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Market Researchand Distribution management of Frozen
Dessert in India
Project Report submitted to Symbiosis Institute of Business Management, Bengaluru in partial
fulfillment of the course “Summer Internship Program” for the award of the degree of
Master of Business Administration
Submitted By
Student Name: Nitin Kumar Gond
PRN: 12020841148
Under the guidance of
Name: Prof. Aarti Mehta Sharma
Designation: Assistant Professor
SYMBIOSIS INSTITUTE OF BUSINESS MANAGEMENT,
BENGALURU
95/1 & 95/2, Electronic City Phase-1, Hosur Road, Bengaluru – 560100
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Certificate
This is to certify that Mr. .Nitin Kumar Gond of MBA (2012-14 Batch) of Symbiosis
Institute of Business Management, Bengaluru has done the project entitled Market
Research and Distribution management of Frozen Dessert in India under my guidance.
Signature of the faculty guide
Name: Prof. Aarti Mehta Sharma
Designation:Assistant Professor
Date:23rd May 2013
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DECLARATION
I hereby declare that the project work submitted by me entitled “Market Research and
Distribution management of Frozen Dessert in India” done during my Summer Internship Program
(SIP) is submitted as a partial fulfillment of the requirement of MBA program at Symbiosis Institute of
Business Management, Bengaluru.
I also declare that this project has not been submitted nor shall it be submitted in future for the
award of any other degree or diploma in part or full to any other institution or university.
Place: Mumbai Name: Nitin Kumar Gond
Date: 17th June 2013 PRN: 12020841148
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Table of Contents
Acknowledgement ……………………………………………………………………………….. 7
Executive Summary …………………………………………………………………………....... 8
Chapter 1
1.1 Industry Analysis…………………….…………………………………………………… 9
1.1.1 Key Features………………………………………………………………………………… 9
1.1.2 Major Players……………………………………………………………………………….. 11
1.1.3 Trends………….…………………………………………………………………………….11
1.1.4 Consumption Process of Frozen Dessert ……………………………………………. 12
1.2. Company Analysis………………….…...……………………………………………….. 15
1.2.1 Mission and Vision…………………………………………………………………………. 15
1.2.3 Organizational Structure..…………………………………………………………………… 15
1.2.3(A) Hierarchy………….………………………………………………………16
1.2.4 HR Details………………………………..………………………………………………..... 16
1.2.5 Products……………………………………………………………………………………… 17
1.2.6 Customers……………………………………………………………………………………. 18
1.2.7 Competitors………………………………………………………………………………….. 18
1.2.8 Operational Processes ………………………………………………………………………. 18
1.2.9 Supply Chain………………………………………………………………………………….19
1.3. Introduction of the Project ……………………………………………………………….20
1.4. Objectives of the Study …………………………………………………………………. 21
Chapter 2
2.1 Research Methodology ………………………………………………………………………… 22
2.1.1 Research Strategies …………………………………………………………………..22
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2.1.2 Methodology …………………………………………………………………………23
2.2 Limitations of the Study ………………………………………………………………………..24
Chapter 3
3.1 Analysis of the Data …………………………………………………………………………….. 25
Chapter 4
4.1Conclusions and Suggestions ……………………………………………………………………36
V References ……………………………………………………………………………………… 37
VI Annexure
Annexure I ………….…….…….…….…….…….…….…….…….…….…….…….…….…….…………38
Annexure II………..………..………..………..………..………..………..………..………..…………....… 39
VII Tables
Table 1 Concentration of Frozen desert in India ……………………………………………………40
Table 2 SWOT Analysis – Amore …………………………………………………………………..41
VIII Figures
Fig.1 Key Channels ………………………………………………………………………………… 9
Fig.2 Drivers and Challenges ……………………………………………………………………… 11
Fig.3 Five Year Trend ………………………………………………………………………………12
Fig.4 Region Wise Consumption ………………………………………………………………….. 13
Fig.5 Perceptual Map ……………………………………………………………………………… 14
Fig.6 Organizational Structure of Amore ………………………………………………………….. 16
Fig.7 Supply Chain of Amore ………………………………………………………………..…….. 19
Fig.8 Percentage of Sales for Hypercity …………………………………………………………… 30
Fig.9 Percentage of Sales for D-mart ………………………………………………………………. 33
Fig.10 Percentage of Sales for Natures Basket …………………………………………………….. 36
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ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my mentor Mr. Nirav
Momaya for his exemplary guidance, monitoring and constant encouragement throughout the course of
this thesis. The blessing, help and guidance given by him time to time shall carry me a long way in the
journey of life on which I am about to embark. I also want to thank Mr. Yasir Ali for helping me
providing all the information related to my project which helped me during the survey and research. I
also take this opportunity to express a deep sense of gratitude to Snehal Mam for her cordial support,
valuable information and guidance, which helped me in completing this task through various stages. I
am obliged to staff members of Amore Gelato for the valuable information provided by them in their
respective fields. I am grateful for their cooperation during the period of my internship. I am also
thankful to Mr. Mohit of Natures Basket for helping me out during the project. I would also like to
express my gratitude towards Mr. Sudhish of Hypercity for discussing all the information and providing
me the needful help. I would like to thank my mentor Mrs. Aarti Sharma and my university SIBM-B for
giving me such opportunity and providing me the support that I needed during the course of the
internship. Lastly, I thank almighty, my parents, brother, sisters and friends for their constant
encouragement without which this assignment would not be possible.
