PREFACE

In pursuance of my objective towards specialization in marketing I was fortunate enough to get a project work with a leading MNC Nestle India Ltd. who have a major lead and expertise in the FMCG industry. The project assigned ' Introduction of Maggi noodles in institutions and bakeries who have micro wave ovens ' gave an opportunity to get familiar with the functioning , identification of business opportunities for promoting Maggi noodles in the bakeries and office complexes . The project helped me in facilitating a fruitful interaction and understanding the methodology that is to be adopted for promoting the concept aimed by the project . The processed food industry is undergoing a revolutionary change with the speeding urbanization combined with increasing mass employment opportunities being generated . The processed food industry has to tap all avenues available for growth and in the process have to fine tune its marketing and sales strategies to make headway in the office / institution complex by changing and introducing food consumption habits and patterns . The openness that the employment sectors have created has helped exploring avenues for the cooked food service category by suitable innovation and renovation methods .

EXECUTIVE SUMMARY

SAMPLE STUDIED Location of study - Delhi City Duration of study - 8 weeks ( 3rd May to 30th June 2004 )

FINDINGS Exploration of new avenues covering bakeries and to generate

consumption of Maggi noodles , a product having a strong brand name , high retail clientele , and low unit cost , was a rewarding experience in terms of opportunities available . Out of the bakeries , large employment centers , and medium to large institutions like call centers covered , the response to the concept of cooking Maggi noodles or any catering activity for that matter was not very open as the institutions by and large were very particular about time keeping and maintenance of cleanliness in the work environment . Not withstanding the resistance to the suggested idea of generating consumption of cooked Maggi noodles within the work premises , can be pushed for with persistent hard selling efforts because even the smallest
2

of institutions with barely fifteen to twenty employees has an operative pantry where tea / coffee are prepared inside the premises . Bakeries are quite open to the concept of serving cooked noodles as a ready to eat snacks and so are desiring consumers who are willing to buy cooked Maggi noodles but at a price not exceeding 20 % of the MRP at retail market . Large employment pockets like District centers in the VikasPuri area in Delhi are ideal locations for furtherance of Maggi noodles cooked to serve . Small offices with pantry could be converted to regular use of Maggi noodles for lunch and snacks, as the employment in these setups do have regular snacking habits as well as in - office consumption of tiffin brought from home . Vends like caf Nescafe could be put up in or around these complexes to promote sale of cooked Maggi noodles which could act as a clear substitute to snacks of typical local origin and can attract large segments of the middle , upper middle and high end customers .

RECOMMENDATIONS

 Bakeries indicated reasonably good opportunity for selling cooked Maggi noodles from microwave ovens as many of them owned ovens . This avenue should be extensively explored for creating opportunity . Small offices with limited employment of fifteen to twenty

headcounts should be encouraged to commence serving of cooked Maggi noodles as a substitute for home food / and snacks ordered from outside . Large employment houses like call centers could be persuaded to introduce Maggi noodles at snack time at either partially subsidized or wholly subsidized rates . Large employment complexes like multioffice centers complexes could have Nescafe vends serving cooked Maggi noodles .

OBJECTIVE OF THE STUDY

The objective of the study was to ascertain the availability of opportunity for promoting sale of cooked Maggi noodles from institutions and bakeries who have micro wave ovens . SCOPE OF THE STUDY The opportunities available are from bakeries and in the work premises of establishments like banks ; call centers ; large employment centers like government offices ; LIC ; newspaper offices etc and also through outside catering located at large office complexes . METHODOLOGY OF THE STUDY Surveying bakeries for acceptance of the idea of serving Maggi noodles cooked in microwave ovens. Explore opportunities for introducing of service of cooked Maggi noodles in the office pantry itself , contracted canteens . The study was restricted to bakeries ; consumers ; offices located in East and West Delhi . The study involved extensive field work to locate bakeries and office premises , type of which were suggested by Nestle. Bakeries were contacted and interviewed with a standard

questionnaire on their interest , opportunities , acceptable cost , workable margins etc .

5

 Similar

survey

was

conducted

on

consumers

as

well

who

patronized these bakeries . Their views were ascertained on matters like their willingness to buy cooked Maggi noodles and the price they are agreeable to pay . Offices were surveyed by addressing a separate approved standard questionnaire to ascertain views on the idea of serving cooked Maggi noodles from their pantries . East and West zone of Delhi city was surveyed . From each zone 12 bakeries were surveyed . So a total of 24 bakeries were interviewed . From each zone 30 consumers were interviewed . The total number of consumers contacted in Delhi city were 60 . From each zone 15 institutions were interviewed . The total number of institutions contacted in Delhi city were 30 .

COMPANY PROFILE

NESTLE INDIA Ltd

NESTLE INDIA Ltd.

EXECUTIVE SUMMARY Nestle India Ltd , a subsidiary of Nestle S.A of Switzerland , is among the leading branded food player in the country . Nestle India Ltd is a vibrant company that provides consumers in India with products of global standards and is committed to long term sustainable growth and

shareholder satisfaction . It has leading market shares in instant coffee , infant foods , milk products and noodles . It has also strengthened its presence in chocolates , confectionaries and other semi processed food products during the last few years . The company has launched dairy products like UHT Milk , butter and curd and had also ventured into the mineral water segment in 2001 . Nestles leading brands include Cerelac , Nestum , Nescafe , Maggi , Kitkat , Munch.

Industry scenario : The processed food sector , which currently accounts for less than 2 % of total food consumption in the country , is slated to grow at a fast pace . The Indian government has identified Food Processing as a high potential industry and has been creating a policy environment conducive to its growth . MNCs as well as other domestic players have made aggressive investments in this sector . Quantitative restrictions on import of several food products have been lifted , leading
8

to greater availability of imported products . MNCs are able to offer a wider product range , without the need to establish a manufacturing unit .

