S2 11 shimla dairy products


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  • The few South Indian restaurants that used cheese tended to use more volume of cheese per serving compared to North Indian restaurants.
  • Plan to expand second plant by 2005 Projected growth of sales of 25 per cent.
  • Establish Brand Equity by implementing new marketing strategies- The Company must reposition itself as a superior brand with specialty products which cater to specific consumer segments with varied and effective marketing initiatives. This can also be done by having a brand ambassador for the milk products. This involves high marketing expenditure but surely has more returns. They need to create awareness about different varieties of cheeses offered. There by helping them in cross selling and up selling to the household consumers. enhance its distribution network to other states and small towns with attractive trade promotions with discounts, price off, extra commissions, free samples and the like
  • S2 11 shimla dairy products

    1. 1. Marketing Management SHIMLA DAIRY PRODUCTS Group 11 Pranav Gopal Jha (FT 12238) Harshavardhan Chinchore (FT 12279) Rajiv Garg (FT 12245 Siddharth Sureka (FT 12258) Smruti Rekha Padhy (FT 12261)
    2. 2. Indian Scenario  204 million cows and 84 million buffaloes, largest population of cattle in the world.  livelihood to 70 million dairy farmers.  In terms of total milk production, India ranked first with 78 million tonnes in 1999-2000.  India today is the lowest cost producer per litre of milk in the world  Milk yield per animal was very low in India at around 1.5 liters per day.  Main reasons for the low yield were  lack of use of scientific practices in milking,  inadequate availability of fodder in all seasons  unavailability of veterinary health services.2 Group 11 Shimla Dairy Products July 4, 2011
    3. 3. Cheese Market  Indian palate broadly divided into the north and the south.  North more exposed to cheese through Western food outlets such as pizza chains and McDonald’s.  To the south, cheese still a new food item  International brands began to enter the market-Dutch Gouda, French Camembert and Italian Parmesan.  Shimla Dairy Products made local versions of all these cheeses.  For Camembert, Shimla imported the starter culture and other materials from Australia and France.  The branded cheese market was estimated to be 9,000 tones per annum valued at Rs1.8 billion  Mainly consumed in urban areas- Four metropolitan cities accounted >60 % of consumption.  Per capita consumption, even among the cheese consuming households, was a poor 2.4 kilograms per annum as compared to over 20 kilograms in the United States.3 Group 11 Shimla Dairy Products July 4, 2011
    4. 4. Competition  Dynamix –  current supplier to most leading pizza chains  processing capacity of 500,000 litres of cows’ milk per day  GMP ,HACCP,ISO9002  Gujarat Cooperative Milk Marketing Federation (GCMMF) — Amul -Turnover: Rs25 billion in 2002  Milkfed — Verka  Andhra Pradesh Dairy Development Co-operative Federation (APDDCF) — Vijaya -Vijaya Dairy Parlours and a chain of retailers  Britannia,Dabon4 Group 11 Shimla Dairy Products July 4, 2011
    5. 5. Shimla Dairy Products  Two plants within 120 kilometres of each other.  First was located at 5,500 feet altitude while the other was at a lower elevation.  Both plants had a total cold storage facility of 12 tonnes.  Shimla plant -8,000 litre throughput per day, Kiarighat plant - 2,000 litres  30 employees two shifts, -365 days a year.5 Group 11 Shimla Dairy Products July 4, 2011
    6. 6. Production vs Consumption Production  Peak production season during the monsoons  Lean production months occurred when there was comparatively much less rain  Peak cheese production was 22 tonnes of cheese per month Sales  Peak sales seasons directly opposite to peak production seasons.  Holidays taken during monsoons-taken during the summer months Storage  22 tonnes of cheese produced in a month, minimum of 17 tonnes sold.  Surplus stored to be sold during peak seasons.  Cheese stored at 4C in the company’s own cold storage space, Capacity 20 tonnes of cheese.6 Group 11 Shimla Dairy Products July 4, 2011
