A MANAGEMENT RESEARCH PROJECT- II ON “Study of Functional Area of Ramdev Food Products Pvt. Ltd.” In the partial Fulfillment of the requirement of Master of Business Administration (M.B.A.) Program (2002-2004) of North Gujarat University, Patan UNDER THE GUIDENCE OF: Dr. Hitesh Ruparel Head Of The M.B.A. Department PREPARED BY: Mahesh Patel (29) Rajesh Prajapati (42) Vishnu Prajapati (44)
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A
MANAGEMENT RESEARCH PROJECT- II
ON
“Study of Functional Area of Ramdev Food Products Pvt. Ltd.”
In the partial Fulfillment of the requirement of Master of Business
Administration (M.B.A.) Program (2002-2004) of North Gujarat University,
Patan
UNDER THE GUIDENCE OF:
Dr. Hitesh Ruparel
Head Of The M.B.A. Department
PREPARED BY:
Mahesh Patel (29)
Rajesh Prajapati (42)
Vishnu Prajapati (44)
S.V. INSTITUTE OF MANAGEMENT
Serva Vidyalaya Campus,
B/H Railway Station, Kadi
PREFACE
We have to undergo a Micro Analysis project for a particular organization in
Management Research Project subject. After doing a lot of brainstorming we
choose Ramdev Food Products Pvt. Ltd. as our organization and studied it
under the title “study of functional area of Ramdev Food Products Pvt. Ltd.”
In our project we studied the market size of Ramdev Food Products Pvt Ltd.
Its total product range for domestic and international market. Its distribution
network etc.
This project will really help us in the future a great deal.
ACKNOWLEDGEMENTS
Preparing a project of this nature is an arduous task and we were fortunate
to get enough support from a large number of persons to whom we share
always remain grateful. We would like to record our gratitude to Mr. D.
Souza & Mr. Nikhil Pandya for allowing us to this project.
We are also desirous of placing on record profound indebtedness to Mr.
Hitesh Ruparel & Mr. Bhavin Pandya , faculty member, S. V. Institute of
management , for the valuable advice, guidance, precious time and support
that he offered.
Last but not the least, we would also like to thanks all the respondents for
giving us their precious time and relevant information and experience, we
require which this project would have been a different story.
MAHESH PATEL
VISHNU PRAJAPATI
RAJESH PRAJAPATI
CONTENTS
ABOUT INDUSTRY
Facts about Spices Exports
About Packed Spices Industry
Major Competitors
INTRODUCTION TO RAMDEV
History
Phases of Development
RESEARCH METODOLOGY
1. MARKETING DEPARTMENT
Introduction
Market Segmentation
Packaging
Distribution
Pricing
Product Launch & Withdrawal
International Distribution Network
2. PRODUCTION DEPARTMENT
Purchase Of Raw material
Product Range In Indian Market
Product Range In International Market
Manufacturing Process
Hierarchy in Production Department
Role of Production Manager
Other Important Points
3. HUMAN RESOURCES DEPARTMENT
Manpower Planning
Recruitment & Selection
Training
Performance Appraisal
Internal Mobility
Absenteeism
Working of E.S.I. Scheme
Study of Provident Fund Scheme
Labor Turnover
Leave Encashment
Grievance Handling Procedure
Time Keeping
.
RAMDEV HISTORY
India, the Queen of Spices, has always attracted the world with her exotic
masalas. In fact, the connection goes back many centuries. To the time when
travellers like Vasco da Gama and Columbus were still exploring the
geography of the Earth. Even then, the mystique of Indian spices magnetised
them to India and paved the way for a new chapter to be written in the annals
of time.
The lure of the unknown', which repeatedly brought visitors to the Spice
Land, was the presence of nature's rich elements in those fresh and highly
aromatic spices. Spelling magic and carrying an enviable aura, they left
people spellbound.
