Indian Biscuit Market: Segmentation and Customer Analysis

Indian cooky Market Segmentation and Customer AnalysisFor an effective and efficient subdivisionation, however, a mix of on the whole(a) of these in a spunkyer place mentioned parameters hire to be used. Extending the higher up creation of buns of segmentation, the criteria of segmentation crossways contrary conditions is natur wholey different. For example, for the general instinct of a food securities pains, one should keep in take care the benefits sought, convergency get and usage patterns, needs, dishonor fealty and switching patternsOn the separate hand, for aligning studies, ware usage, harvest preference have to be taken into account. On one hand, incase of advertise decisivenesss, when media usage and psychographic /lifestyle is considered seriously, on the otherwise hand for distribution decisions, store loyalty and patronage clubbed with benefits sought in store selection is contemplated entirely oer. Also, it has been often concluded that th e segment profitability is unnatural by five-spot principal factors Industry Competitors and the threat of segment arguingPotential entrants to the mart and the threat of mobilityThe threat of substitute overlapsBuyers and their relative queenSuppliers and their relative powerLast but not the least, to ascertain on segmentation, a k in a flashledge of following five patterns of mart coverage is authorised . They argon - Single segment concentration, selective specialisation, product specialisation, grocery specialisation, full phase of the moon market coverage.PROMOTION -For any promotion strategy to be successful, it is in the premiere place essential that the flow of thought process behind it be understood. A market Plan is essentially a mix of ingathering, Place, Price, Promotion, physical tell and Process charge . This merchandising Plan is a derivative of Marketing strategies and objectives, which is in turn derived from Corporate Objectives. And on an overall le vel, all of these are derived from the Final Corporate Strategy . Amongst these, the Promotion mix consists of a simple variety of selling tactics like Product Placement, advertize and advertorials, Packaging, face-to-face Selling, P.O.S., Publicity .Sponsorship, gross sales Promotion, Exhibitions, E-Mails, Text messaging etc. While ontogenesis the talks Plan, the following crests have to be kept in mind by a Marketer -The nature and detail of the target audience.The short-term and Long-term communication objectivesThe messages that are to be usedThe colloquy take that will carry the messageThe BudgetThe Mix of communication tools that is to be used and how the elements of the promotion mix are to be integrated and how, in turn, the promotions mix is to be integrated with the selling mix.The measure of the ROI of the campaigning.Apart from the above mentioned, approaching the guest in a Integrated Marketing Communication Channel is the most effective. i.e. by achieving a higher level of consolidation among the individual elements of the communication mix, the contriver should achieve a greater level of clarity and consistency, with the result that there will then be a seamless integration of messages and a broader r distributively . grime ManagementA fundamental element of any product strategy is the piece played by the flaw. Brands are designed to enable customers to identify products or services that promise specific benefits. As such they are a skeletal frame of shorthand in that they create a set of expectations in the mind of customers about purpose, performance, quality and hurt. This in turn allows the strategists to build added evaluate into products and to differentiate them from competitors.To be truly effective, a dishonor strategy has to gird over time and reflect environmental conditions. There is therefore a need from check off emergence, the key elements of which involve a detailed dread ofCurrent perceptions of the bran d amongst customers and the tradeThe expectations of both customers and the tradeThe strengths and weakness of separately brand within the portfolioThe value of each of the brandsThe links that exist between the different brands owned and the nature and significance of any overlaps and gapsThe dangers of brand cannibalizationWhen and where sunrise(prenominal) brand works need to be wearedThe opportunity for brand stretchingProbable competitor movesThe starting point for this involves analysing the brand in order to understand detail what it means to customer and how much it is worth. In doing this, the strategist needs to identify the core values, the scope that exists for extending the brand name into other product or market sectors, and the areas that must be avoided at all costs.Developing a brand strategyFor many placements, stigmatisation is a fundamental element of the product strategy