Tushar Bhargav Report

8/11/2019 Tushar Bhargav Report

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STP PROFILE

OF

BRITANNIA NUTRICHOICE

Submitted to: Professor Ashis Mishra

(Date: 14 th August, 2013)

Prepared by:

Banhi Howladar(1311009)

Jyoti Nathany(1311022)

Priyadarshini K(1311035)

Sankalan Prasad(1311048)

Tushar Bhargava(1311062)

Group 10


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TABLE OF CONTENTS

Executive Summary ............................................................................................................................................. 3

Overview of the Brand NutriChoice .................................................................................................................. 4

Market Segmentation .......................................................................................................................................... 4

Geographic Segmentation ......................................................................................................................... 5

Demographic Segmentation ..................................................................................................................... 5

Behavioural segmentation ........................................................................................................................ 6

Psychographic Segmentation ................................................................................................................... 7

Targeting .............................................................................................................................................................. 7

Differentiation ................................................................................................................................................... 11

Positioning ......................................................................................................................................................... 11Conclusion ......................................................................................................................................................... 13

References ......................................................................................................................................................... 14

Annexure ........................................................................................................................................................... 15


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Executive Summary

NutriChoice as a brand targets especially at the health conscious population of India came up in 1999.However, it failed to cater the major chunk of its target population since it was not an overall product whenit was compared with other tasty alternatives available in the market. Its main consumers were limited tothose who had special health concerns.

In 2005 due to the change in management, the entire marketing strategy underwent a radical overhauling.Britannia NutriC hoice changed its focus from simple Eat healthy to Health, taste and happiness. Severalnew products were launched under the umbrella of NutriChoice and many old products were re-positioned.They targeted middle aged, high income and health conscious people. They also targeted people suffering

from specific health problems like diabetes and heart issues.


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Overview of the Brand NutriChoice

Britannia NutriChoice is one of Indias leading health brands today, infusing a change in the way Indians thinkand feel about health and healthy living. NutriChoice has been able to shift its market from a narrow group

of consumers who had special health concerns to a broader group of health conscious people. Britannia hasa belief that small yet smart food choices can play in enabling its consumers to get more out of theireveryday lives. With this hope Britannia has developed a unique range of healthy snacking choices under theumbrella of the brand NutriChoice that can meet in-between cravings and nutrition needs of a diverse set ofconsumers.

According to Britannia, the health and nutrition space in the Indian market, way back in 2005 had not beentapped sufficiently and the company realised that introduction of a product in this space could act as agrowth driver for it. Currently, where brands such as Marie Gold and Milk Bikis have been consistent sincedecades, NutriChoice emerged as a dark horse.

When they conceived the idea of establishing themselves into the health segment, the initial plan was tocreate and market a milk-based drink named Anlene, which was targeted at Indian women suffering fromosteoporosis. However, the idea had to be withdrawn during the test phase of product in the EasternRegion. The product Anlene failed and the company analysed that although Indians were becoming healthconscious but their mind space was ruled by more common and fatal diseases such as heart diseases anddiabetes. Gradually, they also started to focus on healthy stomach. Says Bali, " We opted to use what wehave whether a brand, consumer insight or way to market and suffuse that with health propositions."NutriChoice is basically built around Britannias philosophy of Eat healthy and think better. In addition tothe economic progress, Indias increasingly urbanizing lifestyles have brought along erratic schedules, emptycalories and sedentary lifestyles. Here NutriChoice offers a smart, healthy as well as tasty snacking option.

Today, the NutriChoice range comprises of Hi-Fibre biscuits, 5 Grain biscuits mid meal snacking, ArrowrootLite Crackers, Diabetic Friendly snacks(Oats and Ragi biscuits) and the recently launched line of healthy crispsviz. Multigrain Thins.

NutriChoice was revamped in 2005, due to change of management, leading to some strategic changes interms of product segmentation, marketing and overall positioning for each strategic business unit. Currently,NutriChoice, accounts for nearly 75% of an admittedly small but rapidly growing health snacks niche.

