The changing trends in biscuit consumption pattern: a study of McVities digestive biscuits in Jaipur.
Narula, Anupam ; Taneja, Shallini ; Tyagi, Abhishek 等
[ILLUSTRATION OMITTED]
Introduction
Cookies dominate the market space, with Britannia leading the game
with its Britannia Good day Cookies, which are one of the most expensive
of all cookies in market. In terms of value, Parle is ahead, by
providing more amount than other brands with a promising quality and
taste. People of higher income segment are more inclined towards high
end health biscuits as compared to moderately priced glucose ones.
Packed healthier food usually costs more and the people in a particular
segment are ready to pay for consuming healthier biscuits.
As a result of opening up of cross country trades and businesses in
the last 15 years, the taste preferences and consumption styles which
get developed in one country seem to be developed in other countries as
well. Biscuits are one of the most popular snack-food because of their
ready to eat nature. The Indian biscuit industry has become crowded with
competition and the fact that consumers have fallen in love with foreign
brands, like the British brand 'United Biscuits'. The company
has biscuits in many different packing's available all across
India, especially north. It also has manufacturing unit in India.
If we talk about the consumption composition of biscuits in India,
rural accounts for around 55 percent of total, with states like
Maharashtra, Karnataka, West Bengal and Uttar Pradesh being the states
that consume maximum biscuits in India (Dutta, 2015). It is interesting
to know how, when more than 30 big companies have come up on large scale
for organized biscuit production, India still remains a country where
around 70 percent of the biscuits are produced by small scale sector.
The estimated consumption of biscuits in India (Per capita) is around
1.8 Kgs, which has a high disparity in terms of locations and economic
classification (Dutta, 2015; Technopak, 2014). In India, Biscuit
industry currently contributes around 33 percent of the total production
in Bakery industry. Within the biscuit industry, there is a broad
classification among 3 major categories: Glucose, Cookies and Cream
biscuits. There is a fourth new emerging category of Digestive biscuits,
which is gaining momentum in the economically stable segment.
Cookies are the anchors in the category of premium offerings, like
Britannia's Good Day (Leader in cookie segment).Even when it may
cost as much as Rs. 500 per kg, people in some segments do buy them.
Within this category, Nutri Choice Heavens, Sunfeast Delishus are the
players which claim their cookies provide both health and taste.
Parle's Hide & Seek and Milano are also a part of this
category, with Parle itself dominating the glucose segment.
In the glucose segment, Parle is ahead of all, by providing more
amount than other brands with a promising quality and taste. The trust
level of Parle is too high to be beaten in this segment when compared to
other brands. Sunfeast's glucose biscuits are the challenger to
Parle G in this category.
When it comes to the cream biscuits, ITC could be called the leader
in this category. Among the premium biscuits in this category are
Sunfeast Dark Fantasy (Choco Fillz and Choco Meltz) and Mondelez, which
entered India with Oreo. Due to huge investments in marketing and very
appealing campaigns (for instance, Oreo's bus campaign around 450
small towns in India), there was an increase in sales, for a time period
of around 2 years. The overall share of creams would be around 20
percent, and the year on year growth rate has been on a decline
recently. As per a media planner on condition of anonymity, "This
category is seeing disproportionate marketing outlay accounting for
nearly 40 percent of ad spends even though the market share is just
about 7 percent (Advertising Age India, 2015). Among other segments, the
health biscuit segment, which is around 2-3 percent of total biscuit
industry, is very promising. Players like McVities and Britannia have
introduced categories of digestive and Marie biscuits, which offer
promising future in India.
Britannia and Parle have approximately the same market share of
around 28 percent, placing both of them as the market leaders, with
ITC's Sunfeast as the next closest competitor claiming around 11
percent market of the total biscuit market share in India. (Economic
Times, April 8, 2015).
People with higher income level tend to spend more inclined on high
end health biscuits as compared to moderately priced glucose ones. Due
to increase in the awareness level regarding the healthy consumption
options, people in a particular segment are ready to pay for consuming
healthier biscuits.
