itc project

Chandragupt Institute Of Management

"A Detailed Study on ways to increase Numeric and Weighted

Distribution in Biscuit category in Patna Town."

2013-15

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

OF THE DEGREE OF POST GRADUATE DIPLOMA IN MANAGEMENT

CHANDRAGUPT INSTITUTE OF MANAGEMENT PATNA

BY

[AMRITESH KUMAR VERMA]

[30/06/2014]

CHANDRAGUPT INSTITUTE OF MANAGEMENT PATNA


Executive Summary

India has a very strong base for producing FMCG goods. From Indian to multinationals are

targeting are the strong base of India, which is having high disposable incomes and consumption.

Improvement in infrastructure and distribution channel or so to say the kind of distribution

channel ITC has ,it capture 4% of market share for any new product to be launched And

sunfeast biscuits are contributing in biscuit industry very significantly.

Sunfeast is expanding its umbrella of biscuit at a higher rate every year with upcoming .This

motivated a marketing research to be done to know the numeric and weighted distribution. And

to see if any one of them are low, and if low then what is the reason for that. Numeric

distribution came out to be low, and then research was conducted to find out the reason for the

same. Firstly industry leader Britannia’s various distributors were identified, and after much

convincing , they agreed to provide the list of top 20% outlet of Raja Bazar ,Kankarbagh and

PTC .

With open discussion with serviced and non serviced retailer questionnaire was developed and

then approached to non serviced outlet .After doing the factor analysis of the data collected four

factors that came out were sales , delivery, economical issues and D&D .But most important

were D&D and Convenience .

Also weighted distribution was calculated with market visit to all the outlets, were category was

present which came out to be healthy .


Declaration

This is to certify that this report entitled "A Detailed Study on ways to increase Numeric

and Weighted Distribution in Biscuit Category in Patna Town." submitted by Amritesh

Kumar Verma to Chandragupt Institute of Management Patna, as a requirement for

the award of the Post Graduate Diploma in Management, is a bonafide record of research

work carried out by him/her under our supervision. The contents of this report, in full or

in parts, have not been submitted to any other Institute or University for the award of any

degree or diploma.

(Prashant Sinha) ------------------------------ (Sign)

( Anup Raj) ------------------------------- (Sign)

Date: ___________________


Acknowledgement

Every project big or small is successful largely due to the effort of a number of people who have

always given their valuable advice or lent a helping hand. I sincerely appreciate the inspiration;

support and guidance of all those people who have been instrumental in making this project .

I, am extremely grateful to “ITC Limited” for the confidence bestowed in me and entrusting my

project entitled “A Detailed Study on ways to increase Numeric and Weighted Distribution in

Biscuit Category in Patna Town.”

At this juncture I feel deeply honored in expressing my sincere thanks to Prasant Sinha guiding

me.

I express my gratitude to College Dr. V. Mukunda Das for arranging the summer training in

good schedule. I also extend my gratitude to my Project Guide Mr.Anup Raj, who assisted me in

compiling the project.

I would also like to thank our Librarian and library staff of Chandragupt Institute Of

Management Patna who provided me access to all needful things without which this project

would not have been possible. I would also like to give my special thanks to Mr.Abhishek of ITC

for going out of the way to help me with his insight.

Last but not the least I place a deep sense of gratitude to my family members and my friends who

have been constant source of inspiration during the preparation of this project work.

DATE – 30/06/2014 YOUR NAME – AMRITESH KUMARVERMA

PLACE – PATNA


CONTENTS

List of Abbreviation: ...................................................................................................................................... 7

Introduction .................................................................................................................................................. 9

Company Introduction ............................................................................................................................ 10

ITC in FMCG ............................................................................................................................................. 11

Indian Biscuit Market .............................................................................................................................. 13

Patna Overview: ...................................................................................................................................... 14

PRODUCT PROFILE: ................................................................................................................................. 17

SUNFEAST BRAND OF BISCUIT .................................................................................................................... 19

SWOT OF ITC LTD. ....................................................................................................................................... 19

DISTRIBUTION CHANNEL ......................................................................................................................... 21

Factors affecting the choice of distribution channel ........................................................................... 21

Various factors which affects the choice of the distribution channel are : ......................................... 22

Market Size ......................................................................................................................................... 23

HIERARCY AT PATNA ....................................................................................................................... 25

