KIRLOSKAR

STUDIES

INSTITUTE

OF

ADVANCED

MANAGEMENT

A report on Belge. Cakes and More

Relationship Marketing

Submitted to: Prof. Anita Kshetri

Group 2

Submitted by:

Belge Relationship marketing : an overview

Relationship Marketing is the relationship an organization maintains with a
customer, marketing partners, employees and other financial stakeholders
in order to encourage strong, lasting relations with the brand and through
that to create higher customer lifetime value.
The strategies a firm puts in place in order to achieve the desired
objectives of Relationship marketing are called Relationship marketing
Strategies.
Belge being a start up with an innovative idea, a very unique competitive
advantage and small resources has huge potential to grow. The Customer
base in the area available is tremendous.

Suspect

Prospect

Customer

Partners

Belge being located in Sangli, both locations brimming with opportunities

may have the following suspects.

The total of 719,357 people living in the urban areas. Subtracting the
number of people with diabetes or other such health issues, the entire
urban population may be our target because even if people do not have an
inclination for cakes, breads and biscuits, it can very well be created.
Besides this, a total 2,102,786 people are living in rural areas. This is also
an untapped market where the culture of Cakes and pastries may exist with
a very small coverage. This coverage can be extended. In both areas,
focus should be on Children as well.

Other than Sanglis resident population, it is about to receive a breeze of

educated, skilled and unskilled labour because of its developments in Wind
Power, with the existent Suzlon and upcoming Reliance wind power plants.
The BhartiVidyapeeth being in close proximity to the bakery is also a key
customer base because it comprises of Students and faculty who are
educated, and well to do with the knowledge and interest in confectionary
items.
Alongside an IT revolution awaits Sangli with the formation of the IT
park.Again bringing in a group of prospective buyers.
These are all suspects to tap in Sangli for Belge.These suspects need to
be lured in to become Prospects.
Most important prospects to Customer:
Children and youth.( Primarily people- less than 35 years)
The employees of the IT Park. This may be a very profitable group.
Belge can create special strategies:
1. For individual employees create a discount on purchases if they
show their ID Cards.
2. This individual relationship that is created may further bring the
possibility to become the official Bakery caterer for all the official/
Corporate event of the IT sector.
In this manner from one employee Belge allows a number of employees
and in turn the IT sector to become loyal customers. This is the conversion
of a Suspect to Prospect to Customer.

 Belge can lure in Children by making unique cakes and pastries

primarily keeping in mind the thought process and current trends
running in the Childrens segment. For example: cakes and pastries
showcasing animated characters like- ChotaBheem, Doremon, Angry
Birds etc.
For this Belge can become official partners with the organizations
who have created these characters in order to gain a competitive
advantage and gaining monopoly in producing confectionary items
with these caricatures.
To lure in the Youth( the students from BhartiVidyapeeth and other
near-by colleges), events like Valentines Day, Friendships day etc.
Where in special cakes of these themes may be produced at
reasonable rates.
An important prospect is also the Vegetarian individuals and
communities of the area. The competitive edge of BELGE is that they
produce 100% vegetarian cakes with absolutely no use of egg or any
other such components. This is an important factor that should be
highlighted in order to pull in the Vegetarian crowd.
(This is in favour of Belge because in the Hindu society especially,
even non vegetarians have holy days of the week when they forbid
from eating Non vegetarian food. If a birthday or other special
occasion arrives on such a day of the week, this crowd will be
interested in buying Belge cakes as the purpose is served without the
holy day being forfeited.)
Partners:
All of these customers will become partners and advocates for Belge once
they are completely satisfied with the service of the Bakery and have an
enhanced experience each time they visit Belge. If the quality is maintained
and customers receive good treatment they will be loyal and spread the
word in favour of Belge.
Small errors in quality etc can be made up for by replacing a damaged
cake and sending in an apology greeting.

Besides the above written strategies for the Four important stakeholders,
Belge can come into the public eye by indulging in certain C.S.R. activities.
We suggest:
For an important social event like: 14th November (Childrens day).
Belge can sponsor a small local event for orphan children or supply
pastries to an orphanage on Childrens Day. This will not only
complete their C.S.R event but also will gain the attention of local
media and lead to publicity.
Waste reduction program: This is again a win-win situation because it
leads to a clutter free working environment at Belge but also makes
Belge a company with goodwill in the city as they are reducing the
waste generation in the city.
Customers:

Demographic Profile
SANGLI

URBAN AREA

RURAL AREA

Percentage population

25.49%

74.51%

Total population

7,19,357

21,02,786

Males

3,64,604

10,71,124

Females

3,54,753-

10,31,662

Literacy rate

86.24%, 90.63%

87.39%, 72.12%

Belge products

CAKES

PASTERIES

BROWNIES

MUFFINS

MOUSSES

*Pure veg products

Relationship marketing strategies

a. Creating new customers and retaining existing customers.
1. Categorizing customers based on measurable factors such as buying
cycle, customer purchase value, profit/month etc. and following
different strategies for each of the categories to move the customer to
the upper class.
Categorization can be into the following categories:

Bronze
class

Silver
class

Gold
class

Platinum
class

2. Creating and maintain database for the existing and target customers
with the following parameters:
a.
b.
c.
d.
e.
f.
g.