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EXECUTIVE SUMMARY
India is the largest milk producer in the world. They have the capability of producing finest milk products
with the resources available. The ice cream industry one of the oldest and most traditional ones in the
country is getting attention and growing with a good rate. Summer is getting hotter, but the most common
trick to beat the heat is facing a meltdown. Many companies are trying hard to survive and compete in this
oligopolistic market. To provide the best with affordable price companies have to think out of the box and
come up with superior products to satisfy customer needs. Increasing incomes, a burgeoning middle class,
buoyant economy and widening of outlook contributes in making ice-cream more affordable and acceptable
among Indian masses. Often people get confused about the difference between ice cream and gelato. The
purposes of both are the same but the difference between them is that Gelato is considered to be a natural
frozen dairy product which is made up of fresh natural ingredients as much as possible and also includes
fresh milk. Also the air content in gelato is much lesser than ice cream. On the other hand Ice cream is
produced in a huge quantity and also incorporates the use of artificial ingredients and coloring. But due to the
advanced technology and innovation the players in the market are doing very well inspite of such stiff
competition. The objective of the companies is to find the key point where they can do well and provide the
quality product for the customers.
The current key trends in the market are:
1. Increasing presence of international brands driving consumption in metros and mini-metros.
2. Availability of multiple options to consumers — from ice-creams to traditional kulfis to new forms
such as gelatos and flavored yoghurts.
3. Growing trend of going out to eat ice-cream.
The objective of the project was to analyze different brands in the market and how they are enhancing
themselves among each other. The research involves the study about the prices that other competitors charge,
the way they handle customer and their demands, store location and layout of the store. The project also
involves the survey of different supermarket chains to know about their inventory management, suppliers,
and distributors and how they are dealing with them. Amore Gelato is planning to launch their frozen
products in organized retailers market so collecting information from the supermarket chains was the main
source of data. Before launching the product it is important to first understand the process and procedures of
such supermarkets, how they carry other products and other store details.
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Chapter 1
1.1 Industry Analysis
1.1.1Key Features:
Ice cream is one of the most lovable products among every generation or any age people. Ice cream is a
frozen desert made up from dairy products such as milk. India is considered to be a largest milk
producing country and because of that Ice cream is catching up with the trend and growing well. The Ice
cream industry is a competitive market with some strong competition from unorganized as well as
organized sector. Ice cream was one of the fastest growing product categories in 2012. There are some
companies who started producing gelato as well as Ice cream. The unorganized sector currently accounts
for a larger share of the Indian ice cream market; it is shrinking considerably in the urban areas. In the
rural areas, however, kulfis/ice creams made by small/cottage industry are popular. In small towns and
villages, there are thousands of small players who produce ice creams/kulfis and cater to the local
demand. The market for the organized sector is restricted to the large cities in the country.
Key Channels
Pushcarts Distributors
Parlors Retailers
Fig. 1 – Key Channels
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Ice Cream and Gelato
The purposes of both are the same but there is still some mainstream difference between them. People
generally consider both as same. The difference between them is that Gelato is considered to be a natural
frozen dairy product which is made up of fresh natural ingredients as much as possible and also includes
fresh milk. The production takes place in small quantities. Also the air content in gelato is much lesser
than ice cream. The chefs feel very proud and have passion for making the best gelato ice cream in the
world and they keep the recipes secret. On the other hand Ice cream is produced in a huge quantity and
also incorporates the use of artificial ingredients and coloring and one of the major cost components in
the production of industrial ice cream is the transfer and storage of the large amounts of ice cream that is
produced. When it comes to gelato the flavors that can be created are limitless. Making of gelato
requires a continuous research throughout the world and the best practices. The gelato industry in India
is relatively new and trying to holds roots among consumers. People in India generally consider having
something sweet after the meal. They are very concern about the freshness and hygiene of the product.
The Gelato made its entry in the Indian market some 7-8 years ago and basically caters to the premium
consumer. With not many players in this niche business segment, there is lot of scope and untapped
market. Technology has made consumers more advanced and informed about various global trends. In
India, gelato customers are divided into two independent groups: people who consume gelato and people
who can be substituted from ice cream.
Challenges Faced By Gelato Industry
There are several factors/issues which are critical for the growth prospects of Gelato industry:
Supply chain management: The shelf life of gelato is of very few days; it is freshly prepared and sold on
daily basis. Franchisers prefer to have their stores near the manufacturing unit.
Infrastructure: The refrigerators and cabinets are different from that of regular ice cream stores, and
since gelato is 10-15 degrees warmer than ice cream and require different temperature settings. The
gelato manufacturing involves typical recipes, equipments, production process and store formats.
Lack of Product Knowledge: Gelato has still to make his identity different from the ice cream. People
still are not able to differentiate between ice cream and gelato.