Vijay Udasi, from Nielsen India, says: "In an average
household, biscuits typically come like a repertoire of various segments
and categories. The challenge will be to find relevance in that
basket." The real challenge now for the major biscuit players in
India is to move cream biscuit consumers to higher priced variants or to
expensive cookies, and also to bring back the healthy options with more
nutritious offerings.
Digestive is less than 1 percent in the market today. Also, in
modern trade, McVities has a 40 percent share in the digestive category
within India-Excerpts taken from an interview of the CEO of United
Biscuits, Mr. Jeff van der Eems, published in Economics Times, India,
April, 2013.
'Marie', as per industry reports, is a Rs. 3,000-crore
category, growing 9.5 per cent a year. On the other hand, in the
digestive category, with estimated sales of around Rs. 150 crore,
McVities' all-India share in the digestive segment is around 15
percent.
Various attempts have been made by many companies to enrich the
taste and nutrient content of their biscuits, and McVities has been one
of them. It has been experimenting with launching different flavours in
the Indian market, and Indian consumers have given a mixed response to
these experiments.
Literature Review
There has been a good deal of academic research focusing on buying
behaviour of consumers which directly affect their repurchase decisions
(Yi, 1991). Due to the globalisation and changing preferences in recent
years, consumers demand for convenience food including biscuits, snacks
and healthier alternatives have been on the riser side (Kitson and
Michie, 1998). In India, biscuits are the most common snack along with
tea and coffee. It continues to be one of the fastest moving packaged
food categories from various retail channels. According to Bloemer and
Kasper (1995) the relationship between customer satisfaction and loyalty
could be moderated by respondents on the evaluation of the brand choice.
Consumers and retailers are closely connected when it comes to
consumption of goods (Bowman and Narayandas, 2001).
While growth of this segment is expected to slow down as
manufacturers are offering discounts to push volume sales, which in turn
has slowed down the value growth of the industry (Wilson, 2000), still
the biscuits are expected to grow by a value Compounded Annual Growth
Rate (CAGR) of 6 percent at constant prices during the period of
forecast (2014). Companies have worked explicitly towards diversifying
their distribution in the retail sector while improving the bottlenecks
i.e. factors like type of channels, number of new variants and volume,
etc. They have out of both necessity and demand, maintained a
competitive price in order to enjoy a healthy growth during past few
years (Dumond, 2000). Digestive biscuits are the latest addition to the
portfolios of all major biscuit companies in India, especially with the
rise of health consciousness and need of healthy snacks suitable to the
health pattern among people of all age groups. Biscuits no longer remain
an impulse purchase in some brands, while they are for others (Berry and
Clark, 1986). The average consumer rarely comprehends the amount of
thinking that goes into his basket of biscuit purchase. Expectations,
generated by information provided, are reported to have an effect on
hedonic ratings in the case of health and nutrition claims for biscuits
(Carillo, Varela and Fiszman, 2012a; Carillo et al., 2012b).
Consumer satisfaction has been considered very important from
various angles, especially in food industry where taste and health are
two major issues people consider before making a purchase (Gyrna 1988).
It becomes imperative to ensure that consumer behaviour is known in
order to make strategies aligned to those behaviours (Cooper, 1990).
Bloemer and Kasper (1995) talked about the relationship between customer
satisfaction and loyalty that was moderated by respondents on the
evaluation of the brand choice. The acceptability of the new choices in
any brand depends upon the past experience of the product and the
factors affect the satisfaction of the consumer and it becomes more
crucial when comes to make a health choice (Keaveney, 1995).
Biscuits constitute major component of human snacks in most part of
the world. It is an unleavened crisp, sweet pastry made from wheat
flour, shortening (hydrogenated fat) and sugar, and is usually made
light by the addition of baking powder (a mixture of sodium carbonate,
sodium bi-phosphate and cereal flour). Wheat flour constitutes the basic
ingredient for biscuit production because of its gluten proteins, which
are not present in flour of other cereals. Gluten protein forms elastic
dough during baking and gives high organoleptic quality to the finished
product (Dumond, 2000). Bakery industry is the one of the largest food
industries in India with an annual turnover about Rs 3000 billion. The
biscuit industry has been growing at an average rate of 15 percent
during the past 3 years and this is expected to be maintaining in coming
years (IBMA, 2010).
