Pepsi Case Study PDF

7/16/2019 Pepsi Case Study PDF

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India Hetero eneit : The ProductCustomization Challenge


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--

In our field of la And on the FMCG landsca e


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A Portfolio Promise Of Refreshment,A Portfolio Promise Of Refreshment,

un u r onun u r on

A spectrum of beverages delivering fun and refreshment Snacks offering plenty of good food and 'good fun'

The Quaker range of healthy food choicesTropicana, the best of fruit

Dairy

Re-hydration and sports nutrition expertise


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A Culture Of Excellence That Builds PowerfulA Culture Of Excellence That Builds Powerful

ra emar s, e ncu a ng nnova onra emar s, e ncu a ng nnova on


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9 # 3 FMCG Business

9 #1 F&B Business

# Basis overall system turnover


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Powered By A Portfolio Addressing A Range OfPowered By A Portfolio Addressing A Range Of

Beverage Need States Snack Need States

Hydration Enjoyment Sustenance EnjoymentRefresh

Refresh

TransformationNourishment EnhancementNourishment

IndulgenceHealth IndulgenceHealth

EnergyEnergy


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Driven B Muscular ConsumerDriven B Muscular Consumer--Preferred BrandsPreferred Brands


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r K En l r r K En l r

Robust GTMEntre reneurialIntuitive,

SystemsCulturens g - r ven

Marketing

Communication Operationalxce ence

5Th Best Marketing Team

2009: Brand Equity

14,800 routes

Reach > 1MM O/Ls

Weekly frequency

Empowered

Culture

Drive for Results

Leaders in ModernTrade

Visionary Best PepsiCo Intl BeverageMarketing Team 2009


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Another Key Enabler: Agile Response To A ChangingAnother Key Enabler: Agile Response To A Changing

TOTOacro nv ronmen n us ness ynam cacro nv ronmen n us ness ynam cFROMFROM

Talking Only

ToTeens

AddressingCohorts

Fun And Refreshment Range Of Need-States

Short Term,Equity + Need-

state Based,

InnovationOnly

Va ueAccretiveInnovation


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Our Buildin BlocksOur Buildin Blocks

INNOVATIONRELEVANCE 2How our brands integrate into

consumers livesHow we craft our portfolio

to be

Resonantwith their values,

attitudes, lifestyle

Alignedwith consumers

beverage and food need-states

Reflective of their physical

and emotional needs, today

and tomorrow

Appropriate for the occasions

they consume us in

Integratedinto their daily

rituals

Value, Health &Wellness,

Affordability


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Stories Have Been Built On These Pillars OfStories Have Been Built On These Pillars Of

RelevanceRelevance &&InnovationInnovation


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Communication RelevanceCommunication Relevance

eps e o ce oueps e o ce ou


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The secret to Pepsis continuing relevance?The secret to Pepsis continuing relevance?

Not Cricket Neither Celebrities Not even

Indias Religion Indias demigods the product

Commemorativeflavors

My PepsiMy Can

PepsiCoglobalformulation

adapted forAP palatepreference


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Flavor RelevanceFlavor RelevanceConvertin Consumer Franchise Into BrandConvertin Consumer Franchise Into Brand

The Magic and Emotions Of

EvangelistsEvangelists

Cracking Indian

Bollywood in a Bag

s ree - snac co es

Indian flavors are 30% of mix


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Occasion RelevanceOccasion Relevance

Anc or ng Trop cana n our consumerAnc or ng Trop cana n our consumers vess ves

Occasion Based Marketing Product Innovation

The Indian habit of

Street Fruit Juice is

Anchor Tropicana in the

breakfast occasion rooted

well developed

Mixed Fruit one

of the most popular

in product functionality

flavors

Tropicana Mixed

Fruit Juicedeveloped

exclusively for India


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Driving Relevance Via Subverting anDriving Relevance Via Subverting anExistin HabitExistin Habit

KurkureKurkure -- The CodeThe Code--Breaking Indian SnackBreaking Indian Snack

Kurkure has always driven relevance by breaking existing codes

Innovation pipeline

Brand role:

Transformation Catalyst

palate preferencesThe Great IndianFamily and Tea-time

are two enduring themes challenged and

reinvented by Kurkure

Product as hero

Product sensorials deliver a unique and wickedtwist on familiar Indian Namkeen codes.