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Small Consumer Base: The gelato industry in India is very small targeting only niche market and
comprises of the consumers who have knowledge and appreciation for the quality food ingredients.
Drivers and Challenges
Drivers Challenges
Fig. 2 – Drivers and Challenges
1.1.2MajorPlayers
There are very strong players present in the market. The concentration of these players varies from cities
to cities. Some players are trying to target a particular city and some are trying to focus more on a
particular city by opening large number of stores.
1.1.3Five YearTrend
Expected CAGR:
Indian ice cream market is expected to grow at 17% during 2012-2017 reported by “IMARC Group”.
Currently the total market of the industry is Rs. 3000 and is expected to double to the value of Rs. 6000
by 2014-2015.
Lucrative nature of business
Rise of buyers in impulse segment
Strengthening of distribution network
Increase in disposable income
Low per capita consumption
Rise in input costs
Erratic power supply
across the country
Rise in local
manufactures
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Last five year trend in Ice cream market:
Fig. 3 Five Year Trend
Consumption Process of Ice-Cream/Gelato/Desert
Pre-purchase:- Brand image, Health issues, suitability
The consumer considers the kind of image the brand that he is going to purchase depicts. It has to suit
certain status symbol, quality and any other personal brand requirements that the consumer may have. It
is important that the brand maintains goodwill, satisfactory to the consumer Health Issue to ice creams
relating-The modern consumer is highly health conscious and is becoming aware of the rising health
issues and its impacts. It is important that the brand satisfies this need of the consumers and ensures
health related gains rather than loss. About which we will be discussing further in this report. The
product should suit the taste, flavor and ingredients that is in line with the consumer needs and wants.
Purchase:-Price, Environment, Service
Price should be affordable and the product should provide money’s worth in terms of quality, quantity
and consumer satisfaction. As kids also form a main segment of section a proper care should be given as
far as pricing is concerned. The environment should be such that the consumer wants to stay there and
0
500
1000
1500
2000
2500
3000
3500
2008 2009 2010 2011 2012
Value (In Cr.)
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spent some quality and quantity time. The service should be fast so that the customer waiting time
should be less and leads to their satisfaction and results in formation of good brand image.
Post-purchase:- Quality, Satisfaction, Store experience
The quality of the ice cream delivered certainly plays a vital role in determining whether the customer
will re purchase the brand or not. The quality and taste of ice cream determines the satisfaction level of
the customer and hence plays a vital role in determining his approach towards the product. Satisfaction
is a holistic picture the total experience of the customer with the brand considering various factors as
mentioned above and then finally arriving at a conclusion saying whether he is satisfied or not from the
product.
RegionWise Consumption of FrozenDessert in India
Fig. 4 Region Wise Consumption
The take-home-segment of ice creams performs better than consumption of ice cream at ice-cream
boutiques and parlors. This is the key inference of a survey conducted by Retail Research India (RRI)
about a decade ago. The survey also found that impulse purchase of ice creams constitutes 50 per cent of
the market, followed by family consumption of ice creams (large/family packs) which constitutes 35%
40%
13%
30%
17%
Consumption
West
East
North
South
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of the market, followed by in-parlor sale, which constitutes only 15%. Although the gaps are reducing
drastically but in terms of maximum sales impulse purchase still rules the roost.
Ice- Creams Perceptual Map
Fig. 5 Perceptual Map
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1.2 Company Analysis
1.2.1 Missionand Vision
Make People Smile, deliver happiness and spread love.
Smile and make others smile with you.
Make and serve the best productpossible.
Innovate and experiment with new ideas.
Looking after our environment & planet with our smallest actions
E ach staff member and customer to be treated with dignity & respect
1.2.2 OrganizationalStructure
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1.2.3 (A) Hierarchy
Fig. 6 Organizational Structure of Amore
1.2.4 HR Details
All over India – 348
In Mumbai – 68
Executive Team Management:
Technical Director
Mr.Costanzo
Mallato
Chairman
Mr. Nayyer Hussain
Director
Mr. Yasser Ali
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1.2.5 Products and Services
Products Range
Gelato Gelato Cake Gelato Sticks
Sorbet
Gelato and Sorbets
Gelato is typically made with Milk & fresh fruit /chocolate (pure chocolate, flakes, chips, etc.), nuts,
small confections or cookies, or biscuits. Our Gelato has 150 – 210 Calories per 100 grams. Sorbet are
made with water & Fruits/Chocolate. Our sorbet has 120 – 140 calories per 100 gm.
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1.2.6 Customers
Amore’s target customer is the quintessential food connoisseur. They do not categorize their customers
into any stringent demographics. They aim to satisfy that intent customer who is gastronomically driven
and who not just relishes their ambrosial gelato but also appreciates the effort and content-value put in
his scoop. At Amore, they call them Amore Aficionados.
1.2.7 Competitors
Amore was established in India in March 2006, but before that there were very few players in that
market. So they captured this opportunity and entered the market. Some of the major competitors of
Amore today are: Cocoberry, Yogurt berry, Gelato Italiano, Haggen Dazs, and Baskin Robbins etc.