Biscuit consumption per capita in India is 2.1 kg, compared to more
than 10 kg in the USA, UK and West European countries and above 4.25 kg
in South-east Asian countries, e.g. Singapore, Hong Kong, Thailand,
Indonesia, etc. China has per capita consumption of 1.90 kg, while in
the case of Japan it is estimated at 7.5 kg (Pathak and Srivastava,
2009). "If we talk about the organized segment of the biscuit
market which is estimated to be 0.44 mn tons whereas the unorganized
sector accounts for the balance 0.66 million tons. Within the biscuit
category, cream and specialty biscuits are growing at faster pace as
compared to the other categories" (Goswami et al, 2013).
Biscuit industry in India in the organized sector produces around
60 percent of the total production, the balance 40 percent being
contributed by the unorganized bakeries and United biscuits, being an
international company, has made tremendous growth in India in past 6
years after its launch in 2010. Companies like Britannia, Parle, ITC,
etc. have created spaces in both the minds of consumers and shelves of
retailers in past many years of their operations in India. The hybrid
model, what most studies do not highlight, is the need of studying both
the consumer and retailer behaviour together, in tandem. The inference
would not only help the retailers to gauge the customer's
preference but both could be made and utilised for growth of the
companies in a more strategic way.
The range of launches in biscuits industry is expanding: While
United Biscuits has launched a wide assortment of products under brand
McVitie's, GSKCH has introduced Horlicks biscuits in animal shapes,
targeting very small kids. It has also extended the Horlicks range to
new options like bubble-gum flavour and crunchy cornflakes. Britannia
has also expanded the range of its Nutri Choice brand from plain vanilla
digestive biscuits to spice- flavoured and diabetic biscuits. ITC has
also come up with new variants, such as Marie Light Orange and Marie
Light. United Biscuits being world's fourth-largest biscuits maker,
is now focusing upon growth in the revenue of India, and not just
chasing market share. India is the largest market of McVitie's
digestive biscuits in Asia for the company, just after three years of
its entry. Also, it's really tough for company to stand up against
rivals such as Parle, ITC and Britannia.
Rationale for the Study
Digestive biscuits, as a concept, have evolved in India only in
past few years. United biscuits, despite being the harbinger of it, have
not been able to cash upon its first mover advantage. Other competitive
brands have come into picture, especially Britannia, which have occupied
the largest share in the digestive segment along with other segments of
biscuits like cream, glucose, etc.
Therefore it becomes critical to study the factors, at the end of
both retailers as well as consumers, which have affected the buying
behaviour of the consumers and the sale of digestive biscuits. This
segment is one of the newly emerging one among all the existing
segments, hence it would be beneficial to study it from both an academic
as well as corporate point of view.
Jaipur city is an appropriate choice for research, given has a
population of 6.6 million and stands as 10th most populous city of
India. In cities like Delhi, a stud will reveal the picture at a metro
level, which might not be generalised for all other parts of India. Any
new concept is very popular in big metros, but this might not be the
case with relatively smaller cities. Also, choosing geography like a
small city of 3-4 lakh population would not be beneficial as digestive
as a concept is not a all popular there. Hence, research could not take
place with appropriate data. Digestive biscuits have scalable market in
Jaipur and the picture would be much more relevant on a general front.
This study could be helpful in studying new trends in biscuit (or
food) industry in order to analyse the changing preferences of
consumers. At the same time, it would reveal factors that affect the
retailer: decision of keeping a particular category of brand or prefer
it over another. It also links the consume behaviour and retailer
choices of brands, which forms an essential part of marketing of any
commodity especially FMCG.
