ENTRY STRATEGY FOR

BRANDED RICE BUSINESS-

ANANYA

By Keerthan G
IIM Indore
Market Insights (from the case)
Presence of National brands have been strong in Urban areas

Local players competing by trade relationships and price discounts

Demand Supply Scenario

- There has been a steady increase in the number of national brands with many companies in the food
segment and FMCG category entering this category

- Certain areas have few dominant local players which have relied mostly on their trade relationship to push
their products

- The urban consumers who mostly visit modern retailers mostly prefer branded rice

- Slowly branded rice is finding acceptance in Tier 2 and 3 towns

Category Value determinants

1. Price (because of high level of price sensitivity)

2. Quality

3. Availability Price sensitivity

Segmenting
The food preferences are generally Geography based.
In the 1st year, it is advisable to start with South India as it is has high rice consumption
and provides a direction towards the Pan India launch in the coming years
Region- South India
Cities - With Population > 0.5 million
Segments- Based on Socio Economic classification

Targeting
SEC
Customers who mainly visit Hyper Markets, Large retailers or Departmental stores A& B
Who look out for premium quality products which delivers the optimum value
Target- SEC A,SEC B

Positioning
A rice brand which offers the best export quality rice at the best local price
Branding Strategy

For a category like Rice brand, a Brand name can be adopted like
Ananya and line extensions can be done as and when a new variant
needs to be introduced like Ananya Basmati, Ananya Sona Masuri etc.
Ananya
Points of Difference
The brand has to introduce a container packaging that helps in storing
as well as pouring out the rice from the air tight container. This is a
true value created for the consumers who can forget the hassles of
storing and taking out the rice which no competitor offers
Points of parity
There are a lot of parities with the competitor brand as it is a low differentiated
product
Quality
Pricing
Customer Value Hierarchy

Augmented Product-
Air Tight Container
Packaged Premium
Rice

Expected product-
High quality Rice

Basic Product-
Rice

Core benefit-
Food
Pricing

Points to be considered while pricing the product

low-involvement category

high level of price sensitivity

So pricing needs to be considered very carefully as it has a high relevance for a consumer

1. Pricing objective: Market entry

2. Demand: High price sensitivity

3. Estimating costs: Production costs + Transportation costs+Marketing costs+Misc.costs

4. Analyzing Competitor: Costs, Prices and Offers

5. Selecting a Pricing method: Going rate pricing i.e. basing the prices on competitors prices

Adapting the Price

Prices can differ on the basis of geography, short term promotions and the sales channel
Marketing Channels
As it is a low involvement and highly price sensitive product, channels play a significant role in ensuring

- availability and

- controlling the price

Considering the Segmentation and Target markets as mentioned earlier

2-channel strategy needs to be adopted

1. Modern retail- includes Supermarkets, Hypermarkets and Large retailers

2. Traditional channel In certain localities for easy availability to customers

in the coming years i.e. 2nd or 3rd year

Trade margins
Trade margins play a significant role in sales as the store keepers tend to push those products.
So a higher margin in comparison to the competitors needs to be given to create the initial push to
the brand
Marketing Communications Mix
1. Sales promotion- To create the initial pull towards the brand by offering short term offers

2. Events and Experiences- Sponsoring a Cookery show on TV grabs eyeballs which provides
a highly targeted communication

3. Interactive marketing- Providing innovative recipe ideas using the brands rice through its
online channel and engaging with its customers

4. Advertising: Cost effective Localized advertising and promotional activities like

In-store promotions and visual display aides

These activities should help achieve

Brand name awareness measured based on recognition, recall and top of mind

Brand loyalty Segmented into non customers, price switchers, passively loyal,
fence sitters and committed and moving them to the next higher level

Improvement in Perceived quality

Brand associations
 Timeline of events

Nov 2013
Oct 2014 Dec 2015-
Brand launch
with a few variants Easter n India Western
in South launch India launch

May2014 Apr2015- Mar 2016-

A few more Traditional North India
variants launch channel Launch
after gauging the operations
response start
Cost Implications
Year wise
1st year budget allocation (South region- largest region) = Rs. 30 Crores

2nd year budget allocation (South + Eastern region) = Rs. 45 Crores

3rd year budget allocation (Pan India ) = Rs. 25 Crores

Total = Rs. 100 Crores

Budget reduces from year to year because of the fringe effects carried forward from the previous year

Activity Wise

Pan India Infrastructure including Sales and Supply chain = Rs. 70 Crores

Branding activities = Rs. 30 Crores

Total = Rs. 100 Crores

This category requires more of below the line activities over above the line
Summarizing

Going for a regional launch and then slowly moving on for a nation wide launch by
gauging the response
Launching a few variants initially and then bringing in the other variants in a phased
manner
High focus on the modern retail channels along with a small traditional channel to
complement it
Trade promotions and discounts are the drivers to sale and less spending on
traditional marketing channels like TV and print
i.e. higher emphasis on Below the line activities over above the line as it suits the
category under consideration
Thank you