For a big organization like Britannia Industries Ltd, the business hugely depends on the distribution channel and the consumer attitude towards the product. In distribution channel retailers plays a very important role. While making a product a SKU (stock keeping unit) of the shop retailers think about the GMROI (gross margin return on investment) and they promote the brand which provides them highest. They expect return in the form of profit margin, company schemes, window display and reference of the shop. Among these, company schemes make the difference and are the highest sources of motivation after profit margin. Retailing demands a constant push from the company.
Marketer needs to use advertising and brand building strategies to address the discerning buyers and retail push to in different buyers. The manufacturer should understand consumer behaviour because retailers can't help quality and price. It is only up to manufacturers to deliver what consumer wants.
There is a greater need to understand the retailer behaviour. Considering them as a team, working for the company may help them to be attached to the company. There should be a feeling of belonging to the company in inner of the retailers. This can be done by setting values club for retailers so that they may exchange views with the company and help in understanding consumer behaviour.
A channel is the pipeline through which a product flows on its way to the consumer. The manufacturer puts his product into the pipeline or marketing channel and various marketing people move it along to the consumer at the other end of the channel.
According to American Marketing Association: " A channel of distribution or marketing channel, is the structure of intra company organisation units and extra company agents and dealers, wholesale and retail through which a commodity product or service is marketed."
Functions of Channel Intermediaries
- Reconciling the needs of producers and consumers
- Improve efficiency by reducing the number of transactions and creating bulk for transportation
- Improve accessibility
- Providing specialist services
Channel Distribution for Consumer Goods
- Zero Level Channel:
- One Level Channel:
- Two Level Channel:
- Three Level Channel:
(Direct marketing includes use of personal selling, direct mail, telephone selling and internet. Examples are Avon Cosmetics, Acquaguard, Amazon. Com)
(It is economical for producers to supply directly to retailers than through wholesalers. Supermarket chains and Wal-Mart are examples)
Manufacturer--- Wholesaler--- Retailer---Consumer
(Wholesalers buy in bulk from producers and sell smaller quantities to retailers)
(Producers delegate the task of selling their products to an agent who contacts wholesalers and receives commission on sales. Prevalent in foreign operations)
Decisions Involved in Distribution of Goods
- Customer service: What level of customer service should be provided?
- Order processing: How should orders be handled?
- Inventory control: How much inventory should be held?
- Warehousing: Where should the inventory be located? How many warehouses should be used?
- Transportation Mode: Which modes of transport should be used to transfer goods on time and without damage?
- Materials Handling: How will the products be handled during transportation?
The Bread industry is low - tech and low margin industry. In 1977, the Government of India had reserved bread industry for small scale industries (SSI). The then existing two large units viz., Britannia Industries Limited and Modern Food Industries Ltd. were however allowed to continue on the basis of their respective existing installed capacity.
35 percent of the total production comes from the small scale sector with about 1500-1800 units in operation. The organized sector accounts for 20 percent of the total production. The balance production comes from the un-organized traditional bakery units operating under cottage/tiny sector numbering approximately 65000 units in the country. The two major players i.e. BIL & MFIL are having a market share of 10-12 percent and 7-8 percent respectively. Apart from these two, there are few large regional players such as Spencers in South India, Vibbs in Maharashtra, Harvest Gold and Perfect in Delhi, etc.
Bread being consumed by wide cross - section of the society, the marketing of bread is based on a strong retail distribution network which services the customers. As bread industry is a low margin business, cost control is crucial in sustaining profitability in the long run.
The total market size of bread industry is approximately 15 billion standard loaves (SL) or 1.5 million tonnes. The current growth is around 5 - 6 percent p.a. and is expected to remain in the same level in the medium term. Citing the financial distress faced by the bread industry, All India Bread Manufacturers Association sought assistance from government and sought inclusion of bread in Centre-sponsored schemes.
Government should extend timely assistance to the ailing industry, which is employment oriented and productive users of agriculture," AIBMA president Vinod Tiwari said. He said the government should also include bread as a food item in the Mid-Day Meals Scheme and Integrated Child Development Scheme.
