Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Haldirams 4p's analysis report

19,923 views

Published on

  • Be the first to comment

Haldirams 4p's analysis report

  1. 1. MARKETING REPORT HISTORY &ANALYSIS OF 4P’S FOR HALDIRAM’SIBS HYDERABAD,1st SEMESTER, MARKETING REPORT 1
  2. 2. CONTENTSBACKGROUND NOTE ............................................................................ Error! Bookmark not defined.INTRODUCTION....................................................................................... Error! Bookmark not defined.THE MARKETING MIX ......................................................................................................................... 5PRODUCT .................................................................................................................................................. 5PRICING ...................................................................................................... Error! Bookmark not defined.PLACE ......................................................................................................................................................... 6PROMOTION............................................................................................................................................. 7COMPARATIVE ANALYSIS .............................................................................................................. 10VALUATION OF BONDS .................................................................................................................... 11CONCLUSION ........................................................................................................................................ 13BACKGROUND NOTEIn 1937, Ganga BishenAgarwal, (popularly known as Haldiram), opened a small sweet shop inBikaner, a small district in Rajasthan. Bikaner had a large number of sweet shops selling sweetsas well as namkeens. Bhujiasev, a salty snack prepared by Ganga Bishen, was very popularamong the residents of Bikaner and was also purchased by tourists coming to Bikaner. In 1941,the name HaldiramsBhujiawala was used for the first time.In 1950, Prabhu Shankar Agarwal (Prabhu), along with his father RameshwarLalAgarwal (sonof Ganga Bishen), expanded the business by establishing a small manufacturing unit for sweetsIBS HYDERABAD,1st SEMESTER, MARKETING REPORT 2
  3. 3. andnamkeens in Kolkata. The success of this unit motivated Prabhu to upgrade its machinery toimprove the quality of its products.As demand for Haldirams products increased, it was decided to scale up the companysmanufacturing and distribution activities. In 1970, a large manufacturing unit was set up inNagpur in the state of Maharashtra (India). In 1983, a retail outlet was set up in New Delhi. Theoutlet became very popular not only among the Delhiites but also among tourists visiting Delhi.Haldirams was able to achieve significant growth during the 1980s and 1990s. In 1992,amanufacturing unit with a retail outlet attached to it was set up in the outskirts of Delhi. A yearlater, Haldirams syrups and crushes were successfully launched in the Indian market. In 1995, arestaurant was opened in New Delhi. In 1997, realizing the potential of namkeens, the companyset up a manufacturing unit in Delhi exclusively for making namkeens. To add potato products toits existing product portfolio, machinery was imported from the US. Haldirams maintained highquality standards at every stage of the production process. All its food items were prepared andpackaged in a very hygienic environment.In the mid 1990s, Haldiram s added bakery items, dairy products, sharbats and ice creams to itsportfolio. At the beginning of the 21st century, Haldirams products reached millionsofconsumers not only in India, but also in several other countries, including the US, Canada, UK,UAE, Australia, New Zealand, Sri Lanka, Nepal, Japan and Thailand.Analysts felt that the growing popularity of Haldirams products could be attributed to itsconstant focus on all the elements of the marketing mix. An article posted on the APEDAswebsite - apeda.com quoted some of the companys strengths, "To sustain in the competitivemarket, Haldirams has endeavored stress on its product quality, packaging, shelf life,competitive price with a special emphasis on consumers satisfaction and its lingering taste isamongst the best available in the world."INTRODUCTIONOver a period spanning six and a half decades, the Haldirams Group (Haldirams) had emergedas a household name for ready-to-eat snack foods in India. It had come a long way since itsrelatively humble beginning in 1937 as a small time sweet shop in Bikaner, in the Rajasthan stateof India. In 2001, the turnover of the Haldirams was Rs 4 billion. The group had presence notonly in India but in several countries all over the world.Till the early 1990s, Haldirams comprised of three units, one each in Kolkata, Nagpur and NewDelhi. The Agarwals family that owned Haldiramswere always conscious of the need to satisfycustomers in order to grow their business. The company offered a wide variety of traditionalIndian sweets and snacks at competitive prices that appealed to people belonging to different agegroups.IBS HYDERABAD,1st SEMESTER, MARKETING REPORT 3