Most of the market has been captured by the big players like Amul, Kwality Walls, and Mother dairy but
Amore focusing on Gelato rather than ice cream is growing very well in the market. The total frozen
desserts market in India is worth Rs. 3000 cr of which 60% is under the organized market. Amul is the
market leader with 38% market share followed by Kwality walls with 14%, Mother dairy with 14%,
Vadilal with 11% and Baskin Robbins with 3%.Mmajor players in gelato industry are: Gelato Italiano,
Amore gourmet gelato and Gelato Vinto has making strong presence in north region. Gelato Italiano has
a major market in the gelato industry and brands like Haggen Dazs and London dairy are spreading
quickly in the market which is a major threat for the company.
1.2.8 OperationalProcesses
Amore creates handmade natural Gelato avoiding the obscure chemicals, additives and preservatives
common to many industrial “ice cream” brands on the market today. Since the product needs to be fresh
they take care of the cleanliness, storage and transportation very seriously. The stores that they operate
were maintained very well by the employees. In the process of preparation of Gelato first the milk, sugar
and cream is pasteurized and then they held it for cooling at 4°C (Aging). Fresh fruits from market is
bought, cleaned and processed. Then required quantity of fruits, nuts, chocolate and other ingredients are
added. After this, the mix is blended with a hand blender. This ensures that there are no pieces of fruits
or lumps of chocolate left in the mix. The mix is tested and balanced. Next step is Batch freezing - This
process transforms the gelato from liquid state to semi solid state. It cools and binds the mixture to give
body to the gelato and takes the mix to a temperature of -9 to -10°C in approx 15 minutes. Once the
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gelato is ready in the batch freezer machine, it is taken out into clean, dried and chilled GN Pans in an
artistic way. Once the gelato is extracted its chilled in a blast freezer for 10 minutes and then garnished
with sauces/nuts/fruits. Distribution of the freshly made gelato later then distributed to different stores of
the company according to their demand and needs.
1.2.9 Supply Chain
The manufacturing unit in Mumbai prepares the gelato and delivers to the different stores. When there is
need of any flavor or product the retail store people order for the required product to the SCM team, the
SCM team passes the order to kitchen staff and then the kitchen staff starts preparing for the order.
Apart from that they also have online delivery system where people can order the cakes, gelato online.
The billing system they are using required a software called Dytel which is used in all the stores.
Kitchen
Fig. 7 Supply Chain
SCM Team
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1.3 Introduction of the Project
Background
The industry is growing at a very good rate and there are lots of opportunities for the players in the
market. Ice cream and Gelato are the two categories which often become confusion among consumers.
Some do not care much and some have no idea about the difference between them. Gelato is fresher than
Ice cream and comes in premium products. Players are trying hard to survive in the market in every field
so that they can increase their market presence. Talking about the industry of frozen desserts, the market
today is decked up with various ice-cream brands and other new concepts of Sorbets, frozen yogurts,
frozen custards, frozen puddings, smoothies and gelato that are admirably nursing the sweet tooth of the
people. With the concept of frozen yogurt increasingly becoming popular, many national and
international brands are sprouting up to satisfy the cravings of all the customers. All of the big players
are eyeing on improving their distribution network, logistics and trying to expand their outlets in India.
Purpose
Amore is looking forward to launch its new range of products in frozen packs (Packed Products) with
flavored gelato. The project was aimed to study the market demands and the efficient ways to launch the
product. Before launching any product a company should consider all the opportunities, pros and cons.
My job was to study the market in depth and analyze the possibilities and trends regarding the launch of
the product. Initially they are planning to launch in the organized retailer segment (supermarkets and
hypermarkets) and then they will move to unorganized retailers. During this research I visited and met
store and purchase managers of these organized retailers. The project also includes the market survey of
other competitors on their performance and other activities. The project also gave me an opportunity to
study the logistics and distribution network of different brands including Amore. The company in the
past had some issues regarding the kitchen staff related to production and distribution of the products, so
finding the loopholes was also one of the main tasks for further process in the project.
The report represents the analysis and the result of several brands including Amore about their
marketing plan, distribution network, logistics, and inventory management.
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1.4 Objectives of the Study:
The industry is oligopolistic with so many players and it is difficult to survive in the market. To survive
a company must come up with innovative strategies and plans. Amore is following this innovative
strategy by launching packed gelato product (family pack/party pack) with the help of organized
retailers. This will give them a competitive edge among other players. Amore products come under
premium quality products and they are looking forwards to launch premium gelato products in the
market. The objective of the study was to analyze the market demand especially in the organized retail
category. Studying the pattern and behavior of the customer, supermarkets on their purchasing of the
products is one of the aims in this project. Launching the product in organized retail shops will help
them selling their products to more number of customers. Also the project involves understanding and
improving the distribution and logistics of the company.
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Chapter 2
2.1 ResearchMethodology
Significance of the Research
The significance of the research was to find out the ways and opportunities for the company in
launching their new product in the market considering all the possibilities.
2.1.1 ResearchStrategies
The best way to find out the required details was to follow the market pattern, demand, current
capabilities. Studying about the distribution networks and production capabilities of company was being
taken care during the research. Collecting information personally from the store and purchase manager
of the particular store was one of the strategies followed during the research. The method used was
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mainly based on qualitative research. The data collection includes interviews, Focus Group and
observation.