The government should assist the bread manufacturers by making bread as a compulsory food item in the mid-day meals Scheme," he said. The bread industry also demanded preferential allotment of wheat to the industry at export rates that could help the growth of the industry.
Tiwari stated escalating prices of wheat flour has lowered profit margins resulting in closure of over 250 small scale bread units, while over 1,000 units are on the verge of closure. "The perennial problem of low margin and stiff competition, short shelf-life, unprecedented escalation in the cost of fuel, transportation, other ingredients have added to the woes of the industry, eroding its competitive capabilities," he added.
There are three segments in the Indian bread industry such as Regular, Popular and Nutrichoice. Britannia's major strength has been to build presence across all price segments. They have succeeded in doing so in a well-balanced manner, each segment contributing approximately a third of revenues. Britannia approaches the high-volume, low-price category, through its Regular Bread. Two other major players are in competition. One is Perfect and other is Harvest in NCE region, India
Today Britannia is a market leader in terms of market share and has appreciable momentum in the form of strong revenue growth while maintaining a respectable return on sales. To reach this position, Britannia's strategy has been one of incremental rather than radical innovation. From a branding standpoint, their recent strategy has been to leverage well-established brands, rather than establish new ones.
Britannia Industries has taken full control of the Bangalore-based bakery foods retailer Daily Bread. Britannia, which had acquired 50% stake in June 2006, has now mopped up the remaining shares, taking over the operational reins fully from the original promoter Arjun Sekri.
"We had an original plan to take full control of Daily Bread by 2011, but we have now advanced that," Vinita Bali, MD of Britannia Industries, told ET. Daily Bread is a manufacturer and retailer of bakery products, including specialty breads, across the institutional and retail segments. It also operates standalone retail outlets and kiosks in markets like Bangalore and Goa, which is now likely to be scaled up. Daily Bread is as an incubation venture that it is currently being perfected in order to be rolled out once the external environment improves, Ms Bali added.
"We are not talking about a national rollout because this is still not a venture that will add 'numbers' to Britannia top line. It is not there yet," she explained Britannia is now also taking the franchise route to expand the retail store footprint. Daily Bread has 11 standalone outlets in Bangalore and one in Goa, where it recently entered through a franchise route.
Daily Bread had experimented with several formats, including a bakery retail store and one with a cafe-like ambiance. "While this gave us an opportunity to dabble in retail and shape the business, we realized the economics of a quick-service restaurant is entirely different as it requires a chain of outlets and resources to man it. Bakery is our core competency and our focus will be on intensifying this facet of the brand," Ms Bali said.
Daily Bread has also tied up with large format retailers such as Spencer's to set up shop-in-shop formats and is currently banking on a saleable kiosk model. Britannia will, however, not look at rebranding Daily Bread as it is already an established brand name, positioned one step above regular bread brands.
4P's of Britannia
Rather than venture into new product categories, Britannia has used line extension, staying within existing categories and introducing product variations (often around nutritiousness). One recent visible area of innovation has been packaging, with the introduction of low-price, small-quantity packs, known as nano packs. By and large then, the strategy has been a conservative one, building on existing strengths, rather than creating ones from scratch.
The success of Britannia's brands has been the result of sound product quality and astute advertising. In the food business, marketing is a key to success.
"The major competitors in the bread market all have good distribution systems and there is no major difference in product manufacturing technology. Those are not real differentiators; marketing is"
The company spends about 7% its revenues on advertising and it appears to spend it to good effect. Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country. It was equally recognised for its innovative approach to products and marketing: the Lagaan Match was voted India's most successful promotional activity of the year 2001 while the delicious Britannia 50-50 Maska-Chaska became India's most successful product launch.
In products, the strategy has been a relatively conservative one, of line extension; in packaging, Britannia has been more adventuresome. In 2007 it introduced low price small-quantity packs, known as nano packs. Depending on the brand, these retail for Rs 5 and 7. The low price and low unit count are destined to attract the on-the-go urban consumer, as well as the more budget-constrained rural consumer.
