Written Analysis and Communication

Individual Assignment No. 3

Case Analysis Report
On
Natureals Growth Options: Rural or Urban Markets
ubmitted by
Name : Varun Verma
Roll No : 131158
Setion : !"A #$%& ' A
Institute o( !anagement) Nirma *niversity
+ate o( Su,mission: -1'Septem,er'-.13
$or O((ie *se:
/rade
!"ecuti#e ummary
"rot0ers $ood 1rivate 2imited (aes issues 3it0 its pa4aged (ood ,usiness gro3t0 and e5pansion
deisions. It (aes dilemma 30et0er to position itsel( as a "-C player or a "-" player.
Segmentation) targeting and positioning
i
o( its retail ,rand Natureal are ma6or onerns. %0e
ompany s0ould ta4e a stand over its position in t0e mar4et and must at s3i(tly to prepare a
strategy and 0al4 out an ation plan. "rand Natureal is at sta4e and t0e o3ner) Vi6ay C0a3la needs
to ta4e a all to sa(eguard 0is ompany7s ,usiness.
Number o$ words in the !"ecuti#e ummary: %&
1age ' o( ((
ituational Analysis
"rot0ers $ood 1vt 2td #"$12& traes its roots ,a4 to t0e early 185.7s 3it0 setup o( retail ,usiness
o( pi4les ,y 0is grand(at0er in *daipur) Ra6ast0an
ii
. 1assage o( time) generation gro3t0 and inter'
(amily developments led to t0e ,irt0 o( t0e ompany in -..3 ,y Vi6ay C0a3la in /and0inagar)
/u6arat.
At its ineption "$12) 3it0 its state'o('art prodution (aility) 0ad a vision to 0ave presene o( its
0ig0 9uality (ood produts aross t0e glo,e. And t0us ,rand Natureal ame into e5istene 3it0 a
(amily o( ot0er su,',rands (or (ood items li4e pi4les) 6ams) urry'pastes et. "ut Natureal (aed a
lot o( pro,lems (rom t0e very ,eginning li4e:
%oug0 ompetition (rom ot0er players.
1oor ,rand a3areness.
:uge inventory pile up and 0ig0 storage osts.
Ris4 o( loss due to e5piry o( produts 30i0 3ere peris0a,le in nature.
It 3as only 3it0 t0e in(lo3 o( ,ul4 orders and government su,sidies) t0at "$12 ould 3it0stand its
(inanial risis. No3 Natureal needs to (ous on its 12C gro3t0 stage ations strategies
iii
.
S;O% Analysis o( Natureal
iv
s0o3s it 0as 0uge opportunities in rural and semi'ur,an mar4ets.
/u6arat s0o3s su,stantial inome levels and spending apaity 30en ompared to national levels
v
3it0 <.= sales o( "$12 /u6arat sales ome (rom rural mar4ets.
It is evidently lear t0at t0ere is 0uge sope in /u6arat7s rural and semi'ur,an mar4ets. %0ere is also
sope (or indiret promotions) as 3ell as revenue generation 3it0 ,ul4 orders (rom small
p0armaeutial ompanies. Natureal produts rea0 t0e end onsumers li4e (amilies o( dotors and
reate a ,rand image among t0e masses.
"usiness opportunities also lie in ta4ing t0e ompany a0ead as a 9uality supplier (or ma6or ,rands in
India and (oreign e5port mar4ets. "ut ,eoming a pure "-" player mig0t mean deat0 o( ,rand
Natureal and leaving t0e lurative and 0ig0 volume rural mar4ets (or $!C/ !NCs to ta4e over. All
t0e investments o( e((orts and apital in t0e ,rand Natureal 3ill ,e 3asted. On t0e ot0er 0and) "$12
an pose its 0ig0 9uality prodution system as a ma6or strengt0 (or t0e retail ,usiness) 6ust li4e t0e
,rands :aldiram> and ;ag0'"a4ri> are 4no3n (or 9uality.
1age ) o( ((
Vi6ay C0a3la) a(ter ? years in t0e industry) still 0as on(usions over mar4et'segment targeting and
positioning in t0e pa4aged (ood industry. +eisions must ,e ta4en s3i(tly to give proper diretion
to its ,usiness and loo4 (or neessary (uture ations to ,e ta4en.
*roblem tatement
%0e pro,lem 3it0 "$12 is regarding ,usiness gro3t0 and e5pansion. 1oor larity on 30et0er to
(ous in "-" or "-C segment ris4s t0e e5istene o( t0e ,rand Natureal) and t0us t0e ompany does
not 0ave a strategy in plae as to 30at diretion t0e ,usiness must ,e given in terms o( mar4et
positioning. I( deisions are not ta4en in time) t0e ompany may lose out its ,usiness to ot0er
players in all t0e target segments.
Ob+ecti#es
1. "usiness gro3t0 in t0e pa4aged (ood industry.
-. Sta,le revenue soures.
3. Critially e5amine and ta4e a stand ,et3een a "-" or "-C player.
?. Carve out strategy to proeed 3it0 mar4et penetration and ,rand promotion.
5. Inrease presene and a3areness amongst t0e target ustomers.
Options and Alternati#es
1. 1roeed as a "-C player 3it0 strategies to promote ,rand Natureal amongst t0e rural and semi'
ur,an mar4ets.
-. "eome a "-" player as a 9uality supplier to ,ig players and 0ave ontinuous stream o( large
revenues.
1age , o( ((
!#aluation o$ Alternati#es
1. "-C 1layer: "oost Natureal as a onsumer ,rand and put great e((orts on promotions to
indue onsumption. As disussed in t0e situation analysis) ,rand Natureal s0ould try to