2.1.2 Methodology
The data collected from the store and managers were based on the questionnaire prepared. There were
two questionnaires – one for the store manager and one for the retail store of various brands (See
Annexure I and II). Interview helped the most among other methods in carrying out most of the
information. The interviews were well scheduled via mails and calls. I visited their office for the
interview and informed them about my project. They responded very well to most of the answers from
the questionnaire and some questions came out during the discussion. During the internship, I got a
chance to perform a focus group among the employees of my company where they discussed about the
launch of the new product and challenges that they are facing now.
Methods of data collection
1. Primary Data (75%-80%)
2. Secondary Data (20%-25%)
Contact Methods: Mail, Telephone and Interview
Primary Data
Observation method: Visited several organized retail stores( supermarkets and hypermarkets)
and noted down the behavior of customers, actions and their reactions towards the products and
the layout.
Questionnaire: Direct approach was followed and formal lists of questions were asked to all of
the respondents. The format of the questionnaire was open ended which allowed respondents to
answer in their own words. The questions were interesting and easily followed by the
respondents.
Telephonic and Personal Interview
During the interviews the questions asked were based mostly based on the inventory management of the
store. Some questions were related to the distribution and logistics management of the company It is
important to know about capability and ability of the store where the company is going to launch the
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product. The interview was one to one in the office of the particular store manager. The questions were
arranged in a systematic flow which made it easy to connect all the answers. Also the questions were not
very long and complex, prepared mostly considering all the limitations and regulations. The focus group
was arranged among the employees of the company. The topic of the discussion was about the launch of
the new product and logistics management. The discussion went very well and we come up with useful
results and further
2.2 Limitations of the Study
Limitations generally occur during research and some are out of control which should be taken care
while doing so. The results that came out from the research can’t be called as ideal because of the lack
of available or reliable data. Sometimes people restrict themselves in providing the actual data because
of misconduct or unconditional situation that might occur later. The method used was mostly secondary
data so there are some chances of unreliable and scrap data. The data collection through questionnaire
would not be thought of as a proven fact. The questionnaire was distributed to only some of the branches
of the brand so it is difficult to compare other stores and their behavior. Also the store/purchase manager
did not answer some of the questions and some of the questions were answered partly/not fully. The
information collected by noting down the beliefs, feelings, attitude that motivate buying behavior of the
customers in the store cannot be considered as the main source of information because every day all
these attributes changes.
Other limitations:
1. Respondent’s reluctance to answer questions asked by unknown individual/interviewers about
things they consider private.
2. Unpleasant answers which were answered without taking the questions seriously
3. Unreliable data (Secondary Data)
4. High cost
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Chapter 3
3.1 Analysis of Data
Market survey of other brands
The survey was conducted with different brands and their branches. The data collected represents the
distribution network of different brands and their current activities in the market. The table (see Table 1)
shows the market penetration of the different dessert brands. I can be seen that Amul is leading right
from the front and also the market share of Amul is around 38%. Amul and mother dairy has strong
distribution network because of the strong production unit and factories. Amore can take advantage of
its distribution network which they are doing on their own and can give a good competition to other
gelato players. In Gelato and other categories there are so many foreign players like Cocoberry,
Yogurtbay, and Haagen Dazs etc entering the market with innovative strategies. Market share of Gelato
Italiano is more than other players.
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The family packs products amounts for 40% of the market share in the market which can be seen as
good sign for the company to launch their own frozen pack product. People generally buy Amul family
pack products which are cheaper than others with several available flavors. I also got a chance to
manage the store for one day which let me look over the closing and opening inventory, customer
behavior, and daily sales. Almost all aged people came down to have gelato over the store and the best
selling gelato was Belgian chocolate. From the data collected from surveys it was found that Baskin
Robbins and Amul are very much customer oriented among others in terms of flavors in the stores. They
allow customer to choose the flavor according to their need. India is a country with more than 6.7
million FMCG outlets1. Thus, to cater the ice cream demand of the nation, Amul is focused on retail
outlets through following means. Amul and Vadilal distributes its ice cream products to organized as
well as unorganized stores such as local kirana stores, malls, supermarkets, grocery store, push carts,
vending, cycles and even to some railway stations. The big players like Amul, Vadilal, kwality walls,
Havmor are trying to expand their retail outlet as much as possible. Due to the strong distribution
network of the parent company HUL and with the help of redistribution stockists and Carrying and
forwarding agents Kwality walls are doing a great job in providing their products to different regions in
India. The players with large number of stores are generally trying to maintain their market share by
keeping the price low. Other premium players like Gelato Italiano, BR, Cocoberry and Yogurtbay are
following differentiation and Focus strategy with the help of product innovation. Some of them are
trying to expand their retail stores first in the current cities where they already exist then they will move
to other tier cities. International players like Haagen Dazs, Yogurtbay are some of the premium players
who do not have many stores but still are a very well known brand with some innovative products.