Problem Statement and Research Objectives
Research agencies and companies do various studies on biscuit
industry, but digestive as a concept is not specifically touched upon by
many, given limited knowledge among consumers and retailers both. The
purpose of this study is to understand the awareness level of Digestive
biscuits in Jaipur- From the point of view of both retailers as well as
consumers.
In particular, the study has been conducted based on the following
research objectives:
* To understand the buying behaviour for digestive biscuits among
consumers in Jaipur (India).
* To examine whether people know the difference between
'Digestive' and 'Sugar free' biscuit categories.
* To determine the reasons for retailers keeping/not keeping
digestive biscuits of both McVities as well as competitive brands
* To understand retailer perspective of consumer behaviour in case
of biscuit purchase
Research Methodology
The practical approach of this study focussed on the buying
behaviour of consumers of Jaipur. It aimed at determining why they buy
digestive biscuits of a particular brand, how many times, when do they
decide to buy it, and what are the factors that they consider important
while buying them. Also, it aimed at finding out the availability of all
brands of digestive biscuits on retail counters. Hence, the current
research is exploratory in nature. The sampling frame used comprises of
two segments:
Segment 1: Young age people below the age of 30, who are either
college going students or working professionals. These people belong to
the geography, Jaipur. A total of 150 responses were collected.
Reason for selection of above target segment: The reason for
selecting this sample was to understand the level of awareness of
digestive brands among young people, as they are most likely to
understand the concept of digestive biscuits, and are the target segment
of most of the companies. It would therefore be beneficial to know how
the target segment perceives the brand and why does it buy (or not buys)
them.
Segment 2: Important retailers across Jaipur city- Out of 943
counters visited, 120 major retailers (On basis of size of retail point
and approximate sale it does, including canteens) were selected and
interviewed (Qualitative) to understand their perception of McVities and
other digestive brands. Also, data of availability of other competitive
brands and sub brands of McVities was collected at all these 120
counters.
Reason for selection of above target segment: Since digestive is a
relatively new extension in biscuits, it's logical to interview
retailers who at least know what McVities and/or digestive mean, or keep
them on shelves already. This however doesn't mean that all
retailers had knowledge of the brand and category, but selecting the
largest of all retailers/ canteens did increase the chance.
Data Collection and Analysis
The self-administered semi- structured questionnaires was designed
i.e. for the consumers. The questionnaire for consumers comprised of
mostly closed ended and a few open ended questions. Other questions were
closed ended, inquiring about the available brands of McVities and other
competitors. The Questionnaire of the consumer was intended to yield
nominal and ordinal data, so that a quantitative analysis could be
facilitated. This was done using the following techniques:
1) Cross Tabulation- Chi Square test
2) Percentage Analysis
3) Factor Analysis
The factor analysis technique was applied on the consumer responses
and two factors were extracted. The questionnaire was prepared by taking
the factors from the literature review and the expert opinion both from
the academicians and practitioners in the FMCG and biscuit industry, and
the major factors affecting the buying decision of consumers. A detailed
study of distribution system of Jaipur was conducted in order to get
idea of the retail scenario of the city. Since the current study has
been conducted for the United biscuits so the contact details have been
provided by them. The data collected from various set of respondents.
Apart from the data collected from the consumers the preliminary
interviews of retailers have been conducted to understand the
consumer's perception in an intensive way.
Analysis and Finding
Consumer Survey
The survey floated to consumers yielded many results regarding
their buying behaviour.
Demographics
Most of the people surveyed were youngsters. Out of the 150 people
surveyed, 102 were between the age group of 15 to 25 years and 48 lied
in the age group of 25-30 years. Around 40 percent of the respondents
were female and rest were males. In order to know the awareness level of
McVities, consumers were asked whether they had heard about McVities or
not. Around 90 percent consumers responded with affirmation, which shows
that the brand is quite known, even though the concept of digestive is
not very clear to all.
Factor Analysis
To understand the nature of the Consumer Demand and Awareness, an
exploratory factor analysis is done to understand/explain the factors
affecting the consumer awareness of McVities brand.