penetrate deep into t0e rural and semi'ur,an mar4ets.
-. "-" 1layer: "$12 an leave its ,ase as a retail ,rand and (ous on "-" ,usiness to loal
players and !NCs 3anting to tap t0e Indian mar4ets. %0is also means a sari(ie o( t0e
retail ,rand. :ig0 9uality prodution (aility is surely going to ,e t0e attration (or t0e
ustomer ,ase and gives a 3inning edge over ot0er ompetitors. A 0uge ris4 in t0is ase is
t0at ,ig !NC players mig0t loo4 (or a9uisition in o( t0e "$12 to add on to t0eir loal
strengt0 in t0e long run. %0e o3ner 3ill t0en 0ave to evaluate and ta4e proper deisions at
t0at time.
-ecision
Critial @valuation suggests it is more ,ene(iial to ontinue as a "-C player and 3or4 on
esta,lis0ing ,rand Natureal as a ommon 0ouse0old ,rand in t0e rural and semi'ur,an mar4ets o(
/u6arat.
Action *lan
1. Improve relations0ip 3it0 0annel partners and try to pit0 sales o( Natureal ,rand.
-. Invest in promotion o( Natureal. $ous advertisements on onneting 3it0 t0e yout0 and
middle'aged group o( t0e soiety.
3. $or ,oosting revenues) loo4 (or assoiations and ,ul4 orders (rom government and private
entities. 10armaeutial ompanies are a via,le option to go a0ead in near (uture.
?. +istri,ution 0annels must ,e prepared to aommodate t0e antiipated inrease in sales and
t0e assoiated omple5ities.
5. 1enetrate in t0e untapped retail stores o( entral and sout0 /u6arat and try to gain ma5imum
s0el( spae.
A. /ive lurative o((ers to ne3 and e5isting distri,utors to gain trust and assoiations.
1age . o( ((
Contin/ency *lan
I( all goes 3rong and ,rand Natureal (ails to reate impat in t0e onsumer mar4et) "$12 an ur,
retail spending and (ous on supplying ma6or retail players and ,ul4 only orders to redue osts
intensively. All e((orts must t0en ,e put on prodution e((iieny and timely delivery o( ,ul4 orders.
I( possi,le) Vi6ay C0a3la s0ould also loo4 (or e5port opportunities as a 0ig0 9uality supplier o(
Indian made pa4aged (ood.
Number o$ words in the report: %,%
1age 0 o( ((
Report !"hibits
1. !"hibit1(: WO2 Analysis o$ Natureal
Helpful Harmful
Internal
Origin
2R!NG23
/ood 4no3ledge a,out prodution and
,usiness o( pa4aged (ood produts due to
(amily',usiness ontinuity.
!odern prodution (aility.
Su, ,rands 0elp in onneting 3it0 t0e large
0un4 o( yout0 and middle age
vi
3it0 at0y
taglines and attrative pa4aging.
Innovative distri,ution 0annel resulting in
deeper penetration in small to3ns) good
relation 3it0 its distri,ution 0annel partners
and ,etter ontrol to address issues
e((etively B e((iiently.
Assoiation 3it0 a ma6or regional daily
providing ,oost to promotions and ,rand
penetration in t0e target mar4ets.
*ni9ue styles o( promotions li4e ,randing on
distri,ution vans) annual visit o( distri,utors
to (atory to s0o3ase modern prodution
(aility leading to on(idene in 0annel
partners and spread o( 9uality t0roug0 C3ord
o( mout0D.
W!A4N!!
2evel o( penetration in various regions
o( /u6arat is still lo3.
"rand la4s universal appeal 3it0 its
taglines and pun0es and mig0t (ail to
onnet 3it0 ur,an population.
:ig0 maintenane osts o( t0e state'o('
art prodution (aility.
Company still unlear a,out (uture
gro3t0 and target mar4ets even a(ter ?
years o( ineption.
External
Origin
O**OR2UN525!
Retailers in rural and semi'ur,an areas o(
entral and sout0 /u6arat.
Ad6aent areas o( neig0,ouring states an ,e
tapped.
Inreasing inome levels and pur0asing
po3er o( target population.
"-" opportunities li4e 3it0 small
p0armaeutial ompanies and ot0er ,ul4
orders give good ,oosts to t0e top'line in
inome statements o( t0e ompany.
Constant inrease in pur0asing'po3er o(
23R!A2
Capturing o( mar4ets ,y !NC ,rands.
Small loal players mig0t pose
pro,lems in villages and to3ns.
%oug0 ompetition (rom ot0er players.
1age & o( ((
rural and semi'ur,an populations.
-. !"hibit1': *opulation distribution in 5ndia 6by A/e7

1age 8 o( ((
Undertakin/
%o ;0om It !ay Conern:
I) Varun Verma 0ere,y delare t0at t0is assignment is my original 3or4 and is not opied (rom
anyoneEany30ere. I( (ound similar 3it0 soures) I s0all ta4e omplete responsi,ility o( ation ta4en
t0ereo( ,y ;AC %eam.
Signature
Name: 9arun 9erma
Roll No:: ()((.8
ection: A
1age % o( ((
!nd Notes
1age (; o( ((
i
*se !ar4eting !anagement ,y 10ilip Fotler) 0apter <) 8
ii
*se C@'1: %a,le'1: %imeline
iii
*se !ar4eting !anagement ,y 10ilip Fotler) 0apter 8) 1age --<
iv
Re(er R@'1: S;O% Analysis o( Natureal
v
*se C@'1: %a,le'II #C&
vi
*se R@'-: 1opulation +istri,ution in India