There is no family/pack product in Gelato in the market right now, so Amore has a very good
opportunity to launch their own in retail stores. Haagen Dazs, London dairy, Mother dairy have some
products in the organized retail stores such as Hypercity, Natures Basket etc.
Issues
Gelato can’t be consumed after some specified life time 2(3-4 days max), so this is the biggest problem
in launching the gelato packed product in the retail stores. If the products did not sell out in 3-4 days
1 www.amulicecream.in/amul_partner.html
2 Shelf Time – Time till the product remains fresh
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they have to take it back to their production head and have to recycle or throw it out which leads to
wastage and loss. They have to launch the products in very limited quantity to take care of this issue.
Inventory and Distribution Management (Supermarkets)
HyperCity- (Big Store Big Savings)
It is a supermarket chain. Currently there are 12 stores operating in India. In Mumbai it is located near
Malad west which is one of the locations where most of the people can be seen because of the presence
of large numbers of malls. Hypercity is one of the biggest supermarkets in Mumbai dealing with large
inventories, various brands and products. Due to the presence of over 40000 products and savings
opportunities people visit the store very often and would like to purchase their products from the store.
They have large storage area and warehouse where they keep thousands of products and keep changing
according to customer needs and market demand. In Ice cream and other deserts categories they have
big freezers and containers enough to store all the big brands available. Some of the big brands they
have are: Amul, Mother dairy, Kwality Walls, Haagen dazs, London Dairy. Amul is the most selling
brand among all of these with almost 40% of overall sales. Percentage of sales is one of the most
focused aspects for them to know about the stock details. If sales of Amul are 40%, they keep 40% of
stock of Amul products in their stock.
Planogram: For visual representations of the products they use Planogram, which helps in placements
of different products and brands on selves to maximize sales. Planogram helps the store in dictating the
layout of the different products in the store.
28. P a g e | 28
Existing and New Products
The regular checking of existing products is necessary so that there is no excess in inventory arise. In
HyperCity they inspect the quality and position of the existing product in the market and according to
that analysis they decide on what products to store and what not to store. For existing product they
evaluate each product how it is performing in terms of sales. The evaluation period is of 3 months.
They keep checking the market requirements and the customer demand of the different products. They
have to move their inventories according to the demand. For new products they give enough time for it
build their position in the market and increase their sales. The evaluation period is 6 months. For
deciding whether to take new products or not they have certain criteria’s:
The quality of the product
If there is a high demand of some specific kind of product. For example if people prefer more of
yogurt or any other particular product and there is a new yogurt product in the market they will
definitely take that product so that people can buy those products directly from their store. This does
not only help the brand but also their store.
If the brand is entering the first time in the market they look out their past activities, their
distribution network, capabilities of the brand in the market.
29. P a g e | 29
Safety Stock
It is important for any such supermarket to have some safety stock or inventory for backing up the
uncertain demand. Sometimes demand for a product may rise because of the promotional strategies and
other activities of a brand. So the store must have back up plan for such situations. To handle these kinds
of situations they keep their inventories more than the average demand. If the average demand is 80 for
a product, they order 100 and keep 20 as safety stock.
Categorization of Inventory: ABC Analysis
Stock take is a year round, cyclical count of merchandise whereby the entire inventory is covered
according to certain pre-determined criteria.
For the purpose of stock take the inventory will be categorized as follows:
Category A – Items of high value, low volume and possibility of pilferage is high.
Category B – Items of low value, high/low volume and possibility of pilferage is low to moderate.
Category C – All other items not covered above.
The periodicity of stock take will be as follows:
Category A – Once a month
Category B – Once in two months
Category C – Once in three months
Stock Take Schedule
The schedule for the year is determined in advance and is common across the chain. The stock take
available will be made at sub class level. The schedule for a month will include the entire Cat A items,
half of Cat B items and one third of Cat C items. The objective of having a common schedule is to
facilitate comparison of stock take variance of a department across the chain on a month-to-moth basis.
30. P a g e | 30
Fig. 8 Percentage of Sales for Hypercity
Order and Delivery
Monday and Friday are the days when they order for the products. The delivery time is 3 days for almost
all of the brands.
Landed Cost
Establishing landed costs for the products that a company handles can be a tricky business. All
businesses that import or export need to understand what the total cost of goods is for what they are
buying or selling. In order to accurately calculate the landed cost, all factors beyond the obvious primary
price must be considered. Calculating landed cost is critical in understanding what a product actually
costs and therefore what is can be sold for.
Landed Cost is the total cost of a product once it has arrived at the buyer’s door. This list of components
that are needed to determine landed costs include the original cost of the item, all brokerage and logistics
fees, complete shipping costs, customs duties, tariffs, taxes, insurance, currency conversion, crating
costs, and handling fees. Not all of these components are present in every shipment, but that entire are
must be considered part of the landed cost.
The carrying cost, ordering cost everything in here is covered upon the landed cost. Clearly it is
advantageous to reduce the cost of each or any component of landed cost. Each one will allow the seller
to lower the final selling price or increase the margin associated with that sale.