, ,

twisted finger snack


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IngredientIngredient As Relevance DriverAs Relevance Driver

Cultural Significance of

oo o o emon aoo o o emon a

Zesty, yet cooling

Sharp sensorials

transform a bland

experience

Catalyst and Problem

Values it transfers to

Brand 7 UP

Mitigates category

barriers of

Artificiality

a Clear/Water-like

category


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Relevance Via Cultural CodesRelevance Via Cultural Codes

Baked crackers with an Indian heart

Culturally RelevantCulturally RelevantIngredientsIngredients

Locally RelevantLocally RelevantStimulating FlavorsStimulating Flavors

The Indian preference for Chai and ChatpataThe Indian preference for Chai and Chatpata


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Globally Too, PepsiCo Is Driving GreaterGlobally Too, PepsiCo Is Driving Greater

Rediscovering the

best of tradition

Evoking food codes, memories and

emotional benefits anchored in local

onsumer rac on a oca e evanceonsumer rac on a oca e evance

Re-framing existing

snacking rituals

Mexico Thailand

Europe

Russia z Natural ingredientsPoland

z Made 100% with olive oil


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Case Stud IssueCase Stud Issue Executive SummarExecutive Summar

Category Trends: Fundamentals are robust, huge headroom for growth.As the PepsiCo portfolio of foods and beverages evolves, the key consumer

cohort will continue to be Youth. Two other cohorts will assume increased

significance: Women, and Base of Pyramid consumers

Consumer Trends: Buo ed b stron macros the Indian consumersaspirations, interests and symbols of upward mobility are converging at a

national level

We are also witnessing a celebration of regionalism

F &B Trends: Experimentation, convenience, wellness, rise of regionalcuisine, renewed belief in traditional ingredients, value-seeking, strengthening

franchise of regional brands

Affordability, Access and Relevance will be key drivers

Local relevance is a potent growth levercan unlock consumer demand,

part cu ar y t a so ts t e sweet spot on A or a ty


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12.3

lion

By 2032 India will be among thethree largest markets in theworld Bric Report Goldman Sachs

8.1

P)U

S

$Tril

India is amon the three most4.1

3.6

2.5GDP

(P attractive FDI destinations in theworld AT Kearney

US China Japan India Germany India has among the highest

returns on foreign investment

Source: World Bank, 2007


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Ideas that have Ideas that will Ideas to

Affluence /

Economy /

Globalization

Education Higher

Acceptance to

Demographic

DividendUrbanization Environment

Growing concern

on Ecology

Technology Infrastructure Culture / Media

/ Politics


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The Indian Consumer Is Comin Of A eThe Indian Consumer Is Comin Of A e

Leapfrogging technology and becoming more global

in his aspirations

The emergence of a consumer who expects a

resolution of all contradictions -

Taste v/s Health,

Value v/s Premium experiences

The convergence of desires, aspirations across

demographic divides


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Youth And Women AreYouth And Women Are Key Consumer Cohorts Of theKey Consumer Cohorts Of theFuture and Their Ph siolo ical and Emotional Needs WillFuture and Their Ph siolo ical and Emotional Needs Will

Guide Business StrategyGuide Business Strategy For Many CategoriesFor Many Categories

Segment size: 302 mn ( U+R); 43 mn ( SEC ABC)

Between 03 and 50, India will add 250 mn to its labour pool @ 14 mn/year.

By 2020, 78 mn Indians or 61% of India will be < 35 yearsYouth

130 mn (Urban); 80 mn ( Literate women)

107 mn ( Working women)Women Working women are expected to be 20% of the workforce by 2020

Source: Segment size numbers - IRS Round 2, 09


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302 Mn Youth In India302 Mn Youth In India

98 Mn youth in Urban India

23 Mn metros, 75 mn non-metros62 Mn college educated youth

43 Mn in Sec ABC,31 mn ABC non-metros 128 Mn working youth

73 Mn youth students

Source: IRS Round 2, 09


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Indian Youth: Breathe Globalization, Live Technology,Indian Youth: Breathe Globalization, Live Technology,

Dream-Chasers, RiskSelf-obsessed,

Family asanchor, and

takersmaterialistic, butlooking for a

cause

Friends asFamily

Challenging themainstream, but

high need tobelong

Staying ahead on

the style curve isver im ortant

Money is the

the greatenabler Hunger to expand

horizons; fear ofbein left behind

success; Real joylies in spending

This is broadly true both of Metro Youth, as well as Youth in Non-Metros


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The Urban Indian Woman Is Evolving On All DevelopmentalThe Urban Indian Woman Is Evolving On All Developmental, ,, ,


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Across Demographic Segments, The Indian WomanAcross Demographic Segments, The Indian Woman

Family comesIncreasing

x s ore ra sx s ore ra s

rsconcerns aboutHealth, tho little

action

between self

and role ofcaregiver

Increasing needto celebrateVery Focusedn v ua y,

sexualitya out see ng

value

DefersGratification, Looking for

Stressed by the

-

indulgence Convenience,but couched inrationality

Multitasking


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Additionally, Base Of Pyramid Consumers Are Beginning ToAdditionally, Base Of Pyramid Consumers Are Beginning To

All IndiaAll India

*

Re ect onsumpt on Patterns m ar To T ose At T e TopRe ect onsumpt on Patterns m ar To T ose At T e Top

36%

SEC A, B, C,

SEC R1, R2

Top ofTop of

PyramidPyramid

(ToP)(ToP) Rs.7861

**Avg. Spend in

Rs/HH/Yr

ToP

44%

% Contr. of

Spends

SEC D, E,SEC R3,

Base ofBase of

PyramidPyramidBoPBoP

Rs. 5577BoP 56%

(Urban 24%,Rural 32%)