Ramdev has preserved the same values in all our products ever since we
started as a small unit in 1963, in Ahmedabad, India. A small step became a
giant leap in no time. But there was a binding force, a commitment that
helped us keep our promise of purity and freshness in our products for all
these years. Our immense belief in the philosophy of 'reaching a customer's
heart through quality' has enabled us to spread the rich Indian heritage to
millions of homes all over the globe. And that’s our pride. Indian food. The
Indian way.
Today Ramdev is a very familiar name in Gujarat as well as in other States
of the country.
PHASES OF DEVELOPMENT
Phase 1
In1963,Mr Rambhai patel installed a grinder at Madhupura where he used to
grind the whole spices into powder for customers.
Phase 2
In 1967, he started to offer whole spices like chill, turmeric and coriander
seeds also. He also started selling their own grinned masalas in loose packs.
Phase 3
In 1989, Ramdev Food Products Pvt. Ltd. Was incorporated. At that time
they started selling their spices in boxes and poly pouches. They were the
pioneer in selling the spices in polypouches as they were the first to do that
in the country. Spices such as chili, haldi were introduced in poly pouches.
Phase 4
In 1991, company launched Blended spices i.e. Mixed Masala and then
Ready To Eat i.e. instant Mix in the market.
Phase 5
In 1992, Hing was launched which added to the product range.
Phase 6
Launched Whole Masala In 1998
The factory is located at Changodar. This location was ideal because of sales
tax benefit and also due to nearness of the Ahmedabad city.
Ramdev sells its masala and spices under three category:
1. Whole Spices
2. Basic Powder Spices
3. Blended Spices
According to the opinion of Ramdev Basic Powder Spices have the huge
market
At present company sells its products in Gujarat and 14 other States of the
country. Southern Region is not catered because these people prefer mainly
home made masala.
All the products except Instant Mix and Blended Spices are Agmark.
The company has its own Quality Control and Research and Development
Lab where all the ingredients and finished goods have to undergo strict and
through examinations. Due to this reason Ramdev Products have maintained
the highest quality standards.
RESEARCH METHODOLOGY
Objective
To study the functional area of Ramdev Food Products Pvt. Ltd.
Information need:
Information about
Production Department
Marketing Department
Human Resources Department
Distribution network of product
Size of the market
Organization History
Sources of data:
Generally these data are to be collected from Internet
From marketing manager
INTRODUCTION
For the success of any FMCG company marketing function plays a vital
role. Marketing is the process of planning executing the conception, pricing,
promotion and distribution of goods services and ideas to create exchanges
with target customers that satisfy customer and organizational objectives.
We will be taking care of various aspects of marketing like advertising and
promotion, sales and distribution, pricing, packaging etc. with respect to
Ramdev.
MARKET SEGMENTATION
Ramdev sells three categories of masala and spices into several of the
country.
The following are the different places were Ramdev products are sold
1. Gujarat
2. Calcutta
3. Konark
4. Maharastra
5. Utter Pradesh
6. Bombay
7. Vidharba
8. Nagpur
9. Orissa
10.Rajsthan
11.Malava
12.Pune
13.Howrah
14.Delhi
15.Himalaya
16.Bihar
The southern region is not catered as they have a habit of using home made
masala. Different size of packing is used for different types of customers.
Different type of packing starting from 15gms, 25gms, 50gms, 100gms,
200gms, and 1kg are available
in the market for the convenience of the customer.
According to the survey 500gm packet of chili is the fastest moving in the
market. As far as Ramdev is concerned 70 % of the Ramdev turnover is
from chili.
Considering in the the loose market chili accounts for the highest turn over
with 70% to 80% varying from State to State.
In the Rural market chili accounts for the highest turnover 80% in the loose
masala market.
Looking at the trend of the last five years, packed masala has gained
importance and is growing in the market. Before 95% was loose masala
market, compared to today’s 70% to 80%.
There is very slow growth rate in the masala. The growth rate is estimated
to 1% to 2% every year.
Ramdev started, pioneered and are the market leader in polypouches.
At the National Level Ramdev is the leader in chili powder and Everest and
MDH are the leaders in Blended masala.