Competition : Baby food and instant coffee are categories where brand loyalties are very strong and Nestle is the market leader . HLL is a significant competitor to Nestle in instant coffee , while Amul/Heinz are the main competitors to Nestle in the baby foods market . Nestle has achieved a significant around 40 % share in the chocolate / confectionary market . The company has recently expanded its dairy product portfolio to include milk , curd and butter . The company had also forayed into the bottled water segment with the launch of its Perrier brand in the premium mineral water segment and Pure Life in the purified water segment . Nestle has maintained its thrust on improving availability of its products and on initiatives to increase the freshness of stocks available to consumers . New products are continuously launched in all product segment . The culture of innovation and renovation within the company and access to the Nestle Groups proprietary technology / brands , expertise and the extensive centralized Research and Development facilities helps the company to create value that can be sustained over the long term .
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SWOT ANALYSIS

STRENGTHS Strength of brand name Maggi . High consumption item .

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 Low price product . Target customers are children , with target base expandable opportunity . WEAKNESS Quality of water . Hygiene while cook and serve . Infrastructure / Storage and manpower cost . Price as compared to chowmein available on roadside kiosks . Awareness amongst the customers about the new launch ( availability of prepared Maggi noodles ) . Right preparation .

OPPORTUNITIES Bakeries with microwave ovens Nescafe vends Teabunks Workplaces like call centers with a pantry and microwave oven THREATS
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 Local brands / Roadside kiosks , pushcarts serving chowmein .

SWOT analysis has been further discussed in observations .

OBSERVATIONS It is evident that the noodles market is in the grip of the Nestle range of Maggi noodles and the local brands like chowmein available on the roadside kiosks . Local brands like chowmein manage to make inroads into the segment of consumers who prefer a cheaper brand with slight compromise on taste variations .

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Given this background of the leadership that the Maggi brand enjoys it would be quite appropriate to explore further avenues beyond the retail consumer segment . The advent of big players like McDonalds , Pizzahut , Wimpys etc have revolutionized the eating habits of the people outside their homes , by introducing a wide range of fast foods . The youth and the young children have taken a great attraction for the kind of fooding that is available in the markets . The business size of the fast food joints has grown by leaps and bounds with the generation of large scale

employment opportunities for the youngsters in Business Processing Offices and commercial centers. It is obvious that with expanded commercial activities leading to higher employment generation will also simultaneously lead to growth of the

restaurant industry . With more and more of foreign investments coming in the core employment sectors the industry catering to outside eating needs will register a large growth in the times to come . For Maggi noodles , as a snack food a new avenue for growth is clearly opening up .

13

Given the background , low cost snacking / eating habit amongst the urban middle class in the working class sector , any alternative that can be thought of should be equally satisfying without any major increase in cost . If a snack like Maggi noodles is promoted as a substitute it has to decisively provide the premium edge in terms of satisfaction and affordable cost . If we have to capture the low cost snack segment we may perhaps have to ignore the segment , if we do not make inroads into the segment with our premium pricing . However there are segments which cater to the upper middle class , middle and upper classes by providing premium quality snacks with related premium pricing . Pizza and burger joints are an example . The concept of cooked Maggi noodles has to make inroads into this segment where for quality one can command a premium and over a period of time the market could grow with the help of persistent efforts that have to be initiated . A step by step approach , by introducing the concept of serving cooked Maggi noodles in the small to medium sized eating joints , will turn fruitful . On the lines guided by the project leader Mr Sanjeev Sharma the bakery segment in the various market pockets of Delhi were explored for opportunities . The response from the bakeries in many cases were not
14

very encouraging but were not disappointing either . The bakeries by and large were keen on exploring the business opportunity for cooked Maggi noodles. While it has been suggested that the noodle should be cooked in microwave oven only , there are bakeries who have been experimenting by cooking on a gas stove , appearing to be finding it convenient and cost effective . We should give allowance to the use of cooking methods on the gas stove to encourage sale of cooked noodles even from bakeries , who do not have microwave ovens .

15

From the study of the market and views expressed by the bakers it is amply clear that majority of the bakers are interested in the concept of selling Maggi noodles cooked in microwave ovens but the success of this concept lies in the demand generated , as most of the customers go for local brands like chowmein . In institutions specially offices and banks where eating is limited to lunch brought from home . As a result they show initial resistance to the concept of consuming of cooked Maggi noodles . Though call centers and offices where there is large employment have shown interest in this concept , they impose restrictions on the staff on time keeping .

DEMAND GENERATION The concept of serving cooked Maggi noodles has to be backed up by persistent efforts towards demand generation . While in the bakeries cost is a major limiting factor combined with likely size of the business to be generated , we have to essentially promote the concept by facilitating understanding of the unit cost / margins and at the same time do our bit by supplementing the opportunity development with necessary inputs on

16

localized campaigns support with the help of placards and printed leaflets etc . The bakeries already have ready to eat items in terms of hot patties

kept in microwave ovens or hot cases to be served to the consumers across the counter itself . This apart bakery customers also consume pastries and typical Indian snacks like bread pakoras , samosas and dhoklas etc . The point to be grasped over here is that with the advent of growing fast food counters , outside eating and ready to eat items have acquired a strong preference , with customers . With this kind of business opportunity we have to indeed get

aggressively into the fray and grasp opportunity by making a quick entry into this market segment and also create an ongoing recognition in this segment . The bakery segment apart from opening up newer avenues for developing business opportunity are also growing in numbers and will in the near distant future be acquiring a lead in promoting low volume ready to eat items .

17

OPPORTUNITIES AHEAD IN BAKERY SEGMENTS

Having discussed the opportunities in the preceding paragraphs let us move towards the methodology to be adopted for developing the opportunity in the bakery segment .

UNDERSTANDING THE PROFILE OF THE BAKERIES Bakers by and large have a fixed / resistive mindset . Where the bakers are having good business on the vending of their own internal

preparations ready to eat items and are reasonably satisfied with the size / performance of the business may not open up initially to Maggi noodles but we should essentially tap such outlets which have high clientele and flourishing level of business . There are also medium to small sized bakers who do not have very heavy sales / consumption across the counters but would also be keen on exploring avenues for expansion of business opportunities . Here is where we should commence high focus . At the outset we should be very clear on the costings and margins that the vendor is likely to

18

make so that the bakers do maintain continuity in promoting the concept . Now let us examine the total cost with the help of the data gathered. Following are the cost structures that is seen to be workable .