There have been no major strategic innovations in distribution in the last few years. Britannia's distribution in urban areas is excellent. However 72% of India's population still lives in villages and Britannia needs to worry more about tapping and therefore distributing to that market.
Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic.
FRANCIES RUMMER defined "Research: It is a careful inquiry or examination to discover new information or relationship and to expand or verify existing knowledge.
Research is the solution of the problem, whether created or already generated. When research is done, some new outcome comes out, so that the problem (created or generated) is solved.
- To study about the marketing channel of Britannia bread which service the customers
- Is Britannia able to maintain their market leadership in terms of market share in bread industry in NCR region, India?
- To understand the FMCG (bread) business, identify the problems faced by Britannia bread in the Indian market.
HO = Britannia is able to maintain their market leadership in terms of market share in bread industry
H1= Britannia is not able to maintain their market leadership in terms of market share in bread industry
Research Design: Descriptive research design
As I have to analyse the retailers behaviours towards bread industry. Therefore descriptive research design is the most suitable research design. Because it includes survey and fact-finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. Descriptive research helps in measuring such items as, for example, frequency of shopping, preferences of people, or similar data.
- Objective of the study: To know the current scenario of bread industry in NCR region by conducting a market survey.
- Methods of data collection: Primary data: Interview, Questionnaire, Store Audits, Observations, Examination of Records and Schedules
Secondary data: Internet, Newspaper and Journals.
- No. of sample: 400
- Point of data collection: Retailers, Wholesalers, Distributors and Suppliers
- Type of universe: Finite universe such as retailers, distributors, wholesalers and suppliers etc.
- Sampling unit: Ghaziabad, Noida, Delhi and Gurgaon
- Source list: Retailers, distributors, wholesalers and suppliers etc.
- Size of sample: 400
- Parameter of interest: People which are connected in bread business.
- Budgetary constraint: Undefined
- Sampling procedure:
Probability sampling: Simple random sampling, stratified sampling and area/cluster sampling
Non probability sampling: Deliberate sampling and judgment sampling
Scope of the Study
- To analyze the retailer awareness for different variety of bread.
- Understanding the demographic profile of consumers.
- Identify the competitor's strategy.
- Analyze the competitor's market share.
- To analyze the trends of arrivals, prices and other related factors of the bread market all over NCR region.
- Identify potential market and major market leaders and understand the competitive environment.
- Get insight in to trends in market performance.
- To suggest ways and means to enhance the marketing and sales strategy of bread.
This objective gives a clear idea regarding the retailer awareness towards different variety of bread as well as towards the different brands prevailing in the market. The retailer's awareness creates a demand towards the particular product.
The consumer acceptance depends upon the knowledge and maturity level that he has gained during his age for the different food habits prevailing in the surrounding. The age factor is an important factor to know product demand for a particular age group. So the interest can be made to motivate those age groups for buying their product.
The competitors pace of capturing consumers though they have similar products in different label name of different companies. Competitor's strategies force a producer to think different to acquire the reasonable profit from the market and retention of customers for his product. Competitor's strategies vary because of competitiveness among them to create identity in front of the consumers by showing different activities and promoting their product name through different techniques. This objective shows the prevailing strategy of the product and the enhancement for the product for greater acceptance in the market.
The retention of customers changes from time to time. The retention of customers shows the market share. The retention from different from different product shows the orientation of consumers towards the product. The orientation of consumer change due to the various factors as explained in the above objectives. The numerical value of their customer retention gives a clear picture regarding demand of their product. From these producers change their strategy to retain more customers.
- Time will be a major constraint, in completing the project. As the project is very vast and there is paucity of time.
- Retailers may be biased while giving information on different competitors.
- The study is limited to the Delhi, Ghaziabad, Gurgaon and NOIDA region giving less importance to other cities under NCR.
- The seriousness of the respondents and their ability to justify their answers may also be a limitation.