Name
Father name
Age
Address
Contact no.
No. of family members
Date of birth of all the family members with name

3. Making calls on all occasion to exchange greeting and remind them

of Belge cakes and more. This could act as the most cheapest and
convenient way to market themselves.

Advantages
1. Create an impact on customers mind.
2. Inexpensive and easy processes that can be handled by a team
among staff.
3. Effective two way communication to the customers.

b. Relationship marketing through various social media channels.

1. Create digital media presence on platforms like Facebook, Twitter,
Google+.
2. Post regularly on the platforms to communicate and get connected to
the customers in a better manner.
3. Launch events and prices for winners.
4. Communicate about the various events and activities in and around
the company. Like discount offers etc.

This can be done in two ways:

1. Outsource the whole concept of digital marketing to some company.
2. Assign responsibilities to a team by dividing the jobs.
Outsourcing wont be a good option at this stage as the no. of outlets and
the target customers strength is low right now but can be a good option
after some time.
Advantages
1.
2.
3.
4.

Better way to get connected to young generation.

Effective and efficient way of communication.
Better spread and scope.
Cheap and easy to use technology.

Employees:
BelgeTM cakes should understand the importance of its employees.
Belge should harness its employee relations in order to keep them happy
and motivated. Employees with high morale will in turn bring profits to the
organization.

Rules and regulations

Working Hours:Belge should invest in a system of Full time (FT) and
part time (PT). Full time employees must average work for at least
48hrs i.e.; [(9hrs-1hr. meal break)*6 days] hours per week. Itshould
also encourage youth who want to work as part time employees.
They should be allowed to choose their working shifts. They will need
to work for 7 hrs and will receive their perks as per part time
employees policies. While part time employees can also become a
full time employee by making an average of what is for the time
duration for full timers for a week for continuous 3 months.

Work schedules are established based on demand and sales volume.

Dress code:All staff members should be given a fun, lively uniform.

The uniform must reflect the spirit of Belge in every sense. All the
employees are needed to follow food safety regulations. The back
end employees need to strictly follow the rules while preparation of
products. These regulations are the key to quality and will take the
firm a long way.
Employee Responsibilities: Employee cooperation should be
encouraged. This is the best way to ensure the work environment is
free from corruption and harassment.
In case of leaving the job a person needs to give a notice 2 months
before the date of leaving.
We have an open door policy and we have meetings around the year
for all the employees. Attendance in such meetings is compulsory.
Any employee found destroying or damaging company property will
have to face severe actions.
As the organization is decentralized, as a responsible employee you
are always welcome to keep your viewpoints and suggestions about
any amendments of betterment that can be brought to the
organization. This open conversation will win the confidence of
employees who will give their best in their work.
Monthly meetings should be conducted to listen to the employees
take on matters and also weekly reports should be collected to mark
progress.An official Whatsapp or Google group may be created for
Belge for fast and urgent conversations to aid in quick decision
making. This group can also be usedto express concerns of
employees.

Benefits for Employees

Medical insurance:Belge may offer medical insurance plans wherein
it can pay a major part of the employees monthly premium. The
specific company-paid portion may vary based on the plan and tierlevel selected. It will be deducted as (pre-tax) from the pay each
payday.
Max Life insurance: A tie up with Max(or a similar insurance
company)to provide FREE term life and Accidental Death &
Dismemberment insurance to eligible FT employees. This insurance
policy is with collaboration to Max life insurance services.
Vacation: Employees are provided with facility of taking a paid leave
for (4+1 emergency) days in a month. Employees are given all
national holidays.
o Vacations cant be taken in peak seasons(Christmas, New
Year, Easter). Information of vacation being taken must be
given in advance.
Employ meals: Company provides its employees lunch on working
days.
The Employ referral bonus: If an employee gives referral to high
quality candidate, a bonus is given to the employee.
Perks for Employees
Bonus: Employees may get an equal hours of holiday benefit for
doing over-time.
Performance appraisal: An employee may get incentives, promotion
and increments based on performance. Performance appraisal is
done every 3 months.
Employees could be given discounts on Belge products.

