markets such asDubai, Muscat and Oman. 21
  22. 22. The main strength of Priyagold biscuits is that almost 70% of its sales come fromrural India which is a booming market. This gives the company a fine opportunity toleverage its rural distribution network for exponential growth of the country. 22
  23. 23. 6. Analysis of Consumer Behaviour6.1 Survey MethodologyWe surveyed people on the internet using an on-line survey and direct surveys bygoing directly to the people. The on-line survey was sent to people across thecountry in different states in order to make sure that we get the best mix in oursurvey.6.2 Demographics of the Respondents:Following are the details we gathered from the respondents, along with appropriatereasons for choosing these parameters: 1. Monthly family Income: On the basis of this we can find if different tastes and preferences exist for consumers falling in different income levels. 23
  24. 24. 2. Type of family: Here we have given two options to the respondents: nuclear and joint. This was again aimed to find the different tastes, preferences and usage for the biscuits across various types of families.3. Lady of the house: Here two options were given to the consumers: Housewife and Working. This was so because buying behaviour of a house wife contrasts with that of a working lady. Compared to a working lady, a housewife generally focuses more on the variety, buys from local shops and uses biscuits for various purposes. 24
  25. 25. 4. Family size: This was added to see the increase in the consumption of biscuits with the increase in family size. 25
  26. 26. 5. No. of children: As biscuits are mainly consumed by children and it has been seen that biscuits, especially glucose present in the lower range, are targeted towards the children. So, this was added to find out how biscuit consumption increases with the increase in no. of children.6.3 Details about FamilyWe further gathered details about the family, like who decides to buy the biscuit andthe age of the person who decides about the brand to be purchased. 1. Decision about buying the biscuits: This was to know about the way decision is made about the biscuits at any home. This way we can identify which family member needs to be targeted by the company. The results we obtained are as follows: 26
  27. 27. From the data it is evident that most of the time the decision is taken by the lady of the house. This clearly gives the idea about potential buyer for our product. 2. Age of decision maker for buying biscuits: Depending upon the age of the decision maker a company can further come to know about his/ her tastes, likes and preferences.6.4 Consumption Behaviour We tried to learn more about the consumption behaviour of the respondents by asking them details like who consumes the biscuits mostly in your house, 27
  28. 28. what kind of biscuits are most preferred, for what purpose are the biscuits consumed, etc.1. Who likes biscuits the most: This was again asked to further learn about the consumption behavior. The options given are: everyone, children, adults and others. Those who will consume the maximum will definitely have some say in the purchase, so that aspect can be provided. We obtained following results: Here we can see that biscuits are liked and eaten by everyone in the house. The biscuits are generally bought by the lady of the family and liked by children more, but ultimately it is consumed by everyone.2. Purpose of eating the biscuits: This will give us the details of the way biscuits are consumed, about the purpose for which biscuits are mostly bought, etc. This can again provide an effective medium to position a brand by the company. We obtained following results: 28
  29. 29. Here we can see that mostly biscuits are consumed during evenings and mornings. We can spot a trend. Generally this is the time when biscuits are taken with the tea.3. Type of biscuits preferred: There are various types of biscuits available in the market. A few of them are glucose, cream, marie, sugar-free, salted etc. So, the results obtained are: As far as the preference of type of biscuits is concerned we can see that the preference is almost same for cream, Marie, namkeen (salted) and glucose biscuits. Although out of these we can see cream biscuits leading the way. On the other hand, sugar-free biscuits are not preferred by many. 29