Market SegmentationWith the concept of a new product in mind, Britannia started with market segmentation, identified targetmarkets and tailor made their positioning strategy to reach out to consumers. The broad categories underwhich a market is segmented are:

Geographic Variables Demographic Variables Behavioural Variables

Psychographic Variables


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Geographic SegmentationThe company which started in Calcutta as a small bakery house has one of its purpose as To facilitate every

Indian to experience Britannia products four times a day With this purpose, they went on and segmented

the Indian market according to different factors.

Urban-rural Market: Britannia didnt try to segment based on region because they didnt try to appeal toany of the regional eccentricities of the various regions in India. Britannia did not intend to divide the marketon the basis of climate. The usage or taste of the product would be uniform across climatic conditions.However, it was important to appreciate the fact that the buying behavior of consumers in rural market isdifferent from those in urban market and hence taking into consideration the attributes of the product, therural and urban divide becomes essential.

Demographic Segmentation

Some of the factors relevant to Britannia for NutriChoice were:

Age : The needs and the tastes differ across different age groups. Britannia, as a whole, has its presenceacross multiple age groups and the company understood that its important to cater to specific needs of theconsumers. To identify such variability, the population is divided into following 5 groups

Health : As the primary motive was to target the untapped health segment, Britannia divided the market intothe following groups:

Income: The income of an individual determines his/her purchasing power which in turn influences theirconsumption pattern. To analyse the income and consumption patterns of the potential consumers wesegregate the population into following annual disposable income groups:

Age

Health

IncomeOccupation

Education

55+40-5530-3920-29


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Education : Level of education influences the consumer choice in buying products; accordingly market can besegmented into the following groups:

Occupation: The consumer preferences differ according to their occupation which has been categorised asunder :

Behavioural segmentationBenefits sought : Biscuits are widely popular from rural to urban segments and available in different flavoursand price range. But with increasing affluence, there is increased requirement for healthy food products.Especially in urban sector, with increasing work load and stress in their lives, people are getting attractedtowards health product segment.

Purchase behaviour : India is traditionally price-oriented market. Indian consumers prefer quality but withincertain price range. New products in the market are placed with specific balance between price and quality.Britannia with its mass production advantage has used this leverage to segment the consumer base based onpricing and impulse buying.

Usage : In Indian households, biscuits and savoury snacks are the most commonly consumed items. They areconsumed by people under all segments. Here, if the biscuits are aligned to the health aspects of theindividuals within their affordable range, the consumers would be ready to buy such products. Also, diabeticpatients have a strict diet schedule and if a product specific to their diet requirements is placed, it has a highchance of being successful.

Student s Business Service Homemakers Others

Illiterate

Literate but Below matric

Matric but Not Graduate

Graduate

Income (INR)


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Psychographic SegmentationWith continuous increase in urbanisation, there is enormous change in the lifestyle and the expectations ofthe consumers around the world. Britannia thus tried to analyse the needs of the people based on theirlifestyles and values through Activity, Interest and Opinion Analysis

According to the market survey conducted for the report (questionnaire attached as Annexure), out of the51 respondents, following figure shows the leisure time activity of the respondents.

According to the market survey conducted for the report (questionnaire attached as Annexure), out of the51 respondents, following figure shows the leisure time activity of the respondents.

64% of the respondents wished to have a healthy lifestyle but only 20% of them do exercise in their leisuretime. This shows that though people want to pursue healthy lifestyle, still they find difficult to follow one.Britannia identified such people as potential market segment.

On scale of 1-5 (1 being lowest and 5 being highest), the respondents gave the following average ratings tovarious attributes. The ratings show the preference order of average Indian consumer for the three

attributes in the order of taste, price and nutritional value.

TargetingBased on the segments identified in the previous step, we tried to analyze the targeting strategy ofNutriChoice brand by Britannia. We first did a Five Force Analysis and then identified our targeting strategy.