and provides the basis for a consumer franchise that, if managed effectively, allows fo r greater merchandise flexibility and a higher degree of consumer loyalty. However, it needs to be recognised that branding involves a great potful more than than simply putting a name on a package. Instead it is about creating, maintaining and proactively developing perceived customer value, it is only in this way that the organisation is able to promise and continue to deliver to the consumer a superior value than that twistinged by competitors.It follows from this that any brand strategy is, of necessity, a persistent term process that involves an investment in and commitment to the evolution of the brand over time. This long term perspective involves the dovetailing of a satisfactory turn of issues, but in essence can be seen to be interested with the two principal issue that emerge from the discussion above1. Where the brand is currently and how it is perceived2. How the brand is to be perceived in three, five and ten eld time, and how this might best be achieved.With regard to the first off of these, the starting point for any brand strategy involves identifyingThe brands current market slipingCompetitors positioning strategies and resource basesThe way in which the market is presumable to develop, and the implications of product, brand and market life cyclesCustomers perception of the portfolio of brands in the marketCustomers expectations and the effect to which these are be met both by the brand and its competitorsLevels of customer loyalty across the marketThe financial, managerial and operational that can be called in managing a brandThe bases for competitionThe relative importance of the brand to the organisationManagerial expectations of the brandIt is only against this background that the strategist is able to develop a vision for the brand.Finally in developing the brand strategy, the planner needs to give consideration to a series of financial issues, including the boundary lines and component part that the brand is required to generate in both the short and the long term, and the levels of investment that the brand needs if it is to achieve the objectives set.Consumer BehaviourFrom the viewpoint of the marketing planner, the mix of cultural, social, in the flesh(predicate) and psychological factors that baffle behaviour is largely non-controllable. Because of the influence they exert upon patterns of acquire, it is essential that as much effort as practicable is put into catch how they interact and ultimately, how they influence obtain behaviour. in doing this, it is main(prenominal) not to lose sight of the differences that exist between customers and consumers, and the implications of these differences for strategy.Against the background of an soul of the factors influencing motivation, the marketing strategists needs them to consider the influence of perception, since it is the way in which incite individuals perceive a presumption situation that determines precisely how they will behave.Cons umer is at the centre of all decision making in an organisation. The linkage of the consumer to other aspects is shown in the following diagram. We can see that on the left, the consumer interacts with his perception, understanding (cognition), beliefs and social influences. These aspects determine the behaviour of the consumer. The search for this behaviour is through market research and insight mining. The market question gives fodder for the strategy to be formulated.MARKSTRAT SUMMARYBefore entering any market, it is important to understand what the market stands for, the kind of products in the market, the competitors that the party will face and various orthogonal and internal factors that will play a crucial role in making decisions by and by every quarter/ extent. The Industry chetah has 6 players in the Market namely A, E, I, O, U, Y.After the initial feelers of the whole simulation, it was transparent that we would have to focus on certain key areas and others woul d be on low priority. The key-focus areas that were decided were -Philosophy, Guiding Principals and OrganizationProduct PortfolioResearch tuitionAdvertising and Sales Force DecisionsPricing EffectsCompetitor dynamicsNew Product LaunchesProduction Planning and Inventory Managementfiscal FocusAfter setting the above agenda, the next step was to decide what needs to be done in the first period. The single point agenda in this case was to enter the Sonite market while tutelage away from the Vodite market . The logic behind this was that to, make Vheetah Y the convey price malarkyer clubbed with highest ROI. A snapshot of results varying across different periods are as follows - tooth root (period 0) 1000 full point 11 (End) 1687Highest 2485 ( layover 6 End)Lowest 1000 (base)Highest Stock Price in Industry 3244 (Cpny. I) nearly of the