Group Assignment

Subject: Distribution Channel Management

Name of the faculty: Dr.Pingali Venugopal

Course: PGCLSCM

Batch: 3

Group No. 6

Group members

Ravi Adlakha Roll No: 101250

Ravi Pandey Roll No: 101547
Siddhartha Sengupta Roll No: 101222

Name of center: Noida & Kanpur

Product Selected: Sweets

Brand Selected:
1. Haldiram – National Brand
2. Thaggu Ke Laddu - Local Brand (Limited to Kanpur)

Company Overview:
HALDIRAM

The company was started in 1941 in Bikaner, Rajasthan by Shri Gangabisanji Agrawal
alias Haldiram Agrawal . The brand name 'Haldiram Bhujiawala' was introduced during
pre-partition era -1941.

The group comprises three companies:

(i) HMCL – Delhi based opened in 1983 for Northern region.

(ii) Haldiram Foods International Ltd – Nagpur based setup in 1970 for Western
& Southern region.
(iii) Haldiram Bhujiawala Ltd Kolkata based opened in 1958 for Eastern region.

These three are separate entities and operations are carried out independently of each
other. The only thing common is the Haldiram brand name, though each company
maintains different logo styles.

The company also exports packed Sweets & namkeens to USA , Pakistan, Canada,
Australia, Srilanka, Singapore, Malaysia, South Africa, Indonesia, Qatar, Hong Kong,
Japan, Kenya, North Korea, Nigeria, Mauritius, United Kingdom, Zambia and Bahrain.

Annual Turnover: 10 Billion

THAGGU KE LADDU

The company was started in 1960 in Kanpur, Uttar Pradesh by Shri Ram Avtaar Pandey.
This shop is famous for its special local sweets (Ladoo) and for its unique style of
campaigning. Mysterious campaigning slogans based on the national issues attract people
to visit the shop.

Initially the slogan was “Neta bazaar Ka Ladoo – Dekhne mein kuch aur khane mein
kuch” and now it is “ Aisa koi saga nahi jisko hamne thaga nahi”.The shop is quite
famous and the extent of it can understood by famous lyricist Gulzar using this slogan in
the film “Bunty aur Bubli” in its title song.
Thaggu ke laddu is basically a partnership firm with four company owned shops. To
maintain similar quality standards across all four shops the basic material (generic
product) is prepared in one central workshop and distributed to all the outlets and at the
outlets standard operating procedures are followed to convert it into finished goods.

Annual Turnover: 50 Million.

Marketing Strategy:
All marketing strategies are based on Segmentation, Targeting & Positioning. Based on
these guidelines the strategies of the two companies are as follows:

Haldiram

Segmentation: The company focuses on buyer’s primarily seeking good quality sweets.

Targeting: Further the company sees different characteristics associated with each
consumer response segment on which it is rated. These are:
- Income groups
- Region
- City (Tier-1, Tier-2 etc.)
- Occasion

Based on this two types of sub-segments have been targeted:

(i) High income group seeking fresh prepared sweets. This is handled by opening
company owned outlets in Tier-1 cities where there is huge demand.
(ii) High & upper middle income group seeking branded sweets at lower cost.
This is handled by channel in Tier – 1,2 &3 cities.

The pattern selected for target market selection is:

Market Specialization (for high income group): The firm concentrates on serving many
needs of a particular customer group.

Product specialization (for upper middle income group): The firm makes a certain
product (Sohan papdi, gulabjamun & rosogulla) that it sells to several market segments.

Positioning:

The company created a customer focused value proposition of “Quality & trust”. The
initiatives which helped haldiram to uniquely position its brand are:

- Products: Offering wide variety of fresh sweets & packed sweets. Adding new
varieties which are preferred by target market.

- Pricing: The strategy is two levels:

  One for fresh prepared sweets for higher income group. These are
the most profitable customers.

 Second for packed sweets for price conscious high & upper middle
income group customers. Offering its products at competitive
prices in order to penetrate the huge unorganized market of sweets.

- Place: The strategy is two levels:

 Company outlets in Tier-1 cities for fresh perishable sweets & for
packed sweets.
 For packed sweets strong distribution network to ensure the widest
possible reach for its products in India as well as overseas. The
company has C&F agents in all states, 700 distributors in domestic
market almost in all the towns, 35 buyers in international market.
The retailers for this product are almost all multi brand outlets
(hyper market, super market, confectioners etc).

