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CHAPTER-1

PROFILE OF THE INDUSTRY

1.1 INDUSTRIAL OVER VIEW OF CHOCOLATE INDUSTRY

The vital statistics of the confectionery segment seem more promising than the conventional FMCG categories such as toilet soaps or detergents. While toilet soaps and detergents already reach over 90 per cent of the households, both chocolate and sugar confectioneries have abysmally low penetration levels.

ORG-MARG estimates suggest that chocolates penetrated just five per cent of the Indian households in 2000. On the other hand, sugar-boiled confectionery reaches 15 per cent of the households, leaving ample room for growth. Even considering the urban market alone, the category reaches just 22 per cent of the urban consumers. This category, therefore, has considerable potential to grow before it reaches saturation point -- as have traditional FMCG products such as soaps and detergents. Chocolates and sugar-boiled confectionery boast of even lower penetration levels than biscuits, which reach 56 per cent of the households. The Indian confectionery market is segmented into sugar-boiled confectionery, chocolates, mints and chewing gums. Sugar-boiled confectionery, consisting of hardboiled candy, toffees and other sugar-based candies, is the largest of the segments and valued at around Rs 2,000 crore. Nutrine Confectionery and Parry Confectionery dominate the organised segment, apart from the Indian arms of MNCs such as Perfetti India and Warner Lambert.

Cadbury India and Nestle India also made a foray into this segment five years ago and have a small presence. Chocolates make up a 22,500-tonne market, which is valued at Rs 400 crore and dominated mainly by listed players Cadbury India and Nestle India. But slipping volumes however, despite its unmistakable potential, the major players in the confectionery industry have not fared too well in recent times in terms of sales growth. Take the chocolate segment. Cadbury India, which derives nearly 76 per cent of its revenues from chocolates and sugar confectionery, has seen its top line growth wind down from 19 per cent in 1999 to 12 percent in 2000 and further to 7 per cent in the first six months of 2001. Nestle India has managed to report healthier sales and profit growth, but this is more on account of the contribution from milk, coffee and culinary products rather than sugar or chocolate confectionery. The only listed player in sugar-boiled confectionery has not done too well either. Parrys Confectionery, a leading player in sugar-boiled confectionery, has reported shrinking sales volumes in 1998-99 and 1999-2000, after robust financial performance in earlier years.

Screeching to a halt these topline numbers only reflect the ground realities. Industry sources estimate that the 22,500-tonne chocolate market, which grew at a robust 12 per cent per annum until 2000, grew by just three per cent in that year. Several factors appear to behind this slowdown. As with all other FMCG products, the demand for confectionery products appears to have been hit by the economic slowdown and the consequent shrinkage in consumer spending. Confectionery products are impulse foods and thus appear to have borne the brunt of a cutback in consumer spending over the past couple of years, while staple foods have continued to exhibit healthy growth rates. This is evident from ORG-MARG figures, which suggest that the annual per capita consumption of chocolates actually fell from 312 grams in 1999 to 307 grams in 2000, while that for sugar boiled confectionery fell from 621 grams to 579 grams (source: ORG-MARG Milestone Papers: The Growth Inertia). Branded staples such as atta and salt registered a healthy increase in per capita consumption over this period. No price hikes,Despite fairly aggressive promotional efforts by marketers, the overall penetration level for chocolates registered no increase between 1999 and 2000. Consumption of chocolates could have been impacted by the selling price increases that marketers affected between 1999 and 2000. In 1999 and 2000, selling prices of key chocolate brands were pegged up by 5-15 per cent, partly reflecting a spike in cocoa prices in that period. This probably contributed to the sales growth for the year. However, with cocoa prices falling sharply in the second half of 2000, marketers were forced to maintain selling prices of most products, holding back value growth in sales. Cadbury India, the market leader in the chocolate segment (market share 71.9 per cent) saw the growth in its chocolate portfolio slow to 6 per cent in the April 2000 to April 2001 period, from nine per cent the previous year. This was mainly due to the healthy double-digit growth rates in its flagship brand -- Cadbury's Dairy Milk. Brands such as 5 Star and Perk stagnated in 2000-01.