  30. 30. 4. Different ways in which biscuits are used: This can further provide company details about the way biscuits can be positioned. Here we can see that biscuits are used (in most of the households) in the form of snack, supplement with tea/ coffee, serving the guests etc. Very few times it was used as a food, hunger cruncher or general eating etc. So this can give us fair amount of idea how a company can position its brand. 5. Food items used instead of biscuits: The results gave us the details about the substitutes of the biscuits prefer. In most of the cases these were some snacks like namkeen, samosas, rusk, chips, sweets etc. Although very few of the times people even said fruits, dry fruits etc.6.5 Buying Behavior We analyzed buying behavior of the respondents. Here we generally asked about the place from where they buy the biscuits, frequency at which they buy biscuits etc. 1. Place where biscuits are bought: This can give us an idea about the place where customer buys the biscuits. Here company can concentrate for the maximum promotion. The following results have been obtained: 30
  31. 31. Here we can see that biscuits are mainly purchased from nearby provision store. So our main focus should be increse our brand reach to small retailers as it still people but 70 % of time from nearby stores.2. Frequency of purchase: Here we decided to link the results obtained here with the demographics of the respondents so that we can relate the consumption with the demographic attributes like monthly income of the family, type of family etc. 31
  32. 32. Also with respect to various demographic parameters we obtained following results: Frequency of purchase increase with the 1. increase in family income 2. increase in family size 3. increase in no. of children 4. more for joint families 5. more if lady of the house is not working3. Time of purchase: Here we decided to find the time of purchase. The time of the day when maximum biscuits are bought. On the basis of the results we can see that maximum purchase occurs during evening. This is the time when we can find maximum people purchasing the biscuits.4. Attributes affecting Buying Behavior It is a comparative study of the consumer perception about the below listed attributes of a biscuit across various products while buying decision: • Freshness 32
  33. 33. • Crispness • Price • Taste • Availability (easy access, in required size) • Advertisements • Brand Name/Image • Packaging (easy to carry/store, attractive) • Other (looks, smell, consistency) • Recommendation of shopkeeper • Recommendation of family/friends/relatives It has been seen that the Taste, Freshness and Crispness are the major draws to consumers when they purchase biscuits. Surprisingly Britannia Tiger falls behind in terms of advertisements and packaging as per the consumer data. However Tiger scores well in Freshness, Price, Availability and Brand Image vis-a-vis its competitor products, attributes which augur well for the product and is a pointer as to why it has been able to retain its customers and bag a large market share over the years.6.6 Brand AwarenessWe decided to test the brand awareness of Tiger’s competitors. Tiger basically lies inthe glucose segment of the market. The respondents were questioned about theawareness of various competing brands in the glucose market and the brand whichthey liked the most. Here we judhed the Tiger against Parle G, Priya Gold and ITCSunfeast. 33
  34. 34. 1. Brand Awareness: Here respondents were questioned about the awareness of the glucose brands. The following results were obttained: Here we can see that Parle G has maximum brand awareness out of all.2. Most liked brand: Here respondents were questioned about the brand they liked the most. Here we can see that Parle G is the most preferred brand out of all these. On further analysis we found out that Parle G, ITC sunfeast and priya gold are more preferred by people in lower income group while Tiger is preferred by people in upper income group. 34
  35. 35. 6.7 Most Liked functionalities We asked respondents about the factors liked by them: • Easy/quick to eat • Easy to carry in tiffin/picnics/journey • Is liked by members of the family • Is good for health • Is trendy/ fashionable • Is not for adults • Is preferred over other foods that can be eaten instead of biscuits by members of the family • Is too dry/not tasty to eat • Does not become stale/spoilt quickly • Is preferable in some season of the year • Is easily digestible • Good biscuits are easily availableWe asked them to rate the factors as per their preference. We found thatrespondents have given high importnce to following factors: • Is not for adults • Is too dry/not tasty to eat • Is preferable in some season of the year 35