Distribution channel of Haldiram is as follows:

For fresh sweets For packed sweets

Company Company

C & F Agent
Company owned
Companyoutlet
owned outlet

Distributor

Consumer
Retailer

Consumer

Promotion

Haldiram product promotion in sweets had been low key. The company has tied up with
 Company

an advertising firm 'Profile Advertising' for promoting its products. Attractive posters,
brochures and mailers are designed to enhance the visibility of the Haldiram brand.

Marketing is clearly trying to classify its product category in South East corner (i.e.)
High uncertainty of untried brands & High difference between brands as for the target
market it is always a part of the consideration set, neither information nor evaluation is
required. The buying behavior has been sub contracted (to Haldiram) due to very strong
brand equity.

Thaggu Ke Laddu:

Segmentation: The company focuses on buyer’s seeking, high quality special type of
local sweet.

Targeting: Further the company sees different characteristics associated with each
consumer response segment on which it is rated. These are:
- Income groups
- Occasion

Based on this the company following sub-segments have been targeted:

(i) High & middle income group seeking fresh prepared sweets.

The pattern selected for target market selection is:

Market Specialization: The firm concentrates on serving many needs of a particular

customer group. In this case it is the population of Kanpur. It gains a strong reputation in
serving the customer group and becomes a channel for additional products the customer
group can use.

Positioning: The company uses mysterious campaigning slogans but just to attract the
customer but once inside the shop it is all together different. The company creates a
customer focused value proposition of “Fresh & Honest”. The initiatives which helped
the company to uniquely position its brand are:

- Products: Offering fresh sweets to the target market. The company prepares daily
fresh sweets to handle immediate requirements. Alternatively the customized
sweets can be prepared as per the requirement of customer in front of him in 20 to
25 minutes. In this case the sweets are kept in generic form (ready to mix). The
variants used are:
 Dry fruit (Almonds, Cashew, Pistachio, Mixed)
 Mawa Ratio (50% or 100%)
 Suji Ratio (25% or 50%)
 Wheat Ratio (25% or 50%)
 - Pricing: The pricing is based on the variants used and hence fits in every ones
pocket. Details are as follows:

 Plain Ladoo (Mawa, wheat or ladoo): Rs 180.00

 Addition of Almond: Rs 40.00
 Addition of Cashew: Rs 60.00
 Addition of Pistachio: Rs 60.00

- Place: Four company owned outlets are strategic located so as each point of
Kanpur lies in 7-10 Km radius of the shop. The company offers home delivery as
well for the sweets with a minimum order value of Rs. 250.00.

Company

Company owned
outlet

Consumer

- Promotion:The product promotion is almost negligible as each person of Kanpur

is aware of this shop. In case some new product is introduced promotion is done
by putting big banners on the shop itself & advertising in local news paper.

Marketing is clearly trying to classify its product category in North East corner (i.e.)
High uncertainty of untried brands & Low difference between brands as for the target
market it is always a part of the consideration set, no information is required & products
can be evaluated during preparation in front of them. The buyer is a habitual buyer.

Selling Strategy:

Haldiram:

From the historical era sweets has been a part of the Indian culture & hence need for
good quality sweets has always been present. Due to demand & supply gap of raw
material in the past years a lot of cases related to use of adulterated goods, not following
government norms have come up in the recent years and this need was very well
understood by the management of Haldiram who through their Unique Selling
Proposition against the unorganized sector on level of hygiene and sustained product
quality without any compromise in taste has resulted in a shift of the consumers getting
higher level of satisfaction, by consuming products from a bigger brand.

The brand image has been made over a period of time by continuously providing
expected quality sweets to the customer, maintaining manufacturing hygiene & quality
standards, and most important of all “Word of mouth” by their customer’s. Keeping in
view long term business presence, pull strategy is adapted by the company.

Consumer schemes in the form of gift packs come up during festival season when there is
a huge demand of sweets. The company uses this opportunity for promoting its new
products by bundling new products in the gift pack. This is the only evidence of push
strategy.

No promotional offers to customer or to channel members are given by the company.

