COOKIE MAN: EXPLORING NEW FRONTIERS Professors Neena Sondhi and Afsha Dokadia wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-06-29 In 2015, Anil Pathak was appointed the new chairman of Australian Foods Private Limited (Cookie Man). The Cookie Man brand was originally franchised in 2000 to Australian Foods India Private Limited (AFI), a joint venture between Cookie Man and Paracor Capital Advisors (Paracor), an Indian private equity firm. The bakery chain began its journey in Chennai, Tamil Nadu and now operated 70 outlets in 25 Indian cities. Wish you a very happy new year and please convey the same to the students in your respective sections. I am attaching my copy of the case study on 'Cookie Man' which is scheduled for the forthcoming class on Retailing in your respective sections. Group No. 1-6 have to prepare presentations and students of Group 7-12 have to come prepared for discussions after reading the case. Th questions to be answered are as follows: 1. How is the biscuit market in India in 2015? What are the key advantages and disadvantages for Cookie Man (CM) due to the market situation? 2. What are the key elements of CM marketing strategy? What are the strengths and weaknesses of their business model? 3. How well ahs the CM brand performed? Justify. 4 Pathak is considering different growth engines for CM brand. Examine pros and cons of each. What according to you should be the way forward?

1. Exploring New Frontiers
Submitted by:

2. Q1. How is the biscuit market in India in 2015? What are the key advantages and
disadvantages for Cookie Man (CM) due to the market situation?
❖ The Indian biscuit market was largely organized and dominated by three
big players:Britannia Industries (Britannia), Parle Products (Parle) and
ITC.
❖ Market was estimated to grow at CAGR of 14 percent from 145 billion to
279 billion.
❖ The popular segments (i.e., glucose biscuits, Marie biscuits) were
experiencing low growth rate of between 6 to 7 percent.
❖ The speciality segments (i.e., wafer, cream filled cookies) were growing
at 20 percent annually.
❖ Expensive premium cookie was growing at 17 percent per annum,
which accounted for 25 percent of speciality sector.

3. Q1. How is the biscuit market in India in 2015? What are the key advantages and
disadvantages for Cookie Man (CM) due to the market situation?
❖ The industry was heavily dependent on the raw material, the cost of
which suffered considerable price fluctuation especially for flour, sugar
and fat (oil or butter).
❖ Large number of new launches in premium segments saturated the
competition.
❖ Indian consumers have a preference for salty savory snacks. Biscuits &
cookies were mostly an occasional, luxury or gifting snack.
❖ Digital distribution channel was also becoming a emerging possibility .
E.g.- Britannia’s tie up with Amazon.

4. Q1. How is the biscuit market in India in 2015? What are the key advantages and
disadvantages for Cookie Man (CM) due to the market situation?
ADVANTAGES:
❖ The lack of recognized brands in freshly baked cookie players in India.
❖ Large consumer population.
❖ Increasing disposable income.
❖ Changing Lifestyle and consumption choices.
DISADVANTAGES:
❖ Increasing Competition by big players.
❖ Increasing cost of shop space.
❖ Poor Infrastructure in Tier-II & Tier-III cities for market development.
❖ Fluctuating cost of raw material leading to pricing lathergy.
❖ Wide variety of local snack choices in Indian regional markets.

5. Q2. What are the key elements of CM marketing strategy? What are the
strengths and weaknesses of their business model?
Cookie Man Consumer:
❖ Diverse customer profile from all age groups - children, teenagers,
housewives.
❖ Take home segment dominated by upper middle class house wife.
❖ Muffin and brownie buyers (aspiration product).
❖ Gifting customer
Product:
Started as traditional cookies as part of Australian Cookie man menu
with 50 varieties of indulgence cookies , specialty cookies brownies,
doughnuts , muffins and ice creams , eggless cookies. Special attention
given to Packaging and Labelling.