R4, R5

Urban 15%

Rural 48%

very s m ar mcg spen ng pa erns

13%

18%

15%

19%

12%

18%

12%

18%

14%

19%

11%

17%

Personal Care

140 MN HHs/ 700 MNindividuals

68%66%

70%70%67%

72%

Food &Beverages

Home care

* 22 fmcg categories considered

2009 2009 20092008 2008 2008

All BoPToP

Source: IMRB HH PanelSource: IMRB HH Panel


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Demographic distinctions (Metro v/s Non Metro, SEC) areDemographic distinctions (Metro v/s Non Metro, SEC) arebecoming less relevant today, as motivations, interests,becoming less relevant today, as motivations, interests, symbols ofsymbols of

successsuccess become more congruentbecome more congruent

SIDS

WORLD BUNTYSWORLD


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Yet, The Indian Consumer Has A Gemini SoulYet, The Indian Consumer Has A Gemini Soul

Western Aspiration Indian Soulestern Aspiration Indian Soul

W lki I d llki H lth Walking Indulgencealking Health

Splurge Save

Regional

Splurge Save

NationalIdentityRegionalPride

Pizza Tadka Maar Ke


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Unified As We Are, By A Singular National IdentityUnified As We Are, By A Singular National Identity

n onvergent sp rat onsn onvergent sp rat onsOur Regional roots exert strong influence, particularly

on issues were emotional about like

Festivals Rituals1 2 Family3


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And Food And Food

Food4

Driven as much by our taste buds, as by our cache of childhood memories


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Consumer Attitudes Towards F&B AreConsumer Attitudes Towards F&B Arencreas ng y e ng r ven y our actorsncreas ng y e ng r ven y our actors

1 2

Experience

Indulgence Experimentation

us on

HealthNatural Obesit

Functional

Convenie

eg ona

cuisineLifestyle

Exclusivity

Womens

nutrition Sustaine

Wellness

y

nceGrow-it-

ourselfOrganic

Provenance3energy

Snacky-

Meals

Downsizing4Sustainability

Traditions

B Brands SmallPacks

ValueTherapeuticNutrition

treasurechest

Therapeutic

Nutrition


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For The Purpose Of This Case, We WillFor The Purpose Of This Case, We Will

Focus n T ese TwoFocus n T ese Two1

ExperienceHealth


us on

Natural Obesit

Functional

Convenie

eg ona

cuisineLifestyle

Exclusivity

Womens

nutrition Sustaine

Wellness

y

nceenergy

Snacky-

MealsGrow-it-

ourselfOrganic

Provenance

Sustainability

TraditionsDownsizing

4

treasurechest

Therapeutic

Nutrition

B Brands SmallPacks

Value


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Lets First Talk About The Experiential AspectLets First Talk About The Experiential Aspect

1

oooo

ExperienceHealth


us on

Natural Obesit

Functional

Convenie

eg ona

cuisineLifestyle

Exclusivity

Womens

nutrition Sustaine

Wellness

y

nceenergy

Snacky-

MealsGrow-it-

ourself

Organic

Provenance

Sustainability

TraditionsDownsizing

treasurechest

Therapeutic

Nutrition

B Brands SmallPacks

Value


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RegionalRegional -- The New NationalThe New National

A resurgence of regional pride.

A desire to go back to ones

roots and also ex eriment with

our regional flavors and foods.


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In Calcutta, Andhra Food is big, Chennai is

Rise in domestic tourism, eatingout

South Indian Dosa is now considered Indias

national dish

Increasing Experimentationwith tastes, textures, flavors

Stress, lifestyle-related diseasestriggering a return to ingredientlogic, the do-good value of the

, ,

Authentic


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A culinary osmosis between regions is tingling many palates.

.

Today, more than ever, there's a steaming exchange of cuisines

criss-crossing state borders, and foodies are savouring the barter.

- Outlook India

A mouthful of India http://www.outlookindia.com/printarticle.aspx?229806

Bharat ke Bhoj http://www.outlookindia.com/article.aspx?263519


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The desire to experiment and beadventurous.

The desire to hold on to or rediscover our

regional cuisine.

The end result: A melting pot of ingredients,flavors, textures and a possible

.


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Zone wise broad differencesZone wise broad differences

East : H chondriacalNorth : Ostentatious

Taste Palate: Rice, Potato, Lentil

Food Flavours: Chilly, Mustard, PoppySnacks :Crispy, Soft fillings

-

Taste Palate: Wheat, Lentils

Food Flavours: Spicy,MasalaSnacks :Light crispy, Multi Texture

, ,Salty

Fav Beverages: Leaf/Black tea, Sugarcane

,Sweet& Sour

Fav Beverages: Tea, Sherbets, Lassi.