Company understands the importance of unit service level not only in terms of sales loss
but also in terms of buyer’s decision being altered by the retailer offering other brand. To
improve service level good margin are given to distributor (appx. 5%) and retailer (appx.
11%).

The high cost of products is traded off by the high quality of sweet. Till few years back
the brand has been able to sustain its leadership in the industry & was classified in South
East corner (i.e.) High uncertainty of untried brands & High difference between brands.

But, in the recent years new companies like Bikanervala who are following the same
business model are giving tough competition & shifting industry classification to South
West corner (i.e.) Low uncertainty of untried brands & High difference between brands.

Hence, the role of sales force & channel members have become very crucial not only to
ensure maintain original classification but also to counter its competitor strategy of
shifting it. The roles which the company is emphasizing upon are:

- Ensure the all products are displayed.

- Ensure readily availability of the product.
- Help customer in the decision process understanding his requirements which may
vary depending on:
 Budget
 Own use or for gift purpose
 Consumer age
 Consumer taste
 Shelf life

- Recommend packaging based on the usage:

 Gift
 Own use
 Gap between buying & using
Thaggu Ke Laddu:

The need for special local sweets is present. The company is known for its special sweets
& quality being served for decades and is always a part of the consideration set of the
local people of Kanpur. Clearly the pull strategy exists which generate the demand.

Their Unique Selling Proposition is preparing sweets in front of the customer and all the
information is visible. The customer can actually feel the freshness & purity of the
sweets.

Since it is a reputed sweets shop of a small town it is not possible to compete in the
market without consumer schemes. The company offers 10% discount on single purchase
of more than 10 Kgs.

In cases of marriage if the order book is more than 100 Kgs besides 10% discount the
company on its behalf offer 01 silver coin of 10 gms.

Pricing is slightly higher than its local competitors Mithas, Banarasi, Shantiniketan but it
is traded off by quality it provides to the customer.

The industry classification to North East corner (i.e.) High uncertainty of untried brands
& Low difference between brands. Customers are aware of the product & come to its
shops with a clear mind set as to what they wish to buy. Hence, the role of sales force in
minimal as they are not involved in the decision process. However, the sales force focus
on:

- Ensuring personal attention to each customer.

- Ensuring customer satisfaction.
- Ensuring timely delivery of sweets to the customer.

Lately two more focus areas have been added:

- Informing customer about new upcoming products.

- Getting customer feedback about the products & new choice of products

Impact of selling activities on the attributes:

Haldiram:
 - Strong customer relationship
- Customer trust
- High involvement of sales force in the decision making process

Thaggu Ke Ladoo:

- Customer loyalty
- Customer awareness

Gaps in achieving the marketing goals

Haldiram

1. Company owned outlets are at very few locations due to which a huge target
segment for fresh prepared sweets remains untapped.
2. The company should focus more on customer relations & customer satisfaction.
3. The company should increase their advertisement expenditure.
4. Trial packs for new launched products to have a better feedback about the
product.
5. Customer feedback about its own/ competitors products on critical aspects should
be done on continuous basis & actions thereof.

Thaggu Ke Ladoo

1. Product packaging is not in line with its brand equity.

2. Thaggu ke laddu has confined itself to one city. It is not using its brand image to
tap target segment in surrounding areas which with minimum expense on
advertisements can yield fast growth.
3. Variety of sweets are very less.
4. Is not certified by any local/national/international quality certification agency.

Areas of conflict between marketing and selling

HALDIRAM

1. There is no policy for return of goods from retailer & consumer in case the product
is not sold during its shelf life. This results in pushing such products in the market
with schemes. This seriously affects the brand image.
 2. During festive season the value proposition seems to get diluted. Due to high
demand a lot of sweets preparations are outsourced wherein the quality of the
sweets is not up to standard.
3. People enter multi brand outlet to buy Haldiram sweets .The channel person
influenced by other company, make the consumer reconsider his decision by
informing him about other ‘not so costly ‘ options .The consumer often end up
buying a cheaper product . Company should be vigil to counter such acts of its
competitors by reviewing its information search & evaluation technique..
4. The company still lacks in customer oriented approach. In today’s business scenario
the company cannot ignore this. Hence, sales force needs sufficient training on this.
5. The distribution network although very vast needs to be synchronized with
customer demand as a lot of times cases of stock out are observed. Better
forecasting techniques & ERP systems to be used.

