marketing strategy of britannia executive summary
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executive summary of Britannia Industries Ltd
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#2
The company was established in 1892, with an investment of ₹265.[4] Initially, biscuits were manufactured in a small house in central Kolkata. Later, the enterprise was acquired by the Chugh brothers mainly Bhavya chugh, a renowned attorney, and operated under V.K Brothers." In 1918, C.H. Holmes, an English businessman in Kolkata, was taken on as a partner and The Britannia Biscuit Company Limited (BBCo) was launched. The Mumbai factory was set up in 1924 and Peek Freans UK, acquired a controlling interest in BBCo. Biscuits were in high demand during World War II, which gave a boost to the company’s sales. The company name finally was changed to the current "Britannia Industries Limited" in 1979. In 1982 the American company Nabisco Brands, Inc. acquired the parent of Peek Freans and became a major foreign shareholder. The contribution of this position was of Bhavya Chugh and his family.
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For a big organization like Britannia Industries Ltd, the business hugely depends on the distribution channel and the consumer attitude towards the product. In distribution channel retailers plays a very important role. While making a product a SKU (stock keeping unit) of the shop retailers think about the GMROI (gross margin return on investment) and they promote the brand which provides them highest. They expect return in the form of profit margin, company schemes, window display and reference of the shop. Among these, company schemes make the difference and are the highest sources of motivation after profit margin. Retailing demands a constant push from the company.

Marketer needs to use advertising and brand building strategies to address the discerning buyers and retail push to in different buyers. The manufacturer should understand consumer behaviour because retailers can't help quality and price. It is only up to manufacturers to deliver what consumer wants.

There is a greater need to understand the retailer behaviour. Considering them as a team, working for the company may help them to be attached to the company. There should be a feeling of belonging to the company in inner of the retailers. This can be done by setting values club for retailers so that they may exchange views with the company and help in understanding consumer behaviour.

Literature Review

A channel is the pipeline through which a product flows on its way to the consumer. The manufacturer puts his product into the pipeline or marketing channel and various marketing people move it along to the consumer at the other end of the channel.

According to American Marketing Association: " A channel of distribution or marketing channel, is the structure of intra company organisation units and extra company agents and dealers, wholesale and retail through which a commodity product or service is marketed."

Functions of Channel Intermediaries

Reconciling the needs of producers and consumers
Improve efficiency by reducing the number of transactions and creating bulk for transportation
Improve accessibility
Providing specialist services
Channel Distribution for Consumer Goods

Zero Level Channel:
Manufacturer---- consumer

(Direct marketing includes use of personal selling, direct mail, telephone selling and internet. Examples are Avon Cosmetics, Acquaguard, Amazon. Com)

One Level Channel:
Manufacturer---Retailer---Consumer

(It is economical for producers to supply directly to retailers than through wholesalers. Supermarket chains and Wal-Mart are examples)

Two Level Channel:
Manufacturer--- Wholesaler--- Retailer---Consumer

(Wholesalers buy in bulk from producers and sell smaller quantities to retailers)

Three Level Channel:
(Producers delegate the task of selling their products to an agent who contacts wholesalers and receives commission on sales. Prevalent in foreign operations)

Decisions Involved in Distribution of Goods

Customer service: What level of customer service should be provided?
Order processing: How should orders be handled?
Inventory control: How much inventory should be held?
Warehousing: Where should the inventory be located? How many warehouses should be used?
Transportation Mode: Which modes of transport should be used to transfer goods on time and without damage?
Materials Handling: How will the products be handled during transportation?
Bread Industry

The Bread industry is low - tech and low margin industry. In 1977, the Government of India had reserved bread industry for small scale industries (SSI). The then existing two large units viz., Britannia Industries Limited and Modern Food Industries Ltd. were however allowed to continue on the basis of their respective existing installed capacity.

35 percent of the total production comes from the small scale sector with about 1500-1800 units in operation. The organized sector accounts for 20 percent of the total production. The balance production comes from the un-organized traditional bakery units operating under cottage/tiny sector numbering approximately 65000 units in the country. The two major players i.e. BIL & MFIL are having a market share of 10-12 percent and 7-8 percent respectively. Apart from these two, there are few large regional players such as Spencers in South India, Vibbs in Maharashtra, Harvest Gold and Perfect in Delhi, etc.

Bread being consumed by wide cross - section of the society, the marketing of bread is based on a strong retail distribution network which services the customers. As bread industry is a low margin business, cost control is crucial in sustaining profitability in the long run.

The total market size of bread industry is approximately 15 billion standard loaves (SL) or 1.5 million tonnes. The current growth is around 5 - 6 percent p.a. and is expected to remain in the same level in the medium term. Citing the financial distress faced by the bread industry, All India Bread Manufacturers Association sought assistance from government and sought inclusion of bread in Centre-sponsored schemes.

Government should extend timely assistance to the ailing industry, which is employment oriented and productive users of agriculture," AIBMA president Vinod Tiwari said. He said the government should also include bread as a food item in the Mid-Day Meals Scheme and Integrated Child Development Scheme.

The government should assist the bread manufacturers by making bread as a compulsory food item in the mid-day meals Scheme," he said. The bread industry also demanded preferential allotment of wheat to the industry at export rates that could help the growth of the industry.

Tiwari stated escalating prices of wheat flour has lowered profit margins resulting in closure of over 250 small scale bread units, while over 1,000 units are on the verge of closure. "The perennial problem of low margin and stiff competition, short shelf-life, unprecedented escalation in the cost of fuel, transportation, other ingredients have added to the woes of the industry, eroding its competitive capabilities," he added.

There are three segments in the Indian bread industry such as Regular, Popular and Nutrichoice. Britannia's major strength has been to build presence across all price segments. They have succeeded in doing so in a well-balanced manner, each segment contributing approximately a third of revenues. Britannia approaches the high-volume, low-price category, through its Regular Bread. Two other major players are in competition. One is Perfect and other is Harvest in NCE region, India

Today Britannia is a market leader in terms of market share and has appreciable momentum in the form of strong revenue growth while maintaining a respectable return on sales. To reach this position, Britannia's strategy has been one of incremental rather than radical innovation. From a branding standpoint, their recent strategy has been to leverage well-established brands, rather than establish new ones.

Britannia Industries has taken full control of the Bangalore-based bakery foods retailer Daily Bread. Britannia, which had acquired 50% stake in June 2006, has now mopped up the remaining shares, taking over the operational reins fully from the original promoter Arjun Sekri.

"We had an original plan to take full control of Daily Bread by 2011, but we have now advanced that," Vinita Bali, MD of Britannia Industries, told ET. Daily Bread is a manufacturer and retailer of bakery products, including specialty breads, across the institutional and retail segments. It also operates standalone retail outlets and kiosks in markets like Bangalore and Goa, which is now likely to be scaled up. Daily Bread is as an incubation venture that it is currently being perfected in order to be rolled out once the external environment improves, Ms Bali added.

"We are not talking about a national rollout because this is still not a venture that will add 'numbers' to Britannia top line. It is not there yet," she explained Britannia is now also taking the franchise route to expand the retail store footprint. Daily Bread has 11 standalone outlets in Bangalore and one in Goa, where it recently entered through a franchise route.

Daily Bread had experimented with several formats, including a bakery retail store and one with a cafe-like ambiance. "While this gave us an opportunity to dabble in retail and shape the business, we realized the economics of a quick-service restaurant is entirely different as it requires a chain of outlets and resources to man it. Bakery is our core competency and our focus will be on intensifying this facet of the brand," Ms Bali said.

Daily Bread has also tied up with large format retailers such as Spencer's to set up shop-in-shop formats and is currently banking on a saleable kiosk model. Britannia will, however, not look at rebranding Daily Bread as it is already an established brand name, positioned one step above regular bread brands.



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