Five Force Analysis

For analysis of the 5 forces we will expand the market to include other biscuits and snacks. In this market thedegree of rivalry is very high and limited product differentiation leads to buyer mobility. Due to aggressivemarketing and pricing, new entrants find it difficult to compete.

Activity

>The daily routinelifestyle

>Eating Habits

Interest

>Do they prefer tasteover health?

>Are people willingto pay higher price

for healthy products?

Opinion

>Do they think theyare healthy?

>Do they feel guiltyon having snacksbetween meals?

Attribute Average rating scoreNutritional Value 3.24Taste 3.96Price 3.38


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Buyer Power

Buyer power is weak as loss of any one buyer is unlikely to cause any significant effect on the producersrevenues. However, even though revenue generated by one consumer is low, collectively they represent awide consumer interests. A rise in health consciousness is driving a growing demand for nutritional content

in food products. Food product manufacturers need to accommodate such changes in the demand. Foodproducts targeted for health conscious people can justify high price levels due to high product differentiationand also weaken buyer power due to lack of alternatives.

Supplier Power

Suppliers include farmers, agricultural cooperatives and sugar manufacturers. Large manufacturers ofteneither maintain strong relationships with suppliers or go for M&A for vertical integration to offset the dangerof sourcing and price fluctuations. This strengthens manufacturers standing in relation to suppliers. Leadingmanufacturers can leverage their developed supply chain dominate negotiations with suppliers. Supplier

power has been affected by increase in number of players in the market. Biscuit manufacturers also need tocontest with manufacturers of other industries and also retailers due to the same raw material beingsourced. Hence we would like to assess the supplier power to be moderate.

New Entrants

The financial muscle of the players differs in the market. Large-scale, established manufacturers like ITC,Parle with high operating margins and economies of scale, enjoy the advantage of aggressive pricing andpenetrative marketing strategies. Strong branding and expansion makes it difficult for new entrants.However, there has been a recent rise in health consciousness and people opting for healthy diet. This formsan attractive avenue for new entrants to move into a niche area and create its own space.

Threat of substitutes

There are limited substitutes in the healthy snack area. Strong marketing campaigns, increased awarenessamong consumers undertaken by the company can ensure low threat of substitutes. The company can enjoythe first mover advantage by being the first ones to enter into the segment and reduce the threat ofsubstitutes.

Degree of Rivalry

Competition is often fierce within the food industry. There are a large numbers large competitors like Parleand ITC, and hence Britannia faces a strong competition. In addition there exists a large number of small andindependent manufacturers operating alongside these large players. Consumers face zero switching costs,which means that manufacturers need to secure consumer loyalty by attempting high productdifferentiation. By targeting a niche product segment, a company can afford to increase prices and commandbrand loyalty. Based on the above analysis we identify target of Nutrichoice as middle to high income, middleaged, and urban residents who are educated and health-conscious , since we are targeting a niche product.The analysis of the targeting is given below.

Geographic: In geographic we had considered urban-rural segmentation as the most important form. Wereferred to the census data for India to find the population distribution between rural and urban India. The


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distribution is given below. Of the 1.2 Billion people in India only about 28% live in urban cities with access tomodern facilities. We target this urban population which is about 33.6 Million people.

Demographic: The distribution of age in the urban areas is given below. We infer that about 52% of theurban population belong to the 20 to 59 age group.

For education profile, we investigated the distribution of graduates in urban population. The figures areshown above. We see that about 53% of the urban graduate population belong to the 30 to 59 age group.

Indian household income has risen in the past decade and is slated to increase further. Apart from reducingthe poverty, India has managed to create a large middle class in the past decade. Below we have shared datafrom the McKinsey Global Institute.

Source: McKinsey Global Institute (E: estimated F: Forecasted)


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As indicated above in 2005 the Indian middle class was still relatively small, approximately 5% of the totalpopulation. However based on assumptions on the growth rate at that time, the middle class was slated toexpand to 22% of the total population by 2015 and 41% by 2025. Also the percentage of people withhousehold income below 90000 is going to reduce drastically in the next few years. In 2005 the number ofhouseholds with high income was slated to almost triple by 2025. Over the medium to long-term, thisprovides several opportunities for marketers of niche products targeted for the high income people living inmetros.