DISTRIBUTION
At Ramdev there ar4e two types of distribution channel existing for Gujarat
and for states other than Gujarat
Gujarat (2Leval channel)
Company
Dispatch Distributors Retailers Consumers
Department
Outside Gujarat State
Company
Dispatch C&F Agent Distributors Retailers
Consumers
Department
Strength
Total C&F Agents : 15
Total Distributors : Gujarat: 200
OGS : 550
1 Appointment of Distributors
Distributors are the main role players. Good and dedicated distribution
Would be a boon for the company. Therefore members of it must be selected
properly. Company has framed a definite policy to appoint distributors.
Distributor is not appointed purely on the basis of geographical
regions
i.e. on town level but the local businessman of that particular market
is that purpose.
Whenever the company wishes to appoint a distributor, it advertises in
dailies
And invites end businessman of that particular region to make an
application.
If any distributorship becomes vacant then within 5-6 days other
players in the market come to know about the vacancy and make the
application at their own.
On getting the application the company scrutinizes them and if the
qualification meet requirement then a meeting of company official is
arranged with him. First preference is given to the people having the
distribution experience.
At the meeting he is informed, explained and guided about the
company’s strategies about selling and distributors is checked.
If he assents work according to the guidelines of the company and if
he is adept, he is listed.
Then company’s supervisors go and thoroughly check in person his
shop godown, selling & distribution arrangement, experience of
distribution, personnel, financial capacity, goodwill, other agencies
handled, knowledge of the distributor etc. is checked.
After giving due considerations to all above points company’s senior
officials meets and select the distributor.
After taking the final decision regarding appointment, the selected
distributor is asked to meet in person.A written assurance with his
firm’s stamp is taken on all points which he will work upon.
Following points are specifically discussed.
1. Who will be responsible for distribution of product?
2. On which days will the distribution be done?
3. How will he do the distribution?
After appointment, if necessary the company the gives training in
distribution process. He then has to contact each & every retail outlet
(grocers, provision stores etc.) in his region and prepare their list,
which is to be filed with the company.
When be sends the amount of deposit, appointment letter is forwarded
which contains all information regarding area of his operation.
Initially, after appointment, the company deals on advance basis for
the first 10 dealings.The payment are done according to the normal
payment policy.
2 Guidelines to Distributors
Following are the points to be specifically noted and practiced while doing
distribution and selling of Ramdev product
Distributor should make a list of all (large &small) out l/’;[p-0ets, i.e.
retail stores selling the product &remit to the company.
Each distributer must sell the product in person in the market on fixed
days once in a week.
He must do the work of selling &disrtibotion according to company’s
policy. If for any reason he fail to make a call on certain fixed day
then he must write to the company.
If he wants to start any other business then he must get the permission
of the company.
All distributors must prepare stock statement for each and every
product specially stating opening stock ordered stock total stock sales
&closing stock.
The distributors must keep the stock of 7days considering average
sales of the week . he must fill up company’s order from stating
closing stock on a fixed day of the week. The co. issues 100 order
from to the distributors.
Every retailer should be given stock after considering his average
sales. No one is allowed to keep the stock of more than 2 week.
Every distributor must adhere to payment policy framed by Ramdev.
Once in a week sales Representative goes &check distrbutorship
according to the convienence of the co. the objective behind the visit
is to see that the policies are being given concrete shape ,to see
whether the pop material is being properly used . the sales
representetive also see the sales promotion schemes and also the
crecord keeping and sending by courier.
During his call the sales representatives should check the stock &see
that the old stock is slod first. He must find out average sales and
supply accordingly .this measure will prevent over piling of
stock&consumer will get fresh product.
The distributorsmust give guidelines to the retailers.
Each distributors must fill up the retail card . he must maintain a card
for each retailer to whom he supplies .in the card he must write
partuculers of purchase made by retailer of prducts from such cards
information of retail purchase and sales can be known.
Distributorsare also allowed to do retailing provided they sell it on the
printed price.