Nestle India's chocolate portfolio (comprising of KitKat, Munch and Charge commanding a total market share of 24.7 per cent) slowed even more dramatically, registering less than one per cent growth between April 2000 and April 2001. Though Nestle's recent launch, Munch, has been a success, the low-priced brand has moderated the value growth in Nestle's portfolio. Wooing adults now The avenue for growth appears to lie in taking advantage of the low penetration level for chocolates by roping in new consumers. The chocolate majors attempted to do this by repositioning chocolate, earlier targeted at children, as a snack food for adults. Cadbury's chocolatecoated wafer Perk and Nestle's Charge and Munch were essentially sold on this platform. Though products such as Perk did succeed initially (Cadbury India claims to have added eight million new consumers in 2000), growth in this segment appears to be petering out. Both Perk and KitKat (the chocolate-coated wafer which is central to Nestle's chocolate portfolio), have shown signs of stagnation in 2001, actually reporting negative growth rates for a few of the months. Banking on smaller editions Of late, the chocolate majors have been rejigging their products to launch chocolates in the Rs 10 and Rs 5 price points. Mimicking the trend in other FMCG products, the chocolate majors have been relaunching their conventional chocolate brands in smaller unit packs, hoping that this will prompt more frequent purchases and pep up volume growth. The past year has seen a slew of such launches, the 18-gram version of 5 Star (retailing at Rs 5), the 15-gram version of Cadbury Dairy Milk (Rs 5), Perk Slims (Rs 5), Cadbury Chocobix (a chocolate biscuit combination priced at Rs 5), Nestle Crunch (a mini snack at Rs 6) and Nestle Munch (Rs 5). It is early days yet to judge if this has indeed pepped up volume growth in the segment. However, the chocolate majors do not have much to lose. Unlike the low unit pack versions of products such as shampoos, the low unit packs of chocolates do not cost less on a per gram basis than their normal versions. In most cases, the grammage offered under the low priced packs, has been brought down in the same proportion as the price, leaving realisations for the chocolate majors untouched.

INTRODUCTION

ABOUT THE COMPANY


Thirty years ago the milk producers of Gujarat had come together and decided to create their own organization to enhance the marketing capacity of the dairy Co-operative milk marketing federation Limited (GCMMF Ltd.). Mr. V. Kurien was the founder of this co-operative society and this society had been formed in a small village of Gujarat named Anand. Gujarat Cooperative Milk Marketing Federation (GCMMF Ltd) is a Indias largest food product marketing organization. It is a state level apex body of milk cooperative in Gujarat, which aims to provide remunerative return to the farmers and also serve the interest of consumers by providing quality products, which are good value for money.

Member

12 district cooperative milk producers union

No. of Producer Member: No. of Village Societies : Total Milk handling capacity Milk collection (Total-2004-2005) Milk collection (Daily Average 2004-2005)

2.36 million 11.333 6.9 million liters per day 1.81 billion liters 4.97 million liters

Milk Drying Capacity: Cattel feed manufacturing Capacity:

511 metric Tones per day 2340 Mitts per day

AMULS HISTORY
Amul birth is indelibly linked to the freedom movement in India. It was Sardar Vallabhbhai Patel who said that if the farmers of India are to get economic freedom then they must get out of the clutches of the middlemen. The first Amul cooperative was the result of a farmers meeting in Samarkha (Kaira district, Gujarat) on 4 January 1946, called by Morarji Desai under the advice from Sardar Vallabhai Patel, to fight rapacious milk contractors. It was Sardars vision to organize farmers, to have them gain control over production, procurement and marketing by entrusting the task of managing these to qualified professionals, thereby eliminating the middlemen, the bane in farmers prosperity. The decision was taken that day in January 1946. Milk producers cooperatives in villages, federated into a district union, and should alone handle the sale of milk from Kaira the government run Bombay Milk Scheme. This was the origin of the Anand pattern of cooperatives. The colonial government refused to deal with the cooperative. The farmers called a milk strike. After fifteen days the government capitulated. This was the beginning if Kaira District Cooperative Milk Producers Union Ltd., Anand registered on 14 December 1946. Mr. V.Kurien was the founder of this cooperative society. This society had been formed in a small village of Gujarat named Anand. Originally the Anand pattern included dairy cooperative societies at the level. Inspired by the Kaira Union, similar milk unions came up in the other districts too. In 1973, in order to market their product more effectively and economically, they formed the GCMMF Ltd. GCMMF become the sole marketer of the original range of Amul products including milk powder and butter. That range has since grown to include ice cream, ghee, cheese, chocolates, shrikhand, paneer, and so on. These products have made Amul a leading food brand in India.

