britannia-project

Britannia I n d u s t r i e s L t d. By, Group 6, Section-

Objectives To understand the positioning of Britannia in the consumer’s mind  To identify important factors consumers consider while purchasing products  Marketing mix of Goodday biscuits and do competitor analysis. 

 

Management Team

Contents 1

Organization

2

Competitor Analysis

3

External Analysis

4

Marketing Mix

4

Customer Analysis

Pillar Brands  Tiger  GoodDay  Mariegold  Fifty Fifty  Milk Bikis  Cream Treat

Milestones • 1892 – Started with an investment of Rs. 295/- in Kolkatta • 1918 – Britannia Biscuit Company Ltd. (BBCo) was launched • 1979 – BBCo was rechristened as Britannia Industries Ltd. • 1993 – Wadia group aquired a stake in ABIL, UK & became an equal partner in BIL with Groupe Danone • 1997 – Corporate re-branding exercise gave rise to philosophy of “Eat Healthy, Think Better” • 1999 – ‘Britannia Khao World Cup Jao’ – A major success! Profit up by 37%

Milestones • 2001 – Britannia becomes one of India’s biggest brands – Britannia Lagaan Match – Most successful promotional activity of the year • 2002 – Rated one amongst the top 200 small companies of the world by Forbes Global – India’s 2nd most trusted brand – Economic times • 2004 – Britannia accorded the status of being a ‘Superbrand’ – Volume crosses 300,000 tonnes • 2005 – Company goes in for major expansion

Company Overview • India’s second largest food company • Sales close to Rs. 20 billion • Consistent annual growth rate of 1520% • Sources products from more than 50 factories spread across the country • Key product lines include: – Biscuits – Bread, Cakes and Rusk • Product range caters to the whole spectrum from mass market to the premium segment

Financial Analysis •

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Gross sales increased to Rs 2317.11 Cr in 2006-07 registering a growth of 28%. Profits declined by 33% due to increase in input prices and stiff competition Dividends of the order 100-150% were provided for the past 5 years Britannia followed the industry growth rate for the past 3-4 years while the profit margin followed a zigzag pattern. Costs have increased significantly on the production as well as on selling front.

Financial Analysis • Company has very small debt and its Debt-Equity ratio is 0.01 • Company is maintaining good debt rating for future requirements • PBITDM (Profit Before Interest Tax Depreciation Margin) expressed as a percentage of Sales is 6.58 • ROE is at a healthy Rate of 21.14% • Current ratio has been improving over the years and hence the solvency position of the company

Competitive Analysis Company Britannia Parle ITC Surya Food Agro Others

and

By Value 37% 31.3% 6.3% -

Ma rke t Sha re by Volume

Others 19%

Britannia 31%

Surya Food and Agro 5% IT C 7%

Parle 38%

By Volume 30.5% 38.4% 6.7% 5%

Industry Overview • Biscuit industry is the third largest producer and fastest growing industry in FMCG sector • It grew by 13% in 2006-07 • Estimated Value: Rs 5000 Crore • Organized sector: 60% (approx) • Major Segments: Glucose ,Marie, Cream, Crackers, Milk • Major Brands: Britannia, ITC, Parle, Priyagold, Dukes etc

PEST Analysis

Political Factors

Economic Factors

Social Factors

Technology Factors

Food laws implemented at State & Central level Stringent TAX laws Many other Govt. Regulations

GDP increasing at 8-9% Increase in the disposable Income Rupee Appreciation

70% population below 35 years Good awareness among the people

Process Innovation, Product Innovation Innovative techniques – JIT, RFID

Porter’s 5 forces

•Many Suppliers •Fragmented environment •Switching Costs •Not an important customer •Threat of Forward integration

difficult Economies of Scale – difficult Product Differentiation Capital Requirements Cost disadvantages Govt. Policies

•Less large volume buyers •Switching Cost •No individual buyer can impact •Less threat of backward Integration •Fast food •Home made snacks •Changing consumption patterns

Strengths

SWOT

Brand Name Market Leadership Product Innovation Many Successful brands Distribution Network Danone Promotional Activities Celebrity Endorsements

Opportunities Per capita consumption in Ind–2.55 Kg, develped countries-12Kg, Enormous Scope Increasing Disposable Income Opportunities to increase exports turnover Diversification Bakery Chain 

Weaknesses

Market leaders but still couldn’t prevent competitors to flourish Britannia’s brand perception as biscuits – stumbling block in venturing into new areas Competition-couldn’t adopt any strategy to defend its position May not centre on a single Product Not able to increase its sales in an expected manner

Marketing Mix - Product 20 percent share of Britannia's biscuit share of the market Good Day Choco Nut

2/3 Good Day Cashew

CAGR of 35 percent Gaining acceptance as a family snack Text Good Day Butter

Good Day Products Text

Text Good Day Pista Badam

Good Day Chocolate Chip

Marketing Mix - Product

Fig. Four Product Levels for Good Day

Price • On the basis of price, the biscuit market can be segmented into • Low (less than Rs 40 per kg.) • Medium (Rs. 40-70 per kg.) • High (over Rs.70 per kg.) • Caters to the upper middle and high end of the market - with a touch of premium to it.

• On the price quality matrix, Good Day biscuits can be classified as following a High-Value strategy.

Promotion • Consumers are becoming more health conscious • "Swasth Khao Tan Man Jagao" (Eat Healthy, Think Better) campaign directly addressed this new trend • A new logo was created encapsulating the core essence of Britannia - healthy, nutritious and optimistic • Good Day is positioned as a healthy and nutritious product • Good Day advocates values that stand for health, hygiene, family, trust and taste. • Sports and sporting events are a key channel for promotions. • "Britannia khao, World Cup jao" campaign in 1999 and 2003 was the most recognized sales promotion among all Cricket World Cup-related sales activity.

Place

Customer Analysis Key Information Areas • Demographic Profile of the consumer – Age, Sex, Income level, Occupation • Personal Customer characteristics – When do customer consume biscuits – Type of biscuits consumed – Where do the customer purchase – Purpose of buying (personal consumption, gifting, serving guests) – How much do consumers spend on biscuits • Factors Affecting the buying decision – What are the various factors that are considered – Their order of preference Comparative analysis – After the factors have been found out above, the following issues are addressed. – How does Britannia fare on these attributes – How does the competitors fare on these attributes – The competitor brands taken for the analysis are • Parle • ITC • Priya Gold (Surya Foods)

Customer Analysis Methodology • •

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Preliminary Analysis – Secondary material on: Industry, Category, Competitors and Consumers Qualitative Research – Interviews with few consumers to identify major factors influencing the purchase decision of biscuits – Interacting with friends and family Quantitative Research – Customer survey using questionnaire – Survey done through both face to face interviews as well as online Tools Used – Factor Analysis – Cluster Analysis – Fishbein Analysis. Software used is SPSS.

Data Analysis Round One Analysis

Fishbein Analysis Attribute

Average Score

Brand

0.596774194

Taste

1.64516129

Package

0.016129032

Variety

0.064516129

Health

0.516129032

Price

0.112903226

Value for Money Quality

0.64516129 0.806451613

Hence from the Fishbein Analysis, it can be inferred that customers attitude towards Britannia is very favorable to

Brand

Fishbein Score

Britannia

6.581

Parle

3.161

ITC

2.984

Priya Gold

-1.065

Factor Analysis Rotated Component Matrixa Component

  1

  Variety Package

2

3

0.89 

 

0.835 

 

 

 

Price

 

Quality

 

0.892 

Brand

 

0.771 

Taste

 

0.699 

Value_for_Mo   ney

 

0.843

 

 

0.835

Health

‘Variety’ and ‘Package’ have been combined into one factor which can be named as Appearance factor. Since the survey was skewed towards the urban population, Price has not factored significantly.

‘Quality’, ‘Brand’ and ‘Taste’ have been combined into the next factor which may be named as the Wholesomeness factor. ‘Value for Money’ and ‘Health’ have figured into the third factor which may be named as Well Being factor.

Cluster Analysis •

‘Wholesomeness Factor’ Final Cluster Centers

   

Cluster 1

2

3

Consuming_peri od

2

3

2

Biscuit_type

2

5

2

Place_of_Purcha se

2

2

2

Biscuits_usage

2

1

2

Willingness_to_s pend

2

2

3

Sex

1

2

1

Age

2

2

2

Occupation

1

2

2

Cluster 2 which is characterised by female population also preferred Marie biscuits, and consumed them mostly during tea time. We also observe that the high income level group found in cluster 3 also scored higher on willingness to spend.

While the inter group variance Quality 4 3 4 was minimum for place of Brand 4 3 4 purchase (superbazaar), higher Taste 5 4 5 variance was observed on factors like consuming period, biscuit type, biscuit usage and other Cluster analysis done for Well Being Factor and Appearance Factor demographical factors. Income

2

2

4

Action Plan Reduce dependence On Biscuits - diversify Bakery Chain

Same quality, competencies

Investing on farmers

Exports

Britannia

Improve Operational efficiency

Tap “out of Home” market

Dairy products, rusks, Namkeen/snacks

Thank You, Have a Good Day