Objectives ........................................................................................................................................... 26

Methodology: ...................................................................................................................................... 27

Research Tools ........................................................................................................................................ 27


Data Collection ........................................................................................................................................ 28

Clubbing .................................................................................................................................................. 29

Validation of Variables ............................................................................................................................ 31

After validation of variable ,they were further used in forming the questionnaire . ............................... 34

Factor analysis: ........................................................................................................................................ 34

Perceptual Map ....................................................................................................................................... 40

Sunfeast’s Industry Competitors............................................................................................................. 40

Britannia Industries Limited .................................................................................................................... 41

Swot of Britannia Industries Limited ................................................................................................... 41

Parle Products ......................................................................................................................................... 42

Swot of Parle Products ........................................................................................................................ 43

Bisk Farm ................................................................................................................................................. 45

Swot of Bisk Farm ................................................................................................................................ 45

Benchmarking of Sunfeast biscuits against competitors ........................................................................ 46

FINDINGS ................................................................................................................................................. 50

Recommendations .................................................................................................................................. 51

Bibliography ............................................................................................................................................ 53


LIST OF FIGURES

Figure 1 : Map showing demography of Patna ........................................................................................... 15

Figure 2 : Product Range ............................................................................................................................ 18

Figure 3 : Hierarchy at ITC Limited ........................................................................................................... 25

Figure 4 Clubbing of Variable .................................................................................................................... 30

Figure 5 : Validation of Variables ............................................................................................................... 31

Figure 6: Validation of Variables................................................................................................................ 32

Figure 7 Validation of Variables ................................................................................................................. 33

Figure 8: Validation of Variables................................................................................................................ 34

Figure 9 : Perceptual Map between Delivery & Economical Issues ........................................................... 39

Figure 10 Perceptual Map between Convenience & D&D ......................................................................... 40

LIST OF TABLES

Table 1 Validation of Variables .................................................................................................................. 36

Table 2 : Component Matrix ....................................................................................................................... 37

Table 3 : Rotated Component Matrix ......................................................................................................... 38

Table 4 : Benchmarking of sunfeast biscuits against competitors .............................................................. 47


List of Abbreviation

S.No. Abbreviation Description

1 BI Biscuits

2 CF Confectionery

3 CIG Cigarettes

4 CNF Carrying and Forwarding Agent

5 CR Cream

6 DND Damage and Destruction

7 DS Distributor Sales

8 FMCG Fast Moving Consumer Goods

9 GR Grocery

10 MT` Matchsticks

11 ND Noodles

12 TS Toilet Soap

13 WD Wholesale Distributor

14 WD Weighted Distribution

15 ND Numeric Distribution


Introduction:

(FMCG) Fast Moving Consumer Goods can also be alternatively named as consumer packaged

goods. Products which comes under this segment covers all consumables (other than

groceries/pulses) these items are often purchased at regular interval of time. The products which

are common in the FMCG segment are packaged foodstuff, toiletries, toothpaste, detergents,

shampoos, toothpaste, shaving items, shoe polish, packaged foodstuff, and household accessories

and extend to some of electronic goods also. These products can be said to be meant for daily or

frequent consumption which in return brings high return to the user. FMCG industry in India is

the fourth largest industry in the economy having a total market size in excess of US$ 13.1

billion. India is having a strong MNC presence and is characterized by a well established

distribution network channel, there is an intense competition between the organized and

unorganized segment and operation cost is also low. Presence of raw materials, cheap labor and

presence across the entire value chain gives India a competitive edge. The FMCG segment is set

to jump from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as

per capita consumption in most product categories like jams, toothpaste, skin care, 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 to branded products. Growth is also likely to come from

consumer 'upgrading' in the matured product categories. With 200 million people expected to


shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment

in the food-processing industry.

Company Introduction:

ITC is one of India's foremost private sector companies with a market capitalisation of US $ 45

billion and a turnover of US $ 7 billion. ITC is rated among the World's Best Big Companies,

Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine and among

India's Most Valuable Companies by Business Today. ITC ranks among India's '10 Most

Valuable (Company) Brands', in a study conducted by Brand Finance and published by the

Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by

Business Week.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,

Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded

Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an

outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards,

Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of

Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. ITC's wholly

owned Information Technology subsidiary, ITC Infotech India Ltd, provides IT services and

solutions to leading global customers.