6. Q2. What are the key elements of CM marketing strategy? What are the
strengths and weaknesses of their business model?
Price:
❖ Crispy crunchy cookies - INR 30 to 35 in small packs of 150 gram for
INR 120 or 1 kg for INR 650
❖ 50% revenue
❖ Indulgence cookies INR 40 , 12% Revenue
❖ Chocolate dipped cookies from INR 30 to INR 35 , 10% revenue
❖ Other baked cookies INR 45 to INR 50 for doughnut , INR 80 to 85 for
brownie , 25% Revenue
❖ Specialty cookies INR 25 to INR 30 , only 2 - 3% revenue

7. Q2. What are the key elements of CM marketing strategy? What are the
strengths and weaknesses of their business model?
Place:
❖ Central dough manufacturing facility in Chennai
❖ Present in high traffic shopping areas (malls , airports , IT parks) across
25 Indian cities
❖ Mother shops - 300 to 600 sq ft
❖ Cookie man stores - 100 to 300 sq ft.
❖ Cookie man Kiosk - 25 to 100--sq ft.

8. Q2. What are the key elements of CM marketing strategy? What are the
strengths and weaknesses of their business model?
Promotion:
❖ Buy one get one deals.
❖ Selling a glass bowl with cookies.
❖ Hosting events - cookie eating contest.
❖ Special and exclusively designed packaging made to fit the theme of
festivals.
❖ Regular Product Promotion - Sampling , Sniper Marketing and New
Product Launch.

9. Q2. What are the key elements of CM marketing strategy? What are the
strengths and weaknesses of their business model?
Cookie Man’s Business Model is a combination of Franchise Stores and Company
Owned Stores in the form of Cookie Man Mother Shops, Cookie Man Stores,
Cookie Man Kiosks.
Strengths Weaknesses
● Franchise Model which is
already a tested model in
Australia.
● Amount of time and resources
devoted to Franchise training.
● Core Motto of “Freshly Baked
Premium Cookies”.
● High Cost to premium space in
malls.
● Infrastructure challenges in
Tier-2 cities.
● Large number of available
substitute products.

10. Q3. How well has the CM brand performed? Justify.
❖ Cookie Man was the first player in freshly-baked premium cookies in India.
Major competitors like Parle Products, Britannia and ITC could not challenge
Cookie Man.
❖ Cookie Man is the market leader in premium freshly-baked cookies with 70
stores across 25 cities in India.
❖ Cookie Man grew at 14% CAGR while premium cookies was estimated to grow
at 20% CAGR.
❖ Created a premium impulse buy snacks that appeal to consumers of all ages.
❖ Presence across Malls, Airports, mother shops and city kiosks. Next phase of
expansion aims to tap high street markets and kirana stores.
❖ Continuous growth and market expansion. Effective R&D spending to create a
range of cookies, muffins, brownies, puffs, ice-cream and the recently-launched
macaroons.

11. Q3. How well has the CM brand performed? Justify.
❖ Visionary Product Strategy. Ensuring 20 % of its portfolio is made up of new
products, replacing some older non-performing ones. This strategy helped them
clock constant revenue growth.
❖ Since inception offers free unlimited sampling at its outlets. 100% replacement
guarantee against wrong/defective products sold.
❖ Around 30 % of Cookie Man's revenues comes from corporate gifting. A brand
value strong enough to charge premium prices and have a sturdy foothold in
the corporate and bulk purchasing space.
❖ Mostly used Below the Line Marketing. Less spending on ATL Ads and
focussed on focussing on the product quality and variety. Although a VIP club
scheme is there under which some select customers (influencers) are sent
yearly gift hampers and new product samples.

12. Q4. Mr. Pathak is considering different growth engines for CM brand. Examine
pros and cons of each. What according to you should be the way forward?
Growth
Engines
Pros Cons
❖ Grow
Organically
● Create Aspirational Values to New
Customers.
● Already implemented and largely
successful.
● Infrastructure Issues in Tier 2
Cities.
● High cost of retail in metro cities.
❖ Increase the
reach
● Wider presence and recognition
● Better understanding of market
● High costs of premium shelves.
● High costs of marketing.
❖ Explore new
product lines
● Attracting wider range of customers.
● Greater customer engagement and
loyalty.
● Losing core competency.
● Limited retail floor space.

13. Q4. Mr. Pathak is considering different growth engines for CM brand. Examine pros
and cons of each. What according to you should be the way forward?
Organic Growth is the best way for Cookie Man Brand because:
❖ It has been implemented successfully earlier by the company.
❖ Continuous Improvement of Infrastructure in Tier 2 cities.
❖ A complete new set of customers can be tapped by creating an aspirational
value for Tier 2 consumers.
❖ Ensures a good understanding of local business and cultural nuances that are
very important in the food industry.
❖ This will give Cookie Man, better ability to scale up and establish a presence in
multiple markets with relative ease.