0
10
20
30
40
50
60
70
80
Cat A ( Amul, Kwality walls) Cat B ( Mother dairy, Vadilal) Cat C( Haagen Dazs, London
dairy)
Percentage of sales
Percentage of sales
31. P a g e | 31
Distribution and Suppliers
They do not interfere much in the distribution process. The brands take care of all the distribution of
their products to the store. The negotiations in the transportation and carrying cost are taken care by the
brand itself.
Organizational Structure
D-Mart- ( Daily Discounts, Daily Savings)
D-Mart seeks to be a one-stop shopping destination for the entire family, meeting all their daily
household needs. A wide selection of home utility products is offered, including foods, toiletries, beauty
products, garments, kitchenware, bed and bath linen, home appliances and much more. Since D-
General
Manager
Dy General
Manager
Assistant
Manager
SOM(Food, Non
Food)
SOM(Checkout,
CSD)
SOM(Staples,
Personal Care)
SOM(Receiving)
Service
Manager
Service
Manager
Service
Manager
32. P a g e | 32
Mart first opened its doors in the Mumbai region in 2000, it has grown into a trusted and well-
established shopping destination in Maharashtra, Gujarat, Andhra Pradesh and Karnataka. D-Mart is
now looking forward to growing its stores across India.
Organizational Structure:
Layout
All FMCG products which are used daily are kept on the ground floor. The product mix is very good
and we can see large variety of products. The purchase manager and store manger are responsible for all
the layout of the products. The representation, ordering, space, design of the shelves and the products are
decided by them. The layout is very simple and people find it easy to find any products among different
varieties. They keep changing the position of the most selling products to make it visible to all the
customers. The area where they keep all ice cream products is not very large but enough to keep the
products which are doing good business in the market. Their inventories are full of the ice cream which
sells more such as Amul and Kwality walls. These products are kept in such a way that people can find
them easily. The capacity that they keep depends upon the demand in the market.
Existing Product and New Product
Every week they inspect the entire product to check the stock availability and arrange them according to
sales and requirement. Generally they try to keep all the best selling products in large quantity and keeps
on ordering them. There is no fixed period for evaluation but they evaluate the product according to the
customer demand.
CEO
CFO IS Controller HR & Admin
Controller
Projects
Controller
G.M Operations
Manager
Accounts
Supply Chain
Controller
Store Managers
33. P a g e | 33
For new product they are very restrictive, they do not take each and every new product that comes in
market. They do a deep research and analysis about the new product and then take decision about the
product. If a good quality brand is coming with a new product they rate them high among other quality
brands.
Safety Stock
They do not have large storage areas or warehouse so they keep very less safety stock but their
distribution network is good and they do not face issues regarding empty stocks. If the demand is 100
they keep 2-3% of the demand as safety stock.
ABC Analysis
Fig.9 Percentage of Sales for D-mart
0
10
20
30
40
50
60
70
80
Cat A (Amul, Mother dairy) Cat B ( Kwality walls) Cat C(Vadilal and others)
Percentage of Sales
Percentage of Sales
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Natures Basket
Godrej Nature’s Basket is the retail venture of Godrej group and is today India’s foremost retail
destination for fine foods from across the World. Started in 2005 as a single fresh food store, they have
today morphed into a 26 store chain of premium Gourmet Stores strategically located at high street
locations in Mumbai, Delhi/NCR, Pune, Hyderabad and Bangalore. With the growing palate preference
of the Indian consumers, they are ready to embrace sophisticated and exotic tastes from around the
world. They are travelling more than ever before, and as they take a bigger place on the world stage,
they want to explore everything it has to offer.
The supermarket is way ahead of many others in terms of quality, ambience, maintenance, service.
Currently they have 27 stores in India and they are planning to reach to 40 stores by the end of 2013. It
is one of the most sorted destinations for high quality imported food products. We can find various kinds
of products from around the world in this store. The store is positioned as premium gourmet place for
food lovers and enthusiast. Changing preference of consumers to experiment with new cuisines and food
products has helped the store become a frontrunner in a variety of food items. The store has about 6000
stock keeping units. The store brings in new products every month to induce the customer to experiment
with new products and not be loyal to a particular brand of item. All the products are imported from
various countries. Quality is the top most priority at these stores and not compromised. Taste and quality
is a key driver for sales. They believe in the customer perception and treat them as their family. The
main target audience is families, who are from the upper middle class and live a luxurious life. The store
is more often shopped by women only.
35. P a g e | 35
The placement of the product is quite innovative and creative. The way that they have placed the
products is changing the way the customer generally looks at the other stores. They have different
shacks of two premiums Ice cream Haagen Dazs and London Diary. But we can find other brands of ice
creams besides the shacks such as kwality walls, Amul etc.
Existing and New Products
They always try to bring something new and fresh in the store which would give the customer various
opportunities to visit the store and such products. They do not keep their existing products for long time
until the sales are going very well. They keep on chipping in new and good quality products for the
customers. They prefer premium ice cream or gelato over other brands in new as well as existing
products. They never backed up and always try to add some kind of excitement and innovation in the
store layout so that customer would love it and come back.
