Executive Summary- ITC

November 30, 2017 | Author: Lohith | Category: Brand, Drink, Retail, Nutrition, Juice
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Exec summary of ITC products...

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Executive Summary ITC, one of India’s and world’s most reputable and respectable brands has been built after a century of continuous efforts and perseverance with customer focus, respect for people, excellence and innovation as its strong pillars. After conquering the tobacco, hotels, printing& packaging businesses ITC has made substantial inroads to the foods business since its entry in 2004, the disruption it has caused in the industry has been owing to its allegiance to the strong pillars it has been built upon. These core values, coupled with reception to the dynamics of market changes has made ITC gain substantial market share in the businesses it has entered. ITC has brought innovation to the table and opened new avenues to businesses evident with the likes of Yippee Noodles and Bingo, which has led us present similar propositions that talks about penetrating the market and the available categories rather than concentrate on dismantling the current market leaders by competing on the same grounds they are in. Expanding the size of the pie should be the way forward as there are opportunities available for the same. The size of the juices and nectars segment, the annual growth rate that is expected, the demographic dividend looking for the products in this segment strengthened by the demographic profile of our country, the market available to be captured especially in the east and north east regions will emphasize the need to go for category penetration. B Natural should position itself as the product that gives us a rich and enriching experience provided only by the natural products which is also evident by its taste. B Natural should be a celebration of Taste, without compromising on achieving health. It should also talk about being the natural self, and convey those emotions that are resultant of one being in the midst of nature and going nostalgic. ITC should relook at its ATL and BTL advertising which can provide sufficient momentum to the efforts put to increase the brand awareness of B Natural. With growing trends in digital marketing – content marketing, affiliate marketing, the company should explore additional avenues to harness the available opportunities. The introduction of PET bottles, changes in the structure of packaging, as the competitors’ products look the same, posing difficulty for a consumer to identify ITC’s products, having a brand ambassador, are some of the areas the company should look at in order to gain mileage. The extensive distribution network that ITC possesses can be used to make B Natural reach the nook and corner of our country. B Natural should be bundled along with some of the most successful brands of ITC which have a greater penetration especially in regions of North and West. Ultimately the incentives that are provided to the retailers will play a major role in B Natural occupying a longer shelf space and providing greater visibility to the consumers. Attractive margins, additional properties in the form of display stands and shelf spaces are the need of the hour especially at places like Point of Sale. Packaged fruit juices have the impression of containing very high amount of sugar and hence not viewed as healthy, to overcome this perception, B Natural should position itself as a product that provides a very high perceived benefit. Indian consumers like to add sugar when they squeeze fruit juice. B Natural should ensure that it caters to the customers' taste and preferences, and has added the sugar required to its juices and being even more Indian. The flavours that are widely sold should be made more reachable, and this should be specific to the regions, the promotions, especially BTL should concentrate on those flavours that have been not been doing tremendously well. B Natural has a huge role to play when it comes to assessing the competitors’ presence. It should implement a strategy which is more focussed on sales by streamlining the process and can call this as “Start Small Today, Take a Giant Leap Tomorrow”, where on the ground activities to assess the presence of other players should take

place with respect to sales volume and revenues. All these provides ITC a plethora of opportunities to position itself as a brand of choice and gaining substantial market share

Why do people drink juices? 100

95 73

80 56

60 40

30

39

34 16

20

9

18

0 Healthy/Nutritious

Energetic

Supplement to soft drinks

Non Carbonated

Beating the Heat

No preservatives

Best for Skin

Taste

Convenience

After knowing why people drink juices, we should also look at their buying patterns, which may be planned, unplanned, impulsive and non-impulsive. Planned buying pattern should stimulate ITC to look at potential avenues like Supermarkets, food chains, grocery stores, where fighting for shelf space takes place. Attractive incentives in the form of margins, providing an additional shelf space at the points of sale, offers during various occasions can make or break the reach of B Natural. These market places generally attract women and the placing of the product should be closer to those products which are regularly bought by them, the colour combinations of the shelf space should also be in such a way that it resonates with their preferences, this will require the team from B Natural to work closely with the super markets/ grocery stores. Unplanned buying occurs in regions like colleges, schools, and also places where millennials gather, generally the local kirana stores, where availability of B Natural makes a difference to this population. ITC can use their extensive distribution network which caters tobacco products to reach out to these places. The incentive paid to the salesman can enable him to carry a sales beat at least a day before that of the competitor. ITC can also focus on associating with small format retail stores like HUL’s Super Value Stores, Dabur’s Parivaar and Marico’s Mera. The counter can be modified into a C shape, signifying the C from the ITC group so that the shopper can move and pick items just like that of the large retail stores. A closer look at the reasons given by same set of respondents for not drinking packed juices throws some light regarding the aspects B Natural should be worried about.