    7. 7. Pricing  83% output- Cheddar/Mozzarella  Parmesan imported from Italy-Rs2,500 a kilogram  Shimla’s Romano - Priced Rs1,000  Pizza cheese, Priced at Rs125 per kilogram.7 Group 11 Shimla Dairy Products July 4, 2011
    8. 8. Distribution System Distribution : See Chart Retailer :  Tamil Nadu and Karnataka -Nilgiris ,Food World 85 %  Kerala – Varkeys Supermarket.  Hyderabad -Q mart and Giant,  Bombay -D Mart and F Mart. Speciality  ‘The Cheese Shop’ in Shimla  ‘Cheese and Wine’ shop in Bangalore8 Group 11 Shimla Dairy Products July 4, 2011
    9. 9.  Hotels: Segmented under two categories:  High-end, five-star hotels(90%)  lower- to mid-end hotels.  Four main types of restaurants:  a) Italian restaurants (20 % market);  b) Continental (15 %);  c) Chinese (10 %)  d) Indian (55 %).  Pizza Chains9 Group 11 Shimla Dairy Products July 4, 2011
    10. 10. Company  Working Capital : 35 Lakh + Overdraft facility  Pricing : High end Margin – 20 % Low end Margin – 15%  Marketing :  Word of mouth  Flyers ,Brochures  Display at Shops, smaller shopkeepers provided with refrigerators  Give Aways at Pizza corners  Experiencing a growth of 15 -20 % in sales per annum as opposed to 7-8% growth for other cheese manufacturing companies10 Group 11 Shimla Dairy Products July 4, 2011
    11. 11. Changes  Night shift introduced, milk supplied twice  Regular testing as per HACCP  Plan to expand second plant by 2005  Negotiation to become sole supplier to large Pizza chain11 Group 11 Shimla Dairy Products July 4, 2011
    12. 12. Which area should it focus?  Low End –  Market very less penetrated, Low Awareness, Consumer not ready ,Perceives cost as factor.  North sales – 3000 kg/month (Delhi + Kolkata),Total 22000  North more exposed to cheese through Western food outlets such as pizza chains and McDonald’s  Already following HACCP so easy to get license12 Group 11 Shimla Dairy Products July 4, 2011
    13. 13. Was there a way to streamline operations and make the production process more efficient?  Reduce farmer travel, invest in better supply chain.  Storage capacity to be improved from 20 tonnes.  Product line consolidation from 29 varieties13 Group 11 Shimla Dairy Products July 4, 2011
    14. 14. With the possibility of growing demand, would the production facilities need to be expanded?  Yes  Dairy sector to triple in 10 yrs  Army as customer where lucrative- large operations & economies of scale needed.  Attainment of Economy of scale – competitive advantage against new entrants.  Rate of growth faster than others - 15 -20 % in sales per annum  Better Supply chain management  Processing capacity of competition high –Dynamix -50000,New players planning to expand.14 Group 11 Shimla Dairy Products July 4, 2011
    15. 15. How could the company market its products better? Can it create more brand awareness?  For Long term yes, since India has growing population of 1.2 billion, good aware customers could be created who would be less price sensitive. How it can be done:  More Specialty shops.  Product line can be consolidated from 22 varieties since customer was not very aware.  Lure youth with western style food attraction.  Advertisement about 30 years of legacy, HACCP, superior quality products.  Go for advertising like Amul.  Negotiation with Pizza chain to be given prime importance15 Group 11 Shimla Dairy Products July 4, 2011
    16. 16. Product Positioning for different market segments.?  Company should focus fast-food chains and restaurants for its least expensive cheese-mozzarella, as they together contribute 37% to the total cheese sale.  Also focus on hotels with Cheddar and mozzarella cheese as they contribute 40% of the total cheese sales  Introduce high end cheese in metros where consumption of cheese is high and enter in new markets with less expensive variety of cheese.16 Group 11 Shimla Dairy Products July 4, 2011
    17. 17. How to position Shimla to best take advantage of the growth potential in the industry  Establish Brand Equity by implementing new marketing strategies.  Focus on products which would yield high profitability and narrow down the current Product line.  Capital Sourcing and Cash flow Management.  Distribution and Promotions  Increasing the current production capacity17 Group 11 Shimla Dairy Products July 4, 2011
    18. 18. THANK -YOU18 Group 11 Shimla Dairy Products July 4, 2011