Inventory and Safety Stock
Although some of the stores are not very big in area but they hosts a variety of items properly stacked
and categorized. They have enough space in their storage areas to store products of different brands but
they do not display all the brands in the freezer to the customer until a customer asks for it. They are
very good in their predictions and do not stock very much as safety stocks. They carry just over the
original demand as the safety stock. Many a times they just order according to the right amount of
demand and manage those profits with other important things.
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ABC Analysis
Fig. 10 Percentage of Sales for Natures Basket
0
10
20
30
40
50
60
70
80
Cat A (Haagen dazs, kwality
walls)
Cat B ( London dairy, Amul) Cat C( Vadilal, mother dairy)
Percentage of Sales
Percentage of Sales
37. P a g e | 37
Chapter 4
4.1 Conclusion and Suggestions:
Amore is following differentiation strategy with lots of production innovation which is helping them
gaining attraction and market share. But still if they want to get enough of the market share they should
consider changing their price menu of the products to a new level. Upper class people did buy their
product a lot in malls, supermarkets but there is still a gap for middle and lower-middle class. Most of
the people who come under middle class and lower than that consume either Amul or Vadilal because of
lower price. To make their stay comfortable in the market they should do some renovation in the menu
to make the products worth. Their products come under premium quality because of the innovation and
varieties and the price, so to get more sales for the new frozen product they should target premium
supermarkets like Natures Basket on first. Nature’s basket is well known retail store for premiu m and
international products. The store has large number of products and they keep looking for new products
to take in the store. Customer who visit Nature’s Basket look for these premium and any new innovative
product. It would be good if come with different variants in the product category so that people have
option of buying so many available products which gives them a confidence of buying and hope of
getting satisfaction about the product and the brand. The product should be launched first in the metro
cities and tier 1 cities starting with Mumbai as they have their production department in the city and it
would be a great help in their distribution network. If the product started off very well they should wait
for some time till it covers some cost and then they could move to other tier cities.
38. P a g e | 38
ANNEXURE
Annexure - I
Questionnaire for Store/Purchase Manager:
Q.1 What are the products you store?
Q.2 How and when do you decide when to take new products in the store?
Q.3 How do you time the purchases of the products/warehouse scheduling?
Q.4 How do you buy products in relation with their carrying costs? How much carrying costs depends
upon the products?
Q.5 How the negotiation process works with the suppliers and distributors?
Q.6 Has it ever happened that you ran out of the products but the demand is high. If yes, what actions
you took?
Q.7 How do you switch between the products in the inventory? How do you manage inventories?
Q.8 How do you deal with a late critical shipment?
Q.9 How do you decide the layout of the products in the store?
Q.10 Brief steps on how the ordering system works?
Q.11 What are the difficulties in purchasing the products?
Q.12 Best selling products.
Q.13 What actions you take to increase the sales of the products?
39. P a g e | 39
Annexure – II
Questions for different stores of different brands:
Q.1 When did the store open first?
Q.2 Where is the head production plant?
Q.3 How frequently do you change the inventory?
Q.4 Daily Sales
Q.5 Price variation between different flavors.
Q.6 Best Selling Product
Q.7 Daily order of the products.
Q.8 How do you decide which flavors to keep?
41. P a g e | 41
Table II: SWOT Analysis – Amore
Strength:
Strong innovation in products like
sorbets’ and sugar free
Value for money among other gelato
players
Loyalty and good relationship among
customers and employee
Weakness:
Less awareness among some cities
Price is high among some ice cream
market leaders in India
Some stores have less flavors inspite of
having large number of flavors produced
Opportunities:
Frozen products in supermarkets and
other stores
Expansion in developed cities
Huge opportunity in the market for stick
gelato
Threats:
Large players already dominating the
market
Entry of players like Yogurtbay and
Cocoberry in different regions
High threat of being replaced by
substitute brands - Lower shelf life
42. P a g e | 42
References
www.wikipedia.org
http://www.chihealth.in/articles/Gelato-Italiano---A-Real-Change-in-Ice-Cream-Trend?/1926
http://timesofindia.indiatimes.com/business/india-business/Entry-of-international-companies-peps-up-
ice-cream-market/articleshow/19876402.cms
http://articles.economictimes.indiatimes.com/2013-02-06/news/36949688_1_mother-dairy-ice-cream-
market-share
http://www.euromonitor.com/ice-cream-in-india/report
http://www.franchiseindia.com/articles/Opportunity/Unique-Concepts/Gel-with-success-the-Gelato-
way-468/
http://www.financialexpress.com/news/hul-amul-battle-hots-up-in-branded-ice-cream-market/617485
http://www.slideshare.net/narechania/amul-ppt-14991806
www.scribd.com
http://expressindia.indianexpress.com/fe/daily/19991106/fst05024.html
http://www.groupon.co.in/deals/mumbai/Gelato-Italiano-Mumbai/94523
http://indiafranchiseconsultant.blogspot.in/2011/03/cocoberry-forays-into-ahmedabad.html
http://hospitality.financialexpress.com/20120630/market06.shtml
Companies Websites
www.amulicecream.in
http://www.blue-foods.com/brands/gelato-italiano/about-us/
www.amoregelato.com
www.yogurtbay.com
www.cocoberry.co.in
www.vadilalicecreams.com