19

COSTINGS Having shared the preliminary details regarding the overall observations in the market place and institutions relating to the factors involved in the introduction of Maggi noodles ( both pack iske 50 gms and 100 gms ) , now I am going to focus attention on the elements / specific details supported by numerical workings done on the basis of information gathered . The components materials involved in the serving of cooked Maggi noodles are :

MAGGI NOODLES ( 50 GMS AND 100 GMS ) ELECTRICITY CONSUMED AS MAGGI NOODLES WOULD BE COOKED IN MICROWAVE OVENS DISPOSABLE PLATES / SPOONS PAPER NAPKINS MANPOWER COST MAGGI SAUCE SACHETS ( 12 GMS )

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The cost of all the above mentioned items have been shown in Annexure 1 , 2 supported by working notes in Annexure 3 . The survey conducted amongst the bakers , consumers , institutions revealed that they would be comfortable consuming noodles in disposable plates / spoons . The cost of disposable accessories have been calculated on the basis of wholesale prices and the cost of these accessories to the bakers . The manpower cost is calculated assuming that approximately , a baker can sell fifty units per day and cost of manpower is approximately rupees two thousand per month which is supported by the data available .

Accordingly the cost of manpower required for one unit of Maggi noodles is calculated . To calculate the cost of electricity a demo was done in Nestles kitchen to find out the exact time consumed for preparing Maggi noodles in microwave ovens for 100 gms and 50 gms pak size . For 100 gms it takes 5 minutes 30 seconds and for 50 gms it takes 3 minutes 30 seconds . Running fuel of microwave oven is 850 watts . Accordingly the cost of electricity is calculated for both pack sizes . Including the cost of Maggi sauce sachets depends on the bakers and the taste preference of the consumers . Interested bakers indicated that serving
21

of Maggi noodles without Maggi sauce sachets is incomplete . So the cost of Maggi sauce sachets have been added after calculating the total cost to the bakers and margin @ 30 % to the bakers . As the price of Maggi sauce sachets includes the margin . On an average bakers generally earn 30 % margin on the snack items ranging from rupees ten to rupees fifteen . On this basis we have restricted the initial margin to 30 % . While the costing details provided with the annexure are amply clear in providing an operative base for fixing up a price for the unit to be served , it should be clearly borne in mind that the cost on adding garnishing and providing ketchup sachets / additive will be an add-on which could make a difference of 7 % to 10 % on the final price of the Maggi noodles. It is of importance for us to keep the cost as low as possible and provide adequate margins to the bakers to encourage them to get into this business . Though the volumes could be seen as unlikely to be high in the initial stages we must keep exploring avenues by virtue of our promotion efforts to generate volumes that are satisfying and acceptable to the bakers showing interest . Here we can be very selective to begin with , who are located in areas with very high traffic of people . We can also
22

add on over here kiosks that are operating at bus stops and highways having stopovers . For a 100 gms noodles our present costing with vendors margin includes 30 % over the other costs , appears justified but this itself in terms of absolute earnings is not very high for the vendor. While the 100 gm noodles is priced at rupees 11.92 , could be rounded off to rupees twelve . Further add on ketchup as an additive can be send up the cost by another one rupee ten paise . This will mean the serve price will have to be fixed at rupees thirteen . The survey of consumers to ascertain the level of acceptance of the pricing strongly indicated that the willingness level was for a price around rupees twelve . This is clearly because the average consumer is aware of the price from the retail counter and is not willing to pay a very high premium to cover the other costs . Planning for a price level as high as rupees fifteen to a unit served

amongst the medium and small sized bakeries will not be an acceptable preposition . However at low volume generating bakeries , it could be justifiable . Similarly in the case of 50 gms Maggi noodles served it may not be very highly yielding in terms of business volumes as the % margins and
23

the cost of preparation and serving are almost the same as in the case of 100 gms of Maggi noodles . Therefore as a viable commercial option we should ideally focus on promoting cooked noodles through vends like bakeries .

ANNEXURE 1 COSTINGS FOR 100 GMS MAGGI NOODLES

S.No
24

RAW MATERIAL

QUANTIT

COSTING PER PORTION

COST 1 2 3 4 5 Maggi Noodles Electricity consumed Disposable plates / spoons Paper Napkins Manpower Total Cost Margin @ 30 % Price

Y 100 gms

(Rs) 6.83

5 mins 30 secs 0.31 0.43 0.1 1.5 9.172 2.75 11.92

ANNEXURE 2

COSTINGS FOR 50 GMS MAGGI NOODLES S.No RAW MATERIAL COST 1 Maggi Noodles QUANTIT Y 50 gms COSTING PER PORTION (Rs) 3.41

25

2 3 4 5

Electricity consumed Disposable plates / spoons Paper Napkins Manpower Total Cost Margin @ 30 % Price

3 mins 30 secs 0.20 0.43 0.1 1.5 5.64 1.69 7.33

26

ANNEXURE 3 WORKING NOTES COST OF MANPOWER 9 Hours = 50 Units FOR 26 Days units * 26 days = 1300 units Manpower costs = Rs 2000/For 1 unit = 2000 / 1300 = Rs 1.5 per unit COST OF ELECTRICITY CONSUMED

100 gms consumes 5 mins 30 secs of electricity 5 mins 30 secs = 330 secs 1000 watts = 1 unit / hour 850 watts = 0.85 units / hour For 5 mins 30 secs = ( 0.85 / 3600 ) * 330 = 0.078 units Commercial cost for 1 unit is Rs 4 /Total cost = 4 * 0.078 = 0.312 paise 50 gms consumes 3 mins 30 secs of electricity
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3 mins 30 secs = 210 secs for 3 mins 30 secs = ( 0.85 / 3600 ) * 210 = 0.049 units Total cost = Rs 4 * 0.049 units = Rs 0.196 paise or approx 0.20 paise

COST OF MAGGI SAUCE SACHETS 15 gms Sachets = 80 Sachets @ Rs 112 = Rs 1,.4 / Sachet. 12 gms Sachets = 80 Sachets @ Rs 88 = Re 1.10 / Sachet.