  4. 4. Haldirams had many firsts to its credit. It was the first company in India to brand namkecns2,.The group also pioneered new ways of packaging namkeens. Its packaging techniques increasedthe shelf life of namkeens from less than a week to more than six months. It was also one of thefirst companies in India to open a restaurant in New Delhi offering traditional Indian snack fooditems such as "panipuri," "chatpapri," and so on, which catered to the needs of hygiene consciousnon-resident Indians and other foreign customers.Since the very beginning, the brand Haldirams had been renowned for its quality products. Thecompany employed the best available technology in all its manufacturing facilities in India.Giventhe increasing popularity of Haldiram s products, the group planned to expand itsoperations.However, some analysts felt that Haldirams still had to overcome some hurdles. Thecompanyfaced tough competition not only from sweets and snack food vendors in theunorganized marketbut also from domestic and international competitors like SM Foods,Bakemans Industries Ltd,Frito Lay India Ltd.(Frito Lay) and Britannia Industries Ltd. Moreover,the group had toovercome internal problems as well. In the early 1990s, because of the conflictwithin theAgarwals family, Haldirams witnessed an informal split between its three units as theystartedoperating separately offering similar products and sharing the same brand name. In 1999,after acourt verdict these units started operating as three different companies with clearlydefinedterritories. This split had resulted in aggressive competition among themselves for ahigher shareof domestic and international markets.THE MARKETING MIXPRODUCTSHaldirams offered a wide range of products to its customers. The product range includednamkeens, sweets, sharbats, bakery items, dairy products, papad and ice-creams. However,namkeens remained the main focus area for the group contributing close to 60% of its totalrevenues. By specializing in the manufacturing ofnamkeens, the company seemed to havecreated a niche market. While the Nagpur unit manufactured 51different varieties of namkeens,the Kolkata unit manufactured 37 and the Delhi unit 25. The rawmaterials used to preparenamkeens were of best quality and were sourced from all over India. Haldirams sought tocustomize its products to suit the tastes and preferences of customers from different parts ofIndia. It launched products, which catered to the tastes of people belonging to specific regions.For example, it launched Murukkus, aSouth Indian snack, and Chennai Mixture for southIndian customers. Similarly, Haldirams launched Bhelpuri, keeping in mind customers residingin western India. The company offered certain products such as Nazarana, Panchratan, andPremium only during the festival season in gift packs. These measures helpedIBS HYDERABAD,1st SEMESTER, MARKETING REPORT 4
  5. 5. Haldiramscompete effectively in a market that was flooded with a variety of snack items indifferent shapes, sizes and flavors.PRICINGHaldirams offered its products at competitive prices in order to penetrate the huge unorganizedmarket ofnamkeens and sweets. The companys pricing strategy took into consideration the priceconscious nature of consumers in India. Haldirams launched namkeens in small packets of 30grams, priced as low as Rs.5. The company also launched namkeens in five different packs withprices varying according to their weights. Pack Weight Price (In Rs) 30 gms 5 85 gms 10 180-250 gms 18-35 400-500 gms 40-70 1 kg 95-200The prices also varied on the basis of the type of namkeens and the raw materials used tomanufacture it. The cost of metallized packing also had an impact on the price, especially in thecase of snack foods. The company revised the prices of its products upwards only when therewasa steep increase in the raw material costs or additional taxes were imposed.PLACEHaldirams developed a strong distribution network to ensure the widest possible reach for itsproducts in India as well as overseas. From the manufacturing unit, the companys finished goodswere passed on to carrying and forwarding (C&F) agents. C&F agents passed on the products todistributors, who shipped them to retail outlets. While the Delhi unit of Haldiram shad 25 C&Fagents and 700 distributors in India, the Nagpur unit had 25 C&F agents and 375 distributors.Haldirams also had 35 sole distributors in the international market. The Delhi and Nagpur unitstogether catered to 0.6 million retail outlets in India.C&F agents received a commission ofaround 5%, while distributors earned margins rangingfrom 8% to 10%. The retail outlets earnedmargins ranging from 14% to 30%. At the retail outletlevel, margins varied according to theweight of packs sold. Retailers earned more marginsranging from 25% to 30% by selling 30gmspouches (priced at Rs.5) compared to the packs ofhigher weights.Apart from the exclusiveshowrooms owned by Haldirams, the company offered its productsthrough retail outlets such asIBS HYDERABAD,1st SEMESTER, MARKETING REPORT 5
  6. 6. supermarkets, sweet shops, provision stores, bakeries and ice creamparlors. The products werealso available in public places such as railway stations and busstations that accounted for asizeable amount of its sales. Haldirams products enjoyedphenomenal goodwill and stockistscompeted with each other to stock its products. Moreover,sweet shops and bakeries stockedHaldirams products despite the fact that the companysproducts were competing with their ownproducts.Haldirams also offered its products through the Internet. The company tied up withindiatimes.com, a website owned by the Times of India group to sell its products over theInternet.Haldirams products could be ordered through a host of other websites in India andabroad. Gifistoindia.com, giftssmashhits.com, tohfatoindia.com and channelindia.com enabledpeople residing abroad to send Haldirams gift packs to specified locations in India.Regionspecificwebsites enabled people to send gifts to specified regions. These includeindiamart.com(Delhi and surrounding areas), mumbaiflowersgifts.com (Mumbai), andchennaiflowersgifts.com(Chennai and other parts of Tamilnadu). These websites competed onissues such as deliverytime, which varied between 48 hrs to one week, delivery charges (somewebsites offered freedelivery