The brand name AMUL, has taken from the Sanskrit Amoolya, meaning priceless, was suggested by a quality control expert in Anand. The first products with the Amul brand

name were launched in 1955. Since then, they have been in use in millions of home in all parts of India and beyond. Today Amul is a symbol of many things: of high quality products sold at reasonable price, availability, and service. Amul is the brand name of two million farmers, members of 10,000 village dairy cooperative societies throughout Gujarat. This is the heart of Amul; it vis what is so special about the Amul saga. Amul in 1946 was really an effort to carve out a truly Indian company that would have the involvement of millions of Indians and place direct control in the hands of the farmers. It was a mandate for producing, owning and marketing and above all, building your own truly Indian Brand. Amulss birth was thus a harbinger of the economic independence of our farmer brethren. Today, 173 milk producers cooperative unions and 22 federations play a major role in meeting the demand for packed milk and milk products. Quality packed milk is now available is more than 1,000 cities throughout the length and breadth of India. Amul, therefore, is a brand with a difference. That difference manifests itself in a larger than life purpose. The purpose freedom to farmers by giving total control over procurement, production and marketing.

RANGE OF THE PRODUCT:-

Bread spreads:

Amul Butter Amul Lite Low Fat Bread spread Amul Cooking Butter

Cheese Range:

Amul Pasteurized Processed Cheddar Cheese Amul processed Cheese Spread Amul Pizza (Mozzarella) Cheese Amul Shredded Pizza cheese Amul Emmental Cheese Amul Gouda cheese

Curd Products:
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Yogi Sweetened Flavored Dahi (Dessert) Amul masti Dahi (Fresh cured) Amul Butter Milk Amul lassee

Milk Drink: Amul cool flavored Milk

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Amul kool Kesar Amul kool Elachi Amul kool Coffee Amul kool Rose Amul kool Strawberry Amul kool Mango

Health Beverage:

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Amul Shakti White Food

Mithaee Range (Ethnic Sweets):

Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamuns Mix Amul Mithaee Kulfi Mix

UHT Milk Range:


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Amul Shakti 3% fat Milk Amul taaza 1.5% fat Milk Amul Gold 4.5% fat Milk Amul Lite Slim & Trim Milk 0% fat Milk Amul Shakti Toned Milk Amul Fresh Cream Amul Snowcap Softy

Chocolate & Confectionery:

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Amul Milk Chocolate Almond Bar Chocozoo

Milk Powder:

Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder

Fresh Milk:

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Amul Taaza Toned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardized Milk 4.5% fat Amul Slim & Trim Double Toned Milk 1.5% fat Amul Saathi Skimmed Milk 0% fat

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PRODUCT SPECIFICATION

Composition:

Milk Fat 2% Sugar 55% Total Fat 32.33% (Milk Fat + Cocoa Fat) Cocoa Solids 7.5% Milk Solids 20%

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MARKET PRESENCE Sales Turnover


1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Rs. (Million)
13790 15540 18840 22192 22185 22585 23365 27457 28941 29880

sale s tu rn o v e r
35000 30000 25000 Rs. million 20000 15000 10000 5000 0 R s . (Millio n ) ye a r 1 9 9 5 -9 6 1 9 9 6 -9 7 1 9 9 7 -9 8 1 9 9 8 -9 9 1 9 9 9 -0 0 2 0 0 0 -0 1 2 0 0 1 -0 2 2 0 0 2 -0 3 2 0 0 3 -0 4 2 0 0 4 -0 5

ORGANIZATIONAL STRUCTURE

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BOARD OF DIRECTOR MANAGING DIRECTOR CHIEF GENERAL MANAGER GENERAL MANAGER ASSISTANT GENERAL MANAGER EXECUTIVE DEPUTY EXECUTIVE ASSISTANT EXECUTIVE SENIOR EXECUTIVE JUNIOR EXECUTIVE

FIELD SALES REPRESENTATION

DISTRIBUTION CHANNEL
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MEMBER UNION (PLANT)

DEPOT GODOWN

DISTRIBUTOR

RETAILERS

CONSUMER

NETWORKING STRUCTURE OF AMUL INDIA LTD.