ITC was incorporated on August 24, 1910 under the name “Imperial Tobacco Company of India

Ltd.” As the company's ownership progressively Indianised the name of the company was

changed from “Imperial Tobacco Company of India Ltd.” to “India Tobacco Company Ltd.”

The company forayed into the Foods business to create a new driver of business growth. It

began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet

dishes. In 2002, the company entered the confectionery and staples segments with the launch of

the brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour).

Today, the company is the leading FMCG marketer in India, the second largest Hotel chain, the

clear market leader in the Indian Paperboard and Packaging industry and the country's foremost

Agri business player. Additionally, the company's wholly owned subsidiary, ITC Infotech India

Ltd, is one of India's fast growing Information Technology companies in the mid-tier segment

ITC in FMCG:

ITC's Branded Packaged Foods business is one of the fastest growing foods businesses in India,

driven by the market standing and consumer franchise of its seven popular brands - Aashirvaad,

Sun feast, Bingo!, Kitchens of India, mint-o, Candyman and Yippee! The Foods business is

today represented in 4 categories in the market - Staples, Snack Foods, Ready To Eat Foods and

Confectionery.


ITC's uncompromising commitment to the health and safety of its consumers ensures adherence

to the highest levels of quality, safety and hygiene standards in manufacturing processes and in

the supply chain. All ITC-owned manufacturing units are Hazard Analysis and Critical Control

Point (HACCP) certified. The quality performance of all manufacturing units is monitored

continuously online. Going beyond process control, ITC ensures that quality standards are

scrupulously adhered to while choosing ingredients that go into the preparation of its food

products.

ITC's Foods brands delight millions of households with a wide range of differentiated, value-

added products developed by leveraging ITC's in-house R&D capabilities, relevant consumer

insights, a deep understanding of the Indian palate gained from its Hotels business, its agri-

sourcing & packaging strengths, exciting, innovative communication and an unmatched

distribution network. The business continues to invest in every aspect of manufacturing,

distribution and marketing to ensure that it can leverage emerging opportunities and fulfill its

aspiration of being the most trusted provider of Branded Packaged Foods in the country. ITC's

Foods business also exports its products to the key geographies of North America, Africa,

Middle East and Australia.


Indian Biscuit Market :

With an estimated market of over dollar 2.5 billion; the Indian biscuit industry is the 3rd

largest

industry in the world. The biscuit industry consists of economy, middle, premium and super

premium segments.

Biscuits priced at below Rs 100 a kg come under the economy segment, Priced at Rs 100-150 per

kg are categorized as middle segment .Biscuit of an MRP of Rs 125 to 150 per kg fall in the

premium category and above Rs 150 a kg in the super premium segment. Currently, economy

and middle segment comprise about 70% of the total biscuit market in India. The biscuit industry

has shown a very consistent growth rate of around 20% in the recent years and according to

industry expertise it is expected to grow at this rate in the foreseeable future as well. Although

based on the recent trend it has been speculated that the premium segment will have a higher

growth rate than the economy segment; especially considering the fact that the glucose segment

which contributed 33% by value a very few years ago now has a contribution of 24% by value

Total market of biscuit in Patna is Rs. 4.10 Crore per month.

Categorization of Biscuit Market at Patna, Britannia is the market leader with 34% and ITC

Sunfeast is at 3rd

position with 15%.


Chart 1 : Categorization of Biscuit Market at Patna

Source A.C neilsen and self calculation

Patna Overview:

Patna is the largest town and headquarters of Patna district, Patna division and Bihar state. Patna

is the capital of Bihar state. It is located on the south bank of the river Ganga. It is well

connected by railway and road. It is mainly an administrative and educational centre of Bihar. It

has however a few ancient sacred places as also places of tourist interest.

ITC

15%

Britannia

34% Parle

26%

Surya Foods

4%

Anmol Bakers

4%

Mondelez

International

2% Saj IND

3%

Others

12%


Figure 1 : Map showing demography of Patna

The literacy rate of Patna is 62.92%. The female literacy rate is 50.83%. The male literacy rate is

73.34%, which is shown in the graph below;


Chart 2 : Literacy rate of Patna

The population distribution of Patna is 42% people in urban area and 58% in rural area .