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DEVELOPMENT IN THE BAKERIES SEGMENT

While the final unit cost of consumption and the margins / earnings accruing to the vendor are a consequence in this segment we should also take strong development initiatives because the absolute number of bakeries and the size of the turnover in these bakeries is going to determine the final volume to be generated in this new opportunity segment . Apart from persistent efforts in selling we will have to help the bakery vends to put up the necessary infrastructure and extend valuable guidance in terms of cooking for maintaining hygiene , standards at which Nestle would prefer them to maintain . Adequate assistance has to be extended by way of demo activities and display materials to help promote the concept . The volume of business could obviously depend on the introductory effort , the location of the vend and the consumer interest generated for eating from such vends .

29

From a futuristic point of view we can gauge the business volume opportunities that can be possible even if the smallest of the vends sells five units per day and the best ones manage fifty units per day . An average of the vends unit turnover when spread over the number of bakeries in the country could well determine the final size of the business volume that could be additionally generated .

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COMMERCIAL ESTABLISHMENTS

Commercial establishments like banks and small to medium business establishments like private companies like ad agencies , small

establishments , large companies , domestic call centers are another set of avenues which could be explored for furthering opportunities for the cooked noodles concept . These establishments have employees numbering ten to fifty and offer good scope for our noodles either by way of preparation within the pantry area of the establishment . Initial inhibition amongst the personnel who mange the establishments is the need for maintaining absolute cleanliness at the workstation and maintaining discipline in terms of controlling excessive frequency of likely consumption on the snack item because of reasons of popularity of the brand itself . It is a given fact that the employees in these establishments either bring their lunch packets from home or order their eats be it lunch or snacks from outside establishments

31

The consumption of food in such establishments is either in the small eating room that is provided or on their own tabletops at the workstation. Considering that these consumers are well groomed I would surely respect the norms of cleanliness required . Hence the apprehension on the likely loss of cleanliness may not be all that base founded . Therefore here is an opportunity for us in the semi urbanized to fully urbanized towns where commercial establishments invariably have an organized pantry setup where from tea and coffee is regularly served . Here is where inside cooking for Maggi noodles appears a possibility . We could encourage these establishments to hygienically stock noodles in the pantries , as cooked noodles would be a convenient and tasty substitutes to replace the risks associated with unhygienic foods , brought from outside . While the food brought from home cannot be wholly replaced yet over a period of time the employees may opt for cooked noodles from their

pantry as a substitute for the home lunch at least for a few days in the week / month . Snack habits are generally limited to the consumption of repeating the same items everyday , cooked noodles from the pantry could be pushed as a substitute that could conveniently replace the snacks

coming from outside .

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This is an opportunity that has to be aggressively pushed towards eventual overall gains.

INSTITUTIONS The business opportunities in institutions could be categorized amongst the following groupings : Large government ; semi government offices like DDA , LIC , Income tax office etc . BPO(Business Processing Offices or call centers )

District commercial centers have hundreds of offices from small , medium to large . In the institution segment you have the availability of a very large number of working population which is either dependent on homemade food or subsidized staff canteens or food ordered from outside and consumed within the office premises or eating in the restaurants within the vicinity .

While the nature of consumption in this segment could not be seen as an avenue where the availability of cooked food is a constraint , yet cooked

33

Maggi noodles could be promoted as consumption item which could generate regular large volumes for us .

OPPORTUNITIES IN THE LARGE GOVERNMENT , SEMI GOVERNMENT OFFICES LIKE DDA , LIC , INCOME TAX OFFICE In this segment of large employment in the semi government , government and also some of the private sectors like newspapers , the number of

people consuming cooked food is very high in number hence this segment could be developed for generating consumption of cooked noodles . Most of the offices have their own canteens either subsidized or non subsidized . In some of these establishments the decision makers to provide entry for us could be either HRD departments or the canteen contractors or the employee unions themselves . For example : The Times of India group establishments at Bahadur Shah Zafar Marg employs around one thousand people and has subsidized canteens to serve various categories of employees .

While the workers category is provided meals and snacks from the designated canteen organized for them at highly subsidized rates possibly
34

as a part of the basic statutory requirements , the employers do not subsidize individual items in the menu but pay a lump sum to the

contractor employed for running the canteen . In this segment as the canteen operator will be maximizing cost cuts to maintain low unit cost without compromising on quality standards , the operator will be

endeavoring to maximize his own margins in the process . As this segment has the largest set of consumers our exploration or opportunities could be initiated with a preliminary discussion with the contractors . As the law does not stipulate on extending subsidies to the officer and executive levels , we could possibly explore inroads in such canteens where people have the ability and willingness to pay a premium for the snacks food being consumed . Eating in these establishments is restricted to within the limits of the cafeteria and service is done by the canteen boys and the unit cost of items is said to be very low . While the cooked noodles in the form of chowmein is a widely consumed item, cooked Maggi noodles as an item on the menu is non existent . There are indication that ten to fifteen percent i.e hundred to hundred and fifty units per day consume chowmein as a lunch or a snack item ,

35

hence is an indicative opportunity for serving cooked Maggi noodles in this segment . At establishments like LIC which do not have major subsidies on the unit cost of the items being served from the contracted canteens that are operative opportunity within for the establishments , there Maggi noodles in is surely a very large

cooked

these semi

government

establishments because of the frequent level of snacking habits and outside lunching habits . Cooked Maggi noodles can make headway while being either a substitute or a supplement to the main meals and as a snack time eat . In all the establishments like LIC and Times of India the liaison ,

interaction , negotiation etc is to be initiated with the contractor himself .

BPO ( Business Processing Offices or call centers ) Our best opportunity lies in this segment which is growing at a very fast rate as one of the greatest employment generators for our workforce amongst the youth . This workforce often due to frequent changes in their
36

work timings is forced to depend less on cooked food . Most of the establishments have varying kind of arrangements for providing food and snacks for employees either at subsidized cost or free of cost or as a fixed component of the pay packet which is broadly categorized as follows : Fully subsidized dinners . Free snacks which are generally self service counters in the pantries where in some establishments Maggi noodles is available . Regular meals / snacks are provided at fixed prices which form a part of the pay packet . These establishments have very well organized pantry support

infrastructure like provision of hot case , microwave ovens , bain-marie . Such establishments either have self service items or contractors handling food service arrangements .