  36. 36. This implies that these are the factors that impact them the most while deciding tobuy or not buy any biscuit brand.6.8 Outcomes On the basis of our survey we have made the following conclusions: 1. The decision of the brand of the biscuits to be bought is mostly taken by the lady of the family 2. Biscuits are liked by people of all age groups (not only by children) and are mainly taken during evenings and mornings with tea/ coffee. 3. Glucose, Marie, cream and salted biscuits are the most preferred types of biscuits with sugar-free and others being the least. 4. Snacks like namkeen, samosas, rusk, chips, sweets etc. are the major substitutes of the biscuits and respondents prefer to have these food items in case biscuits are not available at home. 36
  37. 37. 5. In glucose segment of the biscuits Parle G has the maximum brand awareness and is liked by the most. So we can say that this is the major competitor of Tiger. 6. As far as the buying behaviour goes consumers prefer nearby provisional store more than bakery or hypermarket. Hence availability and sales promotions at small retailers will play major role. 7. When asked about the factors which influence the decision about biscuits, we found that people give importance to: a. Is not for adults b. Is too dry/not tasty to eat c. Is preferable in some season of the yearThis indicates that the biscuits are mostly liked by children, generally preferred insome season of the year and taste is a very important attribute before a consumerdecides to buy or not to buy. 8. Out of all the attributes taste, freshness and crispness are the major draws to consumers when they purchase biscuits. 9. The major factors which form the perception about the brand are: a. Taste b. Brand Name/Image c. Packaging (easy to carry/store, attractive) 10. Out of these four attributes Britannia has been perceived well in taste and brand name, while perception about its packaging and ease with which it can be returned to consumer is not very good. 11. It has been found that the people in lower income groups prefer attributes like taste and packaging more important than others. While those in higher income group emphasize more on brand image 37
  38. 38. 7. ConclusionBritannia Tiger is the largest player in the domestic glucose biscuit market.Britannia has been able to maintain this strong presence consistently because ofthe strong brand image of Britannia tiger and its strong distribution network.Even though this market segment is very price sensitive and has low profitmargins, Britannia has leveraged its contract manufacturing model strategy tostay competitive. In fact, Britannia has been able to introduce different variants ofBritannia tiger (cream variants) at similar competitive prices, to challenge thecompetitors. Also, Britannia Tiger is perceived as a value-for-money product byits consumers, which enhances the brand loyalty of the product.In India per capita consumption of biscuits is estimated at a low 1.5 kg, reflectingthe huge potential for growth of the industry. The penetration of branded productin this segment is quite significant, and is valued at Rs 2,500-3,000 crore. The 38
  39. 39. Indian biscuits market is estimated to be 1.1 million tonnes per annum andvalued at over Rs 50 billion. The market has been growing at a CAGR of 6-7%pa.The present biscuits-bakery sector in India looks like a battlefront. The battlebeing led by stalwarts like Britannia and Parle with close competition from othercompanies like ITC, Nutrine, HLL Kissan, Kwality and even international brandslike Kellogg, Nestle and United Biscuits.Consumer behavior analysis of the customers, as studied in this report throughmarket surveys, reveal some insights into the biscuit industry and Britannia Tigerbrand in particular. • Brand awareness – This is an important factor when it comes to sales. Britannia Tiger brand is behind Parle on this parameter and needs to improve on it • Substitute products – Namkeens and other food snacks are fast emerging, growing at 35% pa, as product substitutes of Glucose biscuits • Consumers prefer nearby provisional stores to hypermarket and thus good distribution network is a prerequisite of good sales. Also, availability and sales promotions at small retailers will play a major role • Urban vs Rural – Organised biscuit industry has a very low penetration in rural markets. ITC is the only player to have good sales in rural markets • Taste, freshness and crispness are the major draws to consumers when they purchase biscuits • Britannia has been perceived well in taste and brand name, while perception about its packaging and ease with which it can be returned to consumer is not very good • Bleak industry outlook - growing inflation and food prices will eat into the profit margins of the biscuit industry 39
  40. 40. • Industry needs to keep innovating the product and marketing strategies to keep up with the changing customer wants, viz. customer shift towards namkeens and other food snacks8. References1. 40