pertinent stock prices Index observations over the periods were - SPI amplifyd by 68.7% after 11 periods compared to base value. A very encouraging positive suppuration was seen from item 0 to Period 6 (138.9% egression from Period 0 to Period 6) On the Contrary there was a continuous hang in SPI from Period 7 to 11 (32.11% decline in Period 7 to period 11). The high-point of the SPI plunk for was that at the end of Period 6, Cheetah Y was the market leader in terms of SPI.A company vs Company comparison of SPI shows the following results -The next focus shifted to pushing the Product through Sales and advertising .The logic behind our heavy Advertising Budget was that there was no point in having a thoroughgoing(a) product if the target market does not know about it. A fine balance of quality and quantity does the trick.Down the line, Cheetah Y excessively realised that it is wisest to allocate the money to the products with the highest Return on Investment. Also, from a strategical point of view, it makes a cluster of sense to be opportunistic and increase the advertising money when the competitors are squeezed for money . In this regard, the most important function is Competitive Advertising which defines a product (in this case SYGU and SYCA) against what its communication ratios and message quality are. Initially, the dimensions Economy and Performance and Performance and Convenience fared jolly badly . But towards Period 7 (from Period 3 to Period 7), it reached the message Quality Excellent. Parallely, in the Vodite Market, the product VYLE on the communication dimension Economy Felxibility it scored a message quality of Excellent.A combined overview of how the sales department fared for Cheetah Y is given below. Also, it gives the insight into what cheetah Y fared vis-a-vis competitors and current market scenario.Base (Period 0)(a) Sales Volume 167.53 kg Units(b) Revenue K$ 48659.3 MillionPeriod 11 (End)(a) Cumulative Sales Volume 539.60 Kilo Units(b) Cumulative Revenues K$ 1463564.9 MillionHighest Sales in any Period (Units) 788.4 (Period 7 End)Highest Sales in any Period (Revenue) K$ 193776 (Period 7 End)Lowest Sales in any period (Units) BaseLowest Sales in any Period ( shelter) BaseHighest Cumulative Sales ( revenue) in industry after 11 periods K$ 1949822 (Company I)(A snapshot of Sales Volume across all the competitors)After investment funds in adequate sales force across lastingness Stores, segment stores and Mass Merchandise, the next logical step was to analyse the Market role after each period. Some of the key highlights in case of market divvy up were -Market Share at Period 11 (End) 7.03%Highest 28.35% (Period 5 End)Lowest 7.03% (Period 11 End)Highest Market Share in Industry (Period 11 end) 38.88% (Company U)The broad strategy to achieve the initially set agenda is that first we enter the Cheetah market with minimum number of products, and with zero product in the Vodite Market. Also, offering the same product across multiple segments enhance the revenue base. There was an overall increase emphasis on targeted advertising to increase brand aw areness. The Pricing strategy also worked in this direction, i.e offer the product at a cheaper price than the competitors (even when the product is superior) . But as dynamic as our market strategies, even the Market threw up a lot of surprises. There were the constantly changing consumer needs, aggressive product development of competition, large disparity in growth rates in different segments of the two markets. Thus a snapshot of the strategies pursued are given below, vis-a-vis what actions were taken .Thus, from the above describes strategies pursued and an analysis of their results, the following lessons were learnt broaden customized products to each segment in the marketKeep track of changing consumer needs modify products accordinglyIf the product is not performing well, ingest from marketPay emphasis to RDObserve competition and their strategy touch strategy suitablyAdvertising swing does not necessarily lead to greater salesLowering price will not better sales even in a price sensitive segmentPossible Applications of the learnings -There is space for growth for additional brands in the customer segments of Buffs and Singles as the entire market is concentrated in alone a couple of players. A well positioned and well priced brand by all odds has a lot of promise in these segments.We need keep a tap on ideal value evolution of the physical characteristics or dimensions. Continuous re-evaluation and modification of existing brands like SYGU and SYCA should be done and marketing and advertising efforts should be employed keeping the changes in mind.The position of SYGU brand needs to be questioned and, if need be, repositioned with a modified RD project.A product/brand catering exclusively to the Followers segment in the Vodite