Extraction Method: Alpha Factoring, Rotation Method: Varimax with
Kaiser Normalization.
a. Rotation converged in 3 iterations.
b. The value of Chronbach's Alpha is much above than the
required, i.e..895
A scale was developed to understand the crucial factors actually
affecting the buying decision behaviour and awareness of consumers. The
respondents were required to rate the 9 statements/variables on from
1-10, as least important to most important factors affecting your
biscuit purchase. As per the factor analysis, the given 9 factors have
been categorized into 2 major factors. Factor 1 is Brand Knowledge and
the other is the Product Features. Promotion, advertising, packaging and
schemes lie in the Brand Presence, the other 6 factors like flavor,
price, quantity, availability, etc. lie in the Product features.
There is one exception of 'Brand name' in Factor 2.
Factor 1: Brand Knowledge
This factor includes all the factors that relate to non-physical
aspects of the brand, like promotion, awareness, advertising, schemes,
etc. Packaging is lying in this factor as it is a part of brand which
appeals the customer from the perspective of brand appeal. Schemes are
shown as factors shown in advertisements as well, to make the brand more
attractive.
Factor 2: Product Features
Five factors like Price, Quantity, Flavor, Availability and Brand
Name are a cluster within this single factor. Four of them are closely
related to the physical buying behavior of consumers, while Brand Name
is also a part of it. This is due to the fact that brand name is not
strongly correlated with the knowledge of brand, probably due to not so
strong correlation between Advertising (0.552) and Promotion (0.430).
Buying Decision (For All Biscuits)
It can be observed that buying decision is predominantly made at
the retail store itself by majority of consumers.
A chi square cross tab correlation test was run in order to find if
there was any correlation between the decision making point (Store/Home)
and Actual buying of biscuits.
As per the results of the test, [chi](1) = 0.659, p = 0.417. This
tells us that there is no statistically significant association between
decision making point and actual buying action of biscuits; that is, it
is not necessary that a consumer who makes an on the spot decision of
buying is more likely to buy biscuits or vice versa.
Action in case Brand of Choice is not Available (For All Biscuits
and McVities- Comparative) I
In case the brand of choice is not available to consumers, 64
percent of them prefer buying any competitive brand within that category
of biscuits, instead of looking for it at another retail store. Only 28
percent are loyal enough to look for their preferred brand somewhere
else. This shows that convenience is an important factor for consumers
and availability of own brand at maximum number of counters is very
important. Also, biscuits still are a low involvement product, enough
for making consumers change their preference at last minute. Competitors
come into play in this case, as lesser availability of McVities as
compared to Britannia, which has a very wide distribution network, leads
to change of consumer's mind at the retail store itself.
Availability of McVities and other Competitors Across Retail
Counters
Following are the availabilities of both McVities and other
competitive brands in Jaipur: Total outlets visited: 150 (117 retail
shops and 33 canteens)
[FIGURE I OMITTED]
Parle, as can be seen in figure 1, has the highest penetration
among all the competitive brands, followed by Britannia and then ITC.
Among the competitive brands analysed, McVities has the least
penetration in Jaipur.
Perception of 'Digestive' and 'Sugar Free' as
same
It is very clear from the chart in Figure II that 36 percent of the
people think that both digestive and sugar free are the same categories.
This shows that level of awareness of digestive biscuits as a concept is
very less. This is a major reason of McVities lagging behind other
companies which dominate the market scenario due to their explicit
command over other mass-aware categories of glucose and cream biscuits.
Retailer Survey (Field insights)
Retailers have mixed opinions about McVities. While most retailers
who were surveyed felt that there is no pull-factor in the brand
McVities, very few said so for the digestive category as a whole.
Therefore, McVities as a brand was found weak in attracting consumers to
retail outlets, and most of them had to adopt a push strategy for
selling the same. Push strategy of companies like ITC played an
important role in retailer decision making, wherein some retailers were
given extremely high margins/extra benefits to keep a particular
company's products and display them on the front shelves. Also,
some companies pushed digestive brand along with other brands even when
the retailer did not require them as per the consumer demand.
McVities as a brand is still new, despite been launched in 2010.