  41. 41. 3. Prowess database 4. 5. 6. 13e edition, Kotler, Keller Koshi and Jha: Marketing Management, Pearson Publications Britannia-Tiger Questionnaire1.Are biscuits eaten in your house?  Yes  No 41
  42. 42. 2.Who generally eats biscuits in your house? (Please tick only one) Everyone  Children only Adults only  Any other (specify)_________________3.When/for what do you generally use biscuits? (You may tick more than one) Morning (breakfast)  Evening (snack) Meals (lunch/dinner)  Tiffin When sick  Any other (specify)_________________4.Which of the following kinds of biscuits does your family use? (You may tick more than one) Namkeen biscuits  Cream biscuits Marie Biscuits  Sugar Free Biscuits Glucose Biscuits  Any other (specify) ________________5.What are the different ways in which biscuits are generally used in your house?1. ____________________ 2. ____________________ 3. ____________________6.Which food items are generally used in your house instead of biscuits?1. ____________________ 2. ____________________ 3. ____________________7.From where do you generally buy biscuits? (You may tick more than one) Nearby provision store  Hypermarket Bakery  Others 42
  43. 43. 8.How often do you buy biscuits? (Please tick only one) Daily  2-3 times a week Regularly other than weekends/holidays  Weekends/Holidays Occasionally, for special purposes  Any other (specify)_________________9.What time of the day do you generally buy biscuits? (You may tick more than one)Morning Evening Other10.What brands of biscuits are being/have been used in your house?1. ____________________ 2. ____________________ 3. ____________________11. Are you aware of the following brands of biscuits?Parle G ITC Sunfeast Priya GoldBritannia Tiger12. Please rank the following brands of biscuits in order of preference.Parle G ITC Sunfeast Priya GoldBritannia Tiger13. Please rate the following for how likely each of the factors are to influence you (and your family)to use/not use biscuits? (-3: most likely reason not to use, 0: does not affect, +3: most likely reasonto) -3 -2 -1 0 +1 +2 +3Easy/quick to eatEasy to carry in tiffin/picnics/journeyIs liked by members of the familyIs good for healthIs trendy/ fashionableIs not for adultsIs preferred over other foods that can be eaten insteadof biscuits by members of the familyIs too dry/not tasty to eatDoes not become stale/spoilt quickly 43
  44. 44. Is preferable in some season of the yearIs easily digestibleGood biscuits are easily available14. Please rate the following on how important each of the factors are when you buy/use biscuits? (1:least important, 7: most important) 1 2 3 4 5 6 7FreshnessCrispnessPriceTasteAvailability (easy access, in required size)AdvertisementsBrand Name/ImagePackaging (easy to carry/store, attractive)Other (looks, smell, consistency)Recommendation of shopkeeperRecommendation of family/friends/relativesCan be returned to shopkeeper easily if not good15. Please rate the performance of the given types of biscuits on each of the attributes on a scale of 1to 7. (1: performs poorest, 7: performs best) Tiger Biscuits Parle G SunfeastFreshnessCrispnessPriceTasteAvailability (easy access, in req size)AdvertisementsBrand Name/Image 44
  45. 45. Packaging (easy to carry/store,attractive)Other (looks, smell, consistency)Recommendation of shopkeeperRecommendation offamily/friends/relativesCan be returned to shopkeeper easily ifnot good16. How do you buy biscuits? (Please tick only one) I collect information, develop perceptions about the brand, then buy the brand. I buy the brand, learn about the brand, then form perceptions about the brand. I buy the brand, experience the brand and then gain information about the brand.17. Which of the following is true for you in biscuit buying? (You can tick more than one) I am price conscious. I look at a lot of information before buying biscuits. I associate biscuits buying with esteem/ego. I am emotionally involved in biscuit buying. Biscuit buying is a habit for me. Biscuits give me quick satisfaction. I am more likely to buy brands of biscuits that offer gifts.Please tell us about your family?1.In your house who decides whether to  Mother/ wife  Earning male member buy biscuits or not?  Children  Other (specify)2.In your house who decides which  Mother/ wife  Earning male member brand of biscuits to buy?  Children  Other (specify)3.Age of decision maker for buying  Less than 20 years  20-30 years biscuits  30-40 years  Greater than 40 years4.Monthly family income  Less than Rs. 10000  Rs. 10000-15000  Rs. 15000-25000  More than Rs. 25000 45
  46. 46. 5.Type of family  Nuclear  Joint6.Lady of the house  Housewife  Working lady7.Family size____________ 8.No. of children___________ 46