should be launched with the desired physical characteristics.Need to define the space for competition so that maximum efforts can be employed there with minimal overlap and wastage with any concurrent efforts for any oth er brand of the company a case in point is Company I which has excellently delineate brands in each of the customer segments of Singles, others and followers.Need to use the MDS and SEMANTIC scales more precisely for setting advertising objectives for SYGU and SYCA.COMPANY STRATEGY -Biscuit industry is the third largest producer and fastest growing industry in FMCG sector.Its Estimated Value is approximately Rs 5000 Crore. It forms a part of the Organized sector 60% (approximately). major Segments in which it operates are Glucose, Marie, Cream, Crackers, Milk. Major Brands in the industry right now are Britannia, ITC, Parle, Priyagold, Dukes etcCOMPANY OVERVIEW - Britannia is Indias second largest food company with Sales most to Rs. 20 billion. Over the years it has shown a Consistent annual growth rate of 15-20% . It Sources products from more than 50 factories spread across the country. Key product lines include Biscuits, Bread, Cakes and Rusk .Product range serves to the who le spectrum from mass market to the tribute segment .FINANCIAL psychoanalysis -An indepth analysis of ult few years shows that the Gross sales increased to Rs 2317.11 Cr in 2006-07 indicating a growth of 28% . Britannias Profits declined by 33% due to increase in input prices and stiff competition (like Parle, itc, Priya ). An interesting trim showed that Dividends of the order 100-150% were provided for the past 5 years. Although Britannia followed the industry growth rate for the past 3-4 years, the profit margin followed a zigzag pattern. But owing to Inflation, Costs have increased significantly on the production as well as on selling front. 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) denotative as a destiny of Sales is 6.58.ROE is at a wakeless Rate of 21.14% .Current ratio has been improving over the years and hence the solvency posi tion of the company.COMPETITIVE ANLAYSIS -(Marketing Mix of Britannia )PRICING -On the basis of price, the biscuit market can be segmented into the followingLow Range Biscuits (less than Rs 40 per kg.)Medium Range Biscuits (Rs. 40-70 per kg.)High Range Biscuits (over Rs.70 per kg.)Britannia 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 -Britannia has engaged into various Integrated Marketing Communciation activities some of the more prominent ones are mentioned as follows. Since Consumers are go more health conscious Swasth Khao Tan Man Jagao (Eat Healthy, Think Better) campaign directly addressed this new cut off (Tiger Biscuits). A new logotype was created encapsulating the core essence of Britannia healthy, nutritious and optimistic. Good Day is positioned as a healthy and nutritious product and it advocates values that stand f or health, hygiene, family, trust and taste. Since events form a major chunk of the Brand visibility agenda, Britannia sponsors a lot of Sports and sporting events as key channel for promotions. One of the majorly acclaimed campaigns of Britannia is Britannia khao, World form jao campaign in 1999 and 2003 and was awarded the most recognized sales promotion among all Cricket World Cup-related sales activitySEGMENTATION AND CUSTOMER ANALYSIS -Before delving slurred into Segmentation Targeting and Positioning, it is important to identify what the Key breeding areas are, specially the Demographic profile of the consumer on the parameters age, sex, income level and occupation. Some of the personal characteristics of consumers include the identification of When do customer consume biscuits, Type of biscuits consumed, Where do the customer barter for, Purpose of buying (personal consumption, gifting, serving guests), How much do consumers spend on biscuits, Factors Affecting the buying decision, order of preference etc. polar products will have different target group depending on the above mentioned factor. Though a Good-day would appeal to the consumers as a mid-range biscuit, a save extension of that product called Good-day Choco-nut falls in the category of High-end biscuits. RD - Qualitative Research includes an in-depth analysis of the consumer needs and wants and for this, a wide variety of tool may be used. For example, FGDS with a set of consumers to identify major factors influencing the purchase decision of biscuits (and Interacting with friends and family Quantitative Research Customer survey using questionnaire.Survey done through both face to face interviews as well as online. Tools use are Factor Analysis, Cluster Analysis and Fishbein analysis .Consumer Behavior and marketplace RESEARCH IN CHEETAH YMarket Research forms the basis of almost all of the strategically important decisions that a Company makes over a period