Additionally, India has 50.8 million people suffering from diabetes and by 2030, nearly 9 per cent of thecountry's population is likely to be affected by diabetes. (Source: Indian Express) This forms a very nichemarket segment which can be targeted by NutriChoice and enjoy an early player advantage.

Psychographic

For psychographic analysis of segments we primarily looked at people with a choice for a healthy lifestyle.

Again we researched a number of secondary sources of data. First data we analyzed was from DatamonitorConsumer Survey, 2009. The question asked to people was to what extent they agreed that snacking in-between meals makes them feel guilty. The results are shown below.

Source: Datamonitor Consumer Survey, 2009

This is a clear indication of huge market potential especially in the 35+ age group where more than 40% ofthe population felt guilty of in-between meals. The second question was, to what extent did the people readthe information on product packaging to help them make choices. The result is shown below.

Source: Datamonitor Consumer Survey 2009


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DifferentiationBased on segmentation and targeting approach, Britannia tried to differentiate NutriChoice to create a newposition in the market. While McVitie's have launched their digestive biscuits as the first ever digestivebiscuit, baked with whole wheat flour and other wholesome ingredients, Britannia NutriChoice has

established itself the health category, differentiating itself as a healthy and tasty snacking option. Indiansperceptions have changed over time and are now willing to pay for nutritious food. From sharing of healthyrecipes to promoting innovative health campaigns, it has marked its presence with its high engagement withthe targeted calorie-conscious consumers.

Over a period of time, its packaging and advertising communicated the inclusion of key ingredients and theirassociated health benefits for example the benefits of arrowroot, fibre and whole grain were highlightedprominently in promotion of the products. This not only differentiated the brand from other competingbrands, but also gave it the necessary visibility in an already crowded biscuit market in India.

Earlier, healthy biscuits were targeted at patients and available in medical stores. However, Britanniatargeted NutriChoice as a consumer product but with health benefits. The packaging used natural coloursand consisted of imagery of its constituents to distinguish itself. This has given the brand unique image in theeyes of the consumers in a way that they relate the NutriChoice products with nature and health.

Differentiating Attribute NutriChoiceNutritional Value High on health aspect, promoted as Health Biscuit of India Taste Wide range of products available in different flavorsPrice Competitive pricing as compared to other biscuits in Health Biscuit sectionCrispiness Variety of products from soft to crunchy to cater to various market segmentsPresentation Use of natural colors and imagery to distinguish the brand

Trust Britannia in itself is a trusted brand which differentiates it from competitors

The following perceptual maps try to capture their differentiation strategy

PositioningIn 2005, Nutrichoice underwent a radical renovation process owing to the changing of the management and

its product portfolio as well the overall marketing strategy was overhauled. The products under the brandNutrichoice were put under the category health and nutrition while the rest of Britannia products were


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put under delight and lifestyle category. This differentiation revitalised its position among the target

consumer segment.

Nutrichoice also re-launched its brands according to changing consumer preferences (as in the case ofNutriChoice Hi-Fibre Digestive biscuits, which were sold in a large international sized biscuit pack) and

introduced new products under the NutriChoice platform (such as Britannia NutriChoice 5 Grain). Ever since2005 many new products have been launched under this brand and positioning strategies have changedfrom time to time.

The company took several initiatives to cater to the diverse consumer segments by repositioning theproducts under the NutriChoice brand. A few such notable positioning endeavours by which the productswere re-imaged are:

1. Health plus taste plus happiness positioning: To outgo the staid taste of the earlier products andcome up with a revolutionary new product line which promotes health with taste. Important

changes were made in Cream Cracker brand, which faced a particular taste disadvantage as it was alow-sugar biscuit. The brand was made crispier and tastier, and was re-launched as NutriChoiceClassic Lite Cracker. In addition, another variant of this brand, NutriChoice Nature Spice Cracker, wasintroduced which claimed that: the goodness of jeera (cumin seeds) and ajwain (carom seeds) will

aid in digestion.

