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ACKNOWLEDGEMENT
The making of any report calls for contribution and cooperation from many
others, besides the individual alone. It is the result of meticulous efforts put in
Executive
Summary…………………………………………………………..06
Introduction………………………………………………………………….08
4.1 Observation…………………….……………………………………47
Bibliography…………………………………………………………………54
Annexure………………………………………………………………………
55
Introduction
Deserts
Gajar Ka Haluaa / Sugi Ka Haluaa / Milk Kheer etc.
According to ITC press release on March 2008, Indian RTE market is worth
around Rs 80-100 crore. The market is somewhat in a stagnant state and the
growth is minimal.
According to reports by CNBC-TV18, despite gradual duty cuts on Ready to
Eat and instant mixes the sector is not doing well and growth is minimal. The
concept behind RTE is that urban families are strapped for time and will
definitely buy RTE packs to save on cooking time however this doesn’t seem to
be so because in India people still prefer food cooked and served piping hot by
someone else or themselves so people hire cooks instead of buying RTE packs.
New Delhi Institution of Management Page 11
Hence, this study was undertaken to understand the psyche behind consumers
and what factors goes into influencing their buying decision making.
This is a dilemma faced by marketers of Ready to eat Industry. Marketing being
very close to my heart and strategic marketing is my passion and hence I took
up this study to understand the problems that marketers face and what are the
different mean which can prove strategically beneficial in overcoming these
hurdles.
Objectives of the Study
Research Problem
This Study deals with the Ready to eat Industry in India. The study also aims at
understanding the factors influencing buying decision making of the RTE
products. The factors under consideration are advertising, price, Product, Value
proposition etc.
• Range of ITC and MTR’s RTE products available in the market and
their awareness amongst the people;
• For a generic study like this where the consumers are spread across
a wide area of Delhi and shortage of time, the sample size taken
was very limited i.e. 60.
2. Theoretical Review
The ready to eat meal industry consists of two categories, frozen ready meals
and canned ready meals. The market for ready meals in India increased at a
New Delhi Institution of Management Page 14
compound annual growth rate of 13.7% between 2003 and 2008.The canned
ready meals category led the ready meals market in India, accounting for a
share of 60.3%.
Leading players in Indian ready meals market include ITC Limited, Al Kabeer
Group of Companies and Orkla Foods.
The ready to eat foods have gained momentum in Urban India where even
women are working and there is time crunch to cook. The market for RTE
industry is NRIs and bachelors.
The Indian food processing industry has changed considerably in recent years
to adapt to the demands and lifestyles of domestic consumers, particularly the
growing middle class. This is also due to the rapid expansion of the retail
distribution system replacing mall stores and wet markets with modern
supermarkets, superstores and convenience stores. Dairy products, deli
products, snack foods, ready-to-eat and ready-to-prepare meals are currently the
most rapid growth product categories in the domestic market.
The current scenario
The ready-to-eat (RTE) market in India, currently estimated at Rs. 128 crore
(2006) is expected to expand to reach Rs. 2,900 crore by 2015, according to an
analysis done by Tata Strategic Management Group (TSMG). The report also
highlights that the RTE market in India has remained under-penetrated owing
to factors such as consumers’ penchant for freshness, low affordability and the
Indian housewife’s preference for home-cooked food. According to data in the
reports, packaged foods in India have grown at about seven per cent a year
between 2000 and 2005, with RTE foods being the fastest-growing, at a CAGR
of 73 per cent. the factors contributing to the growth would be changes like
cold chain development, disintermediation, streamlining of taxation, economies
of scale on the supply side, coupled with increasing disposable incomes,
diminishing culinary skills and the need for convenience on the demand side.
Market
There is a huge untapped market opportunity arising due to rapid demographic
shifts in income, urbanization, and proportion of urban working women in
The analysis also pointed out that industry players would have to significantly
improve their price competitiveness with respect to other options such as
domestic help, eating out and ordering in, available to the Indian consumer.
Besides price consideration, the product range offered by industry players will
have to be strengthened.
ITC's Flagship brand 'Kitchens of India ' has begun to carry this
exotic taste of Indian cuisine beyond the shores of India .
KITCHENS Connoisseurs of Indian food in the US, UK, Switzerland,
OF INDIA Bhutan, Bangladesh, Hongkong, Tanzania, Canada and
Australia now have the opportunity to taste these delicious
recipes.
Recently, on Aug 1, 2008, ITC Foods has drawn up plans to extend its Kitchen
of India brand to frozen foods. ITC’s Branded Packaged Foods business
continues to expand with sales growing by 23% over the previous year. Apart
from the development costs of new products, the business has had to contend
with the recent economic slowdown and severe cost increases in input
commodities including wheat, vegetable oil, maize and skimmed milk powder,
in addition to the soaring fuel prices.