Normally during recess and eating hours the snacking habits could be far too frequent .We would surely gain substantially by developing such establishments for eventual high consumption and also as an item in the meal . largely during snack times ,

37

Though these establishments have extremely tight work responsibilities they are lesser receptive to outside commercial interest in the fooding sector trying to gain entry . Our greatest advantage lies in the brands strength that we have convenience and speed in cooking and low unit cost . We should be able to encash on our strengths and on the opportunities available .

DISTRICT CENTERS These locations have many establishments like shopping malls , small commercial units which have small to large employments but do not have facility providing eating convenience within the establishments. The employee by and large depends on the eating joints operative in the from of dhabha and restaurants operative within the vicinity of their work places .

Nescafe vends and organized arrangements like restaurants could be outlets through which we can organize service of cooked noodles . The size of the business that could be generated will depend on the organized promo activities in terms of publicity or managing vantageous locations in and around high traffic establishments .
38

FINDINGS ON SURVEY OF THE BAKERS IN THE DELHI CITY MARKET SEGMENTS

After having covered the details of costings of Maggi noodles , now I am shifting focus to a detailed analysis on views expressed by the bakers
39

when surveyed on various aspects of serving Maggi noodles cooked in microwave oven . The bakers interviewed were of different grades like superA grade , A grade , B grade and C grade covering East and West part of Delhi .

VIEWS ON SELLING MAAGI NOODLES COOKED IN MICROWAVE OVENS The average views expressed by the bakers on the concept could be broadly categorized on the following lines : The majority were open to the concept and wanted adequate support to start up . Some others were open if the indicative real earnings were likely to be satisfactory .

There was some level of disinclination due to : Space constraint Good performance of own snacks , bakery items . Unwillingness to take up added responsibilities on preparation and watching . Inhibitive about the location of their own outlet .
40

The bakeries are an attractive avenue for generating sale of cooked Maggi noodles . Large number of bakeries even if generating small volumes at each of them could well mean an overall high business turnover for us . Hence a determined high focus effort is called for , in tapping this segment . There are obviously resistances of the nature listed above but we should not lose sight of the fact even if we do not have 100 % enlistment of the bakers to the concept , we should surely invest in the effort to start up the bakers on the concept . Refer Annexure : 4

BAKERS VIEWS REGARDING FACILITY IN TERMS OF MANPOWER AND SPACE For the bakers use of the microwave appears to be the best option as there will be cooking convenience and throwaway accessories . The limited inhibition is on the need for power backup which if volumes are justifiably adequate , could also be overcome . Some of the bakers are even willing to use gas stoves in which case the power backup requirements is a non issue .
41

It is reasonably clear that to begin with bakeries will only generate small volumes but never the less we should initiate and continue the process as many other dedicated bakers inspite of low turnover would maintain continuity because of opportunity to sell a branded item . Refer Annexure : 5

BAKERS VIEWS ON UNITS SALE PER DAY The likely number of units per baker outlet would obviously depend on location advantage generating interest of the baker . For us essentially a sizeable turnover increase the opportunity spread over low number of units across a large number of bakers .

We should select bakers located near and around high traffic zones like schools , colleges , employment centers , eating joints . Refer Annexure : 6

BAKERS VIEWS ON APPROPRIATE PRICE PLATE OF 100 gms OF MAGGI NOODLES . Pricing as discussed earlier would be ideal if fixed between Rs 12 to Rs 15 as majority favored price for 100 GMS to be in the range of Rs 12 to
42

Rs 15 . A small segment of bakeries suggested a price range of higher than Rs 15 /- . Here the suggestion would be that the down to earth costing should facilitate satisfactory margins to the bakers and fixing on the end pricing could be left to the bakers on line with the quality of service and customers segment their catering to . Refer Annexure : 7

BAKERS VIEWS ON ITEMS SOLD AT THE SAME PRICE POINT

Bakers already seemed to be selling various items of ready to eat variety which were priced at Rs 10 to Rs 15 /- range . Where , in view of their own internal preparation their absolute margins were indicated to be quite high . Inroads for Maggi noodles would be seen as an opportunity for similar margins . Hence over and above the suggested pricing , it should be left to the bakers to fix up their own prices .

43

BAKERS VIEWS ON PRICE MARGINS AT SIMILAR PRICE POINT ITEMS

Based on the cost structures suggested and data gathered from the survey of the bakers and the consumers also the recommended margins have been detailed to be equivalent to 30 % over the cost . Refer Annexure :8

PREFERENCE OF ACCESSORIES

Use of disposables will go well and is the best suggestion extended by both bakers and consumers . Refer Annexure :9

BAKERS VIEWS ON SERVING OF MAGGI NOODLES WITH MAGGI SAUCE SACHETS Bakers when interviewed , majority suggested that serving of Maggi noodles would be incomplete without Maggi sauce sachets . As some
44

others felt it depends on the cost involved and accordingly will decide the serving of Maggi noodles along with Maggi sauce sachets . Therefore after calculating the basic cost to the bakers initially the suggested pack size of Maggi sauce sachets is 12 gms . Refer Annexure : 10.

