2. SECTORIAL INFORMATION
• Contribution to the worldwide economy
INDIA, 17
US, 46.6
CHINA, 65.6
JAPAN, 71.9
UK,
87
TOTAL REVENUE IS 288.1 BILLION DOLLARS
USA INDIA CHINA JAPAN UK
4. GROWTH OF FMCG SECTOR
0 5 10 15 20 25 30 35 40 45 50
FINANCIAL YEAR 2009
FINANACIAL YEAR 2010
FINANACIAL YEAR 2011
FINANCIAL YEAR 2012
FINANCIAL YEAR 2014
24.2
30.2
34.8
36.8
47.3
GROWTH PATTERN OF THE FMCG SECTOR FOR PAST 5 YEARS
GROWTH PATTERN WITH THE HELP OF CAGR IN TERMS OF DOLLARS
Rural areas expected to be the major driver for FMCG, as growth
continues to be high in these regions. Rural areas saw a 16 per
cent, as against 12 per cent rise in urban areas.
5. PORTER’S FIVE FORCES MODEL
• Rivalry among competitors:
Its very fierce as market is saturated & all sorts of tactics like
price wars, promotional activities etc are done to snatch the
market share.
• Potential entry of new entrants:
Highly viable as price effectiveness is the only factor.
• Substitute products:
Plenty of substitute products are available.
• Bargaining power of suppliers:
Low as a number of suppliers are present for this sector.
• Bargaining power of consumers:
Very high as switching costs are very low & customers are
never reluctant to try new things off the shelf.
6. COMPANY ANALYSIS
• Agro Tech Foods Limited is a company with a dominant market
position in the edible oils and branded foods sector, in India.
• The company was incorporated in 1986 as ITC Agro-Tech to enter the
oil seed and edible oils business. In October 1997, ConAgra acquired
a 51.3 per cent stake in the company through its investment arm,
CAG-Tech Mauritius. At present CAG-Tech Mauritius holds 49.24% of
the total paid-up capital of the company.
• The company has well known brands like Sundrop, Health World, ACT
II and Rath in its portfolio. The company has two business segments
namely Branded Foods Segment and Bulk and Processed
Commodities Segment.It has market share of 13.8%.
• A new initiative for manufacturing Instant Popcorn (IPC) in an location
in Uttaranchal was successfully completed in February 2006.
10. PEST ANALYSIS
• Political: Various factors such as governmental implications on production
and distribution of the product can have an influence on the company.
• Economic: If the buying power of the consumer decreases then they are
deemed to search for cheaper substitutes such as canola oil. This would
decrease the demand of the product and would also bring about a change
in the overall company.
• Social: Social factors such as health consciousness, esteem in usage of
premium goods, increase in the education levels of the consumers would
help the company focus on its premium or top line products and on the
other hand negative social factors like rumors will spoil the company’s
brand image and hamper sales.
• Technological: These factors have a direct implication on the production
systems as well as on the upliftment of the product. Hence its important to
keep up with the technological advancements.
11. BCG MATRIX
• QUESTION MARK: Sundrop Super light, olive oil. They have low
market share & high potential of market growth too due to rising
number of health conscious consumers.
• STAR: Sundrop Heart. This product has been in the market since the
initial years hence it has a large market share and with relative pricing
and features it has a scope for growth too.
• DOG: Sundrop Slim lite.It has low market share as well as low market
growth due to it being a spray oil having less relevance in the Indian
market.
• CASH COW: Sundrop peanut butter. The only product of its kind. It
has good market share but low market growth due to Indian taste
preferences.
12. PLC OF SUNDROP
•Sundrop is in the maturity stage as it is seeing a stable degree of
sales.
•Secondly further penetration is not happening at this time.
• The company may be coming up with new edible oil variants but
sundrop oil is not bringing about any change.
• This shows that sundrop oil is in the maturity stage as further no
decrease in sales is happening and with an upsurge in the number
of health conscious people the number of consumers is constantly
increasing.
13. MARKETING & PRICING STRATEGY
• Sundrop adopted strategy and execution in two folds:
1. Position Sundrop as the healthy oil for healthy people
2. Ensure that this did not in any way erode the delivery of the
'taste' benefit
• Pricing Strategy:
1. Since Sundrop oil commands a premium of 15 per cent over
other edible oil brands, the company should be able to cater
to the demand of the all the customers from different
purchasing power groups.
2. Sundrop launched three new products:
Sundrop Goldlite - Rs 59 per litre
Sundrop Nutrilite - Rs 59 per litre
Sundrop Superlite - Rs 67 per litre
14. DISTRIBUTION STRATEGIES
'FEET ON THE STREET‘ Company is in the process of increasing retail
distribution and consumer awareness of the product. Company has
recruited salesmen and consultants who are responsible for increasing the
distribution and display of products across the country. Also company has
hired rickshaw pullers on a monthly salary to distribute products which
resulted into cost-effective way to expand.
15. ADVERTISING
• ADVERTISING GOALS:
1. Position Sundrop as the healthy oil for healthy people.
2. Ensure that this did not erode the delivery of the taste benefit.
3. Positioning had to be perceptually as far away from competitors.
4. Young, modern and premium feel.
5. Execution had to be distinct and original to stand out from the
clutter.
• MESSAGE:
1. Was related to maintenance of good health
2. Was applicable to all members of the family
3. Was characterized by lively energetic people
4. Thus the message and (positioning): ‘The Healthy Oil for Healthy
People’
16. MEDIA & MEASUREMENT OF ADS
• MEDIA:
Television ad for 30 seconds & Print Ads
• MEASUREMENT:
1. Within 6 months, Sundrop became the largest selling refined
sunflower oil.
2. Redefined the category and expanded the Sunflower oil
segment from 2.71% to 23% in 6 months, and 42% in 1997.
3. Still the largest selling sunflower oil brand holds 15% of
branded oil market.
4. The ad was shown for over 10 years.
17. GROWTH DRIVERS & OPPORTUNITIES:
• Growing Population Base
• Urbanization & Evolving Eating Routines
• Rising Preference for Healthy Oils'
• Escalating Incomes
• Surging Modern Trade
• Low Per Capita Consumption
• Rising Share of Branded Oils
• Presence of increasing health issues amongst Indians.
• Increase in import of word foods in the country.
• An increasing trend of using different edible oils for
different foods.
24. SOURCES
The following have been used as reference points to compile
this project.
www.Aceanalyzer.com
www.ndtvprofit.com
www.economictimes/indiatimes.com
www.ibef.org
www.atfoods.com
www.mbaskool.com
Marketing Management by Philip Kotler, Koshy & Jha
Financial Management by I.M Pandey