Policy regarding deposit
The amount of deposit is finalized after considering the potential
sales of that particular region . the maximum amount of deposit is
Rs25000 in case of a good urben center.
Amount of deposit stays with the company till party remain s
distributors of the company . interest at rate at the rate of 12%is
paid to the distributors on the amount of diposit .
Amount of interest is sent to the distributors at the end of every
financial year. When the distributorswants to stop working for the
company ,his deposit is returned on the same day with the interest
till the day . there is no penalty on ceasing to be distributors even
though it harmed the business till the new distributors are
appointed.
Margins to channel members:
Table showing margins to channel members(% sales)
PRODUCT DISRTBUTOR RETAILERS
Gujarat OGS Gujarat OGS
CTC 5 7 10 15
Premium
masala
8 10 17 20
Instant Mix 7 13
Whole spices 5 10
The C&F agent are paid 1.5% on sales . they are also reimbursed their
expenses relating to the operation of company’s product.
Policy Regarding Supply & its Payment:
Payment should be made within 7 days of the date of supply
through demand draft. If the payment is not made on made on time
on time for quite a few times, then in future he will have to pay
advavnce draft with order . actually for new distributor the first 10
dealings are done on advance basis only.
Credit period of 7 days is for one supply . another supply will only
be made if the payment of the prior one is made.
If the payment is made after the complation of 7 days then
company will issue adebit note having interest charge at rate of
24%p.a.
If any distributor will not maintain appropriate stock of necessary
product then his area of opretion will be reduced and other
arrangements for distribution will be made .
Punishment on late payment ,cheque bounce, ready retailing ,stock
out, etc.is 1%to 2% of turnover. But generally it is not
happepeningand sometimes if it happens then warning is given and
issue is settled.
Policy regarding loading rickshaw:
Distributor should take permission of the company before
distribution with loading rickshaw.
Rickshaw should be of the ownership of the company. Rental
rickshaw is not allowed.
It must be painted according to company’s specification.
Design is same at all India level. It should be in good condition so that
regular supply is possible.
If all above pints are taken care of then monthly allowance is
negotiated on the individual basis.
After preparing reports payment of the amount is made at the
end of every three months though credit notes.
Replacement Policy:
Products of Ramdev remain fresh in the pack for a long
period so problem of replacement generally does not arise.
Then also if the replacement is to make then following points
must be considered.
If the pack is torn then the distributor can replace the
pack after checking it.
Expiry date is printed on every packet so, every
distributor before supplying a new stock must check old
stock at retailer and see that it is sold first. This will
reduce the chances of reaching bad products sto
consumers.
If such old products are found with the retailer then the
distributor should replace it.
Then after negotiating the genuineness of the case
company will decide whether replacement should be
given to the distributor or not.
Company’s policy for retailers and consumers is to
replace packet for packet.
Each month replacement must be done on the end of
each month. If the goods are not selling then the
company is ready to take back the goods but only before
the expiry date.
There is no replacement to be done after the expiry date.
Policy Regarding Complaints:
Company keeps strict quality control so complaints are not
likely to come.But if some complaints do come then the
distributor should do the following.
Take name and address of the complainer.
Name and address of the retail outlet from where the
customer has purchased the pouch or packet.
Name of the product its manufacturing date, batch no etc, of
packet which complain has arisen.
Types of complains as decided by the company and the
distributor.
Distributor should store such packets separately and show
them to the company’s sales representative when he visits
them.
Pouches damaged by rats at retailers or distributors will not
be replaced because it is not the fault of the company.
Each month replacement must be done on the end of each
month If the goods are not selling then the company is ready
to take back the goods but only before the expiry date.
There is no replacement to be done after the expiry date.
Policy Regarding Complaints:
Company keeps strict quality control so complaints are not
likely to come.
But if some complaints do come then the distributor should do
the following.
Take name and address of the complainer.
Name and address of the retail outlet from where the
customer has purchased pouch or packet.
Name of the product, its manufacturing date, batch no. etc, of
packet which complain has arisen.