of time. Consumer psyche, Brand perceptions, Buying behaviours, Priority or preferences, all of these form the building blocks of information, on the basis of which a decision shaper even goes to the extent of changing the very core proposition of a Brand BRAND AWARENESS - To understand the awareness level of brands across our own company Cheetah Y and across competitors, it is important to have a comparative analysis. This has been make possible by Consumer Survey on brand Awareness Segment by Segment . The report delves deep into what exactly is the level of brand knowledge amongst the following segments - Buffs, Singles, Pros, HiEarners and Others. Initially when the game began, the product SYGU set-aside(p) highest mindspace care amongst Singles while the product SYCA occupied highest mindspace amongst Pros. At the end of all 12 periods, SYGU continued to occupy the highest share amongst Singles while also c intelligenturing a significantly high percentage amongst Buffs. On the Contrary, the mindspace percentage of SYCA increased excessively for Buffs and Hiearners.Also one more product SYCO was introduced which managed to gain the highest mindspace . This helped in taking proper measures to increase brand awareness amongst the desired segment and helped in understanding the impact of increasing advertising expenditure .The next logical step after studying the Brand awareness is to find out that how much of it is actually getting converted into Purchase. To study the Purchase aims, the report Consumer Survey-purchase Intentions is the apt report. Here we inferred that purchase intention for SYGU was the highest amongst the Singles, which is in synchronise with the level of Brand awareness amongst them. Also the purchase intention for SYCA was highest amongst the Hiearners which is again in sync with the Brand awareness.IF we analyse the trend across 12 periods, we notice that there is a visible trend reversal i.e. SYGU purchase intention was highest amongst the segment Others while incase of SYCA, the PROS showed the highest purchase intentions . This can be attributed to the fact that a lot of investment was made in the Advertising research and hence overall advertising budget which increased the brand awareness and purchase intention considerably.BUYING behavior of consumers - So where exactly are Cheetah Ys target audience buying from This is important to understand because it helped us plan the salesforce and distribute the salesforce accordingly amongst the Speciality stores, departmental stores and Mass merchandise stores. At the start of period 1, Buffs were by and large buying from Speciality stores, Singles were mostly buying from speciality and Departmental stores while 50% professionals were buying from Speciality stores.High earners preferred to buy through Departmental stores. However, after understanding the buying behaviour, appropriate salesforce was installed in each of these store types. Hence after period 12, singles ended up buying equally from Speciality, Departmental stores and mass Merchandise stores.The result of all the efforts and budget put into Marketing has a direct impact on the market share and stock prices. In this regard, the Report Consumer Panel- Market Shares found on Unit Sales provide the perfect insight into the market share distribution of the two products amongst Buffs, Singles, pros, Hiearners and others. In the Period 1, the highest share of revenue for SYGU was coming from Singles, while highest share of revenue for SYCA was coming from Hiearners (this is in sync with the BRAND AWARENESS report). However, down the line after 11 periods, the highest share of revenue for SYGU was coming from Others while major revenue contributors for SYCA was the segment pros. Since the brand awareness for the product SYCO was low, this duely reflected in in share of revenue beingness almost nil from each of the segments.After understanding the current scenario and facts and figures related to Brand a wareness and Brand purchase intentions, it becomes imperative to do an apt amount of Advertising Research and an estimate of Competitive advertising. The Market research report tells us that initially all the products in the Sonite Market had a rating of poor against the various communication dimensions, except SULI . But over a period of 12 periods, while the communication dimensions and ratings and its corresponding ratings for all the products (and companies) changed, the ratings for SYGU AND SYCA remained poor and only SYCO got a message quality of Good. This can be analysed through the fact that though investment in advertising was being made, simultaneously the changes in the parameters Design, Power, Weight etc through RD was not made. This resulted in a mismatch between the product quality and what is being advertised, hence resulting in poor message quality.