of products) and value added services (like sending personalmessages along with thegift packs).PROMOTIONHaldirams product promotion had been low key until competition intensified in the snack foodsmarket. The company tied with Profile Advertising, for promoting its products. Consequently,attractive posters, brochures and mailers were designed to enhance the visibility of theHaldiramsbrand.Different varieties of posters were designed to appeal to the masses. The punch line forHaldiramsproducts was, Always in good taste. Advertisements depicting the entire range ofHaldirams sweets and namkeens were published in the print media (magazines and newspapers).These advertisements had captions such as millions of tongues cant go wrong, What are youwaiting for, Diwali? and Keeping your taste buds on their toes.To increase the visibility of the Haldirams brand, the company placed its hoardings in hightrafficareas such as train stations and bus stations. Posters were designed for display on publictransportvehicles such as buses, and hoardings, focused on individual products were developed.Captionssuch as yeh com hain (this is com), chota samosa - big mazaa (small samosa9 –bigentertainment), yeh Kashmiri mix khoobjamega (this namkeen item will gel well) andoozingwith taste (for Rasgoolas) promoted individual products. For those customers whoIBS HYDERABAD,1st SEMESTER, MARKETING REPORT 6
  7. 7. wanted toknow more about Haldirams products, special brochures were designed whichdescribed theproducts and gave information about the ingredients used to make it. Mailers were also sent toloyal customers and important corporate clients as a token of appreciation for their patronage.Packaging was an important aspect of Haldirams product promotion. Since namkeenswereimpulse purchase items, attractive packaging in different colors influenced purchases.Haldiramsused the latest technology (food items were packed in nitrogen filled pouches) toincrease theshelf life of its products. While the normal shelf life of similar products was under aweek, theshelf life of Haldirams products was about six months. The company projected theshelf life ofits products as its unique selling proposition. Posters highlighting the shelf life of itsproductscarried the caption six months on the shelf and six seconds in your mouth. Duringfestivalseason, Haldirams products were sold in attractive looking special gift packs.Theshowrooms and retail outlets of Haldirams gave importance to point of purchase (POP)displays.Haldirams snacks were displayed on special racks, usually outside retail outlets. Theshowroomshad sign boards displaying mouth-watering delicacies with captions such as ChineseDelight,Simply South, The King of all Chats’, posters containing a brief account of thehistory ofHaldirams, along with pictures of its products, were also on display at theseshowrooms.Haldirams also diversified into the restaurant business to cash in on its brand image.Thecompany established restaurants in Nagpur and Delhi. The restaurant at Nagpur devisedaninnovative strategy to increase its business: It facilitated people who were traveling by trainthrough Nagpur station to order food from places where stockists ofHaldirams Nagpur unitwerelocated. The customers could order for lunch/dinner by sending a demand draft (DD)orcheque tothe Nagpur unit or giving the same to specified local distributors belonging to theNagpur unit.Along with the DD/cheque, customers had to provide information such as the nameof the train,its likely time of arrival at Nagpur, their names and coach and seat numbers.Haldirams restaurants in Delhi also used innovative ways to attract customers. The restaurantlocated at Mathura road had special play area for children. To cater to NRls and foreign tourists,who hesitated to consume snack foods sold by the roadside vendors since it was not prepared in ahygienic manner, the Haldirams restaurant located in South Delhi used specially purified waterto make snack foods including panipuri and chat papri. These promotional strategies helpedHaldirams to compete effectively with local restaurant chains such as Nathus, Bikanerwala andAgarwals and with western fast food chains such as McDonalds and Pizza Hut.COMPARATIVE ANALYSISIBS HYDERABAD,1st SEMESTER, MARKETING REPORT 7
  8. 8. VALUATION OF BONDSBond 1:12,00,000-15% secured non-convertible debentures of Rs 100 each were issued at par as rights inthe proportion four debentures for every equity share held. The debentures would be redeemed ata premium of Rs 5 per share on the expiry of 7 years from the date of allotment or in three equalinstalments of Rs 35 each at the end of 7th, 8th and 9th year from the date of allotment. TheComp. allotted additional 1,93,742 debentures to retain over subscription.Case 1:Case 2:Bond 2:18000 13.5% Secured Redeemable Non-Convertible Debentures ofRs.1,00,000 each privatelyplaced with ICICI Bank Ltd. on 10th January2000. Debentures are redeemable at par in threeequal annual instalmentsonthe expiry of 5th year from the date of subscription.Bond 3:6,00,000-15% secured redeemable non-convertible debentures of Rs 100 each were privatelyplaced with LIC, GIC & its subsidiaries to be redeemed in 5 equal instalments commencing fromthe end of 5th year & ending with the 9th year from the date of allotment at a premium of 5% atthe end of 7th year.IBS HYDERABAD,1st SEMESTER, MARKETING REPORT 8
  9. 9. IBS HYDERABAD,1st SEMESTER, MARKETING REPORT 9
  10. 10. CONCLUSIONThe following data evaluations have been done and verified: Return on equity by CAPM Return on equity by Dividend Discount Model Calculation of return on debt/bonds Calculation of the Weighted Average Cost of Capital Comparative analyses between the 5 companies in the industryIBS HYDERABAD,1st SEMESTER, MARKETING REPORT 10

×