Having acquired reasonable scale in a relatively short span of time, the business
is progressively focusing on consolidating the portfolio in certain categories,
improving market servicing and driving supply chain efficiencies.
As per the latest data the market share of these major players of RTE industry
has been segregated as:
Under-serviced
At the moment, the regional cuisine and non-vegetarian cuisine markets are
relatively under-serviced with concentration on the vegetarian North Indian
meals.
Challenges
The Rs 130 crore markets have stayed stagnant over the past three years. That's
because in India people still believe in cooking and serving food. Additionally,
The RTE foods have to compete with restaurants, cooks and consumers
Company
Profile
Nation Orientation:
We are aware of our responsibility to generate economic value for the Nation.
In pursuit of our goals, we will make no compromise in complying with
applicable laws and regulations at all levels.
Corporate Governance:
Definition and Purpose:
ITC defines Corporate Governance as a systemic process by which companies
are directed and controlled to enhance their wealth generating capacity. Since
large corporations employ vast quantum of societal resources, we believe that
the governance process should ensure that these companies are managed in a
manner that meets stakeholders’ aspirations and societal expectations.
Core Principles:
ITC's Corporate Governance initiative is based on two core principles. These
are :
Kitchens of India
‘Ready To Eat’ Products from ‘Kitchens of India’
Keeping alive long forgotten culinary traditions, ‘Kitchens of India’ presents its
range of ready-to-eat cuisines. Each one of these legendary delicacies has been
created by the Master Chefs of ITC Hotels, following rare, closely guarded
Dal Bukhara
Dal Bukhara is an exquisite culinary treat made from Whole Black Lentils
simmered with prized Indian Spices over a coal fire, for long hours on end.
Dum Pukht
The art of ‘Dum’ cooking (cooked in its own juices) traces its origin to the
times of the ‘Nawabs of Awadh’ who ruled the Northern Provinces of India
during the 18th century. ‘Kitchens of India’ has currently introduced ‘Mirch Ka
Salan’ in this range.
Mirch Ka Salan
An extravagant delicacy made from succulent green chillies, delicately cooked
Mughlai Paneer
Fresh cubes of Paneer prepared with khus-khus, ground watermelon seeds and
fine onion paste, spiced with coriander leaves and cardamom powder.
Dakshin
This cuisine reflects the tradition and culture of the southern Indian peninsula.
‘Kitchens of India’ offers you Chicken Chettinad and Chicken Stew.
Chicken Chettinad
Succulent chunks of tender chicken in a dark, spicy paste of curry leaves and
freshly ground pepper. Showcasing the distinctive tastes and fragrances of the
South.
Chicken Darbari
A superb blend of juicy and tender chicken chunks in an aromatic tomato
gravy, laced with butter.
Murgh Methi
Discover the delights of Nawabi cuisine in every serving of Murgh Methi.
Tender chunks of chicken, spiced mildly, and simmered for long hours in a
gravy of green coriander and fenugreek.
Paneer Malai
Fresh chunks of Paneer, sautéed with onions and green peppers, immersed in a
creamy tomato sauce.
Noormahal Biryani
Minced tender chicken koftas slow-cooked with saffron flavoured Basmati
Rice. From the Royal kitchens of India.
Bohri Biryani
Delicately spiced chicken layered in Basmati Rice, enhanced with exotic dry
fruits. A feast fit for the kings.
Yakhni Pulao
Succulent chicken chunks marinated in creamy yogurt and cooked in saffron
MTR Foods Ltd is amongst the top five processed food manufacturers in India.
We manufacture, market and export a wide range of packaged foods to global
market that include USA, UK, Australia, New Zealand, Malaysia, Singapore,
UAE, and Oman.
MTR is very proud of rich heritage, their tradition of food and hospitality began
in 1924 with the establishment of the Mavalli Tiffin Room by the Maiya family
in Bangalore, India. This restaurant is a city landmark today people still stand
in a quee to savour its unique, completely authentic dishes. Culinary secrets
have been protected and handed down over the generation and their food is
based on truly authentic recipes from their region of origin. MTR’s journey to
India’s premier, processed food company has been marked by innovation and
the adoption of new technology, every MTR product will be always embody of
tradition of unmatched taste, purity and quality.
➢ 100% Natural
MTR products are 100% natural do not contains preservatives and use only the
finest, most authentic ingredients.
➢ Uncompromising Quality
➢ Technology
It uses the latest technology to preserve the quality standards from sourcing
ingredients to processing and packaging. Use of Technology award from
Defense Food Research Laboratory for Ready to eat products has won the
President’s award.
➢ Vegetarianism
Mission
Vision
In terms of principles
MTR Foods Pvt Ltd is committed manufacturing and marketing food products
of high quality, hygienically processed. Using state of the art technology with
the following objectives
➢ Creation of the MTR brand synonymous with quality and food safety.
➢ Continuous improvement by total committed participation by all.
➢ Satisfying the changing needs of consumers for total delight.
MTR Products Profile:
3. Research Design
A research design is the arrangement of conditions for collection and analysis
of data in a manner that aims to combine relevance to research purpose with
There are three types of research design. The research design adopted here is
descriptive. I have made use of secondary data collection and also primary data
collection.
The sources of data used in this project report are both primary and secondary
data.
Primary data
Primary data consists of original information gathered for specific purposes at
hand. These are gathered for a specific purpose or for a specific research
project. Primary data was collected online as well as manually. A survey
questionnaire was made on Google Documents and the link was mailed to the
sample. Additionally, to the sample that were not net savvy printouts of the
questionnaire was distributed and the result was compiled.
Secondary data
Sample design
Sample Size
The total number of respondents was 60 of the total 102 approached. The age
group in which the sample lied is 18-40.The occupation of this sample size was
a healthy mix of self employed individuals, working people and students. The
respondents included 17 people from Hostel/Paying guest which form a large
chunk of the target market for RTE foods.
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Figure 4:
87% of the respondents have used the RTE meals and have given their rating
based on their usage and their experience. From this we can conclude that RTE
has penetrated sufficiently in the Indian Urban market.
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New Delhi Institution of Management Page 48
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Figure 5:
68% of the respondents said that RTE packs are part of their monthly grocery
shopping and not emergency purchase. Even for emergency purchase the 32%
is quite a huge number. Kindly take note that the sample for this question are
the one who has purchased RTE packs as seen in the previous question.
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New Delhi Institution of Management Page 51
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Majority i.e. 31% of people come to know about RTE products through TV
commercials followed by displays at different malls i.e. 27%
Strongly Agree 14
Agree 42
Neither Agree or
Disagree 04
Disagree 00
Strongly Disagree 00
Figure 7:
Strongly Agree 04
A Ready to Eat Pack saves lot of time and effort Agree 25
in cooking (all figures in %): Neither Agree or
Disagree 13
Disagree 15
Strongly Disagree 03
Figure 8:
A Ready to Eat pack is easily available whenever I need it (all figures in %):
Strongly Agree 16
Agree 31
Neither Agree or
Disagree 10
Disagree 03
Strongly Disagree 0
Figure: 10
I don’t see any sort of health problem due to the consumption of RTE:
Strongly Agree 02
Agree 13
Neither Agree or
Disagree 22
Disagree 19
Strongly Disagree 04
Figure: 11
I think a Ready to Eat (RTE) is value for money (all figures in %):
Figure: 12
Figure 14:
Strongly Agree 02
Agree 17
Neither Agree or
Disagree 33
Disagree 06
Strongly Disagree 02
Figure 15:
Observations
(Based On Above Results)
• Only 29 respondents feel that RTE packs have enough quantity and 18
feel they don’t and the rest have no opinion on this matter. It’s a mixed
reaction and response. The general conclusion that can be drawn is that
people don’t feel the quantity is enough for the money they are spending.
Some verbatim to support “Quantity should be good.”
• 23 respondents feel that RTE packs are not good for health while only 15
respondents feel otherwise which is concerning statistics for the RTE
companies. When a product is considered harmful for health its
reliability decreases and brand value loses. Same is the case for RTE.
This could be one of the reasons why in spite of efforts taken by
companies the growth in RTE segment is stagnant. Well, this is very
critical factors as lot of respondents commented one the health factor of
RTE. Some Verbatim to support this, “Ready-to-eat meals, though a
time-saving option, are sometimes viewed with suspicion by many
because of the usual concerns associated with packaged food.”, “ If the
manufacturers can repose confidence by eliminating all doubts in the
consumers' minds and assure them that these products are not a health
hazard, then the consumption may increase”, “ Should have more
nutritional values”, “use of less preservatives”, “make it more
Healthy...RTE MEALS contains lots of unsaturated fats.”
• 21 respondents feel that RTE packs are value for money while only 14
people feel they are not while the rest 25 respondents did not agree on
either. Some verbatim to support the observation, “although they are
good enough for eating but they are almost on oar sometimes costlier
than food from restaurants with respect to price. So it doesn’t make
sense to me.”
• 41 respondents feel that RTE meals are not tasty as homemade meals and
only 8 people feel otherwise. This depicts unique characteristics of
• As the results suggest 38 people are not sure whether ready to eat meals
are manufactured under best quality standards. “If the manufacturers can
repose confidence by eliminating all doubts in the consumers' minds and
assure them that these products are not a health hazard, then the
consumption may increase.”
and
Recommendations
5. Conclusions
On the basis of findings made, we can safely conclude that:
• Price- Indian consumers are highly price sensitive. For any new product
they judge the product based on their price and more or less the repeat
purchases are impacted by price factor. Same is the case with Ready to
Eat foods. More over ITC and MTR products are closely priced, yet the
demand for the same can be increased amongst the mass by reducing the
prices;
New Delhi Institution of Management Page 58
• Value proposition – RTE foods should be perceived as a value
proposition by customers. Value proposition means it should be able to
save lot of time and money with sufficient quantity to act as a full meal.
• Value for money - Consumers should perceive RTE packs as Value for
money i.e. they should feel the money they spent on it is well spent and
not wasted. This is where repeat buying can be induced. If consumers see
RTE as a Value for money option they won’t look for other options like
ordering from restaurant or going to a restaurant.
• Quantity and taste of food - Indians are voracious eaters and the family
size is also large. And Indians are used to eating a 3 full course meal on
any day. Hence the quantity packaged in the RTE packs should be
sufficient. And that is where the buying decision will come into play if
the quantity is insufficient to fulfill the entire family then defiantly they
won’t consider buying it again. The food should also tickle the taste buds
of consumers. As per the taste is concerned Maggie dominates the market
followed by MTR and then ITC in RTE segment.
• Easy availability - The biggest competitor for RTE foods are restaurants
which are easily available geographically and accessible with the option
of doorstep delivery. Hence RTE has to be made available in such way
that it can be easily accessible by the consumers during normal shopping
as well as during emergencies. While conducting the research it came to
the notice that MTR products are readily available in the market, where
as ITC’s Products are scarcely distributed in the market.
Recommendations
• Indian Households are averse to outside food and they feel only home
cooked food can provide the taste and quality. This is a big hurdle for the
RTE industry and the efforts should be taken to improve the quality of
the food by using better manufacturing, and packing methods. “41
respondents feel that RTE meals are not tasty as homemade meals and
only 8 people feel otherwise.” This is states that need to be changed.
• The ready to Eat marketers should bank upon its strengths i.e. time
saving, effort saving and easily available option. The promotion,
Packaging should revolve around these characteristics as we all know in
the traditional Indian urban family time is less. People crave to spend
time with their family after hard day at work. However, various
limitations like cooking food etc hamper this. RTE should consider this
as their positioning strategy.
• As per the research conducted and results obtained ITC has been
knocked out by MTR as taste was concerned. Majority of people
mentioned that MTR products are tastier than ITC’s products. Therefore
ITC must improve its product taste to maintain its dominance in the
market.
• ITC should redesign its marketing strategy and should ensure adequate
availability of its products in the market as it was found during the
research that they are not available on demand;
WEB-RESOURCES
http://www.statusa.gov/mrd_a.nsf/vwNoteIDLookup/NT0003CA62/$File/X_413629.PDF?
OpenElement
http://www.tsmg.com/media-and-press-releases/219-ready-to-eat-foods-market-in-india.html
http://www.indianfoodindustry.net/
http://www.thehindu.com/2007/10/24/stories/2007102454651900.htm
http://www.oppapers.com/essays/Ready-To-Eat-Food-Industry/198352
http://www.hinduonnet.com/thehindu/mp/2004/06/10/stories/2004061000130300.htm
http://www.thehindubusinessline.com/2003/11/24/stories/2003112400740300.htm
http://www.marketresearch.com/product/display.asp?productid=2552630&SID=63229650-
463567436-409318558
www.marketresearch.com
www.hindubusinessline.com
www.marketingpractice.blogspot.com
www.garamchai.com
Other References
• Market Research Report, Ministry of food processing Industries
• CS Market Research Report, Food additives, India
All Days
Week Days
Week Ends
Never
2. On days when meals are not cooked at home, how do you manage?
(Select more than one if applicable)
Visit a Restaurant
Order food from a restaurant
Pick up a Ready To Eat Packet
TV Commercials
Display At Malls
Word Of Mouth
Other Sources (Please Specify) _____________
2. Age
Grou 18- 26- 41- Above
p 25 40 55 55
3. Marit
al Marri
Status Single ed
5. You belong to a :
Joint Family
Nuclear Family
With In-Laws
Hostel / Paying Guest / Other
6. Could you kindly tick your group as per Total Family Income per month
Less than 20,000
20,000 – 50,000
50,000-1,00,000
Above 1,00,000