THAGGU KE LADDU

1. It uses slogans “Aisa koi saga nahi kisko hamne thaga nahi”,“ Mehman ko
chakhana nahi, tik jayega “or ‘bikti nahi foothpath pe to naam hota top pe’.This
type of slogans attracts public but may also dilute its own pull.
2. To increase sales at times it creates street plays to attract people & media. This
can seriously affect the brand image & the pull towards it.

Recommendations:

HALDIRAM

1. SWOT analysis:
SWOT analysis stands for overall evaluation of strength, weaknesses,
opportunities & threats. Haldiram should time to time perform some sort of
marketing survey in order to understand their strengths, weaknesses (areas of
improvements can therefore be identified), future opportunities & potential threats
from their competitors & act accordingly.

2. Selling concept:
The aim of selling should be to sell what the customers want, rather than what
they make. It is therefore necessary to continuously do surveys for identifying the
products of customer choice & introduce it.

3. The role of the sales force & channel members needs to be redefined:
 Being in contact with the end user should be used for customer feedback.
 New products information communication tool.
 Quality of customer handling.

4. Customer value Triad:

 Value can be seen as primarily a combination of Quality, Service, & Price
(QSP).Though Haldiram is already offering a very good quality & service to their
customer’s, they should work towards being more price competitive.

5. Haldiram spend on advertisement for sweet in minimal. Even if the product is

really of a very good quality there must be some advertisement especially during
the festival season to attract the customers.

6. The company should target lower middle class where there is tremendous
potential to increase sales & revenues. Introducing the product for this class
should be the top most priority for the company.
7. Brand names being same, different people of the family are using it to run
business. The manufacturing plants & processes are different & hence difference
in quality. This severely affects the brands image. All members should come to a
common understanding negotiate and must have a centrally operated system.

FOR THAGGU KE LADDU

1. SWOT analysis:
Presently Thaggu ke Laddu is not doing anything such as a SWOT analysis. But
SWOT analysis is essential even for a small brand like Thaggu ke Laddu in order
to remain a leader in the market.

3. Customer value Triad:

Value can be seen as primarily a combination of Quality, Service, & Price
(QSP).Though Thaggu ke Laddu is already offering a very good quality to their
customers, but they should pay more attention to the pricing of their product &
the service to their customers..

4. Need for new varieties:

They have limited number of products in sweets. There must be some more
variety in its product range in order to expand their business. Thaggu ke laddu
should introduce some new type of sweets in their product range immediately

5. Thaggu ke laddu is only limited to Kanpur .But this brand and product has got
potential to sell in other cities near to Kanpur. They should open their own outlets
or franchisees in nearby towns to expand their business.

6. Today packaging has become a very important selection criteria. It is considered

to be the gateway for quality products. The product packing besides improving
aesthetics needs to be redesigned for maintaining freshness of sweets over a
longer period of time.

7. It must get quality certifications like ISO 9001, HASSP etc. to increase its
reliability & dependability in the unexplored market.
COMPARATIVE ANALYSIS BETWEEN TWO BRANDS:
1. Haldiram focusses aggressively on increasing the growth stage of the product by
adding new variants to their existing products & also adding new products
whereas Thaggu ke Laddu has four products which are in its maturity stage of
lifecycle.

2. Both have very strong brand equity. The customers have a strong psychological
bond with the brand.

3. Both have positioned itself with appropriate point of difference & points of parity
with regard to its competitors.

4. The differentiating strategies being used by Haldiram are:

- Product.
- Image
Whereas used by Thaggu Ke Ladoo are:
- Personnel.
- Image.

5. Both Haldiram & Thaggu ke Laddu concentrates on achieving a superior

performances based on the strengths of their product (quality in this case).They
cultivate this strength to contribute to the intended differentiation in the
market. Haldiram takes special care about the proper packaging of the product to
keep it fresh whereas Thaggu ke laddu believes in fresh preparation & day to day
selling of sweets.

6. Haldiram & Thaggu ke Laddu targets similar class of customers seeking quality
sweets. This class of customers consists of Middle & Upper middle class
customers.

7. The price of sweets is a little bit high for both Haldiram & Thaggu ke Laddu. But
as customers are well aware of the quality, taste & hygiene of their products, they
are always more than happy to pay the extra price.