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HEAD OFFICE (ANAND)

DEPOT ZONAL OFFICE MUMBAI JAMMU PARWANOO AHAMDABAD CUDHINA SRI LANKA, NEPAL MOHALI CALCUTTA THILAND, SINGAPUR DELHI MUMBAI NAGPUR CHENNENAI BOLSER PUNE UNITED STATE OF AMERICA MAJOR EXPORT MARKET IRAQ, KUWAIT

NEWZELAND

RANCHI ASANSOL PATNA

1.3

PROBLEMS OF THE ORGANIZATION

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It is not a hidden fact the amul has its own image or brand, which shows the value of money for its product. The AMULS have a great product line and depth. AMULS products are Amul Butter, Amul Cheese Amul confectionery, Amul Flavored Milk and Pasteurized milk, Dahi, Lashi, Ice-cream, etc. If we give a overall look on the all market position of AMULS product almost all product have a grate market share in other hand all product are market leader with there grater sales volume and high turn over, for example AMUL Butter, AMUL Flavored milk, AMUL Mogerella chess. But in case of AMUL Chocolate the position of AMUL is not satisfactory. It is generally consider AMUL is in the 3rd position after CADBURY and NESTLE. Both the company has separate distribution channel for chocolate, they are giving high priority to confectionery products. They are providing easy replacement, high penetration, and regular visit to retailers shop. Most importantly they are providing cool storage equipment to their retailers and they positioning their product through heavy advertisement campaign. Recently the AMUL Chocolate is re-lunched in market but the position remains same, which is very critical for the company. After re-lunched, the sale volume and customer awareness about the all chocolate products remain unsatisfactory, which create harsh situation for all organization. Companies highly willing to excel in the chocolate field there are some problem, which is adversely influence the organization. There are some problems, which is as follows: -

Competitors position in market Vast distribution channel which deals almost all product Replacement Retailer satisfaction level Awareness about the product

1.4

S.W.O.T ANALYSIS

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STRENGTH:-

Amul has a brand image. It has a high quality. It has a great purity. It has a pool of dedicated and hardworking workforce. Experienced market player.

WEAKNESSES: Company dose not provide credit to retailers Company. Company has no proper promotion strategy. Complex replacement procedure. Fewer margins to retailers. There is Lack of availability. Distribution is not up to the mark in every area. Lack of salesmen and distributor in some areas in Delhi. There is a problem with storage of Amul Chocolate

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OPPORTUNITY: Providing the replacement offer to retailers can increase Sale. Increase in retailer margin can enhance the sale of Amul Chocolate. Focused approach towards small market can also increase the sale of Amul Chocolate. New schemes can be provided to the retailers to attract them to push the sale of Amul Chocolate. Regular supply can be easily compete the competitors and increase its own sale.

THREATS: More competitors are entering in the market. Competitors are providing more margins to retailers. Competitors also giving replacement facility to retailers. Competitors providing regular supply and strong distribution channel. Competitors also reaching to small market.

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CHAPTER -2 RESEARCH METHODOLOGY

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2.1

METHODOLOGY

Marketing research is the process collecting and analyzing marketing information and ultimately arrived at certain conclusion Management in any organization need information about potential marketing plans and to change in the market place. Marketing research includes all the activities that enable an organization to obtain the information. This research is very important in strategy formation and feed back of any organizational plan.

There are many type of research some are conceptual, empirical, descriptive, explorative etc. each research type is being used for various purposes. In this research I have used descriptive research; I try to describe what are the factors, which affect the business plan of AMULS Chocolate. Research design is the plan, structure and strategy of investigation conceived so as to obtained to research problem and control variances. It is the specification of methods and procedures for acquiring the information needed. It is overall operational pattern or framework of the project that stipulated what information is to be collected and from which source and by what procedure.