ANNEXURE 4

BAKERS VIEWS ON SELLING MAGGI NOODLES COOKED IN MICROWAVE OVENS

BAKERIES EAST WEST

INTERESTING 7 9

NOT INTERESTING 5 3

45

10 8 6 4 2 7

9 5 3 EAST W EST

0 INTE R ES TING

NO T INTER ESTING

ANNEXURE 5 BAKERS VIEWS REGARDING FACILITY AVAILABLE IN TERMS OF MANPOWER AND SPACE BAKERIES YES EAST WEST 7 9 NO 5 3

46

14 12 10 8 6 4 2 0

3 NO 9 YES

EAST

WEST

ANNEXURE 6 BAKERS VIEWS ON UNITS SALE PER DAY

BAKERIES 10units-50 50-100 EAST WEST 7 6 3

100-200

100% 80% 60% 40% 20% 0% E AS T

47

3 100-200 7 6 50-100 10units -50

W EST

ANNEXURE 7

BAKERS VIEWS ON APPROPRIATE PRICE PER PLATE OF 100 gms OF MAGGI NOODLES

BAKERIES Rs 10 - 15 15 - 20 EAST WEST 6 4 1 4

>20

10 0% 80 % 60 % 40 % 20 % 0%

1 4 >20 1 5 - 20 4 Rs 1 0 - 15

EAST

WEST

ANNEXURE 8
48

BAKERS VIEWS ON PRICE MARGINS AT SIMILAR PRICE POINT ITEMS

BAKERI 10% - 20% 20%-30% > 30 % ES EAST WEST 2 3 4 3 1 3

100% 80% 60% 40% 20% 0%

1 4

3 > 30 % 3 3 WEST 20%-30% 10% - 20%

2 EAST

ANNEXURE 9
49

BAKERS VIEWS ON PREFERENCE OF ACCESSORIES

BAKERIES DISPOSABLES EAST WEST 7 8

REUSABLES

100% 80% 60% 40% 20% 0% EAST

1 RE US A B LE S 7 8 D IS P OS A B LE S

WEST

ANNEXURE 10

BAKERS VIEWS ON SERVING OF MAGGI NOODLES WITH MAGGI SAUCE SACHETS

50

BAKERIES YES EAST WEST 5 9

NO 2

10 8 6 4 2 0 2 9 5 YES NO

EAST

W EST

FINDINGS ON THE SURVEY OF CONSUMERS IN DELHI CITY After having shared the observations relating to bakers in the Delhi city market , I am now covering the detailed observation relating to the interviews conducted on the consumers .

51

CONSUMERS VIEWS ON FREQUENCY OF CONSUMPTION OUTSIDE AND PREFERENCE OF MEALS OR SNACKS .

The eating habit of the consumers varies from occasional to frequent outings . With the families increasingly opting for outside eating and a very high frequency amongst youngsters varieties and choices are also increasing . This is indicative of a very clear opportunity fro snack foods . There is a stronger preference for snacks where the joints serve both

meals as well as the snacks . Refer Annexure 11 , 12 .

CONSUMERS VIEWS ON THE CONCEPT OF CONSUMING MAGGI NOODLES COOKED IN BAKERIES WHEN THEY ARE OUTSIDE HOME .

Most consumers are opened to the suggestion and are willing to give it a fair try . Refer Annexure : 13
52

 CONSUMERS VIEWS ON ACCEPTANCE OF Rs 15 /- PER PLATE OF 100 gms NOODLES The consumers basically have a mindset regarding the retail price of the 50 gms and 100 gms noodles available in the retail market . Hence the unit of cooked noodles also is being deemed as Rs 5/- and Rs 10/respectively . However when advised on the other costs associated with the cooking and serving process they showed openness in accepting to pay the premium . Refer Annexure :14

CONSUMERS PROFILE Consumers surveyed were a blend of young students , service goers , homemakers and retired persons and majority of them were from the family income group ranging from Rs 15000/- to Rs 20000/- . Many youngsters were in the age group between 10 to 20 years . Refer Annexure : 15 .

53

ANNEXURE 11

CONSUMERS VIEWS ON FREQUENCY OF EATING OUTSIDE

CONSUMERS EAST

VERY WEEKLY ONCE IN A FREQUENT WHILE 9 8 13

54

WEST

19

100% 80% 60% 40% 20% 0% EAST 8 9 7 4 W EST V E RY FRE QUE NT 13 19 ONCE IN A W HILE W E E K LY

ANNEXURE 12

CONSUMERS VIEWS ON PREFERENCE OF MEALS OR SNACKS CONSUMERS MAJOR MEALS EAST 7 SNACKS BOTH MEALS AND SNACKS 21 2

55

WEST

15

100% 80% 60% 40% 20% 0%

2 15 21 9 7 EAST 6 WEST BOT MEALS H AND SNACKS SNACKS MAJOR MEALS

ANNEXURE 13

CONSUMERS VIEWS ON THE CONCEPT OF CONSUMING MAGGI NOODLES COOKED IN BAKERIES WHEN THEY ARE OUTSIDE HOME

CONSUMERS INTERESTING NOT INTERESTING EAST 25 5

56

WEST

29

100% 80% 60% 40% 20% 0%

1 5 NOT INTERESTING INTERESTING

25

29

EAST

WEST

ANNEXURE - 14

CONSUMERS VIEWS ON ACCEPTANCE OF Rs 15/- PER PLATE OF 100gms NOODLES

CONSUMERS YES EAST 15

NO 10

57

WEST

27

100% 80% 60% 40% 20% 0% EAST 10

NO 27 15 YES

WEST

ANNEXURE 15 CONSUMERS PROFILE A ) OCCUPATION

CONSUMERS STUDENT SERVICE HOME MAKER EAST WEST 15 3 11 15 4 8

RETIRED

COSUMERS NOT ACEEPTING Rs 15 /- PER PLATE OF MAGGI NOODLES HAVE SUGGESTED PRICE RANGING FROM Rs 10 12 58

10 0% 8% 0 6% 0 4% 0 2% 0 0 %

4 1 1 1 5 ES AT

4 8 1 5 3 WS ET RT E E IR D H M MK R O E AE S R IC EV E SU E T TDN

b) INCOME GROUP ( 000 )

CONSUMER Rs 10 - 15 S EAST WEST 3 14

15 - 20 17 12

> 20 10 4

100% 80% 60% 40% 20% 0%

59

10

4 12 > 20 15 - 20 14 Rs 10 - 15

17 3 EAST WEST

c) AGE GROUP

CONSUMERS EAST

10 yrs - 20 14

20 - 30 8

30 - 40 5 3

> 40

60

WEST

14

12

100% 80% 60% 40% 20% 0%

3 5 8 14 EAST

3 4 12 14 WEST > 40 30 - 40 20 - 30 10 yrs - 20

RECMMENDATIONS / CONCLUSION

Following a study of the detailed findings , some of the salient points have clearly emerged which suggest the following recommendations :

1 . Bakeries and consumers are quite open to the concept of serving and consuming Maggi noodles cooked in microwave ovens at a price exceeding 20 % of the retail MRP .
61

2 . Persistent hard selling efforts are required in the small employment institutions as they have pantry to serve tea / coffee and they bring lunch from home whereas large institutions have canteens operating which are generally ready to give this concept a fair try .