Chart 3 : Population distribution of Patna

3,06,745, 42%

4,19,619, 58% Urban

Rural


Product Profile:

Sunfeast: Evolution of Sunfeast :

In 2003, ITC launched Sunfeast with six ranges. ITC stuck to category favorites like Glucose,

Marie and Bourbon cream. Along with that, it also launched innovations such as orange-flavored

Marie, Marie light and butterscotch-flavored cream biscuits. In 2004, Sunfeast followed this up

with the launch of Sunfeast Milky Magic. More recently, it also has launched the Sunfeast

Snacky and Sunfeast Golden Bakes. Analysts believe that just because Sunfeast was a new

brand, helped matters. A consultant says, "The biscuits industry had not witnessed any major

product innovation in years. Consumers were just waiting for something new, something fresh,

when Sunfeast happened." Even then the competition had not made things better.

In August 2003, a month after its launch, the company undertook a major sampling exercise to

promote the product. For two years then, the brand did all the usual rounds -- riding behind

buses, blocking television spots, booking that corner space in your favourite newspaper and so

on.

Well differentiated advertisements, some which showed a complete cream world with cream

rivers, cream mountains and cream trees, were targeted at kids watching cartoon channels. At the

same time, on general entertainment channels, mothers received information on the importance

of glucose, the wholeness of wheat and so on. In April 2005, Sunfeast launched its major

campaign. It signed on Hindi film actor, Shah Rukh Khan as its brand ambassador. In the same

year, as the official sponsor of the WTA tennis championship -- titled the Sunfeast Open -- the


company had teenage sensations Sania Mirza and Mahesh Bhupathi campaigning for it. Analysts

say that ITC's deep pockets have helped Sunfeast in any ways.

ITC Ltd. make use of the above 6 success mantras to promote any of its segment, our focus is on

its branded packaged atta, Aashirvaad, which too works on same logistics. With this, ITC’s

Branded Packaged Foods businesses continued on a high growth trajectory recording impressive

growth in market shares and enhanced market standing across segments.

Biscuit Range:

Figure 2 : Product Range


SUNFEAST brand of biscuit:

In July 2003, ITC forayed into the biscuits market with the sunfeast range of glucose, Marie and

cream biscuits. Sun feasts brands essence, “spread the smile “Connotes happiness, containment,

satisfaction and pleasure. The mascot sunny reinforces the emotional aspect of the brand .In a

span of six year sunfeast has launched many new varieties and has its presence in almost all type

of biscuits categories .Sunfeast straddle all segments of the market led by dark fantasy at the

premium end .High quality married with exciting innovations had helped drive this category.

Dark fantasy Chocó fill has wowed the Indian consumers with its innovative centre filled format

and high quality packaging, in addition ,the launch of the dream cream range of biscuits two

exciting and innovative dual cream format further reienforces ITC’s commitment to continuously

delight the consumer.

SWOT OF ITC LTD:

Strengths

1. Vast local knowledge and international expertise helps it to be globally competitive.

2. High quality standard products and services.

3. Excellent brand making capability helping it to diversify it into retailing, IT and hotel

segments


Weaknesses

1. Diversification into various lines in which, it does not have knowledge.

2. Dependency on tobacco business. It accounts for nearly 80% of profit.

3. Low return on investments in the food segment.

Opportunity

1. Per capita consumption of personal care products in India is very low, offering a great

opportunity for ITC’s soaps, shampoos and fragrances.

2. New FMCG retail shops are opening at exponential rate.

3. Rising income level and increase in purchasing power of consumers

4.

Threats

1. Increasing negative publicity of smoking would adversely affect its money minting

cigarette segment.

2. Steep increase in cigarette taxes.

3. Intense competitions from established brands in the FMCG sector.


Distribution channel:

Physical distribution of goods and products is a process of reaching out to the customer. After

the production process is over the main concern of the company is how to make that product

available at the nearest shop of the target customer .For this the company need to have an

effective distribution network which is cost effective, reaches out to every nook and corner of the

target market and delivers the goods the shops on time so that there is no scarcity. Thus a

company needs to have very clear cut understanding of the geographies of that particular area for

an effective distribution channel.

Basically there are two types of market Viz. Urban market and rural market. Both the markets

are very different from each other in terms of preference, frequency of goods sold, price and

quality. With respect to FMCG it has been seen that the frequency of sale is faster in the urban

market and not in the rural market. The area that was given to me is urban market, I was assigned

PTC , Raja Bazar, Kankarbagh area under Patna city.