Types of complains as decided by the company and the
distributor.
Distributor should store such packets separately and show them
to the company’s sales representative when he visits them.
Moreover, in case of Instant Mix if the customer does not get
results as promised by the company and he complains, then
company sends a cook to the customer’s house and satisfies
him.
In this way doubts of the customers are removed and through
guidance complaints are reduced.
Price Change Mechanism:
Prices of products fluctuate on the basis of prices of raw material in
the market; if the prices of the raw material go up in the market the
company will accordingly increase the prices of the product and
vise-versa.
When prices are increased:
No prior information of the price rise is given to the distributor.
But when the price is increased, he will be a supplied product at the
prevailing price.
The distributor is supposed to follow the following steps in case
of price rise:
Distributor and retailer must sell their stock at the price that they
have got or at the price on the packet.
Distributor should intimate to the retailer that he would supply the
stock at a price at which the company gives him. Even then if the
dispute arises between them, it is the responsibility of the distributor
and the company will not compensate for that.
When prices are reduced:
When prices of any product are to be reduced, the distributor will
be informed about in 7 days before that price comes into effect so
that he can sell of his stocks.
He must ask the retailers to sell of f their stock as soon as possible
to avoid possible losses.
If the retailer has more stock then the distributor must make
arrangement for sale. He must take it from the retailer and supply it
to someone who has faster turnover.
Distributor must see that the old stock is sold first and do not
make a fresh supply till then. Because of this there won’t be packet
with two different prices with the retailers.
Company will not give price reduction on old stock. So he must
do his work carefully.
Reimbursement of Expenses:
It will be refunded on the real bill and not if distributor does not
have the receipt.
He must send such a receipt to the company within 15 days of tax
payment along with the following particulars:
Bill No.
Amount of Bill
Rate of tax
Amount paid as tax
Company will refund this amount every three months of the credit
note. It will deduct this credit note amount from the new payment.
Policy Regarding Sale of Other Company’s Goods.
When the distributor wants to sell the products of the other
company besides Ramdev Food product Ltd. then he must write to
the company He must clarify the following points:
Name and products of the company with which the distributor
wants to work.
Who are the persons reponsible for the new assignments.
Does the distributor has a separate godown and delivery vehicle.
Company then will call him and negotiate the situation with him
give further decision. He will be allowed to take up new work only
if company assents him in writing.
Cancellation of Distributorship:
Cancellation of distributorship can take place in two ways:
If the company observes that the distributor is not adhering to
company policy then company is in a position to cancel the
distributorship.
The Distributor has the liberty to leave distributorship. On
cancellation deposit is paid back to distributor and no harsh steps are
taken or punishment is given
Policy Regarding OGS
Due to the difference in yearly consumption attempt, controlling and
coordination problems relating to OGS operations, there is an addition of
one layer in distribution channel. That layer is of carrying and forwarding
Agent.
Except following differences, in case of C&F Agent the appointment policy
is same as that of the distributor In OGS financial standing is of utmost
importance. The other criteria of major importance are manpower and
degree of personal involvement of C & F Agent.
The additional chain of C & F Agent in responsible for the availability of
goods to distributor and stockings of goods. In short the services given by
him are:
>Providing go downs for stocking
>Dispatch of goods and collection of payments.
>Provide an office to sales supervisor and manager of the company.
Other important issues:
>C & F Agent cannot keep the products of the competitors of
Ramdev.
>The telephone expenses, go downs keeper salary, transportation
expenses and computer operator salary of C & F Agent are
reimbursed.
>C & F Agent operating for more than one product then
proportionate expenses is reimbursed.
>In Gujarat the distributors of CTC, whole spices, instant mix, hing
and garam masala are different. But owing to fewer turnovers and
less packaging range. (Fewer products offered in OGS) so, in OGS
distributor is allowed to handle more than one product In case of
OGS rate of interest on deposits is at the rate of 15%.
Different marketing flows in marketing channel of Ramdev: