UTSAV-KEVENETR AGRO

1

A REPORT

ON

“AN ANALYSIS OF

DISTRIBUTION MECHANISM

& COMPARATIVE ANALYSIS

OF COMPETITORS OF

UTSAV”

Submitted by:

SWATI SAMANT (09BS0002511)

KEVENTER AGRO LIMITED

2

A REPORT

ON

“AN ANALYSIS OF DISTRIBUTION

MECHANISM & COMPARATIVE ANALYSIS

OF COMPETITORS OF UTSAV”

Submitted by:

Swati samant (09bs0002511)

KEVENTER AGRO LIMITED

A report submitted in partial fulfillment of the requirements of MBA Program of the ICFAI

University, Dehradun. COMPANY GUIDE: FACULTY GUIDE:

MR. ARUP CHAKRAVARTY PROF.ANUPAM GHOSH REGIONAL SALES MANAGER FACULTY MEMBER

(SALES & DISTRIBUTION) ICFAI BUSINESS SCHOOL

KEVENTER AGRO LIMITITED KOLKATA

DATE OF SUBMISSION: 14/05/2010

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“Industry competition can be beaten with a focus on distribution channels,

efficiently aligned supply chains and retail visibility.”

- Ramesh Chauhan in 4 Ps,

Chairman, Bisleri International

“Most visionary companies don‟t just exist to „be a company‟; they exist to do

something useful. The continual stream of great products and services from highly

visionary companies stems from them being outstanding organizations, not the

other way around. All products, services and great ideas, no matter how visionary,

eventually become obsolete. But a visionary company does not necessarily become

obsolete, not if it has the organizational ability to continually change and

evolve…”

-James C. Collins and Jerry I. Porras in Built to Last

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ACKNOWLEDGEMENT

While undergoing my internship at Keventer Agro I underwent the rigor of professional

environment both in form and substance. In the process, it provided me an opportunity to satisfy

my inquisitiveness to know more details, exposed me to technical skills, and helped me to

acquire these skills by continuous interaction with professionals. A project of this nature calls for

encouragement from many quarters and I would like to express my gratitude to all those who

have shaped my understanding through their rich and varied contributions.

I am deeply indebted to and like to thank Mr. Arup Ratan Chakravarty (Regional Sales

Manager); Prof. Anupam Ghosh (Faculty Guide from ICFAI Business School Kolkata); Mr.

Ankan Chatterjee (Territory Sales Manager); Mr. Awadhesh Jha (Area Sales Manger) and Mr.

Shubhi Pal (Area Executive). Without their able support and guidance the project would have

been half done.

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TABLE OF CONTENTS:

Acknowledgement 4

Abstract 7

1.Introduction 8

1.1 Keventer Agro- A Brief Profile 9

1.2 Product Portfolio 10-12

2.0 Keventer’s Foray into Edible oil Segment 13

2.1 Edible oil industry- An Overview 13

2.2 PEST Analysis of Industry 14

2.3 UTSAV 15-16

3.1 Objectives of the study 17

4.1 Research Methodology 18

5.1 Objective 1- Distribution network and

Distribution mechanism 19

5.1.1 Discussion on Objective 1 19-25

5.1.2 Key Findings 26

5.2 Objective 2 – Competitors analysis 27

5.2.1 Discussion on Objective 2 27-28

5.2.1 (a) Engine – Key Findings 29

5.2.1 (b) Fortune – Key Findings 30

5.2.1 (c) Bullet – Key Findings 31

5.2.1 (d) Kalash – Key Findings 32

5.2.1 (e) NatureFresh- Key Findings 33

5.2.1 (f) Dhara - Key Findings 34

5.2.1 (g) Other competitors - Key Findings 35

5.2.2 Competitors Analysis – A Comparative

Study 36-37

5.3 Objective 3 – Consumer Survey 38

5.3.1 Discussion on Objective 3 38-45

5.4 Objective 4 – Retailers/Wholesalers

survey 46

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5.4.1 Discussion on Objective 4 46-52

6.0 SWOT Analysis of Utsav 53

7.0 Recommendations 54-55

8.0 Conclusion 56

9.1 Questionnaire- Consumer survey 57

9.2 Questionnaire – Retailers/Wholesalers

survey 58

10.0 References 59

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ABSTRACT

This report is on analysis of distribution channel as well as distribution mechanism of Keventer’s

mustard oil- Utsav (Keventer Agro Limited) and a comparative study of its competitors has been

done as a part of Summer Internship Program.

In this project, I covered the entire network of distribution chain that is of C&F agents, consignee

agents, wholesalers / stockists & retailers (kirana shops, supermarkets) of different areas of

Kolkata. For this project, I went to different markets of Kolkata (Park Circus, Rajakatra,

Gariahaat, Shovabazaar, Kidderpore, Behala, Ultadanga, Salt Lake and Kakurgachi) and

conducted various surveys. I covered the region of Howrah district also and found out the

strategies of Utsav’s competitors in different areas as well. I went on to various retail outlets

(Food Bazaar, Future group-Pantaloons, Spencer, 6 TEN, Arambagh) for Utsav which comprises

the ‘Modern Trade’ category. I found out some unique demands in the markets of Howrah.

Though most of the markets of Kolkata show demands in accordance with the consumer segment

present there.

On the basis of my key findings, I did a SWOT analysis for the product and also did a

comparative study with its competitors in this report. I also found out the salient features which

influences this mustard oil commodity industry and did a PEST analysis for it. At the end of the

report, I gave my recommendations based on the key findings throughout the internship period,

on the basis of which the company can accordingly plan its strategies in future.

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1.0 INTRODUCTION

This project involves an analysis of the marketing process of Keventer’s mustard oil- ‘Utsav’, its

distribution channel and a comparative study with its competitors. In this project, I covered

different areas of Kolkata (Park Circus, Rajakatra, Gariahaat, Shovabazaar, Kidderpore, Behala,

Ultadanga, Salt Lake and Kakurgachi) and some areas of Howrah district (Makardaha, Domjur,

Bankra, Jagdispur and Gorgachhia). This project also covers the modern trade retail outlets of

Kolkata (Food Bazaar, Future group- Pantaloons, Spencer, 6 TEN, Arambagh). Keventer has an

effective distribution chain for Utsav – which is through a complex network of C&F agents,

consignee agents, wholesalers / stockists & retailers (kirana shops, supermarkets). Around 65

retailers and wholesalers of the above areas and 52 mustard oil consumers were surveyed

(through questionnaires and interview) in this project.

Today’s industry competition can be beaten with a focus on distribution channels, efficiently

aligned supply chains and a good retail visibility. The mustard oil brand ‘UTSAV’ has been

facing a fierce competition in Kolkata from the national brands like Engine oil, Fortune,

Naturefresh, Kalash and from some other local brands like Tripti, Panna etc. So it becomes

extremely important for Keventer Agro to develop an edge with its widest retail presence and an

efficient distribution chain. Demand for the product varies with the changing markets and with

increasing purchasing power of consumer. So it’s a high time for the company to fulfill the new

demands as corporate history is littered with the bones of companies that have failed to see how

changing environments affect demand for the products they manufacture.

The key findings throughout the internship period, the recommendations based on the

observations made throughout the distribution mechanism and the results so obtained from the

survey conducted are helpful for the company to devise its strategies for the product in the near

future.

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1.1 KEVENTER AGRO LIMITED- A BRIEF PROFILE

Based in Kolkata, KEVENTER AGRO was established in the year 1986. It is the part of Rs

10.50 billion Keventer Group that has been in the food processing industry in India for more

than 125 years. From the last 20 years, it has served the customers with impeccable quality

products at most affordable rates. With extensive experience in food and beverage industry the

company has brands like Metro Dairy, Utsav, Frooti, Bailey mineral water, and novel drinks

like Appy and Njoi. KEVENTER AGRO LTD has franchisee agreement with Parle agro to

market Frooti, appy, LMN throughout the Eastern region.

In its foray to continuously venture into new markets, embrace new challenges and adapt

changing trends, Keventer Agro Limited has taken over the food export division of M/S

Eicher International Ltd. The division exports food products such as Mango Pulp, Guava

Pulp, Sesame Seeds, and Bakery Ingredients to Germany, the Netherlands, the Czech

Republic, Slovak, Poland, Greece, the United States, the Middle East, and various South-

eastern countries. It has tied up with SGS, a company of international repute in the food

quality field to provide quality certification to its Tamilnadu plant.

Recently Keventer Agro has forayed into edible oil segment by launching its own brand Utsav

at the end of the year 2006. Keventer sources and refines it in Saurabh Agrotech Pvt. Ltd oil

mill in Alawar, Rajasthan ant then transport it to Kolkata and other eastern regions.

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1.2 PRODUCT PORTFOLIO

DRINKS

KEVENTER AGRO LTD manufactures Frooti in state-of-the-art machines. It has a franchise

agreement with Parle to market Frooti throughout the Eastern region. Keventer set up a

processing plant for Frooti on the outskirts of Kolkata in 1989. This hi-tech plant has an installed

capacity of 1, 80,000 litres per day, which works out to 280 million packs per annum. It

guarantees zero-bacteria quality in each of the 40,000 packs that it produces per hour. Based on

its innovative adaptation of technology to suit the Indian conditions, the plant achieved a world

record, with the highest productivity per machine in the history of tetra packs, within a year of its

operations.

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Made from orchard fresh apples, Appy is a hot favorite amongst the youth because of its mature

flavor of apple nectar. Premium apples, Appy has added immense value to the beverage

category. The rich blend of its golden color, sweet apple aroma and the tangy flavor makes it

very exciting as a product. Appy is currently available in 200ml TetraPacks.

APPY FIZZ: Retaining the same goodness and flavor of fresh apples, the drink comes with a

mild carbonation - to add fizz to your life! Appy Fizz is available in PET bottles of 300ml, 500

ml and 1 litre.

Keventer Agro Limited took a licensed franchise with Parle Agro and venture into

manufacturing and distributing of packaged drinking water under the brand name Bailey. Bailey

undergoes 100% UV treatment, followed with stringent quality tests to ensure that each drop of

water is pure and safe.

METRO DAIRY

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Metro dairy, India's first dairy project in public private partnership, was established in the year

1994. It is a three-way joint venture signed between West Bengal Milk Federation, Keventer and

NDDB, forming 'Benmilk Keventer Limited' to enhance milk supply in Kolkata.

LMN: LMN lemon aqua is a lemon refresher drink marketed by Keventer. It has goodness and

flavor of lemons with vitamin C in it.

N-JOI: N-JOI milk shake made from premium selected mangoes and handpicked strawberries

are appetizing, wholesome, filling and most importantly lip smacking yummy. Launched in 2002

in TetraPacks, Njoi is available in 200 ml size packs and is reasonably priced.

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2.0 KEVENTER’S FORAY INTO EDIBLE OIL SEGMENT

2.1 EDIBLE OIL INDUSTRY- AN OVERVIEW

Oils: primarily a commodity market - price sensitive.

India – fourth largest edible oil consuming economy after USA, China and Brazil

India accounts for 9.3 % of world oilseed production

Production of oilseeds and edible oil is far below the requirement

In 2008-09, the country could produce only about 8.2 million MT of edible oil, 35-

40% of the demand had to be met by imports, implying heavy reliance on imports

High penetration of 90% in India.

Strong regional preference for oils with natural flavor – mustard, groundnut, coconut oils.

Region wise preference:-

North – Mustard, rapeseed oil

South – Groundnut, coconut oil

East – Mustard, rapeseed oil

West - Groundnut oil

Over 600 oil extraction units, 166 Vanaspati manufacturing units - only 10 edible oil

units and 8 Vanaspati units have national reach.

Over 50% of the units - sick or under utilised due to surplus capacity

Idle capacities among these units due to shortage in feedstock supply.

Oils market growing at 8.7% CAGR .

Effective distribution chain - through a complex network of C&F agents, wholesalers /

stockists & retailers (kirana shops, supermarkets)

Oil sold in bulk (tin, HDPE containers) to institutions; In retail packs (PET bottles,

cans, jars, pouches) to small customers

Most vegetable oil is purchased by household or industrial buyers, food processors,

restaurants and hotels.

Seasonal demand for oils & Vanaspati - September to November (peak season)

Regulation: Under the Edible Oils Packaging (Regulation) Order, 1998, edible oils

cannot be sold ‘loose’ but can be sold only in ‘packed’ form.

Branding essential for success (Oils – Sundrop/Dhara/Sunflower, Vanaspati – Dalda)

Better distribution network to improve reach

Efficiency in operation - to become price competent and withstand competition

This industry is a high volume, medium growth sector characterized by excess/idle

capacities owing to in efficient operations. Imports have been influencing prospects,

leading to domestic industry crisis.

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2.2 PEST ANALYSIS OF INDUSTRY

POLITICAL

Liberal policies for edible oil imports lead to low entry barrier.

Imports of all edible oils were also

placed under Open General License (OGL) since April 2004.

The period from 1994 can broadly be divided into two distinct phases: -First between 1994 and 1998, when

customs duty on edible oils progressively came down to reach a low of 15% in July 1998, -Second after 1999, when such duties witnessed a general upward trend to reach a high of 92.2% for refined palm oil in April 2005

Free imports, low import duties & slump in global prices lead to dumping.

ECONOMICAL

Annual Rainfall in time and area under oilseed crop.

Increase (decline) in Tariff increases

the price and depresses (increases) the consumer surplus.

Global oil prices fluctuations.

While tariffs can increase producers’

revenue the actual impact on profit depends on oilseeds prices (which also increases).

Cost of raw materials - Raw materials cost is 70% of Sale price.

1.

SOCIAL

Consumers - Consumer is extremely price sensitive.

Brand loyalty low.

Increase in per capita income and population.

Change in tastes and preferences.

Increased Health consciousness and low-cholesterol cooking medium.

Industry players – 60% - 70% are small refining units and so are unable to import huge quantities and

may be forced to close down .

One of the most polluting industries in

India.

TECHNOLOGICAL

Low productivity in the domestic oilseed sector

Refining technology freely available

indigenously

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2.3 UTSAV

Keventer group has launched a premium mustard oil under the brand name UTSAV in the end of

the year 2006 as it has years of commendable experience in packaging and distribution. It is

available in 3 SKUs-

50 ml pouch pack

500 ml pouch pack and

1000 ml pouch pack

Recently in summer 2010, the group has also launched it in an attractive looking 1000ml PET

bottle. It is competitively priced. And its 50ml SKU is used for targeting below the line

customers which is priced at Rs 4/- Keventer sources and refines it in Saurabh Agrotech oil mill

in Alawar, Rajasthan. The plant handles 100 metric tonnes of oil everyday and the brand is

marketed in the eastern region of India. Initially when it was launched, the packaging and

bottling of the oil has been done at Barasat factory in Kolkata for its distribution in eastern

region. But presently due to change of strategies and cost cutting, it is directly manufactured and

packaged from Alawar, Rajasthan and then transported to Kolkata and other eastern regions. It

has an effective distribution chain - through a complex network of C&F agents, consignee

agents, wholesalers / stockists & retailers (kirana shops, supermarkets).

Utsav can also justly take credit for bringing world-class practices in packaging of edible oil to

the country. It is one of the few edible oils in the country that uses the tetra pack technology

with six-layer packaging and undertakes more checks and tests than any other brand in the

industry. Tetra packs allow the oil to be packed without the use of additives for maintaining

shelflife. Today UTSAV has earned a place amongst the leading mustard oil labels in the eastern

region and is without doubt every housewife's preferred choice.