Factors affecting the choice of distribution channel :

There are number of channel from which a company can choose.

In choosing the ideal channel, the company always has to struggle between what is ideal and

what is available.What is available need not be the ideal because there are a number of factors

that limits the choice.


Various factors which affects the choice of the distribution channel are :

Factors relating to product characterstics

1. Purchase frequency

2. Perishabilty.

3. Selling Price per unit.

4. Standardized product.

Market factors and consumer factors

1. Consumer of industrial products

2. Number of purchasers

3. Geographical distributin of consumers.

4. Size of the order

Company Factors

1.Financial resources

2.Size of the company.

3.Product Mix.

4.Attitude of the company’s executive.

Marketing Policies.


Environmental factors

1.Economical consideration.

2.Legal restrictions.

3.Social and ethical considerations.

Middle man consideration

1.Service provided by the middleman.

2.Attitude of the middle man.

3.Availabilty of the middle man.

4.Sales volume potential.

5.Cost of channel usage

Thus the above factor influence the decision regarding the distribution channel.It is therefore

right to say that a company is not always free to enjoy the complete freedom in selection of

distribution channel.

Market Size:

The total market size of area which ,I was assigned is as :

PTC – 1280 Outlets.

Raja Bazar -- 925 Outlets.

Kankarbagh – 733 Outlets.

Total of 2,938 outlets were there in these area where itc provides its service.


Chart 4 Market Share of 3 area in Patna within ITC

Chart 5 : Total number of Outlet area wise

44%

31%

25%

Market Share

PTC

Raja Bazar

Kankarbagh

PTC Raja

Bazar Kankarbagh

Series1 1280 925 733

0 200 400 600 800

1000 1200 1400

Ou

tle

ts

Total no.of outlet area wise


Out of all three area assigned to me PTC area was having maximum market capture/share

followed by Raja bazar and then Kankarbagh. Total number and percentage of outlet are shown

in the graphs above.

HIERARCY AT PATNA:

This is the hierarcy at ITC limited. At Patna there are no area manager in order to save cost.Area

executive at Patna directly report to assistant manager,as assistant manager are present in Patna

who can take care of area executives.

Branch Manager

AM - Foods & Confectionery

AM - PAM

Area Manager

Area Executive

Sales Trainee

AM - Cigarettes

Figure 3 : Hierarchy at ITC Limited


Numeric Distribution: Measures the width of distribution. It signifies “being present where the

category is present”. It may be calculated at category level as well as segment level.

Numeric distribution only tells the percentage of outlets where we are present. It does not give an

indication as to whether we are present in the right outlet or not.

Numeric Distribution =

Total no. of outlet stocking our brand

x100

Total no. of category /segment

PTC – 1280 Outlets.

Raja Bazar -- 925 Outlets.

Kankarbagh – 733 Outlets.

New outlet added in Raja Bazar by me =7

New outlet added in boring road by me = 2

So total is 2947.

Non-Serviced outlet which I find in the area assigned to me = 60.

Objectives:

• To find numeric distribution of sunfeast biscuit in Patna market (PTC, Raja Bazaar &

Kankarbagh).

• To find reason for low/high numeric distribution.


• To find Weighted distribution with passive channel contribution in sale and without

passive channel contribution in sale, and then find the difference in both WD in Patna

market (PTC, Raja Bazaar & Kankarbagh).

Methodology:

We found out that the Numeric Distribution of sunfeast biscuit in Patna (area specified to

me) was low.

A sample population of 12 people, which included Non-Serviced retail outlet’s owner,

Serviced Outlet’s owner , Personnel market visit observation & DS of ITC was taken.

Open ended discussion was held with above mentioned people to found out the variables.

After getting Variables, they were clubbed and a new variable was found out.

A questionnaire was then developed based on the variable.

60 Non-serviced outlets were approached ,as identified during market visit.

Weighted Distribution was calculated using formula given by ITC .

Research Tools:

Open Ended Discussion.

Questionnaire

SPSS


During visit to market (area assigned to me i.e PTC,Raja Bazar & Kankarbagh) 60 retail outlet

were found where there was scope of selling ITC biscuit . But they were not selling it.

Though it was a tough job to find retail outlet not selling ITC biscuit because ITC biscuit are

well known brand in the market . But still managed to find 60 such outlets.