Retailers were initially very excited about the brand as they were given
freebies like silver coins for promotion. Retailer also said that the
brand can survive very well only if it continues with schemes. Many
retailers who did not keep McVities biscuits were not aware of the
concept of digestive as a whole different category. Some retailers
confused it with sugar free, another variety within the McVities
portfolio of products. It was very difficult to make the new retailers
in relatively smaller retail counter locations understand what digestive
is all about.
Majority of the retailers considered McVities as a very high
quality product as compared to other competitors like Britannia and
Parle. Few mentioned in an interview that certain specific people are
regular and loyal customers of digestive brands, who are not ready to
compromise with any other product than what they wish to buy. Thus, they
felt that retailers, in a way, have lost control over influencing the
buying and decision making process of a consumer. Despite of being a low
involvement FMCG product, people think twice before spending Rs. 50 or
Rs. 100 for biscuits. This is a major reason why McVities had to launch
smaller packs of as low price as Rs. 5, which are mostly sold in
canteens. Such (Canteen) retailers feel the need of smaller packs of
lesser price in order to keep them on shelves and maintain a regular
flow.
Retailers require simple procedures of dealing with returns. A
couple of retailers said that return and damage form the biggest part of
strain in relations between company distributor and them. Products have
a shelf life of 9-12 months, and consumers do not want to buy biscuits
even 3 months away from expiry. This kind of consumer behaviour has a
bullwhip effect on the company, which ultimately bears the loss of
revenue.
Retailers display the biscuits as per their own wishes, unless they
are given a 'Window', which is a monthly payment given by the
company to make sure biscuits are displayed in a particular shelf with
display tape of company given to them.
Many new retailers recognized the brand by advertisement-
"Morning evening, kya kha rahe ho, biscuit ke naam pe, maida kha
rahe ho". This showed how brand awareness is extremely important to
improve penetration of a brand. The McVities advertisement, till 2015,
has been the one featuring Bipasha Basu. Probably, the company wanted to
associate the product with the healthy star image of Bipasha Basu and
wanted to encash upon it. However, lately, retailers have started saying
that the advertisement has become old and that the company needs to
change it in order to create higher brand recall. This is probably the
reason that there is a new advertisement for Whole Wheat Marie recently
launched, with Kajol in it. They are trying to portray the brand as a
very responsible one, just like the mother of two kids featured in the
advertisement.
There is a general perception among retailers that customers are
becoming health savvy, and hence the consumption of Digestive biscuits
is increasing. Few retailers mentioned how half of the customers are
those with age 40 and above, which means that a particular segment of
population is being targeted by the company and the digestive segment as
a whole.
On the whole, the retailer perception of McVities as a brand is
that of a quality trusted yet sales-risky venture due to less awareness
among people and heavy competition within the digestive space. Retailers
feel that Britannia's Nutri Choice has eaten up a considerable
share of the digestive segment in which McVities used to be pioneer.
Schemes, margins and awareness are the three factors that have led to
this shift.
The main objective to approaching the retailers was to get the
understanding of the perception and viewpoints of the consumers, with
whom they used to deal.
To substantiate the inferences, the retailers of Jaipur have also
been approached for the interviews. Since these retailers are the focal
point of interaction between company and consumers, their responses
would be beneficial for restructuring and rebranding of McVities as a
brand and as a product as well.
Some interesting sharings' from the field itself:
Retailers have mixed opinions about McVities. When asked the
question "What's the reason of low sales of McVities brand, as
compared to the other brands?" Following was the reply of a
retailer:
"There is no pull-factor in the brand McVities. It is weak in
attracting consumers to retail outlets, and we have to push the product
to sell whatever stock we order Companies like ITC push their new and
low selling products along with their higher selling and more popular
brands. They give us very high margins/extra benefits to keep their
products and display them on the front shelves. Why should we then keep
other low selling brand with no extraordinarily high margin or
demand?"
XYZ Retailer, Bani Park Area, Jaipur, Excerpt from the field.
Upon asking another retailer the same question, he said the
following:
We were very excited about the brand, when it was launched in 2010,
as the company gave freebies like silver coins for promotion. The brand
can survive very well only if it continues with schemes.
ABC Retailer, Tonk Road, Jaipur, Excerpt from the field. A very
important aspect that was a part of retailer interview was the fact that
what can be done by the company, from retailer's perspective. When
asked the question
"What according to you should be the revamping strategy for
the company to establish a better share and image in market?"
One of the retailers said the following:
"It is important to display McVities products- They would sell
if they would be seen. We would not sell until we are given a
'Window' (It is a monthly payment given by the company to
important retailers to make sure biscuits are displayed in a particular
shelf with display tape of company given to them)."
PQR Retailer, Mansarovar, Jaipur, Excerpt from the field.
Another retailer
"They should change their advertisement- It's still the
one with BipashaBasu. Other brands keep launching new advertisements in
a year or two, McVities should do that too."
XYW Retailer, BadiChaupad, Jaipur, Excerpt from the field.
A retailer gave the following insight:
We receive a very handsome amount from XYZ company (One of the
leading FMCG players in India), to keep the entire biscuit section
filled with only their products and to not keep any other company's
biscuits at all. We have to sell other company's biscuits secretly
to the consumers who ask for them.
LMN Retailer, Amer Road, Jaipur, Excerpt from the field.
Field Insights and Interpretations
United Biscuits, being a late entrant in Biscuit market of India,
has taken various strategic steps to increase the level of consumer
awareness. All of the following measures suggest how unlike other
industry giants like Parle and Britannia, company has smartly made noise
in the otherwise loud biscuit landscape of India. The measures are:
1) Hiring interns from various B-Schools of India. As per
discussion of researcher with a current employee, around 30-40 interns
are hires annually to conduct market research and gap analysis in
various parts of India. This move helps company to save money in terms
of compensation, as they do not have to hire full time employees for the
work. Also, this gives them a comprehensive insight of market within a
time period of 2 months.
2) The company provides biscuit stands to big canteens with sale of
more than around Rs. 15000-20000 per month or more. These too, are
regularly monitored for proper use and display by the sales
representative. The older stands are repaired and not thrown away, and
sometimes this responsibility lies with sales representative.
3) Company provides 'Window Payment', a certain payment
to some selected big retailers only for keeping their products in
sections covered with tapes of McVities wrapped on the border. This
ensures visibility and hence, increased awareness.
Conclusion and Discussion
Biscuit industry, being a very big part of the FMCG food and
grocery sector, has evolved with time to a scenario where both consumers
and retailers expect different yet overlapping things that the companies
need to take care of. While consumers still do not consider it a very
important thing to decide before buying a low involvement product like
biscuit, some brands do take a lead as they are at top of
consumer's mind. Hence brands like Britannia and Parle take the
lead when it comes to this Top of Mind Awareness, while those like ITC
make use of push strategies to ensure availability everywhere. By taking
McVities as a reference brand, it has been concluded that absence of any
such strategies and other schemes/incentives result in not only lower
sales volume but also lower awareness and clarity. People are largely
aware of McVities brand and that doesn't pose an issue. The clarity
of the concept of digestive and its differentiation from other
categories is an issue which company needs to resolve. People are not
willing to switch from regular glucose biscuits/butter cookies to
digestive for a very crucial reason of taste. There's inertia among
people that they develop the first time they taste the biscuit. Also, it
was found that Britannia's brand name and Nutri Choice's
better taste than McVities has resulted in more sale of Nutri Choice
shortly after its launch. The company (United Biscuits) should adopt a
rigorous advertising campaign to educate people with the concept of
digestive and sugar fee, which many are not clear of. Indian consumers
look for value.
Brand awareness and concept of digestive have been found to be
varying among consumers, but the fact which remained persistent was that
even when people were aware of the brand, the concept wasn't clear.
Upon visiting all the retail counters, even when people know that
McVities as a brand existed, they were not aware of what McVities
Digestive biscuit was all about, and how it was different. Many
retailers asked the questions like 'why we should keep it when we
already have a sale of other categories and no special demand for
digestives from consumers?. Hence, among both retailers and consumers,
there seemed to be a difference in 'Brand Awareness' and
'Category Concept'.
As per the authors' observation and interpretation,
re-strategizing and analysing the gaps will help the company in gearing
up in its own ways, while the new marketing campaigns will be a boon for
their brand awareness in future, for catering the needs of health
conscious consumers.
Jayant Kapre, president, United Biscuits, says, "We are using
the advertising route to promote the popularity of our product and
create awareness in the market. In the last three years, we have done
four television campaigns, but our latest ad campaign was extremely
targeted. We aim to propagate our USP that is rich presence of whole
wheat instead of wheatflour in the biscuit, which is good for
health."
Retailers are reluctant to keep McVitieson their shelves, which
make it imperative for the company to realise that more than the
distribution, the perceived brand value is weaker. The company
salespeople are ready to go to inner parts of city and the adjoining
areas, but retailers are apprehensive of trying McVities, resulting in
low presence at retail shops despite company making many efforts.
Company needs to be more active in promoting at retailer level. This
promotion could be in form of either incentives like banner and racks
for keeping biscuits (which the company already does, but is not doing
at a very extensive scale), or increasing margins for selected
retailers. The company also faces the issue of damage from retailer end,
who are guaranteed a return of expiry/damaged biscuits. This situation
has two possible outcomes-Either a toll over revenue of company on one
side and loss of customer on the other.
The company, therefore, should make sure that it works in tandem
with both consumers' and retailers' point of view for the
company and products. Company is at the beginning phase of expansion in
India, and currently is the right time to take cues from both these
segments and make a smart move to grow in a country like India, and to
fight the rivals across biscuit industry in order to achieve business
sustainability at large.
Limitations
Following were the limitations of study:
1) The geography of research was restricted to Jaipur, Rajasthan
only.
2) The customers surveyed were under the age group of 15-30 years.
3) Retailers of selected retail counters (out of the total counters
visited) were interviewed. These might not give a comprehensive but a
general view of retailer perspective in the region.
4) Due to unavailability of retailers for filling up of
quantitative surveys, interviews were conducted by researcher.
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Table I
Rotated Factor Matrix
Factor
1 2
Advertising 0.260 0.669
Brand Name 0.719 0.324
Flavor 0.953 0.049
Price 0.520 0.545
Promotion 0.132 0.949
Packaging 0.335 0.683
Schemes 0.176 0.584
Quantity 0.692 0.393
Availability 0.736 0.316
Source: Analysis from the Author's Research
Table II
Inter-Item Correlation Matrix
Advertising Brand Flavor Price Promotion
Name
Advertising 1.000 0.522 0.305 0.482 0.707
Brand_Name 0.522 1.000 0.761 0.463 0.430
Flavor 0.305 0.761 1.000 0.585 0.216
Price 0.482 0.463 0.585 1.000 0.511
Promotion 0.707 0.430 0.216 0.511 1.000
Packaging 0.677 0.506 0.367 0.479 0.686
Schemes 0.345 0.234 0.112 0.535 0.604
Quantity 0.321 0.546 0.666 0.643 0.387
Availability 0.358 0.679 0.633 0.520 0.436
Packaging Schemes Quantity Availability
Advertising 0.677 0.345 0.321 0.358
Brand_Name 0.506 0.234 0.546 0.679
Flavor 0.367 0.112 0.666 0.633
Price 0.479 0.535 0.643 0.520
Promotion 0.686 0.604 0.387 0.436
Packaging 1.000 0.399 0.413 0.510
Schemes 0.399 1.000 0.531 0.271
Quantity 0.413 0.531 1.000 0.703
Availability 0.510 0.271 0.703 1.000
Source: Author's Research Analysis
Figure II
Are 'Digestive' and 'Sugar Free' the same thing?
Yes 22%
No 42%
Not clear of the 36%
difference
Source: Author's Research Analysis
Note: Table made from pie chart.