ANNEXURE : 16

BAKERS VISITED IN EAST DELHI

S.NO

ADDRESS

TEL PH NO

INTEREST IN THE CONCEPT

62

1.

CONTACTPERSON: Mr.SIDHARTH PASTRY AND FAST FOOD SHOP NO 4 , A-18 , ACHARYA NIKETAN , MAYUR VIHAR PHASE 2. 3. -1 170 KISHAN KUNJ LAKSHMI NAGAR 47/48 GURU RAM DAS NAGAR . MAIN LAKSHMI 4. NAGAR MARKET RAJEEV BAKERY A 97 , PANDAV 5. 6. NAGAR 84 , MAIN LAKSHMI NAGAR MARKET 6 . KISHAN NAGAR LAKSHMI NAGAR

30934819 YES

22548880

NO NO

22449578

YES

NO YES

63

7.

CONTACT PERSON : Mr SANJAY NS FAST FOOD A-142 , MADHU VIHAR

22526169

YES

8.

PATPARGANJ DEPOT GOPAL PASTRY SHOP 72 B , VIJAY BLOCK , VIKAS MARG LAKSHMI

NO

9.

NAGAR UNIQUE PASTRY SHOP C 15 MADHU VIHAR

22046620

NO

10. 11. 12.

PATPARGANJ L 3 VIJAY CHOWK LAKSHMI NAGAR A/8 SHIVPURI A/8 SHIVPURI

55350250 552977568 22017942

YES YES YES

64

BAKERS VISITED IN WEST DELHI S.NO 1. ADDRESS 10181 ARYA SAMAJ ROAD 2. 3. KAROL BAGH BIKANERI NAMKEENS G 21/1A ANJALIKA PASTRY SHOP 6/78 AJMAL KHAN ROAD KAROL BAGH TEL PH NO 5783878 5740869 25110092 25724824 51048534 YES NO INTEREST IN THE CONCEPT YES

65

S.NO 4. 5. 6.

ADDRESS J 89 MAIN MARKET RAJOURI GARDEN H 42 RAJOURI GARDEN SHOP NO 11 NEW MARKET

TEL PH NO 25105268 51011324

INTEREST IN THE CONCEPT YES YES NO

7.

TILAK NAGAR 2284 ARYA SAMAJ ROAD

25740436

YES

8. 9. 10.

KAROL BAGH D168 FATEH NAGAR SHOP NO 2 POCKET F G8 AREA HARI NAGAR SHOP NO 5 DA BLOCK HARI NAGAR 28122100

NO YES YES

11.

DDA MARKET G 20/1 RAJOURI GARDEN

51446551

YES

66

ANNEXURE : 17

INSTITUTIONS COVERED IN EAST DELHI 1 . CONTACT PERSON : Mr . Rahul Agarwal DESIGNATION : Assistant manager Facilities planning & manager EXL SERVICE A48 , Sector 58 , Noida Tel ph no : 91(120) 2490320 22 2 . CONTACT PERSON : Mr . VK Agarwal DESIGNATION : CEO MAPLES E SOLUTIONS Ltd B31 , sector 5 Noida
67

Tel ph no : 2423825 3 . CONTACT PERSON : Mrs . Kamna Gupta DESIGNATION : G.M HRD SM TELESYSTEMS Ltd A-51 , Sector 8 Noida Tel ph no : 2544676 , 2544678 2531516 , 2533610 4 . CONTACT PERSON : Ms . Vandana DESIGNATION : Executive HCL BPO A 104 , SECTOR 58 Noida Tel ph no : 2589690 ( EXT : 313)

5 . CONTACT PERSON : Mr . Vivek Dharni DESIGNATION : Resident Manager HDFC Ground Floor, VikasDeep Building , Lakshmi Nagar Distt Center, Vikas Marg Tel ph no : 011 22463424 6 . CONTACT PERSON : Mr . Joshi DESIGNATION : HG Asst LIC Plot No 6 Lakshmi Nagar Distt Center, Vikas Marg Tel ph no : 2412152 7 . CONTACT PERSON : Mrs .Dutta
68

DESIGNATION : Administration Pidilite Industries Ltd 6TH Floor, VikasDeep Building , Lakshmi Nagar Distt Center Vikas Marg Tel ph no : 22541970 , 22440890 8 . CONTACT PERSON : Mr . SP SINGH DESIGNATION : SDO Asstt engineer CPWD Y Shape Building ITO Tel Ph No : 23370988 9 . CONTACT PERSON : Mr . CK SHARMA DESIGNATION : LDC Land & Building Deptt Vikas Bhawan , ITO Tel Ph No : 3378745 10 . CONTACT PERSON : MS . REKHA ARORA DESIGNATION : PA to Joint Secretary Welfare FOR Employees BLOCK D Vikas Bhawan , ITO Tel Ph No : 23379697 11 . CONTACT PERSON : Mr Arun Verma DESIGNATION : Senior Manager Personal TIMES OF INDIA 7 , Bahadur Shah Zafar Marg Tel Ph No : 3302431 12 . CONTACT PERSON : Mr K . Jamshed Alam DESIGNATION : Manager CANARA BANK Lakshmi Nagar Distt Center Tel Ph No : 22533662 / 22453662 13. CONTACT PERSON : Mr Praful Dhar
69