And then follwed them with my questionnaire which was made after Open ended discussion with

Non-Serviced retail outlet’s owner, Serviced Outlet’s owner , Personnel market visit observation

& DS of ITC was taken. And since the number of outlets is more than 30 it is also appropriate

for having normal distribution.

Then on a likert scale of 1 to 5,response were recorded and then factor analysis was used.

Data Collection:

First a effective questionaire was developed by conducting a open ended Group

Discussion with Non-Serviced retail outlet’s owner, Serviced Outlet’s owner ,

Personnel market visit observation & DS of ITC was taken.

Survey respondent were Non-Serviced Outlet’s owner 18 + years and class 10th

above and whom we consider to be well informed respondent in the FMCG retail

business because they are in business for long period.


It was found that the numeric distribution of ITC stands to be in 72.03 %,which is considered to

be very low.

So to check or to say find the crucial reason for low numeric distribution further reseach was

done. A sample population of 12 people,which included Non-Serviced retail outlet’s owner,

erviced Outlet’s owner , Personnel market visit observation & DS of ITC was taken.

Clubbing Of Variables for Making Questionnaire of Numeric Distribution:

Clubbing:

It was tried to bring almost similar variables under one category for convenience.

The variables shaded in yellow colour are the variables that was collected after discussion with

above mentioned people, and pink colour area are showing those variables which have been

clubbed. The clubbing of variable is shown in the table.


Figure 4 Clubbing of Variable


Validation of Variables:

Before using these variables for questionnaire, validation of these of these variables were done

on the basis of personnel market observation and reports of A.c Neilsen.

Figure 5 : Validation of Variables


Figure 6: Validation of Variables


Figure 7 Validation of Variables


Figure 8: Validation of Variables

After validation of variable ,they were further used in forming the questionnaire .

And the data received by questionnaire was further analysed using stastical tool i.e SPSS was

used for stastical analysis.

Factor analysis:

Factor analysis is used to find factors among observed variables. In other words, if your data

contains many variables, you can use factor analysis to reduce the number of


variables. Factor analysis groups variables with similar characteristics together. With factor

analysis you can produce a small number of factors from a large number of variables which is

capable of explaining the observed variance in the larger number of variables. The reduced

factors can also be used for further analysis.

First Significance levels and KMO and Bartlett’s test of sphericity were calculated using SPSS.

KMO found to be 0.715 and Sig. level was less 0.05 .Ideally if any one of the two satisfies then

we came move further. For KMO value should be greater than 0.6 and sig. level should be less

than 0.05.

Here both the conditions are satisfying

Next in the Total Varience Explained table (below ) we find that out of 8 variables only 3

variables have Eigen Value of more than 1 ,so only 3 variables can be further explained. And

their cumulative percentage of Rotation Sums of Squared is 63.95%.


Table 1: Validation of Variables

Moving further to component matrix table given below :


Table 2 : Component Matrix

In the table above the variables with value more than 0.7 is selected.

Among the variables to be selected only 3 variables are having value greater than 0.7,which is

not enough here as all the variables coming under component 1 only, so we can rotate the matrix

using varimax option in factor analysis which will give new result by rotating the axis named as

rotated component matrix ,shown in the table below :


Rotated Component Matrixa

Component

1 2 3

Quality

.636

.399

.104

Sales -.057 .054 .717

Service .666 -.197 -.318

Delivery .839 -.002 .082

Offers .241 .537 .558

D & D .016 .845 .013

Economical Issues .792 .278 .171

Advertisement .517 -.339 .489

Table 3 : Rotated Component Matrix

Now 4 such variables are having value greater than 0.7 and they are spread the 3 components.

Further two variable were clubed which were coming under the same component i.e Delivery

and Economical Issues were clubed to Convenience, shown in the table below;

Convenience D & D

Economical

issues

Sales

.717

Delivery .839

D & D

.845

Economical Issues .792

Mean 0.815145555 .845 .717


Further mean value of all the Factors (F1,F2,&F3) were calculated which can be seen in the blue

shaded area in the above table.

The perceptual map is showing that the most important variables which is influencing numeric

distribution are delivery and economical issues and this is within component one i.e .

convenience.

Figure 9 : Perceptual Map between Delivery & Economical Issues

It was found that the highest and second highest mean values are of convenience and Damage &

distroyed and they are within component one and componnt two shown in the next perceptual

map.