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RESEARCH OBJECTIVE
The primary objective would be: To conduct a comparative analysis of Amul Chocolate vis--vis its competitors.

The other objectives would be: To compare Amul Chocolate with its competitors in terms of sales figure. To make an analysis of the shortcomings of Amul Chocolate compared to its competitors. Finally to conclude the findings and suggest the necessary corrective measures and recommendations for improving the market position of Amul Chocolate.

RESEARCH DESIGN
Different types of research design have emerged on account of the different perspectives from which a research study can be viewed. There are three fundamental categories that we used frequently are given below. 1. EXPOLETARY RESEACH: - In the case of exploratory research, the focus is on the discovery of ideas. An exploratory study is generally based on the secondary data that are readily available. It does not have formal and rigid as the researcher may have to change his focus or direction, depending on new idea and relationships among variables. An exploratory research is in nature of a preliminary investigation.

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2. DISCRIPTIVE RESEARCH: - The objective of such a study is to answer the who, what, when, where and how. Of the subject under investigation, descriptive studies are well structured and tend to be rigid and its approach can not be changed every now and then. It is therefore, necessary that the researcher give sufficient thought to farming research question and deciding the types of data to be collected and procedure to be used for this purpose.

3. CAUSAL RESEARCH :- A causal research investigates is cause and effect relationship between two or more variables. The causal research design is based on reason along well-tested line. We use inductive logic for confirming hypothesis with the help of future evidence.

TYPE OF RESEARCH CARRIED OUT: In my project work I used exploratory research, as it aim to answering question about sale, brand availability, service quality, distribution pattern etc.

DATA COLLECTION :To achieve the objectives, the primary as well as secondary source of data are used. Primary source includes the retailers and companys officials through questionnaires. Secondary source of data includes the past records of company. The data were collected through the following methodical techniques in the present project work. 1. Through questionnaires 2. Through interview 3. Through observation

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DATA SOURCES

PRIMARY DATA USED BY THE PEOPLE

SECONDARY DATA
PRIMARY DATA:Primary data is that kind of data which is collected by the investigator himself for the purpose of the specific study. The data such collected is original in character. The advantage of third method of collection is the authenticity. A set of question s was put together in the form of questionnaire with. Question. The method of sampling was the random method as it is unbiased.

SECONDARY DATA:When an investigator uses the data that has been already collected by others is called secondary data. The secondary data could be collected from Journals, Reports and Various Publications. The advantages of secondary data can be economical, both in the term of money and time spent. The researcher of the reporter also did the same and collected secondary from various Internet sites like Google.com.altavista.com and many more. The researchers of the reporter also visited various libraries for collection of the introduction part.

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QUESTIONNAIRES DESIGN : Questionnaires consist of question printed or type in definite order on a form or set of form. It was questionnaire format firms tested on small sample then was modified and developed according to the environmental situation and other affecting factors. Each questionnaire is framed with systematic and modern technique to make useful in achieving the objectives up to a maximum possible limit. There are two types of questionnaires, the first one is standard questionnaire and the second is un-standard questionnaire. The authority or expert sets the standard questionnaire. In the other hand un-structured questionnaire is set according to objective of the study by researcher. In this research work I used un-structured questionnaire with my best ability and under the guidance of my institutes faculties and the project guide of the organization. After floor acing the questionnaire, the respondents (retailers and customers) were personally contacted. Each respondent was requested to answers the question with appropriate answer genuinely. All the questions were made very clear to them. The questionnaires were duly filled with the responses of all the respondents in the current project work.

INTERVIEW METHOD: There is a fact to face interaction with most of the samples they were directly questioned and according personal and professional problem were collected from them for question are asked to the responded to flourish the questionnaire effectively and efficiently. In this project work I have made interview with almost respondent to know some extra data or fact, which was used in this project work. After using this method I tried to find the competitors policy and there strength after this method I was able to conclude all facts with competitors point of view.