Data Type: In this research the type of data collection is
- Primary data
- Secondary data
Research is based upon various types of information .data which is used in the research work can be categorized under two head namely -
Primary data are that which are collected afresh and for the first time and thus happens to be original in character. Various methods which were used to collect primary data were-
- Observation method
- Interview method
- Questionnaire method
In this method the information is sought by the way of direct observation without asking the respondents.
It involves presentation of oral verbal stimuli and reply in terms of oral verbal responses. This method was used through
Personal interview- Asking questions in face to face contact
Telephonic interview- contacting respondents on telephone itself
In this method a questionnaire is sent, usually by post, to the person concerned with a request to answer the question and return the questionnaire. A questionnaire consists of a number of questions printed or typed in a definite order. The questionnaire is mailed to the respondents who are expected to read and understand the questions and write down the reply in the space meant for the purpose in the questionnaire itself.
This method is very much similar to questionnaire method with a little difference which lies in the fact that schedules are being filled by enumerators.
Secondary data are the information which is attained indirectly. They are the data collected by someone else and which has already passed through statistical process. There exist two sources of secondary data
Internal sources- They can be classified into four broad categories-
- Accounting records-They generate a great deal of information. It gives a detailed analysis of sales by product, customer, industry, geographical area.
- Sales force reports- This source provide a great deal of information.
- Miscellaneous reports- Any studies done on marketing problem of the company, special audits also provide a good deal of information
- Internal experts- Executives working as product manager, marketing research manager, advertising personnel also serve to be a good source of information.
External secondary data do not originate in the firm and are obtained from outside source. Examples are Govt Publications, Non-Govt Publications, Newspapers, Magazines, Journals, and Websites etc.
Testing Of Hypothesis
Ethical Issues in Research:
While doing a research there are some ethical issues which can be arise. These are:
- Whether participants in research are being given appropriate information to make a properly informed decision.
- People worry about what sorts of restrictions are in place to make sure the information you are accumulating isn't going to go elsewhere."
- Many people also fail to answer precisely the questions they have been asked.
- Strive to avoid bias in experimental design, data analysis, data interpretation, peer review, personnel decisions, grant writing, expert testimony, and other aspects of research where objectivity is expected or required. Avoid or minimize bias or self-deception. Disclose personal or financial interests that may affect research.
There are following resources required to complete the proposed research which are
Research assistant, Office supplies (Pens, Notepads, Poster Paper, Printer Ink, and Printer papers), Electronic Supplies (mini-disc recorder, batteries, Digital camera, Laptop), Services (photocopying), Transportation (Bus, taxi and walk), Accommodation (Hotel Room) and Food.
In the following example there are seven tasks, labeledAthroughG. Some tasks can be done concurrently (AandB) while others cannot be done until their predecessor task is complete (Ccannot begin untilAis complete). Additionally, each task has three time estimates: the optimistic time estimate (O), the most likely or normal time estimate (M), and the pessimistic time estimate (P). The expected time (TE) is computed using the formula (O+ 4M+P) 6.
References / Bibliography
- BREAD: which ones to buy? Why? INSIGHT -The Consumer Magazine Vol.24 No 6, NOVEMBER-DECEMBER2004 (6-15)
- PHILIP R CATEORA, JOHN L GRAHAM, PRASHANT SALWAN, International Marketing, 13th Edition, Tata McGraw-Hill Edition 2008(472-514)
- Tapan K Panda Professor, IIM Indore. Marketing Management, Second Edition, NEW DELHI, 2007, 2008(179-212).
- Sak Onkvisit , John Shaw: International Marketing, Warren J. Keegan: Global Marketing Management, Dana Nicoleta Lascu: International Marketing, Rakesh Mohan Joshi: International Marketing.
- Chandler, D. (1994), Semiotics for beginners [HTML document]. Retrieved [5.10.'01] from the World Wide Web, http://www.aber.ac.uk/media/Documents/S4B/
- Crystal, D. (2001), Language and the internet. Cambridge: Cambridge University Press.
- Economic and Social Research Council research ethics framework: www.esrcsocietytoday.ac.uk/ (Enter search for "ethics framework".)