Perceptual Map:

(Factor 2)

Sunfeast’s Industry Competitors:

Major industry players present in the market of Patna apart from Sunfeast are Britannia

Industries Limited, Bisk Farm, Parle and Priya Gold. From the inputs provided to me during

briefing of the project I was informed that Britannia is the market leader in the market of Patna

with a market share of close to 48% followed by Sunfeast.

Figure 10 Perceptual Map between Convenience & D&D


Britannia Industries Limited:

Britannia Industries Limited is an Indian food-products corporation based in Kolkata , India . It

is famous for its Britannia and Tiger Brand of biscuits which are popular throughout India.

Britannia has an estimated 26% market share in the Indian Market. Although it is the market

leader in the market of Patna with an approximately 48% market share . The company’s principal

activity is the manufacture and sale of biscuits ,bread ,cakes and other bakery products.

Swot of Britannia Industries Limited:

Strength

Market Leadership

Product Innovation

Many successful brands and products

Well established distribution network

Celebrity endorsement and promotional activities

Weakness

Market leader but could not stop competitors from flourishing

Brand perception as a biscuit maker is a stumbling block in diversifying.

No new strategy to defend its position as the leader

Has not achieved the expected growth in sales.


Opportunities

Per capita consumption of biscuits is low in India at 2.55 kg , while in developed

countries it is 12 kg . This shows a huge opportunity in biscuit industry.

Increasing disposable income of the people

Diversification

Bakery chain

Threats

Increasing cost of raw materials like sugar, milk etc.

Decreasing margin in the glucose segment

Intense competition

Price sensitivity, difficult to increase the price of biscuits for customers .

Increasing dominance of the regional players.

Parle Products:

Parle Products was founded in 1929 in British India. It was owned by the Chauhan family Of

Vile Parle, Mumbai; Parle began manufacturing biscuits in 1939. In 1947 when India became

independent, the company launched an ad campaign, showcasing its Glucose biscuits as an

alternative to the British biscuits . The Parle brand became well known in India following the

success of products such as the Parle –G biscuits.


The original Parle Company was split into three separate companies owned by the different

factions of the original Chauhan family.

Parle Products , led by Vijay , Sharad and Anup Chauhan (owner of the brands Parle-G,

Melody, Mango Bite , Poppins , Monaco and KrackJack)

Parle Agro , led by Prakash Chauhan and his daughters Schauna , Alisha and

Nadia(owner of the brand such as Frooti and Appy)

Parle Bisleri , led by Ramesh Chauhan.

Swot of Parle Products:

Strength

Low price as compared to the competitors

Sizeable market share in country

Offers variety of products under its brand

Greater in number of size variants

An experienced team of sales and marketing executives

Deep and effective coverage


Weakness

No proper replacement system for broken biscuits

Improper and irregular supply

Fewer share in premium biscuit market

High dependence on its flagship brand Parle –G

Lack of schemes for retailers and distributors

Opportunities

Improving supply system for established brands

Rising demand for innovative packaging in packaged food items.

Great scope for snacks and chips if marketed properly

Coverage of untapped rural market

Threats

Increase in demand of local bakery products.

Emerging substitutes like wafers and snacks

Shrinking margin due to increased cost of raw materials

Intense industry rivalry


Bisk Farm:

Since its inception in the year 2000, Bisk Farm has been recognized for its biscuits , cookies ,

cakes and rusks. The brand is owned and marketed by SAJ Food Products(P) Ltd, a part of the

Aparna Group of Companies. Bisk Farm has carved a niche for itself in the market in a fairly

short span of time. Bisk Farm is currently present throughout Eastern and North Eastern India,

and also in the parts of south, central and North India.

Swot of Bisk Farm:

Strength

Lower priced biscuits in the premium segment

Good availability

Punctual visits to the retail outlets

Extensive choice of biscuits in every segment

Weakness

Yet to gain mass popularity

No system for the replacement of damaged products

Sales team lacks the experience of bigger players like Parle or Britannia

Lack of schemes for customers


Opportunities

The uncovered markets in the north, south and central India

Increasing growth rate of biscuit industry

Increasing demand for pockets friendly cream biscuit

Threats

Intense competition from established players like Sunfeast and Britannia

Lower economies of scale

Positioning is a hindrance for the premium segment products

Increasing cost of raw materials

Benchmarking of Sunfeast biscuits against competitors:

ITC Benchmark Product

Product name Company Product name

Sunfeast Glucose

Britannia Tiger

Parle Parle-G

Sunfeast special Cream Britannia Cream Treat


Parle Creams

Sunfeast special Cookies

Britannia Good Day

Parle 20-20

Sunfeast Marie Light

Britannia Marie Gold

Parle Parle Marie

Sunfeast Snacky

Britannia Time pass

Parle Monaco/Nimkin

Sunfeast Dark Fantasy

Britannia choch-chip

Parle Milano

Sunfeast Nice

Britannia Nice Time

Parle Nice Time

Table 4 : Benchmarking of sunfeast biscuits against competitors

Weighted Distribution: This measures whether we are (products) present in the right outlets. It

signifies “being present where the category /segment sell the most”. Weighted distribution tells

us right outlets. A high W.D number would mean that we are present in the right outlet.

Mathematically, W.D may be defined as:-

Weighted

Distribution

=

Total sales of outlets stocking our brand

x100

Total sales of all category /segment handler


There are two weighted distribution one with passive channel (the channel which directly don’t

take biscuit from ITC sunfeast.) .And other is normal one which are shown above.

The difference between the two weighted distribution is shown below ,which is coming to be

very less 0.28%.


Numeric Distribution Vs Weighted Distribution :

If the numeric distribution of any brand is very high ,while the weighted distribution is low,it

would mean that our brand is available at a wide spread set of outlets . However , these outlets

are not the top selling outlets in the geography & do not account for a large quantum of the

industry sale for that brand.


FINDINGS:

Numeric Distrbution

• Economical Issue : Issues do prevail like late payment of SHELF space .Sometime it is

delayed as much as 2-6 months. In kankarbagh area institutional sale issue also prevails .

• Delivery : It was found that some of the outlets who were selling Sunfeast but now they

have discontinued because of some bitter experience. And they claim late delivery for

this.

• D & D : It was found that ITC is little slow in D&D replacement as compared to its

competitors Britannia & Parle. They replace D & D on the very next day of registering

complaint, while ITC does at the end of the month.

• Other brands in some cases do pick up rat eaten biscuit ,they do it to maintain

relationship. Its not a mandate.

• But ITC never pick it up .


Weighted Distribution:

• 11 retail outlet are taking biscuit from passive channel & institutional sale, which was

discovered while regular market visit.

• Rest of outlets are not doing so because ,in that channel return of damage biscuit are not

taken.

• Difference between two WD is very less.

Recommendations:

Numeric Distribution

• ITC should not linger the payment of retailers as , ITC itself do not give much credit

period to retailers.

• Timely payment should be done for shelf space ,if not done so ITC may lose some of the

retailer ,which has already happened in past.

• ITC should keep a close look on its delivery channel, as it plays a crucial role.

• D & D is costing ITC severely , as retailer stop buying Sunfeast biscuit temporarily until

D & D are not replaced and replacement rate is very slow which costs its business.


Weighted Distribution

• Sunfeast is already having a healthy presence in the market ,even if some out lets are

taking sunfeast from passive channel. Ex ; Institutional sale. They difference is

marginally very low .

• So ITC can afford to neglect that now but if it could any how control that ,there will be a

extra addition in WD of sunfeast.

• Sunfeast should be much focused on maintaining the current W D of 86.69 %.


Bibliography:

To complete this project reference were taken from various sources they are as follow:

Books

“Marketing Management – A south Asian Perspective”, thirteenth edition,

Kotler Philip, Keller Kevin Lane, Koshy Abraham, Jha Mithleswar

“Sales and Distribution Management”, seventh edition (reprint

impression,2007),Havaldar Krishna K, Cavale Vasant M.

“Operations & Supply Management”, twelfth edition, Chase B. Richard,

Shankar Ravi, Jacobs F., Aquilano J. Nocholas.

Databases:

Emerald

EBSCO

Internet Refrences:

www.itcportal.com

www.allaboutbihar.com

www.britannia.co.in

www.parleproducts.com

www.biskfarm.com

http://www.itcportal.com/

http://www.allaboutbihar.com/

http://www.britannia.co.in/

http://www.parleproducts.com/

http://www.biskfarm.com/

itc project

Documents

numeric distribution

weighted distribution

patna town

biscuit category

biscuit industry

umbrella of biscuit

detailed study

serviced outlet