2. Healthy mini meals: NutriChoice recognised the fact that people tend to eat between meals andthey often end up eating unhealthy things. This hunger curbs can be met with an healthyalternative. 5 Grain NutriBix with the punch line Bhook bhgagayo kuch healthy khao actuallyfocuses on this concept.

3. Diabetic friendly snacks: Studies show that products with high fibre or whole grain to fight anumber of rising health concerns in the country such as diabetes and coronary conditions. The'Diabetic Friendly' Essentials are a range of NutriBix specially designed for diabetics.it comes in twovariants oats and ragi.

4. Snacks to meet the busy life style of the urban population: out of home consumptions such as atthe workplace or while travelling became easy after the NutriChoice launched the 5 Grain biscuits inpocket -sized meals to achieve portion control a nd make them more convenient for anywhere/anytime consumption.

5. Alternative to fried snacks: Britannia realised through market research, that Indians just love spicysnacks and have a special weakness for them. However, the growing urban population has becomehighly health conscious. So Britannia came up with an option for a spicy / tangy yet healthy nonfried, low fat version , Nutrichoice multigrain thins, a family time snack with the tagline a snack

that loves you back

6. Novel Packaging: It is known that packaging of a product drives their purchasing decisions of thepeople. Indians, especially women across all age groups, use have the tendency to use nutritionalinformation on the product packaging to help make food and drink choices. Hence Britannia made ita mandatory process to include the nutritional contents of its products on the packet.


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ConclusionThe success of a new product is a function of the products identity in the market. To create a uniqueidentity of a product in the market, it is essential to properly segment the market, identify the targetcustomers for the product and then develop the positioning strategy of the product to tap the availablepotential.

Britannia, under its NutriChoice brand, has targeted the health conscious people in the urbanhouseholds. These people have erratic and busy schedules but want to pursue healthy lifestyle. After therestructuring of brand in 2005 and then success of products such as 5 Grains NutriBix, Britannia has gaineda substantial lead in this market segment. Further, it increased its span in this segment by launching otheritems such as its healthy snacks and savory items. The introduction of niche products like NutriChoice Ragi

and Oats has been quite a success in the diabetic patients segment. Overall, the brand has become quite

popular among the targeted segment of health-conscious people.

With increasing affluence and changing mindset of people, this market segment is increasing in size. At thesame time, other players are coming in this market segment. Britannia should prepare for higherresponsiveness to the changing market dynamics and thereby, adopt continuously adapting positioningstrategy.

Hi-Fibre Digestive NutriBix Biscuits packed with Hi-Fiber helps smoothen the functioning of stomach and also digestion system

5 Grain NutriBix

best to stay active throughout the day Oats minimizes the bad cholesterol, Corn helps the heart, Ragi filled with calcium

and fibre, Wheat gives energy and Rice gives energy and lower fat level

NutriChoice Crackers

crunchy, light and good to taste filled with whole wheat, no fat or preservatives, contains Ajwain and Jeera

NutriChoice Arrowroot

keeps stomach stronger and fights the harmful toxin out from the body

Multigrain Thins

Rice, Wheat, Corn, Ragi and Oats, which are topped with crunchy flaxseeds.

Multigrain Roasty

snacks consumed at the end of each meal or mid-meal

NutriChoice Ragi and Oats

for those who are suffering with Diabetic.