Payment Cycle
At Belge they can follow the practice of giving payments every month on
the first working day. The payment will be in the form of bank account being
credited. The Bakery can have a tie-up with a nationalized bank. And the
salary accounts of all the employees are made in that bank.

Marketing partners:
Strategies:
1. Logistics: Since the bakery is situated in sugar belt surrounded by
many vendors. Company can provide free transportation facility to
frequent suppliers which lies within the radius of 7 Km. this will
encourage them to deliver better quality at minimum operation risk.
(This proposition will require good financial resources, hence can be
started after the company hits break even and begins making profits).

2. Web portal for JIT: If company is willing to lessen the inventory cost
they need to follow the JIT concept, in which each of its supplier
would be registered online hence providing the excess to information
regarding supply of raw material demanded by the company, tracking
the inventory by utilizing tracking software or internal spreadsheets
we can design, we can monitor the whereabouts of the inventory.
This will help us to know how much of your product you have, how
much you need, as well as if anything happens to it (damage, decay,
theft, etc). It is important that staff knows how this system works so
they can effectively log information, as well as participate in routine
inventory assessments, moreover we can have SRM software to
manage our supplier, it will provide centralized information to keep
track on them. (Again: installation of such a system requires financial
and technological resources, which can be pursued within a year
from now)

Credit period: It is very important for any suppliers to have minimum

credit period, and certainly becomes difficult for company to manage
with it. To resolve this problem company should categories their
supplier in tier I, II, & III to prioritize them for paying their money back.
For E.g. Vasantdada Sugar factory could be our Ist priority vendor,
which should take care for credit payment.
3. Keeping lines of communication open
4. : Inviting suppliers for strategy meetings, business events and
parties, keep them informed about customer taste and preferences to
make out best quality.

SOP:

1. Getting the call from vendor that raw material is ready to be shipped,
First locate the vendor within circle, then after pass the information to
you logistic company to which you are paired, give the
purchase/order document to the vendor in reciprocate take invoice
from them and deliver the goods to station, Finally handover the
details (distance travelled, time taken, fuel
exhausted, invoice etc.) to store manager.

2. First and foremost hire a software provider, we need to find the

compatibility of using the software between the vendors and
company, or else there is need to educate them. Once they are
familiar with the interface we would ask our software provider to
install the setup and apprehend the use of same.

Q2= Low
OR, Low
VC

Q1= Low
OR, High
VC

Q3=
High OR,
Low VC

Q4=
High OR,
High VC

Fig.Value creation

On the basis of above matrix we would categories our vendors in Tier I, II &
III.

Policies and guidelines:

1. Payment terms as per the categorization
2. Provide free transportation within 7 Km radius.
3. Collaborative programs and meetings.

Financial Stakeholders:
The financial stakeholders/ promoters of the company who would be more
interested in the financial profits of the firm, would like to see a fast and
sustainable growth in their financial indicators like the return on
investments, return on equity etc.

But since Belge being a start-up company, one has to bear in mind that the
initial profits may not surpass their investments. Hence taking flipkart, the
most successful start-up, into consideration, we suggest the promoters of
the Belge, at least for the next 2-3 years, to concentrate more on the
valuation of the company, rather than its earnings.
With an objective of not making the valuation a complicated financial
procedure, we have adopted the discounted cash flow method to
understand the present value of the company.
This procedure will be more appropriate to a naive financial promoter who
wanted to understand the financial status of his company in just one figure.

The current value of Belge:

1

8803

20606

22666

24993

27426

28798

31677

(Cost
of 7575
Production)

17287

19126

20678

22193

23849

25718

EBDIT

1228

3319

3540

4315

5233

4949

5959

(Interest)

98

404

365

320

270

213

157

EBDT

1130

2915

3175

3995

4963

4736

5802

(Depreciatio 497
n)

423

360

309

266

229

198

(Written off 80
Expenses)

80

80

80

80

577

503

440

389

346

229

198

EBT

553

2412

2735

3606

4617

4507

5604

Tax

166

724

821

1064

1385

1352

1681

Sales
Revenue

EAT

387

1688

1914

2542

3232

3155

3923

CFAT

884

2111

2274

2851

3498

3384

4121

Discounted
CFAT (10%)

803.6 1744.6 1708.4 1947.2 2171.9 1910.1 2114.7

4
3
9
7
8
8
2

NPV= 12400.91
The current value of the company, as calculated, is Rs. 12400910/-. Now
this has to be compared with the promoters initial investment which will
then be mapped to their expectations. With the strategies that we have
suggested we believe the above the cash flow to inflate even further, thus
shooting the NPV to move even further, ultimately resulting in the
promoters satisfaction.

In this manner the four most important stakeholders of Belge are covered
and strategies to support the relationship marketing have been highlighted.