In this agro products business, the company already has its time-tested key competencies and

organizational strengths. Here Keventer’s greatest challenge is to enable the edible oil business

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to make the transition from competing in a relatively protected environment to winning in an

intensely competitive and rapidly globalizing market. As mustard oil is a price sensitive

commodity, so the company requires focusing on overall competitiveness in cost and quality.

Capability to source high quality agro products, completely automated and state-of-the-art plants,

packaging solutions, highest standards of hygiene and cleanliness and a robust FMCG

distribution infrastructure have combined to give the company a distinct advantage in the market

place. In order to assure consumers of the highest standards of food safety and hygiene,

Keventer plants are conformed to the highest standards of hygiene and cleanliness with

guaranteed zero bacteria conditions.

As edible oil is a lower entry barrier industry to enter in, the brand ‘UTSAV’ has been facing a

fierce competition in Kolkata from the national brands like Naturefresh, Engine oil, Fortune,

Kalash and from some other local brands like Tripti, Panna etc. The company doesn’t give any

credit policy to its distributors for its pouch packs of 50 ml, 500 ml and 1000 ml unlike other

brands. But nowadays the company has started giving a 1 week credit period to retailers for its

1000ml PET bottle packs. Keventer believes in the strategy of using sales force, trade promotion

money, or other means for inducing the intermediaries to carry, promote, and sell the product to

end users.

The edible oil business can be said to be in the initial phase of the Growth Stage of the Product

Life Cycle. Here we see that the products are getting a rapid market acceptance and there is also

a slow but steady increase in sales.

PRODUCT LIFE CYCLE

SALES

&

PROFIT

TIME

INTRODUCTION GROWTH MATURITY

UTSAV

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3.1 OBJECTIVES OF THE STUDY

1. Analysis of distribution channel as well as distribution mechanism of ‘Utsav’. And thus

to develop an optimal framework for its distribution.

2. Analyzing strategies, retail visibility of its major competitors. And thus to do a

comparative study of Utsav with that of its competitors on the basis of some attributes.

3. To do a consumer survey-

i. To find out whether they consume branded oil or loose oil.

ii. To find out whether they purchase it from Kirana stores or Supermarkets

(Modern trade retail outlets).

iii. To find out what they look for while buying branded oil- Price, Packaging,

Taste/Pungency, Offer.

iv. To find out which package designs (PET bottle, pouch pack, jar and tin) they

prefer more.

v. To find out if the price of Utsav is affordable to them.

vi. To find out which SKU (50ml, 500ml, 1000ml) of Utsav they prefer more.

vii. To find out what other SKUs they want to recommend for Utsav.

4. To do a retailers and wholesalers survey through interview and questionnaire-

i. To find out the availability of mustard oil brands in their store.

ii. To find out the profit margin earned by them in each brand.

iii. To find out the brands having maximum demand.

iv. To find out the credit policies given by the companies (if any).

v. To find out whether the company give any scheme to wholesalers/retailers.

vi. To find out whether the company agent visit the shop regularly.

The above objectives help us to identify the research methodology, which is discussed in the next

section.

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4.1 RESEARCH METHODOLOGY

The analysis of distribution channel and distribution mechanism is done by site visits and

observations, which is described in the discussion section 5.1. While the comparative study of

Utsav with its competitors is done by observing the retail visibility and other key attributes. This

is described in the discussion section 5.2.

I use a cross section of interviews to understand the key issues in marketing and sales of Utsav

mustard oil. The mustard oil consumers are surveyed through questionnaires. While retailers and

wholesalers are interviewed and these interviews are also supplemented by questionnaire

surveys. The results of the interviews and survey questionnaires are analyzed in the discussion

section 5.3 and 5.4, which is now presented.

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5.0 DISCUSSION

5.1 OBJECTIVE 1- Analysis of distribution channel as well as distribution mechanism of

‘Utsav’. And thus to develop an optimal framework for its distribution.

5.1.1 DISCUSSION ON OBJECTIVE 1

DISTRIBUTION CHANNEL OF KEVENTER UTSAV

The end-users of our mustard oil are: households and institutional buyers [catering / hospitality /

processed food / snacks] set-ups. Keventer group has set up a strong distribution network of

Company Distributors, Consignee agents and Super Stockiest for its retail operations. This chain

helps to tap even the small retailers/traders and thus increasing its reach.

Today Keventer has its distribution foot prints across the eastern region of the country with its

depot in Kolkata catering to more than 100 distributors, 6 Super Stockiest, 2 C & F agents

and numerous brokers and other trade associates. Keventer's retail reach is more than 5000

outlets across the region and this retail reach can give competition to the best FMCG giants in

the region.

DIRECT HOME DELIVERY

F

A

C

T

O

R

Y

KOLKATA

GODOWN

CONSIGNMENT

SALES AGENT

COMPANY

DISTRIBUTOR

SUPER

STOCKIST

RETAILER

INSTITUTIONAL

BUYER

(eg.HOTELS)

H

O

U

S

E

H

O

L

D

S

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DISTRIBUTION NETWORK- SCHEDULING & NETWORK FOR UTSAV

r

Has

Manufacturing and Packaging is done at Saurav Agrotech, Alawar

(Rajasthan).

The same reaches to Kolkata depot.

While some amount of oil is consigned to Jorhat and Guwahati.

From Kolkata depot, the edible oil goes to different parts of West Bengal

and other eastern region cities.

From Jorhat and Guwahati, it is transported to different parts of Assam.

SAURABH

AGROTECH,

ALAWAR

DEOGHAR

SUPERSTOCKIST

JAMSHEDPUR

SUPERSTOCKIST RANCHI

SUPERSTOCKIST

GUWAHATI

Consignment Agent

JORHAT

Consignment Agent

ASSAM

DB’S

SILIGURI

SUPERSTOCKIST

PATNA

SUPERSTOCKIST

KOLKATA DEPOT

BIHAR

DB’S

KOL DB’S

MALDA

SUPERSTOCKIST

RETAILERS WHOLESALERS

4-7 days

7-15 days

1-2 days

<1 day <1 day

4-7 days

4-7 days 7-15 days

7-15 days

7-15 days 7-15 days 7-15 days

2-3

days

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Carrying & Forwarding Agents (C & F agents): These are appointed at two or more State(s)

of operation of the company. Keventer has its C & F agents in Jorhat and Guwahati. Carrying &

Forwarding agents work on a commission basis – 3% (industry norms) of the goods handled. It is

recommended that the country keeps about 4 to 6 weeks of inventory at the C&F level and a

commission structure which is in keeping with the industry norm. Therefore a 3 percent

commission on the invoice value may be provided to the agents.

Stockist: A stockiest provides a local delivery point for the manufacturer/marketer. They store

the products, break bulk, and distribute to the retailers. With greater no. of retailers now seeking

credit from the retailer, efficient management of collection has become a vital part of the

stockist’s job. The main problem is that of getting experienced and effective channel members.

As existing marketing marketer/manufacturer can piggy back on the existing channel structure.

The company will have to provide greater incentives to convince channel members to stock the

product offering. Hence, an innovative means of channel handling needs to be adopted:

Competitive commission to the stockiest- around 5.66% on the invoice (industry

standards 5.66%)

The efforts of the sale representatives employed by the stockiest to get orders may be

supplemented by the manufacturer’s sales force.

Retail outlets to be serviced at least four times in a month (atleast once a week)

Distributors (stockiest) to maintain stock of not more than 15 to 20 days.

Wholesaler: Wholesaler’s prime concern is to buy in bulk and sell at the fastest rate. The aim of

any distribution chain of mass-market product category like mustard oil would be to expand its

reach i.e. the no. of outlets storing its products. This may not be possible even with a well

established stockiest network. Hence, wholesaler plays a significant role in supplementing the

stockists’ effort and in providing a better reach to the product.

Retail Outlets: It is extremely important for any mustard oil brand to have a well entrenched

retail presence- ‘Reach is the key’

The first stumbling block for the product is, to convince the retailers to stock the offering.

Retailers want smaller quantities at shorter intervals. Hence, retailers are convinced by offering

smaller quantity options to them. Also, retail margins provided may be higher than the industry

than the industry standards (industry standards range from 8.5% to 9.5% of the MRP). The

margins offered by the company are around 9.37% of the MRP.

My project encompasses study of a part of the Supply Chain of Keventer Agro Ltd and it deals

with the Distribution Channel. The channel I am dealing is termed as the Edible oil Channel. The

Channels have been effectively designed to meet two basic requirements i.e. AVF:-Availability-

22

Visibility-Freshness of the product and also ensure goods reach the retailers On-Time-In-Full

(OTIF).

The wide array of products has made it absolutely necessary that the company adopts the best

Distribution Channel Strategy. This is because the different products vary in terms of freshness,

storage space, packaging, storage norms and demand fluctuations. To ensure smooth and regular

supply of all its products the company has to have the best distribution channel. The products

like edible oils are prone to leakage problem. So keeping in mind the constraints, the company

has designed a single Distribution Strategy for all its products. This has proved not only

economical but has also made all the products share equal importance in the Distribution

network.

The wide product range has made the company to compete with a number of leading players in

the oil and drinks segment. As Keventer’s oil Utsav faces stiff competition from the national

brands like Fortune, Naturefresh, Kalash and from other local regional brands like Panna, Tripti

etc.

Distribution Mechanism

Once the oil reaches the Wholesale Distributors (WD) points, the Edible oil Channel is in

operation. It’s the Distributors responsibility to make sure that the goods reach the retailers &

wholesalers and finally to the consumers. He recruits various personnel to aid him in functioning

smoothly and effectively. He employs DS, Delivery Units and Merchandisers based on the

company specifications to handle the front end operation.

THE FOUR KEY PERSONS IN THE DISTRIBUTION NETWORK

DISTRIBUTION

NETWORK

SALESMAN DELIVERYMAN

MERCHANDISER LOADER

23

For the back end he requires Warehouse Incharge, System personnel, Cashier, Billing Clerk and

others. We can therefore say that the Wholesale Distributors form one of the most important

channel partners in Keventer’s Distribution channel. To understand the role of the WD points in

the Distribution Network we have to understand the functioning of each of its components. Only

a clear understanding of such is achieved it will help us in evaluating the present mode of their

operation and if necessary recommend changes for achieving further efficiency and helping the

company’s product to have a better reach.

The basic component of the Distribution network encompasses the Delivery Unit, Loader and the

DS. They play the most vital role because they ensure the flow of the products and makes sure

the goods reach the consumers effectively through the retailers & the wholesalers.

The WD points either own or hire vehicles needed for the delivery purpose. Two kinds of

vehicles are mainly used for distribution-Cycle Vans and Tempo’s. The capacity of each Cycle

Van is 500Kgs whereas a Tempo can carry a maximum load of 1 tonne. The delivery unit

comprises of two people team and while using the Tempo the driver of the vehicle aid in the

delivery process. The delivery takes place in designated routes. The trip time varies directly with

the number of shops visited; distance traversed; grocer’s promptness and also the efficiency of

the delivery unit.The average time spent by the delivery unit per shop visited is around 4 mins.

The trip time usually varies from 3 to 4 hrs.

Distribution Salesman (DS):

The DS forms one of the most important components of the entire distribution network. He is the

person who is not only responsible for generating order but also acts as the spokesperson on

behalf of the company. He is the person who enlightens the retailers & wholesalers about price,

quality, features of the products and also explains them the schemes on offer. He visits six

different routes in a week. One route per day and the chain keeps on repeating every week. Often

if the size of the market in a particular route is quite big then he visits the same market may be

twice or thrice a week. But no matter how many markets he visit during a week it’s imperative

for him to visit the same market in the upcoming weeks in the same day designated for that

market. The DS has to carry an Order Book for tracking down the orders but the Order Book so

designed serves many other purposes if used in the order as specified. The benefits and uses of

the order book as observed are as follows:

Benefits of Order book:

Range Selling- To ensue that the DS covers all the SKU’s and doesn’t miss out on any

product class or category.

Reference of Competition- The order helps to track availability of competitor’s products

vis-à-vis ours.

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Historical reference of Sales- Easy tool to keep track of the past sales record.

Backend- It’s a convenient medium for the backend and aids them in making bills.

Stock Control- A well maintained Order Book ensures stock control at the retail level.

Uses of Order Book:

Backend for billing.

Sales team- for availability/issue if any.

For forecasting order.

WD- Availability of SKU’s/growth in business.

DS- Modus Operandi:

The DS hits the market in the morning (Park Circus, Gariahaat, Shovabazaar, Howrah

district markets, Kidderpore, Behala, Ultadanga, Kakurgachi ) at around 9.30 a.m. But in

certain markets which open up late like the Rajakatra area the DS starts his operation at

around 11 p.m. There are certain pre-requisites before actual visit to the market:

1. They have to collect the due bills of the respective shops in the route.

2. They have to be well versed with the existing prices of our products as well as that of our

competitors.

3. They also need to know all existing schemes on offer.

4. To know the availability gap they have to refer to the order book.

5. To also have to be aware of the target sales of various SKU’s given to them and have to

make realistic plans to achieve such.

Thus this report gives a comprehensive picture of the outlets where the DS must try and target

the missing SKU’s.

Once the DS reaches the shops he has to perform a number of duties. Ideally the

following sequence must be followed while making a call as per my observations:

1. Checks for availability

2. Communicates schemes on offer

3. Briefs about the price change

4. Makes call for each existing product category at the shop which we deal in

5. Notes down the order

6. Produces the bill outstanding to the outlet. Incase the outlet has a bad history for

payment this step should take place at the beginning and only if the outstanding bill is

cleared the rest of the steps will follow.

7. Checks for replacement or rotation and note it down. Stock rotation involves ensuring

that the oldest stock moves out first, knowing where to locate stock and exact quantity

housed by each location.

25

8. Closes the call- He leaves assuring the shop owner that delivery of the ordered products

will reach him within 24 hrs and he will again visit the same day next week.

After visiting the shops as earmarked in the Order Book the DS reaches the WD point.

Usually he finishes his work in the market by 2 p.m. Once at the WD point his

responsibility include getting the bills verified by the Accountants in respect of cash

collected by them, depositing the cash to the Cashier and also presenting the order book

to the Assistant Accountant to help him in making bills against the orders received. The

orders generated per route later aids the backend in taking out the Load Chart.

MERCHANDISER:

A Merchandiser is a person who is responsible for

checking the availability of our product vis-à-vis

competition; ensuring retail visibility of our products to

the consumer; displays; checking on proper operation

of the delivery unit and the DS.

The Merchandiser uses a Call Card in place of an

Order Book. The benefits of Call Cards are:

1. Availability check of our products vis-à-vis competitors

2. Track on visibility of our products

3. Replacement Stock

4. Services rendered by the delivery unit

The merchandiser needs to communicate any deficiency he finds in service quality

rendered by DS or the delivery unit. He acts as the check to see whether the services

rendered are up to the mark with the set standards.

He also communicates the availability gap and replacement needs to the DS. Often he

helps the DS to push in products in the particular shops.

He is also the person who is responsible for arranging the shelves where our products are

stacked. This only supports the visibility. He also got to have a aesthetic sense cause his

duties include hanging the banners, danglers etc which the company uses from time to

time to attract customers.

26

5.1.2 KEY FINDINGS

It has been observed that the DS often tend to visit the WD points before hitting the

market in the morning. This is a futile exercise and as such there is no need for such a

visit.

The Order Book is a thick bound book which often the DS finds it difficult to place and

note their entries especially at crowded, small shops. So it is advised that we must

undergo a modification of the Order Book i.e. making it more users friendly.

The time spent by the DS at each shop is around 8 minutes. The total numbers of shops

ideally they should visit per day must range between 25 to 30.

Sometimes it has been observed that there is only one merchandiser for different routes.

There should not be more than one merchandiser for different routes as he is entrusted

with the task of servicing all the top outlets along each route.

27

5.2 OBJECTIVE 2 - Analyzing strategies, retail visibility of its major competitors. And to

do a comparative study of Utsav with that of its competitors on the basis of its key attributes.

5.2.1 DISCUSSION ON OBJECTIVE 2

COMPETITOR ANALYSIS

While doing the survey I found out the benchmark companies in terms of order taking,

distribution, retail visibility, merchandising and overall service. In the FMCG oil sector, every

company is our competitor since they block up retailers money and shelve space. In this

business, in spite of the existence of big players like Fortune, Nature Fresh, the major

competition comes from unorganised and unbranded players. The brand ‘UTSAV’ has been

facing a fierce competition in Kolkata from the national brands like Engine oil, Fortune,

Naturefresh, Kalash and from some other local regional brands like Tripti, Panna etc.

In terms of market coverage, retail visibility and distribution Kalash- K S Oils is our biggest

competitor. In terms of market coverage, taste and pungency, the premium mustard oil brand-

Engine is our biggest competitor. In terms of offers and discount schemes available, Naturefresh

and Fortune are bigwigs. In terms of prices, Tripti and a local brand Panna are the lowest price

bidders in the market. I have tried to find out and point the differences between the strategies of

our competitors and that of ours.

Now a detailed analysis is being provided in terms of these benchmark companies. In doing so I

am also trying to focus on all other relevant information I could gather about them.

28

a) ENGINE (PREMIUM MUSTARD OIL)

Shree Hari Industries’ (Hari oil mill) brand Engine is available in wide variety and different

packing based on customer requirements. Engine Mustard Oil is processed with best of Industry

Standards machinery and latest technology equipments so as to give the best in taste and quality.

It has its speciality in terms of it's aroma/ fragrance. Natural essential oil known as ALLYL ISO

THIO CYANATE is used in developing this fragrance available only in Kolhus on hydrolysis of

SINIGRIN and MYROSINASE (Glucosinalates) having very technical and sensitive reaction

process. The whole manufacturing process is controlled under hygienic conditions by oil

technologists regularly. This process enhances the cost but the quality so manufactured is

immensely appreciated wherever marketed, within specifications of AGMARK and prevention

of food adulteration act.

Engine oil is available in TIN, HDPE Jars, Pet Jars, Pet bottles, and pouches in 15kg/ltrs, 5ltrs,

2ltrs, 1ltr, 500ml, 200ml packing in boxes.

Type Photo Product Name Available Packing

HDPE Jar

Matka- 2 and 5 Ltr.

2 Litres, 5 Litre

TIN

Tins - 2 and 5Ltr.,

15Kg/Ltr.

2 Litres, 5 Litres, 15

Kg/Litres

(In Carton/ Wrapper)

HDPE

HDPE Jars - 2Ltr.

and 5Ltr. In cartons

2 Litres, 5 Litres

(In Carton)

29

5.2.1 (a) ENGINE- KEY FINDINGS:

Engine’s marketing strategy is to emphasize on taste, pungency and quality and charge

premium prices for it.

It generally targets a high end consumer segment, who believes in buying quality

products for their family.

Engine has a good retail visibility in almost all of the modern retail outlets (Food Bazaar,

Future group-Pantaloons, Spencer, 6 TEN) and has its presence in most of the markets in

Kolkata but rarely visible in the markets of Howrah district.

Its strong markets are- Gariahaat, Park Circus, Ultadanga, Salt Lake.

PET Jar

PET Jars - 1, 2 and

5Ltr.

1litres, 2litres, and 5

litres

(In Cartons)

Bottles

PET bottles - 200,

500 and 1000 ML in

cartons

200, 500 and 1000 ML

(In cartons)

Pouches

Pouch - 500 and

1000 ML in carton

500ml, 1000ml

30

b) FORTUNE KACHI GHANI MUSTARD OIL

Adani Wilmar Limited (AWL) owns the Fortune brand. Exported to over 15 countries, the

company’s flagship brand Fortune currently sells 1.4 million tonnes per annum. The edible oil

major plans to scale this up to 2.5 million tonnes by the year 2012.

Fortune Kachi Ghani Pure Mustard Oil is a high pungency mustard oil, is made from finest

quality mustard seeds and is a delight of taste as well as health.

It is available in :

Liner Carton - 200 ml

Pouches - 500 ml, 1 litre

PET Bottles - 200 ml, 500 ml, 1 litre

Jerry Cans - 2 litre, 5 litre, 15 litre

Tins (lithographically printed) - 5 litre, 15 litre, 15 kg

5.2.1 (b) FORTUNE - KEY FINDINGS:

Fortune believes in the marketing strategy of providing discount schemes and various

other offers to its customers. And since it is a price sensitive commodity, these schemes

do affect the buying behavior of customers.

Fortune is one of the highest selling brands in the modern retail outlets (Food Bazaar,

Future group-Pantaloons, Spencer, 6 TEN) of Kolkata.

It generally targets the middle income group segment.

It has a good retail visibility in almost all the markets of Kolkata as well as Howrah (Park

Circus, Rajakatra, Gariahaat, Shovabazaar, Howrah district markets, Kidderpore, Behala,

Ultadanga, Kakurgachi ).

Its strong markets are: Rajakatra, Ultadanga, Shovabazaar.

31

c) BULLET KACHI GHANI MUSTARD OIL

Adani Wilmar Limited (AWL) owns another brand of Bullet Kachi Ghani Mustard Oil. Its rich

color and pungent smell validates the oil quality. A stronger variant of the product is also

available in the market as Bullet Strong Kachi Ghani pure mustard oil. It maintains high

pungency levels and a rich color.

It is available in:

Pouches - 500 ml, 1 litre

PET Bottles - 200 ml, 500 ml, 1 litre

Jerry Cans - 2 litre, 5 litre, 15 litre

5.2.1 (c) BULLET - KEY FINDINGS

It believes in the strategy of providing high pungency levels of mustard oil at a

reasonable price to its customers.

It targets below the line as well as middle income group segment.

It is an average doing brand in Kolkata, unlike the co’s flagship brand Fortune which is

the market leader in modern trade.

Its strong markets are- Kidderpore, Behala, Howrah district markets (Domjur, Bankra,

Jagdispur, Gorgachhia)

32

d) KALASH

K S Oils is a leading integrated edible oil company and is the trusted name behind renowned

brands like Kalash, Double Sher, K S Gold, among others. K S Oils today enjoys 11% market

share in the overall mustard oil segment with a dominant 25% market leadership in branded

mustard oil. The company has in the recent past successfully undertaken the growth strategy of

capacity expansion, green field projects and acquisitions, thus creating an unchallenged

competitive advantage. It has a secured raw material supply source, ‘near to customer’ sales

points and a robust distribution and dealer network.

Kalash is K S Oils flagship premium brand in mustard oil segment. Kalash is popular among

mustard oil consumers, who have the conventional affection to the rawness and pungency of

mustard and believe in having healthy and diet conscious food.

5.2.1 (d) KALASH - KEY FINDINGS:

Kalash is one of the most selling mustard oil brands in Kolkata.

It believes in the strategy of „near to customer‟ sales points and a robust distribution and

dealer networks, which results in a very high retail visibility in all the markets of Kolkata

as well as in modern retail outlets (Food Bazaar, Future group- Pantaloons, Spencer, 6

TEN).

Though Kalash is rarely seen in Howrah district markets (Makardaha, Domjur, Bankra ,

Jagdispur, Gorgachhia).

Kalash is giving a tough competition to Utsav in terms of market coverage, retail

visibility and distribution.

Kalash eyes the middle income group as well as the upper end segment.

Its strong markets in Kolkata are: Gariahaat, Ultadanga and Kakurgachi.

33

e) NATURE FRESH KACCHI GHANI MUSTARD OIL

Nature Fresh edible oil and Gemini is a part of $88 billion MNC- Cargill industries. NatureFresh

Purita™ oil is renowned for its purity and taste. With a pungency level of 0.27 percent, higher

than the highest AGMARK standard of 0.25 percent, NatureFresh Purita™ oil is the best oil for

cooking favorite fried dishes.

5.2.1 (e) NATUREFRESH - KEY FINDINGS:

NatureFresh Purita™ oil is one of the highest selling brands in modern retail outlets of

Kolkata (Food Bazaar, Future group- Pantaloons, Spencer, 6 TEN).

Nature Fresh is the highest seller in Future group outlets.

It generally targets the upper end consumer segment.

NatureFresh believes in the strategy of combo offers, coupon schemes and promotions

with brand ambassadors as Sharmila Tagore and Soha Ali Khan and thus emphasizing on

its quality.

Its strong markets are- Kakurgachi, Ultadanga, Rajakatra.

34

f) DHARA

Launched in 1988 under the Operation Golden Flow programme of NDDB (National Dairy

Development Board), Dhara is manufactured and marketed by Mother Dairy Fruit & Vegetable

Pvt. Ltd. It offers products in the refined mustard oil, 'kachi ghani' mustard oil and filtered

mustard oil range. Dhara refined oils are positioned as 'the oil for a healthy family', where the

kids take pride in the father’s strength, epitomised through the ‘My Daddy Strongest’ campaign.

The brand will propagate a social message through all its packs, which reads 'Dhara recommends

use of any cooking oil in moderation'.

5.2.1 (f) DHARA - KEY FINDINGS

Dhara believes in the strategy of providing various discount schemes and combo

offers to its customers.

It targets the health conscious customers in the middle income group segment.

It is one of the highest selling brands in the Future group outlets.

Dhara has a good retail visibility in all the modern retail outlets of Kolkata (Food

Bazaar, Future group- Pantaloons, Spencer, 6 TEN).

But it has good visibility in certain markets of Kolkata only viz. Kidderpore,

Kakurgachi, Rajakatra.

35

g) OTHER COMPETITORS

SUNDROP, AgroTech Foods Ltd., RRO, R.R.Oomerbhoy Pvt. Ltd.,

Banks on Health Provides Combo Offers, Schemes

TRIPTI, KKN Group Industries product, Healthy & Tasty, New entrant

Lowest Price Bidder By Emami

5.2.1 (g) KEY FINDINGS

Tripti’s competitive strategy is to grab the market share by being the lowest price bidder

everywhere.

A small brand like RRO also drives its sales by giving many offers and discount schemes.

Sundrop oil positions itself for health conscious people and shows a decent amount of

sales.

Personal care major Emami has also entered in race with its Healthu & Tasty mustard oil.

36

5.2.2 COMPETITOR ANALYSIS- A COMPARATIVE STUDY

FEATURES

ENGINE

FORTUNE

KALASH

NATUREFRESH

UTSAV

Pungency

Levels

5

3.5

3

4

2.5

Tetra pack

packaging

1

2.5

2.5

2

5

Active sales

force

3

4.5

5

2.5

4.5

Retail

visibility

3.5

5

5

4.5

3.5

Discount

schemes,

combo offers

2

5

3

5

0

Promotions

3

5

3.5

4

2.5

Total (Out of

30)

17.5

25.5

22

22

18

* The ratings here are done on a five point scale on the basis of observations.

37

KEY OBSERVATIONS (Emanating from this diagram)

From the diagram, Engine to Utsav is emerging as the nearest competitor.

Though the key competencies for both the brands are different.

While Fortune emerges as the strongest competitor in the mustard oil

market.

Kalash and NatureFresh are emerging as stronger competitor for Utsav.

Fortune

Kalash Naturefresh

Engine Utsav

0

5

10

15

20

25

30

0 1 2 3 4 5 6

Ratings

Ratings

38

5.3 OBJECTIVE 3- TO DO A CONSUMER SURVEY

5.3.1 DISCUSSION ON OBJECTIVE 3

(i)- To find out whether they consume branded oil or loose oil

ANALYSIS OF CONSUMER SURVEY / INTERVIEW

The following analysis is based on the survey conducted in various areas such as; Shovabazaar,

Behala, Kidderpore,Gariahaat, Kakurgachi, Ultatanga, Rajakatra, Park Circus and other areas of

Salt Lake. Around 52 people (mustard oil users) were surveyed and following are the results and

analysis of that survey:

1. Do you consume branded mustard oil?

a) Kolkata survey

Inferences:

Today most of the consumers are aware of the ills of buying loose oil prone to

adulteration. The consumers are becoming more health conscious and are moving

towards the branded oils unlike the situation prevailing in early 1990s.

It is a great opportunity for Utsav to capture this branded oil share.

Even the lower end consumer segments in these areas are consuming branded mustard

oil. Since the prices have been kept low for popular packs as well. As Utsav has been

offering its 50 ml SKU at just Rs 4/-

92%

8%

Usage

branded mustard oil loose oil

39

(b) Howrah District Survey

Inferences:

The conducted survey shows that a large amount of people in Howrah district still

consumes loose oil.

Here local oil mills viz. Makardaha mill, Makarchandi mill dominates the area with their

loose mustard oil.

Here the branded oil companies should make people aware of ills of buying loose oil

prone to adulteration and can dominate the area. As it can be seen as a large amount of

untapped market.

Premium mustard oil brands like Engine, Kalash are rarely seen in these areas.

The retailers of this market rely majorly on the credit policies provided by the

distributors.

There is no choice as demanded by the customer. The customer takes whichever branded

or loose oil provided by the retailers here.

Branded mustard oil

36%

Loose Oil64%

Usage

40

(ii) To find out whether they purchase it from Kirana stores or Supermarkets (Modern

trade retail outlets)

2. From where do you purchase mustard oil?

Here supermarkets (modern retail outlets) comprises of Food Bazaar, Future group- Pantaloons,

Spencer, 6 TEN, Arambagh.

Inferences:

It seems most of the users buy the edible oil from Kirana stores.

Though number of modern retail buyers seems growing in Kolkata.

It is not because people prefer to buy from Kirana stores but the nearness of these stores

from their houses made them to purchase. Since the modern trade outlets offer the best

prices and better discount schemes and combo offers.

Utsav is purchased more in Kirana stores (of Shovabazaar, Park Circus, Rajakatra,

Ultadanga, Kakurgachi, Kidderpore) than in these modern trade outlets.

Utsav is an average selling brand in supermarkets while brands like Forune, Nature Fresh,

Engine, RRO are the highest sellers here.

Discount schemes, combo offers work best in modern trade outlets and drive the sales.

kirana stores62%

supermarkets (modern retail

outlets)38%

Purchasing place

41

(iii) -To find out what they look for while buying branded oil- Price, Packaging,

Taste/Pungency, Offer

3. Which is the most important feature you look for in a branded mustard oil?

Inferences:

It seems most of the people go by the taste or pungency of the mustard oil and also by the

various discount schemes and offers available with them.

On the pungency and taste basis, Engine rules the markets. Utsav also competes on the

pungency and taste basis.

While on the combo offers and various discount schemes basis, Fortune, Nature Fresh,

RRO beat the race.

Though even price matters to a significant number of people.

Regional brand Tripti competes on price basis in modern retail outlets by being the

lowest price bidder.

Another local oil mill brand Panna competes on the price basis due to its nearness of the

mill and thus rules the Behala market.

02468

1012141618

Price Packaging Taste/ Pungency

Offer

Responses

Responses

42

(iv) - To find out which package designs (PET bottle, pouch pack, jar and tin) they prefer

more

4. Which package form you prefer more?

Inferences:

It seems most of the people prefer PET bottle packs for mustard oil. Possibly because to

avoid the leakage problems associated with pouch packs.

Even a significant number of customers still prefer pouch packs since it costs lower than

PET bottles. Here most of the people prefer tetra packaging provided by Utsav pouch

packs.

Many of the Utsav consumers (of Park Circus, Ultadanga) want it to be available in PET

bottle packs. Since it was earlier present only in pouch packs. But Keventer has recently

launched it in an attractive looking 1 litre PET bottle.

While the Bankra market of Howrah district has demand only for PET bottle packs of

mustard oil.

0

5

10

15

20

25

PET bottle Pouch pack PET jar Tin carton

Responses

responses

43

(v) - To find out if the price of Utsav is affordable to them

5. Do you find price of ‘Utsav’ affordable in comparison to its competitors?

Inferences:

Majority of the respondents think that the price of Utsav mustard oil is affordable. As its

50 ml pouch pack SKU is priced at Rs 4/-, its 500ml pouch pack SKU is priced around

Rs 32/- , its 1 litre pouch pack SKU is priced around Rs 64/- and 1 litre PET bottle is

priced around Rs 80/-.

Though still some of the respondents found price of the pouch packs of Utsav more then

the PET bottle of its local competitors, which is quite obvious. Since the price charged

for the local brands is very less due to nearness of their oil mills.

Affordable87%

Not affordable13%

Responses

44

(vi) - To find out which SKU (50ml, 500ml, 1000ml) of Utsav they prefer more

6. Which SKU of ‘Utsav’ do you use more? (If uses Utsav)

Inferences:

Though 1000 ml and 500 ml SKUs are mostly used by our survey respondents but the

usage rate per SKU differ area to area.

500ml and 1000ml SKUs of Utsav are mostly in demand in Kidderpore.

1000ml SKU is mostly demanded in Gariahaat, there is no demand for 50ml SKU.

50ml and 500ml are in demand in Kakurgachi market.

500ml, 1000ml are in demand in Ultadanga.

1000ml SKU has its demand in Park Circus.

500ml, 1000ml are in demand in Rajakatra.

50ml, 500ml are in demand in Makardaha (Howrah district).

500ml, 1000ml has its demand in Domjur (Howrah district).

Only PET bottle SKUs has its demand in Bankra (Howrah district), so 1 litre PET bottle

of Utsav should be avail here.

500ml is in demand in Jagdispur (Howrah district).

50ml, 500ml are in demand in Gorgachhia (Howrah district).

50ml17%

500ml35%

1000ml48%

Usage

45

(vii) - To find out what other SKUs they want to recommend for Utsav

7. Would you like to recommend any other SKU for ‘Utsav’? (If Yes then

which one?)

Corporate history is littered with the bones of companies that have failed to see how changing

environments affect demand for the products they manufacture. With the rise in purchasing

power, many of the respondents want Utsav to be launched in new SKUs.

Inferences:

Almost more than half of the respondents want Utsav to be launched in 200ml SKU.

Since 50 ml is the targeted SKU of Utsav for Shovabazaar market and Kakurgachi market

but due to rise in purchasing power, the 200 ml SKU is also seeing its demand in these

markets.

Although some of the upper end consumers of Rajakatra, Ultadanga also want 5000ml

SKU to be launched in the markets.

Yes- 200ml54%

Yes - 5000ml17%

No29%

SKU

46

5.4 OBJECTIVE 4 - To do a retailers and wholesalers survey through

interview and questionnaire

5.4.1 DISCUSSION ON OBJECTIVE 4

(i) To find out the availability of mustard oil brands in their store

ANALYSIS OF WHOLESALER’S/RETAILER’S SURVEY/INTERVIEW

The following analysis is based on the survey conducted in various areas such as; Shovabazaar,

Behala, Kidderpore,Gariahaat, Kakurgachi, Ultatanga, Rajakatra, Park Circus , Howrah district

and other areas of Salt Lake. Around 65 retailers/ wholesalers were surveyed and following are

the results and analysis of that survey:

1. How many mustard oil brands are available in your store? (Name all)

Inferences:

These are the major mustard oil brands available in Kolkata.

Out of these, we can see that availability of Utsav is around 90%.

While Kalash is the most available brand with an availability around 97%.

95% 91% 88%80%

75%

97%

0%

20%

40%

60%

80%

100%

120%

Availability

Availability

47

There are total of 28 mustard oil brands available in Kolkata markets:

1. Utsav

2. Nutrela

3. Ruchigold

4. Dhara

5. Naturefresh

6. RRO

7. Tripti

8. Bunge dalda (filtered mustard oil)

9. Fortune (Kacchi ghani and filtered mustard oil)

10. Engine

11. Kalash

12. Panna

13. Purti

14. Ganesh

15. Bharat

16. Saloni

17. Mashaal

18. Gairam

19. Rasoi

20. Bullet

21. Jeevan

22. Shalimar

23. Raag

24. Sundrop

25. Sunrise

26. Fauji

27. Double Sher

28. Gokul

48

(ii) - To find out the profit margin earned by them in each brand

2. What is the profit margin in each brand? (Purchasing price and selling price)

WHOLESALERS’ MARGIN:

Brand Purchasing Price Selling Price Margin

1. Utsav 1L (P) Rs 58.50 Rs 59 50 paise

2. Dalda 1L(B) Rs 61 Rs 61.50 50 paise

3. Ruchigold

1L (P)

Rs 56.50 Rs 57 50 paise

4. Kalash 1L

(P)

Rs 57.50 Rs 58 50 paise

5. Kalash 500ml (P)

Rs 31 Rs 31.50 50 paise

6. Ganesh 1L(P)

Rs 71 Rs 71.50 50 paise

7. Ganesh

1L(B)

Rs 71 Rs 71.50 50 paise

8. Fauji 1L (B) Rs 59 Rs 59.50 50 paise

9. RRO 1L (P) Rs 56.50 Rs 57 50 paise

10. RRO 200ml

(B)

Rs 14 Rs 14.50 50 paise

11. Mashaal

1L(P)

Rs 60 Rs 60.50 50 paise

12. Mashaal

500ml (B)

Rs 32.75 Rs 33 25 paise

13. Mashaal 1L

(B)

Rs 62 Rs 62.50 50 paise

14. Fortune 1l

(P)

Rs 60 Rs 60.50 50 paise

15. Fortune

1L(B)

Rs 62 Rs 62.50 50 paise

16. Fortune 500ml (B)

Rs 33 Rs 33.50 50 paise

17. Dhara 1L (P) Rs 61 Rs 61.50 50 paise

49

RETAILER’S MARGIN:

Brand Purchasing price Selling price Margin

1. Utsav 1L(P)- Modern

Retail

Rs 58 Rs 63 Rs 5

2. Utsav 1L

(P)

Rs 59 Rs 64 Rs 5

3. Utsav 500ml

(P)

Rs 29 Rs 32 Rs 3

4. RRO 1L (P) Rs 62 Rs 64 Rs 2

5. Kalash 1L

(B)

Rs 63 Rs 64 Rs 1

6. Kalash 1 L

(P)

Rs 57.50 Rs 58.50 Rs 0.50

7. Gemini

200ml (B)

Rs 15 Rs 17 Rs 2

8. Dalda 1L (B) Rs 55 Rs 70 Rs 15

9. Saloni 1L (P) Rs 60 Rs 65 Rs 5

10. Fortune 1L

(P)

Rs 62.50 Rs 63.50 Rs 1

11. Fortune

500ml (P)

Rs 32 Rs 37 Rs 5

12. Panna 1L (P) Rs 60 Rs 63 Rs 3

13. Naturefresh 1 L (P)

Rs 64 Rs 70 Rs 6

14. Engine 1 L

(B)

Rs 72.80 Rs 74 Rs 1.20

15. Engine 1 L

(P)

Rs 71 Rs 72 Rs 1

16. Engine 500ml

(B)

Rs 40 Rs 42 Rs 2

50

(iii) - To find out the brands having maximum demand

3. Which brands of mustard oil have the maximum demand?

Inferences:

The pie chart validates that this sector has a very low brand loyalty.

Fortune emerges as the market leader with 18 % share.

Even Utsav has a decent share of 10%.

Kalash17%

Utsav10%

Fortune18%

Naturefresh15%

Dhara8%

Engine16%

Others16%

Demand

51

(iv) - To find out the credit policies given by the companies (if any)

4. Is there any credit period given by the companies in the sale of products? (If

yes then specify)

Keventer does not give any credit period to Kolkata retailers for its pouch packs

(50ml, 500ml, 1000ml) but it has started giving credit period of one week for the sale

of its 1 litre PET bottles.

Though Utsav provide a 3 week credit period to the retailers of Howrah district as

there is extensive competition in terms of credit policies

Small unorganized players like Gairam, Saloni, Bharat, Fauji, Mashaal provide

around 15-20 days credit policies to their retailers in Kolkata as well as in Howrah

markets.

(v) - To find out whether the company give any scheme to wholesalers/retailers

5. Do the mustard oil companies provide any schemes or offers with the

product? (If yes then specify)

Utsav is also giving a discount scheme to wholesalers by giving four 50 ml pouches

free with every single case of 1000ml Utsav.

Apart from this, small players like RRO, Mashaal, Bharat, Saloni also give various

discount schemes to its wholesalers and retailers and thus driving their sales.

52

(vi) – To find out whether the company agent visit the shop regularly

6. Does the company agent visit the shop regularly?

Inferences:

The company agent or DS has to visit the shops and stores weekly. There are different

DS for different routes.

It seems from the responses that most of the company visit their regularly.

It is the duty of DS to be to be well versed with the existing prices of our products as well

as that of our competitors.

They have to hit the markets early in the morning at around 9.30 am.

Yes95%

No5%

Shop visit

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6.0 SWOT ANALYSIS OF UTSAV

STRENGTH

Good retail visibility in almost all the

markets of Kolkata (except in

Gariahaat, Behala)

A very strong distribution network

Active sales force

Above average demand

S

WEAKNESS

Low margin for wholesalers, retailers

Limited credit period policies (No

credit policies provided in any of the

pouch packs, 1 week credit period

provided for newly launched 1 Ltr

bottle)

Limited promotions

Higher priced as compared to its

competitors

W

O OPPORTUNITY

Growing branded oil market

Rising demand of new SKU- 200ml in

areas which target the lower end

segment (Eg Shovabazaar)

Can enter in other edible oil markets

viz. groundnut oil, soybean oil,

sunflower oil

Can explore northern regions of India

as well (Since North is the major

mustard oil consuming market)

Rising per capita income and

population- Increasing purchasing

power

T THREAT

Extensive competition from established

national players

Presence of huge unorganized market

Low brand loyalty

New entrant- the personal care player-

Emami has also entered in the race in

March 2010

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7.0 RECOMMENDATIONS

1. For Distribution chain

The company should start giving a one week credit policy in its pouch pack SKUs also.

Some distribution gaps have been observed in the areas of Gariahaat, Kidderpore (as

complained by retailers). The company distributor should try to be more punctual

regarding the stock distribution. As a lost consumer is a gain to the competitors.

Profit margins for wholesalers and retailers should be increased and should match with

that of major competitors. (As discussed on page 46 and 47)

The company should address the problem of rat bites (as complained by retailers of

Shovabazaar, Howrah which causes leakage in Utsav pouch packs) by giving free rat

killing poison. As it will create goodwill for company among retailers also.

The distribution salesman (DS) should also be told to make a note of the problems faced

by retailers in the sales of Utsav.

The company should rely on two or more suppliers for mustard oil rather than remaining

solely dependent on a single, non-exclusive supplier from Rajasthan.

2. For Consumers

The company should address the demand of consumers in Gariahaat for a 200ml SKU of

Utsav. As with the rise in purchasing power, the consumption rate for lower end

consumers increases and they want a bigger SKU instead of 50ml SKU as targeted by the

company. (A detailed discussion is available on page 43)

High end consumers from Park Circus, Ultadanga, Rajakatra want Utsav to be launched

in PET bottles (they are not aware of the launch of new PET bottle). So the company

should increase its reach and awareness of its new 1 litre PET bottle through ground

promotions.

55

The company should give discount schemes, combo offers for its customers like other

brands do as it will certainly help in driving the sales in modern retail outlets. (A detailed

discussion is available on page 39)

Some consumers of Rajakatra also want Utsav to be launched in 500ml SKU. (A detailed

discussion is available on page 43)

3. Others:

The company should enhance its retail visibility in modern retail outlets of Arambagh,

Pantaloons.

It needs to give promotions positioning on health and on its pungency levels.

It needs to enhance its visibility in Gariahaat and Behala markets.

Howrah district market is mostly consumed by loose oil. Here Keventer Agro should

make people aware of ills of buying loose oil prone to adulteration and can dominate the

area. As it can be seen as a large amount of untapped market. (As discussed on page 38)

The company should launch more SKUs in PET bottles as it is highly demanded by the

consumers. (As discussed on page 41)

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8.0 CONCLUSION

This study was aimed at the following objectives:

1. Analysis of distribution channel and distribution mechanism of Utsav.

2. To do a comparative study of Utsav with its major competitors.

3. To do a consumer survey regarding the attributes of a branded mustard oil and that of

Utsav.

4. To do a wholesalers/retailers survey regarding the branded mustard oils.

We used interview techniques and survey questionnaires for getting the insights in line with the

objectives. The results show that:-

1. The lower end consumers in Gariahaat are demanding a 200ml SKU of mustard oil. With

the rise in purchasing power, the consumption rate for lower end consumers increases and

they want a bigger SKU (instead of 50ml SKU as targeted by the company).

2. Profit margins for wholesalers and retailers should be increased and should match with

that of major competitors.

3. The company should enhance its retail visibility in Gariahaat and Behala markets and in

modern retail outlets of Arambagh, Pantaloons.

4. The company should start giving a one week credit policy to retailers in its pouch pack

SKUs also.

5. The company should tap the large untapped markets of Howrah district as they are mostly

consumed by loose oil. Here Keventer Agro should make people aware of ills of buying

loose oil prone to adulteration and can dominate the area.

However, the project has following limitations:

1. As there is no structured data available regarding this project which results in

insufficiency and inaccuracy of the information so obtained.

2. Inability of retailers and wholesalers to give the right information of the product may lead

to inaccuracy.

3. Time insufficiency

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9.1 QUESTIONNAIRE

(For consumers)

1. Do you consume branded mustard oil? (Yes/No) If yes, then please specify its name below.

2. From where do you purchase mustard oil?

Kirana stores ( )

Supermarket (Big Bazaar,Pantaloons,6TEN, Arambagh) ( )

3. Which is the most important feature you look for in a branded mustard oil?

Price ( )

Packaging ( )

Taste/ Pungency ( )

Offer ( )

4. Which form you would prefer more?

PET Bottle pack

Pouch pack

PET Jar

Tin carton

5. Do you find price of ‘Utsav’ affordable? (Yes/No)

6. Which SKU of ‘Utsav’ do you use more? (If uses Utsav)

50 ml ( )

500 ml ( )

1000 ml ( )

7. Would you like to recommend any other SKU for ‘Utsav’?

500ml ( )

200ml ( )

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9.2 QUESTIONNAIRE

(For distributors/wholesalers/retailers)

1. How many mustard oil brands are available in your store? (Name all)

2. What is the profit margin in each brand? (Purchasing price and selling price)

3. Which brands have the maximum demand? (Rate the top three)

4. Is there any credit period given by the company in the sale of products? (If

yes then specify)

5. Do the mustard oil companies provide any schemes or offers with the

product? (If yes then specify)

6. Does the company agent visit the shop regularly? (Yes/No)

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10.0 REFERENCES

Primary references required for the accomplishment of this project was

acquired through surveys and interviews of different sales outlets.

Secondary Data such as internet (http://www.keventer.com/agro/utsav.html)

Companies and distributors catalogues and books, periodicals, magazines,

and database was referred for collecting the data regarding the current

market scenario.

Last and most importantly, valuable insight was provided by both my

Company guide and Faculty guide.