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References1. http://www.britannia.co.in/Britannia_Annual-Report_2012-13.pdf 2. http://www.ihealthu.com/ 3. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/rural.aspx

4.

http://www.censusindia.gov.in/Census_Data_2001/Census_data_finder/Census_Data_Finder.aspx 5. http://censusindia.gov.in/Data_Products/Library/Provisional_Population_Total_link/PDF_Links/chapter5.pdf

6. http://www.abesit.in/pdfs/article-britannia-contributed-prof-sukti-chakrabarti-dated-21-11-12.pdf 7. http://www.4psbusinessandmarketing.com/09022012/storyd.asp?sid=5144&pageno=1 8. http://www.mckinsey.com/locations/india/mckinseyonindia/pdf/India_Consumer_Market.pdf 9. http://acervo-digital.espm.br/cases/306352.pdf
http://www.britannia.co.in/Britannia_Annual-Report_2012-13.pdfhttp://www.britannia.co.in/Britannia_Annual-Report_2012-13.pdfhttp://www.ihealthu.com/http://www.ihealthu.com/http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/rural.aspxhttp://www.censusindia.gov.in/Census_Data_2001/India_at_glance/rural.aspxhttp://www.censusindia.gov.in/Census_Data_2001/Census_data_finder/Census_Data_Finder.aspxhttp://www.censusindia.gov.in/Census_Data_2001/Census_data_finder/Census_Data_Finder.aspxhttp://censusindia.gov.in/Data_Products/Library/Provisional_Population_Total_link/PDF_Links/chapter5.pdfhttp://censusindia.gov.in/Data_Products/Library/Provisional_Population_Total_link/PDF_Links/chapter5.pdfhttp://censusindia.gov.in/Data_Products/Library/Provisional_Population_Total_link/PDF_Links/chapter5.pdfhttp://censusindia.gov.in/Data_Products/Library/Provisional_Population_Total_link/PDF_Links/chapter5.pdfhttp://censusindia.gov.in/Data_Products/Library/Provisional_Population_Total_link/PDF_Links/chapter5.pdfhttp://www.abesit.in/pdfs/article-britannia-contributed-prof-sukti-chakrabarti-dated-21-11-12.pdfhttp://www.abesit.in/pdfs/article-britannia-contributed-prof-sukti-chakrabarti-dated-21-11-12.pdfhttp://www.4psbusinessandmarketing.com/09022012/storyd.asp?sid=5144&pageno=1http://www.4psbusinessandmarketing.com/09022012/storyd.asp?sid=5144&pageno=1http://www.facebook.com/l.php?u=http%3A%2F%2Fwww.mckinsey.com%2Flocations%2Findia%2Fmckinseyonindia%2Fpdf%2FIndia_Consumer_Market.pdf&h=bAQHYRAhEhttp://www.facebook.com/l.php?u=http%3A%2F%2Fwww.mckinsey.com%2Flocations%2Findia%2Fmckinseyonindia%2Fpdf%2FIndia_Consumer_Market.pdf&h=bAQHYRAhEhttp://acervo-digital.espm.br/cases/306352.pdfhttp://acervo-digital.espm.br/cases/306352.pdfhttp://acervo-digital.espm.br/cases/306352.pdfhttp://www.facebook.com/l.php?u=http%3A%2F%2Fwww.mckinsey.com%2Flocations%2Findia%2Fmckinseyonindia%2Fpdf%2FIndia_Consumer_Market.pdf&h=bAQHYRAhEhttp://www.4psbusinessandmarketing.com/09022012/storyd.asp?sid=5144&pageno=1http://www.abesit.in/pdfs/article-britannia-contributed-prof-sukti-chakrabarti-dated-21-11-12.pdfhttp://censusindia.gov.in/Data_Products/Library/Provisional_Population_Total_link/PDF_Links/chapter5.pdfhttp://censusindia.gov.in/Data_Products/Library/Provisional_Population_Total_link/PDF_Links/chapter5.pdfhttp://www.censusindia.gov.in/Census_Data_2001/Census_data_finder/Census_Data_Finder.aspxhttp://www.censusindia.gov.in/Census_Data_2001/India_at_glance/rural.aspxhttp://www.ihealthu.com/http://www.britannia.co.in/Britannia_Annual-Report_2012-13.pdf


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Annexure

Market Survey for Psychographic Behavior of Consumers


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Documents

Tushar Bhargav Report