30%*

West : Egalitarian South : Strong Sensorials23%*

24%*

Taste Palate: Wheat, Rice,Gram Meal

Food Flavours: Tomato, Sweet&Spice

Snacks: Thin crust, Dual Texture

Beverage Consumed: Thick & Thin,

Taste Palate: Rice, Lentils

Food Flavours: Coconut, Curry leaves

Snacks : Hard Crunchy

Beverages Consumed: Thin, Bitter-*

Sweet & SpicyFav Beverages: Milkshakes, Aamras,Sugarcane

,

Fav Beverages: Rasam, Dust tea, Filtercoffee,Coconut water

* % Of India Population


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Much of the experimentation with food is an urban phenomenon.

down to lower town classes, their food habits tend to be a lot

more entrenched, and affinity with traditional food habits is eveng ereg ass n un a or o um u ce n a aras ra.


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Second, The Indian ConsumerSecond, The Indian Consumers Traditionals Traditionala ue r entat on as arpenea ue r entat on as arpene

HealthNatural Obesit

Functional

Experience


us on

Womens

nutrition Sustaine

Wellness

y

Convenie

eg ona

cuisineLifestyle

Exclusivityenergy

Snacky-

MealsGrow-it-

ourself

Organic

Provenancence

SustainabilityDownsizing

B BrandsTraditions

4

SmallPacks

Valuetreasurechest

Therapeutic

Nutrition

Regional

players


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--

Kitkat single finger

2 rupaye mein 2 laddoo!

McDonalds menu offering hasbecome more value-meals heavy

Trial packs retailed as singles

LUPs low unit packs


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Regional Players Have Driven Salience Via Local MarketRegional Players Have Driven Salience Via Local Marketn ers an ng an eograp c ocusn ers an ng an eograp c ocus

-

dominated by strong national

brands.

Within Food category, regional

brands far more salient:

. .

segment, there are strong national

brands like Fortune, Dhara,

regional brands too:

TN - Gold Winner; Gujarat -

Tiru ati Maharashtra - Star.

Source: AC Nielsen Data, 2007


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The Retail Landscape Remains Highly Fragmented;The Retail Landscape Remains Highly Fragmented;Or anized Retail At Onl 5% Thou h Pro ected ToOr anized Retail At Onl 5% Thou h Pro ected To

Grow To 3 Times Current Size By 2014Grow To 3 Times Current Size By 2014

A predominantly Traditional retail landscape providesleverage for operating models of regional players


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--

Conversion ofUnbranded to

Branded

Regional

Affordability& the ValuePro osition


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Value Is Drivin Penetration and GrowthValue Is Drivin Penetration and Growth

Entry pricePrice

Price PointsAbsolute Value

Rs. 1 2 8 10 15 20

Rs.2 Rs.5Rs.3

Rs.5

.

- , .

09 Datamonitor survey on Impact of the Global Crisis on Consumer Attitudes and Behavior in India69% of respondents based their decision for food and beverages on the basis of value or cost.


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ValueValue continues to rowcontinues to row and is here to staand is here to sta

Progression of Value marketProgression of Value market Value play is a realityValue play is a reality

27%41%

Contribution of Value Player to Categories (Rs)Contribution of Value Player to Western Salty (Rs)

12%14%

19%

23%

23%

15%

' ' ' ' '

Toothpaste Toilet Soaps Cream Bisc

Small Pack TransactionsSmall Pack Transactions 95% vs 65% PI95% vs 65% PI

o ga e vs

Anchor

rem um vs

Others

r ann a vs

Parle

Price

Index

1.7 1.4 1.4

+ + +

Market

Source: Nielsen Retail AuditSource: Nielsen Retail Audit


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Today Value Is A Significant Mix Of FMCGToday Value Is A Significant Mix Of FMCGu r r w u r r w

% of Revenue from Value portfolio

Biscuits Detergent Soaps Tea Salty Bev.Snac s


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The Lower SEC Business OpportunityThe Lower SEC Business Opportunity

Lower SEC Opportunity Aspiring for More

B Brands drivin conversionsIndia Shining has changed their

on the back of valueves an asp ra ons

From To

A

Brands

Unbranded to Branded

gn cant pen s on sp rat on

TotalTotalSECSECAA

SECSECBB

SECSECCC

SECSECD/ED/E

% % % % %B Brands

68%32%

Groceries 28.7 21.8.

6 28.0 35.0

Medical 4.3 3.7 3.9 4.4 4.7

Grooming 3.9 3.2 3.1 3.2 5.3Unbranded

Investmen

ts/Savings 8.6 11.1 9.4 8.9 6.4

Source: HH Panel Branded Shift( 08/06), SECD/E, 6 Metros


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For BoP Consumers, Large Size Aspirations Are BeingFor BoP Consumers, Large Size Aspirations Are Being

Increasing move towards Premium brandsGrowing Spends On FMCG brands

o o

SKIN CARE 25 37

SHAMPOOS 21 30

GLUCOSE POWDERS 16 30LRBs 31 28

DISH WASH 28 24

TOILET SOAPS 15 20

Growth in

Avg Spends

Growth in

Avg Spends

DETERGENT CAKES / WASHIN -2 66TOILET SOAPS 8 4

DETERGENTS/W.SOA 20 20

COFFEE 7 19

WASHING POWDERS 28 18

TALCS 4 14

COOKING MEDIA 1 10

ORAL CARE 4 10TOILET/BATHROOM 2 6

ORAL CARE 1 3COFFEE -5 7NOODLES -19 15TEA 0 3

INSECTICIDES -1 4

JAMS -4 4

TEA 1 3

HAIR OILS -1 8SALT -7 5

% va ue

However, Pack Size and Price Critical

Small pack

penetrationgrowth

(small

DETERGENT CAKES/ WAS 30.8 11

TOILET SOAPS 67.0 12

SHAMPOOS 84.0 9

.

COFFEE12.4 5

BLUES/ WHITENERS 17.1 30

TEA 27.9 15

DISH WASH 23.1 40

HAIR OILS 15.4 7Source: IMRB HH PanelSource: IMRB HH Panel


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The Implications For PepsiCoThe Implications For PepsiCo


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Given The Relatively Lower levels Of Penetration,Given The Relatively Lower levels Of Penetration,ur ategor es ave uge ea room or rowtur ategor es ave uge ea room or rowt

owever, overcom ng ese ca egory arr ers w eowever, overcom ng ese ca egory arr ers w ekey to accelerating growthkey to accelerating growth

Affordability

Access Relevance


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are key, regional relevance not only recruits new

consumers, but also gives brands a chance to innovate and

connect.

However, the key to profitably sustaining a regionally-

relevant proposition, is a fundamental change in the

operating business model.

All elements of the value chain must be re-engineered to

deliver a consumer-relevant proposition that balances local

re evance w a soun va ue propos on.


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Re ional Relevance Could Be A Ke Enabler contd.Re ional Relevance Could Be A Ke Enabler contd.

Trul unlockin Local relevance will mean

Going beyond flavor-based innovation

, , ,

codes and rituals unique to each region


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r ve grea er reg ona everage orPepsiCos portfolio of Foods and Beverages

b recommendin a locall relevant roductproposition that delivers business growth


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UTTAR PRADESH WEST BENGAL ANDHRA PRADESH

TAMIL NADU

MAHARASHTRA


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Undertake a deep dive on your chosen state. Macro and socio-economic trends, penetration trends across categories Consumer outlook, lifestyle and attitudes.

Shadow a successful example of local relevance For your chosen state, track the business strategy of any brand that

has successfully leveraged local relevance I ustrate t e r u ng oc s o success

Study PepsiCos Make-Sell-Deliver model - Foods/Beverages ( Appendix A)

Undertake your secondary research on the foods and beverages category

Esomar paper on discriminating values of the 4 regions ( Appendix B)


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ra a us ness mo e or a pac agefood OR beverage product that delivers a

sustainable rowth o ortunit via localrelevance and differentiation


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Macro Environment, Industry Trends, Relevant Consumer

Energies with respect to the State of your choice

Product Strategy Overview, Segmentation, Targeting,

Packaging, Core Proposition, Potential Brand Positioning

ze o r ze

Competitive Overview Competitive landscape, Source of

Go To Market: S&D Overview, Channel Strategy

Financials: Pricing Strategy, Cost Structure, Revenue Streams


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Thank YouThank You


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Reference MaterialReference Material


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The PepsiCo MakeThe PepsiCo Make--SellSell--Deliver ModelDeliver Model


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Advanta ed O eratin S stemsAdvanta ed O eratin S stems

Strong Supply Chain NetworkStrong Supply Chain Network

45 plants across India45 plants across India

Varied manufacturing platformsVaried manufacturing platforms

Coldfill, hotfill, hybrid, asceptic, ambientColdfill, hotfill, hybrid, asceptic, ambient

PC, random & schaff extrusion, baked RBSPC, random & schaff extrusion, baked RBS

Pioneers in contract farmingPioneers in contract farming

,,

Seeds to storageSeeds to storage

Mini tuber facilityMini tuber facilityFranchise ownedFranchise owned

Oats, corn & juicesOats, corn & juices

ompany owneompany owne


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BeveragesBeverages

MakeMake--SellSell--DeliverDeliver


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The Business

Pepsi makes andsupplies concentrate

Bottling Operation

Bottling Operation

Pepsi Local BottlerJV

ma es, se s,delivers product

Pepsi & Partner

ma es, se s,delivers product

make, sell, &deliver product


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WAREHOUSING, ,

AND RETAIL

Concentrate Supply Chain Planning Product Freshness

Water

Package Handling

Filling

QualityInnovation

Carbon Dioxide

Sweeteners

Measuring Performance

Quality

SensorySensory

Quality


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Go-To-Market Strategy differs depending on Market

PLANTS AS&D

PCE DISTRIBUTION CENTERS

Wh/in Plants

Or

Separate DCs

RETAILERS W.S. AS&DMOD. TRADE KEY ACC.

AS&D

. .DIRECT DELIVERY

INDIRECT DELIVERY

Channel Segmentation


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Channel Segmentation

OUT OF HOMEIN HOME

On Premise On The Go

Hyper (> 40)

Trade

TradeTT - OP O - OP

Convenience

CVS (< 4)

uper -

Grocer

Caterin

Restaurant

Leisure SS

Cinema

Club/ Pub

Leisure

oo erv ce

DiscountersInstitutions

Education

Office

Casual Dine Fine Dine Multiplex

Food Services Leisure

QSR s F/Court Caterer Amu Park/ FEC

Railways Airport Airlines 5* Hotels


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FoodsFoods

MakeMake--SellSell--DeliverDeliver


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Distributed Manufacturing Footprint

Plants /Co-packs

Distribution

Centers (DCs)

Distributors

Kolkata

Pune

4 Co-packers:

Retailers ar a a

Erode

Rajkot

Consumer


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RANDOM EXTRUDED LINE

Latest Technology

POTATO CHIPS LINE

PACKING MACHINESPACKING MACHINES


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Win-win Self Sustaining Contract Farming Model

Quality based fixed buyback

Pay for Performance systems to

AgriCompanie

s Advantaged

supplyGovt

program

s SeedCompanie

s

Farmer FRITOLAYLocally evolvedFarmers

OrganizationBanks

Provide technical su ort and

Directly with theFarmer

InputCom anie

Govt

extension services for chip gradefarm practices.

3PServices

s rogramsupport

Partners in Progress Model

Ad t d GTM Width Vi 3rd P t DSD M d l


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Advantaged GTM Width Via 3rd Party DSD Model

Loading

GTM Split

DB DSD WS / SSGTM

Model

Company

~ 3 Plants

~ 4 Co-Packs

e ng

Cust. DC Distributor Distributor

~ 35

~ 1900

~

~ 100

~ 0.1 MM

~ 150

Delivery

Store

~ 1.3 Mn

Merchandising

Advantages: PI

Pioneer in Out of StoreMerdising

A Store outside the store

Advantages: Retailers

Merchandising and Stockrotation

Incremental volumes D str ut on reac Dr ven y

PI products

T diti l T d Th i ti t t t fi ld l l i b d 3 d


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Traditional Trade: The organization structure at field level is based on 3rd. , ,

company sales officers.

ASM/Territor Head 2nd Level

Factory

DC

Sales Executive (1st Level)

rd

Route Trainers (3rd Party)

Route

Distributor

Retailer

Rack

Area Manager


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The structure in Modern Trade at field level is based on Accounts -i.e the Chains, which are supervised by company sales officers.

Key Accounts Manager + Zonal Sales Manager

MT ASM/Territory Head (2nd Level)

MT Sales Executive (1st Level)

Factory

DC Merchandisers (3rd Party

A/C ChainWarehouses

MT Stores


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S&D Value Chain

DB(Direct Business)

DSD(Direct Store Del.)

WS / SSCosts%(Value Chain)

Retailer Margin 17%-18% 10%-12%10%-12%

Distributor Margin

Trade Spends

-

-

5%-6% 7%-8%

-Inc u ng Exp r es

Route Cost 2%-3% 1.5%-2% -

Supervision Cost 2%-2.5% 1.5%-2% 1%-1.5%

Total 25%-28.5% 23%-28% 21%-25.5%


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Local and Distributed sourcin to levera e Distributed Manufacturin1

Sourcing &RM

Footprint

Agro: Benefits of Contract Manufacturing

2

Manufacturing& Operations

Self owned facilities for Capital Intensive lines (Potato Chips / Crackers)

Outsourced manufacturing: for Traditional Category (Namkeens / Oats)

De-centralised manufacturing for Inbound and Outbound Freight Benefits

Sales &Distribution

Strong 5K Route Infra across the Country

Pioneers in Out of Store Merchandising (Racks)

Differentiated Margins for Different Channels

3

Advertising &Marketing

Powerful Brands

A&M Investments for Brand and Category Growth

4


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Discriminating ValuesDiscriminating Values

Appendix BAppendix B

Source: ESOMAR Paper Patchwork Quilt by Sangeeta Gupta, Abhijeet

Patwardhan, Seemeen Khan


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Authors foreword

discriminating values, to highlight the most

meaningful characteristics that each part of the

country s un que a out, ase on our cons era e

experience across categories and brands.

While we are aware that `re ional diversit ` exists atlevels much finer than just zonal, at a state, district

and even further, we choose to draw slightly wider

,marketer`s perspective is easiest with a zonal

perspective.

Source: ESOMAR Paper Patchwork Quilt by Sangeeta Gupta, Abhijeet

Patwardhan, Seemeen Khan


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Tangible improvementin experience

Sensory Technology

Strong

HotBright Techy

The South

Stimulation

StrikingSharp

Innovations

IndianFiber

Safety Patience

Diligence

Rationality Hardwork

Compliance

Evaluative

Steadiness

The South exhibits a distinct need for stronger


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Taste

AI North East West SouthAI North East West South

Proportion of Dust

The everyday cuisine of sambars, fried chilies, tamarind, red chilly gunpowder, theAndhra custom of green chilly accompaniment etc

AI North East West South

Penetration of Filter

Penetration of Gels 5.5 5 3.4 4.7 7.5

AI South

Mango Fav. Flavor

Tea to Total 35 4 15 46 80Source RSA 2003 Source NRS 2002

. . . . . n o ee can y 11 23

Smell

Source NRS 2002 Source Sweet tooth Confectionary U&A 2003

AI North East West South AI North East West South

,hair, the preference for sandalwood and jasmine in talcs, soaps etc

Penetration of Deos1.4 0.8 1.5 1.4 2

Shampoos 23.4 19.3 24.9 15.4 34.2

Source NRS 2002 Source NRS 2002



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Sight

The riot of colors from the lungis and saris, to the rangoli and kathakali, andeven the temples

The color, vibrance and titillation of cinema


Cinema Regular 9.9 3.9 8.6 7.5 20.9

Source NRS 2002

Touch


Proportion of Talc

(face) 19.6 3.2 8.3 22.4 48


Massaging is good

for baby's skin 34 16 36 37 62Source NRS 2002

Source Baby Care Study 2001

The custom of weekly oil massages, the interesting belief that skin benefits mostfrom babies massage v/s the Northeners belief that it is the bones; the marked

preference for topical medication for headaches and backaches

T h i d The Diligence-


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Tech is ood The Diligence

High propensity to think rational and be stringently

evaluative

tea ness t c

s u y o nves men e av or n s reg on

indicates a low risk market, with the highest preference

for savings in the post office (NRS2002)

It is not immediate success that is so captivating here,but a strong belief in working hard and waiting for the

fruits of their labor to come to them over time, unlike the

Products that have a technological edge are believed to

deliver a tangible, discernible advantage.

From two wheelers to paints, one has seen the South

quickly upgrade to technologically superior products.

North and West where the young desire immediate

success

That patience is a virtue to this populace was also seen

in a study done on home loans - people wait till they are

older before they look at property acquisition, unlike the

North.

NorthEast West South

Share of flat

CTVs in the AI

Age of recent

home-owners Delhi Bangalore

25 - 35 years 76 38

Nerve center of the IT revolution

p e 22 22 25 30


Correct recall

of softwareAI North East West South

36 - 45 years 22 46

46 - 50 years 2 16Source GFK 203

Source Study on Home loans 2003

Like to pursue

professionalcourse 21 15 19 18 29

Accessing the

Internet 17 14 14 18 23

Agree to

statement"Want to be

successful

asap" 63 68 62 72 51Source Youth Study 2001

Source Youth Study 2001


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Internal

Need toinfluence others

Outward AggressionStatus

Seeking

not soimp

Location Deference

Power-Servility

The North

Orientation

SizeNeed to

make a Dominance

IndianFiber

Straightforward Subordination

Chauvinism

Direct

of women

S mp e, Easy

Weaker position ofwomen

Societal approval is a pivotal value for the


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Societal approval is a pivotal value for the

Social approval is derived from the respect others give you due to your possession

of wealth, glamour and power. Large cars, Location of house, large size

North East West South

Large front

loading

packs/SKUs, large sizes in durable purchase

front loading

washers 53 39 36 30

Big Screen

Flat

CTVs/Total

Flat TVs 10 3 6 5

This `outward drive` is further borne out in the youth study, wherein

the North Indian youth clearly wants a

glamorous profession, quite unlike the south.

Source GFK 2003

All India North South

Agreement with

s a emen an a career

in a glamorousprofession" 10 13 6Source Youth Study 2001

Aggression - Abla Nari The attitude


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Aggression Abla Nari The attitude

The North Indian is also high on the The north is characteristically different

om nance towar s omen

needs of dominance and influence over

others. He tends to be an extrovert, is

more pushy and demanding of others

over other regions in the manner that it

relates to and treats its women

Women here seem to be under greater

w en e can e

Prevalence of the Power-Servility

syndrome

Pronounced conce t of Ji Hazuri

male

subordination and at the receiving end of

a lot more male chauvinism

Dominant culture of deference,

ingratiation and servility to people in

power

A more literal example of the subordination of

women is seen in a study on sexual habits

Largestconcentration ofthe Power Seeker

Brands positionedon macho,


Man on Top (%) 53 60 52 52 42

segment (mystery

shoppingexercises)

dominance values

do well Source Sexual Habits Study 2003


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Attracted tospecialhealth

Evolved genres of

Hypochondria IntellectualismPoorhealth

Into

fitnessand

pro ucts

Self

The East

High claimedsuffering

Spurn

IndianFiber

Emotionallyvulnerable

StrongWomen

ChildCentric

Protective

Assertive

Focus

Sensuality

The Health Ne osis Mishti Bab


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The Health Neurosis Mishti Bab

Whether rooted in inadequate

nutrition, a genetic lactose intolerance,While motherhood is revered

or whether it is `just-all-in-the-mind`

the Bengalis are certainly

hypochondriacal in their practices andbeliefs regarding health.

,

focus on the child takes on an

altogether new meaning. The

attention, pampering and

indul ence received b the

The East zone complains of the mostsevere of pain suffering. They also believe

they are the more severe acidity sufferers.

children of Bengal finds little

match elsewhere in India.

An insight neatly leveraged by

brands like Complan and Junior

compared to a 2% to a 12% elsewhere).Not surprisingly, Calcutta had the highestnumber of men who did some form ofexercisin even if it is onl a mornin walk.

Horlicks.

A study on childrens` policies

North East West South

Figures in %

Very Severe

Suffering 6 18 17 13

that Kolkatta was clearly moreoriented towards plannedsavings to meet specific needs ofthe child such as education,


Men Into Exercising 34 33 40 34 24

,etcunlike another center (Delhi)which was more excited byfamily oriented benefits.

ource

Source Wallet Watch 2004


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Quite different form her northern sister, the eastern woman has an inherentstreak of self confidence; she is assertive, outspoken and enjoys a fair

.

I think the Bengali middleclass women have greater security than the north-

Indian womanPradip Sinha, Historian

, .

A small hint of this sensuality was evident in our study on lingerie. While the rest of

the country preferred the subtler shades of white, cream and beige, the Bengali.

Figs in % Delhi Kol Mum Chen

Own Red bras 1 26 1 1

Own Red panties 5 36 17 43

Source Lingerie U&A 2002

Bengali women are also more involved in current affairs and actively

Red in the Bengali culture stands for a sign of luck, emotion, fortune and copulation.

freedom fighters than women freedom fighters from the rest of the country.This woman strength perhaps has roots in the fact that the society is astaunch worshipper of many Goddesses - Durga, Kali and Saraswati andhence respects the many forms of the woman.


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Poles apart from the dominant, aggressive, status seeking northerner, the Eastern Man is

idealistic, argumentative, lazy, romantic and a dreamer.,

literature and culture. The intellectualism that this zone has inherited is very much a partof their culture and tastes even today. Combine this with the frustrations of low incomes

and a lack of economic achievements, the male here displays strong ideologicaltendencies (often socialist), and is quite cynical. He consciously avoids overt status

` ` ` `,

Studies in the paints category indicate that while all the other zones admit to gettingtheir homes painted to impress others, this zone is the exception.

this is really our favorite past time ..we spend a lot of time debating such issues. It's a great way tospend time. Not only do we keep up with what is happening around us but also its nice to figure out who is

Findings from Hercules, a qualitative study on the Indian male

There is work around its not that we can`t find any work, but I want work that can challenge meintellectually. No point doing something that is dull

Biharis are looked down everywhere in India, we need to fight this image.. Weve to show the rest of thecoun ry w a we ve one n e pas an w a we are capa e o

In the evenings when friends meet, we very often sit and discuss culture and history.. it makes us feelvery good about ourselves


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Enjoy Seeing Money

Democratic Joy ofRespect

Independent row

Open-ness

The West

MoneyorWomen

Healthyparent-child

IndianFiber

Guileless

relationships

Travel &leisure

Simplicity

Humble

Democratic & The Attitude to


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e oc a c & e ude oga tar an oney

We observe here a far more `equal-Paiso Vadhe ane Paiso Vasool

Mone is im ortant to eo le here.rights society, there is a high degreeof respect for people acrosssocioeconomicclasses. This is evident in theprofessional ethic, cutting across

Money for moneys` sake! They like tosee their money grow and building

money is an end and achievement initself.In the west eo le en o ust

hierarchies.Our cook is called Maharaja, becausenobody can cook like him, He is themaster of the kitchen and we all

respect him like an elder of the

counting money as it grows!The north, on the other hand, seesmoney as a means to power and

status in society and it is somethinghousehold.

Women in this part of the country areindependent, empowered and activelyencouraged to manage a variety of

Hence, the practice of spendingmoney on the most coveted, mostexpensive assets.For the south money is a means to

outdoor jobs, even go out and work.The large number of women on twowheelers is evidence of this.

in times of need.The east, almost looks down on theconcept of money and materialism asbeing inferior to their main pursuit ,

a o n e ec ua ac ua za on.


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This value is best expressed through the Maharashtrian principle of Sadhi rahani aniuccha vichar translated as simple living and high thinking.

This zone is characterized by simplicity and humility of the people. Excessiveness,immoderation and extravagance are certainly antithetical to western sensibility, both in

thought and living.The other dimension of this simplicity is prudence. Prudence and a matter- of fact

percolated the very way of living, from the simple weddings to the home dcor, whichmay be elegant, but often borders on the minimalist and functional.

To one used to the grandeur of north Indian weddings, attending a Maharashtrian. .equally to the wedding expenses. The traditional dowry consists of a few fixed itemsand is, by no means, a lot. The wedding 'feast' is simple, consisting of the traditionalpuri-aloo and shrikhand served on steel thalis from which guests partake. The cocktails and drinks night preceding the actual wedding have not percolated the

.

The west is also known to be frugal in its habits. Particularly famous is the Ahmedabadi'smiserliness.

Lko Kol Ahd Cochin

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