Not Drinking Packaged Juices, because? Never Tried

6%

Expensive

17%

Added preservatives

20%

Added Sugar Content

28%

Skepticism regarding freshness 0%

29% 10%

20%

30%

40%

While changing the sugar content will involve massive changes in the R&D section, it is not something that the competitors are better off with, Real and Tropicana contain more or less the same amount of sugar. B Natural can address the skepticism regarding freshness and this is more in sync with the value proposition proposed by us, as the product next to nature which symbolises freshness. Indians have a strong preference for freshly prepared foods, and most have a definite prejudice against packaged, branded, or processed foods, believing them to be lower in flavour and nutrients. Analysis of the perceptual map tell us more about the influencing factors which are: Aspects of Fun Refreshment, Enjoyment, Hygienic Mental Makeup Reflects attitude, looks trendy Relaxation Relaxes mentally, satisfies thirst Social Aspect

Factor Analysis of importance of factors for purchasing the packaged fruit drink Rotated Component Matrix Promot ion

Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalisation

Component Product Feature

Qualit y 0.8900 0.0232 45 0.4363 0.4964

Taste No of Flavours

0.02826 0.4508

Appearance of the packet

0.3974

0.6211

0.1716

-0.3304

0.2706

0.6331

Expiry & Mfg Date

Nutritional Value Small Consumption Unit

-0.3961

0.7591

0.0697

0.7919

Frequency of Ads Brand Ambassadors Promotional Schemes

0.8583

0.0281

0.7968

-0.1613

0.7539

0.004

0.0429 0.2131 0.0319 0.0025 0.0961

The above analysis states that number of flavours actually plays a lesser role in promotion and product feature, major role is played by attributes Frequency of Ads, Brand Ambassador (a concept that is not used by Real or Tropicana), promotional schemes, Under quality, appearance of packet, nutritional value, SKU takes dominance.

All these time and again indicates the aspects B Natural should be looking at to reach more penetration.

Why does a Retailer stocks fruit juices? 8%

23% 4%

16%

49%

Customer's Demand Brand Name Relations with the retailer Market leader Trade Schemes

The above chart illustrates the responses that were collected from close to 30 outlets spread across Indore. It depicts the reasons as to why a retailer stocks fruit juices. For a product like B Natural, trade schemes, relations with the retailer and brand name should be of paramount importance. Brand name can be enhanced through activities that will provide a mileage to the brand, some of them include ATL, BTL advertising, coupled with a brand ambassador. Other than these, the trade schemes that are provided to the retailer can be changed, along with

providing a replacement policy and solving the routing problem judiciously by selecting areas which are closer to each other.

Retailers do not stock fruit juices because? 12% 29%

9% 35% 15%

Replacement Policy Relations with the trader Trade Schemes Never Stocks fruit juices Routing problem

An online survey that was conducted recorded close to 370 participants’ responses from heterogeneous backgrounds. Assuming the responses will be more or less the same across all other regions, B Natural has already considered the parameter Taste and should position itself as a drink that can be consumed and also achieving health, refreshing/ beating the heat, an alternative to the available soft drinks and that which makes a person energetic.

Start Small Today, Take a Giant Leap Tomorrow This is an on the field campaign that involves exercise which will estimate the current penetration levels in the market, an initiative that ITC can engage itself in Business schools across the country according to various regions. Students should carry out an activity by selecting a particular area in a region and find out the number of shops that can house fruit juices, how many have Real juice in them, how many have Tropicana and how many have B Natural in them, the activity can also gather information pertaining to different combinations’ availability

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