DESIGNATION : Manager J&K BANK A-6 Acharya Niketan Market Mayur Vihar Phase 1 Tel Ph No : 225751631 , 22751694 14 . CONTACT PERSON : Mr Sumer Kumar Dey DESIGNATION : Sr Sales Officer HDFC BANK G.F 1-2-3 , Lakshmideep Building Lakshmi Nagar Distt Center Vikas Marg Tel Ph No : 22046973 /74/75 15 . CONTACT PERSON : Mrs Shanti Bansal DESIGNATION : Special Asstt PUNJAB NATIONAL BANK PANDAV NAGAR Tel Ph No : 22754036 16 . CONTACT PERSON : Mr Vijay Yadav DESIGNATION : Asstt Manager STATE BANK OF INDIA E 68A PANDAV NAGAR Tel Ph No : 22799401 INSTITUTIONS COVERED IN WEST DELHI 1 . CONTACT PERSON : Mr Tarun DESIGNATION : HR Asstt i-2-i ENTERPRISE Ltd 10TH Floor Vshwadeep , 4 Janakpuri Distt Center Tel Ph No : 25616161 2 . CONTACT PERSON : Ms Tina DESIGNATION : Reception E Creations 324 3RD Floor Jaina Tower 1 Janakpuri Distt Center Tel Ph No : 25616594

70

3 . CONTACT PERSON : Mr VK Agarwal DESIGNATION : Executive Director SAFFRON 113 , Udyog Vihar Phase 1 Gurgaon Tel Ph No : 5007010 4 . CONTACT PERSON : Ms Anjali DESIGNATION : Executive BANK OF PUNJAB Mahatta Tower Tel Ph No : 5596940 5 . CONTACT PERSON : Mrs Monika Mahahjan DESIGNATION : Sr Officer ICICI BANK Ltd Mahatta Tower Janakpuri Tel Ph No : 25545992 6 . CONTACT PERSON : Mrs Taruna DESIGNATION : Lobby Sales INDUS IND BANK B23 B1 Community Center Tel Ph No : 51000141 7 . CONTACT PERSON : Mrs Pravinder DESIGNATION : Officer PUNJAB NATIONAL BANK B22 Community Center Tel Ph No : 25521270 8 . CONTACT PERSON : Mr Bishan Das DESIGNATION : Deputy Chief Manager BANK OF INDIA B19 Community Center Tel Ph No : 25508365 9 . CONTACT PERSON : Mrs Sangeetha DESIGNATION : Reception NCCB Pvt Ltd 301 Vishwadeep Tower Distt Center Tel Ph No : 25517441
71

10 . CONTACT PERSON : Mr BN Acharya DESIGNATION : Executive Marketing Deep peerless general finance & investment company Ltd 209 , 210 Vishwadeep Tower Distt Center Tel Ph No : 25593553 11 . CONTACT PERSON : Mr NC Bahirti DESIGNATION : CEO Taj Milk Foods Pvt Ltd 203 Vishwadeep Tower Distt Center Tel Ph No : 25573063 12 . CONTACT PERSON : Mrs Aarti Duggal DESIGNATION : Executive Secretary STUP consultants p. Ltd 1112 Vishal Tower Distt Center Tel Ph No : 25536108 / 109 / 110 13 . CONTACT PERSON : Mrs Sapa Kapoor DESIGNATION : Office coordinator Solomon technology 513 / 514 Jaina Tower Distt Center Tel Ph No : 25572408 14 . CONTACT PERSON : Mr Yogender Roy DESIGNATION : Manager TMS Infonet pvt. Ltd 1003 Vishal Tower Distt Center Tel Ph No : 25536843 15 . CONTACT PERSON : Mr Suri DESIGNATION : PA to MD Saxsons Ltd 806 10th floor Distt Center Tel Ph No : 25532708 / 09

72

APPENDICES

73

QUESTIONNAIRES FOR BAKERIES 1 . Do you have microwave oven in your shop ? a ) Yes b) No

2 . How do you view the concept of selling Maggi noodles cooked in microwave ovens ? 3 . If you are keen do you have the facility in terms of manpower and place ? a ) Yes b) No

4 . How many units sale per day is possible ? a ) 10 50 b ) 50 100 c ) 100 200

5 . What do you think is the appropriate price per plate of 100gms of Maggi? .. 6 . What other items you sell at the same price points ? . 7 . What is the margin at similar price point items ?
74

 8 . Would you prefer a )Disposable plates / spoons b) Reusable plates / spoons

9 . Should Maggi sauce sachets be served along with Maggi noodles ? a) Yes b) No QUESTIONNAIRES FOR THE CONSUMERS 1 . How often you eat outside ? a) Very frequently c) Once in a while 2 . Is it a) Major meals b) Snacks b) Weekly

3 . How do you view the concept of consuming Maggi noodles cooked in bakeries when you are outside home ? . 4 . For a 100 gm Maggi noodle serving is Rs 15 /- per plate appropriate ? a) Yes b) No 5 . If No , what is the suggested price .. 6 . What is your occupation ? a) Student 7 . Profile : 1) Income group a) 10000 15000
75

b) Service

c) Homemaker

b) 15000 - 20000

c) > 20000 2) Age group a) 10 20 c) 30 40 b) 20 30 d) > 40

QUESTIONNAIRE FOR THE INSTITUTIONS 1 . Do you have a canteen / eatery ? a) Yes b) No

2 . What are the total number of employees ? .. 3 . Is it a) Contractor run b) Employee run c) Company run

4. Type of service arrangement a) Self b) Canteen boys c) both

5 . What type of eatables are served ? a) Snacks b) Meals

6 . Whether the eatables are a) Prepared b) purchased

7 . What heating arrangements you have a) Hot case b) Microwave ovens

76

c) Others

Specify..

8 . Is Maggi noodles being served in the canteen a) Yes b) No

9 . If yes , how many units / day and at what price ? . 10 . If no , how many units / day can be consumed and at what price ? 11 . Is the canteen arrangements subsidized ? a) Yes b) No

12 . If yes then at what % is it subsidized . 13 . Would you prefer a) Disposable plates / spoons b) Reusable plates / spoons Name of the institution. Address . Contact person Designation . Tel Ph no .

77

BIBLIOGRAPHY : Marketing Management Philip kotler www.google.com www.nestle.com

78

GLOSSARY 1. EMP : employee 2. CONT RUN : contractor run 3. EMP RUN : employee run 4. COMP RUN : company run 5. T/C : tea / coffee 6. PREP : prepared 7. PURCH : purchased 8. H/C : hot case 9. M/O : microwave ovens 10.Sal : salary 11.Disp : disposables 12.No : number

79