OBSERVATION METHOD: 30

During the project work, I contact the retailers and consumers particularly and find their opinion about the Amul Chocolate. In the observation method the research himself collects necessary informations by observing the phenomena under this method. Observation may be conducted on in the natural field or in the form of experiment. After observation the data carefully noted in the questionnaire format. I used uncontrolled observation in this observation takes place in the natural setting. Retailer and customer are free to express their felling about the product and the company. The observation method give me an idea about the satisfaction level of customer and retailer in the other hand there precious knowledge about the market situation make me understand the business difficulties which help me a lot to carry out my project in a significant and effective manner.

SCOPE OF THE STUDY


The present study is the study on GUJARAT COOPERATIVE MILK

MARKETING FEDERATION LIMITED, one of the India largest food


production marketing organization, which is a state level apex body of milk cooperative in Gujarat. From the study one can easily infer the present market position of Amul chocolate with its leading competitors. The study is designed and focused primarily on identifying the present market position of the Amul chocolate. It also includes identification of its core competitors and enhancing efforts towards brand repositioning in present and in future.

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MANAGERIAL USEFULNESS OF THE STUDY

The research is a systematic investigation of any idea. The research is widely used in the business world for analyzing & evaluation business policy as well as the analyzing & evaluates competitors activity and policy. The research is itself valuable. The research gives fact and figure, which is useful in planning.

As it is obvious any business activity is based on to the 4 Ps of marketing viz. price, product, promotion, place all these Ps have its own importance and all are interrelated with each other but most importantly all the factor are independent in the nature. In any organization all factors are carefully formulated to gain a success in the market. It is very important for business analyst to evaluate the modern trend and market position. In the other hand it is vital for business operation to know the need and desire of customer. All the necessary information is received from market by research work.

The study reveals many facts that have come up during my project and these facts can either be used as opportunities in exploring and expanding the business as well as can be used as safeguards against threats by the competitions. To prepare an effective marketing strategy a company must study it s competitors as well as its actual and potential retailer. A company should maintain good relation with their distributors and retailers keeping in view competitive orientation in todays global market. Company should neither put much emphasis on competitors positioning nor should it solely concentrate on its own products and policy. Rather it should find midway between these two extremes and adopt flexible policy. Companies should manage a good balance of declares retailer, consumer & competitors monitoring. The information will prove beneficial in taking proactive action for combating competition .the standing of the company and its competitors in the mind off the retailer in a vital factor in deciding the success of business the study also aims at finding out the

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market share in term of their sale, product penetration demand etc which is adjusted by retailer. This information is good guide to management as it brings out the strength of the competition their product penetration, product demand their promotion policy, which gives a overview where the company needs to improve. This study basically aimed at providing the management desired vital information about the market situation. There say due to immerse competition in Indias fast moving consumer goods market my work on GCMMF Ltd. And consumer behavior can be useful in following ways:-

It can be useful for adopting the proper marketing mix in respect of type of chocolate, distribution pattern, and market share.

It can be useful to understand the consumer perception which is very vital for product mix as well as promotion mix.

SIGNIFICANCES OF THE STUDY


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Any Research has its own importance in any business organization. The research shows the real fact about product as well as organization. Research is a systematic and scientific investigation of any idea either precise or abstract from a continuous basis for learning , it could be either exploratory or descriptive. According to above definition research is a systematic and scientific investigation through which any organization try to find out its strength and weakness as well as opportunity and threat. As we know in the present era the business activities have become conscious about quality, more complex and complicated due to modern technology , blind globalization and liberalization and in other hand today customer are highly customers are not

products and brand .In recent time features

follower of a product. They are giving high priority to all feature like price, innovative etc. But after all this features brand becomes the inevitable parts of any product because it gives the complete identification of product so it is also the one most important part. My research work is highly focused on this issue, which is important for me as well as the organization. During research work I learnt retailers opinion about product and services.I learnt which factors affect the retailer to sale an individual product, this research gives me insight to understand the retailers problem as well their area of interest , in this I got the great experience about the market For company point of view I tried to find the serious drawback, which is highly, affected the sale of chocolates. I tried to find market share of Amul chocolate which is itself important .I tried to find the sale figure of Amul chocolate in term of rupees, due to some hurdle I dont claim my research work is 100% accurate because so many factors was uncontrolled during the project .I tried to finish my research with 100% accuracy which is best available in market .

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