Britannia Industries Limited Company Analysis Final PDF

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BRITANNIA INDUSTRIES LIMITED COMPANY ANALYSIS

DIPAYAN CHOWDHURY MMS-I. ROLL NUMBER 16

CONTENTS 1. INTRODUCTION 2. PRODUCT BASKET OF BRITANNIA 3. PRODUCTS AND PRICING 4. 5. 6.

MARKETING MIX OF BRITANNIA MARKETING STRATEGIES PRIMARY SURVEY

7. COMPETITORS 8. DISTRIBUTION NETWORK 9. COST SHEET OF BRITANNIA BREAD 10. COST SHEET ANALYSIS 11. FINANCIAL PERFORMANCE 12. COST INCURRED ON R & D 13. BIL SALARIES OF EMPLOYEES 14. FIVE MAJOR FACTORS AFFECTING THE BUSINESS ➢ CONSUMER BEHAVIOUR ➢ STRONG BRAND NAME ➢ MATCHING MARKET COMPETITORS ➢ MARKET EXPANSION ➢ MARKET THREAT 1

15. BRITANNIA INDUSTRIES FINANCIAL SUMMARY 16. PROFITABILITY RATIOS ➢ GROSS, OPERATING, NE T PROFIT MARGIN ➢ RETURN ON EQUITY ➢ FREE CASH FLOW 17. NET INCOME AND CASH FROM OPERATIONS 18. LEVERAGE RATIOS ➢ DEBT TO EQUITY RATIO ➢ CURRENT RATIO 19. OVERALL PERFORMANCE 20. COMPARATIVE STUDY OF BRITANNIA INDUSTRIES LIMITED IN THE FIRST THREE QUARTERS FOR THE FY-18

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Britannia Industries Limited Britannia Industries Limited (BIL) is the leading player in Bakery Products (Biscuits, Bread, Rusk and Cake), jointly promoted by French food major DANONE and Nusli Wadia. It enjoys market leader ship in Biscuits with 39 % market share in value term. It owns key brands like Tiger, Good Day and Marie Gold. It has six pillar brands, which contribute around 90 % of its top line. Each of its pillar brand generating sales exceeding Rs.1 billion and these six pillar brands include Good Day, Tiger, 50:50, Treat, Milk Bikis, and Marie Gold. BIL is enjoying market leadership in all sub-categories of biscuits, Except in Glucose category where Parle is the leading player.

PRODUCT BASKET OF BRITANNIA The group’s principal activities are manufacturing & marketing•

Biscuits

•

Cakes

•

Rusk

•

Bread

•

Dairy products

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PRODUCTS AND PRICING: BISCUITS 1. Marie Gold

- 25/- and 48/- (available in 250 g ,500 g)

2. Vita Marie Gold

- 39/- (available in 300 g)

3. Treat

- 30/- (available in 150 g)

4. Bourbon Cream

-10/- and 25/- (available in 60g and 150 g)

5. Nice Time- Sugar Showered

- 22/- (available in 150 g)

6. Nutri-Choice OATS

- 60/- (available in 150 g)

7. Nutri-Choice RAGI

- 60/- (available in 150 g)

8. Nutri-Choice Simply Lite

-15/- (available in 100 g)

9. Nutri-Choice Heaven Oats

-20/-(available in 75 g)

10. Nutri Choice - Hi Fibre Digestive

-42/-(available in 250 g)

11. Little Hearts

- 9/- (available in 37 g)

12. Good Day Chunkies

- 50/- (available in 100 g)

13. Good day cookies

- 30/- (available in 200 g)

14. Good day cookies Rich Butter

- 20/- (available in 100 g)

15. 50-50 Biscuits

-10/- (available in 80 g)

16. Tiger Glucose

-10/- (available in 124 g)

17. Tiger Cream Biscuits

-5/- (available in 45g)

Cookies 1. Flower Biscuits

70/- (available in 250gms, 400gms)

2. Coconut Biscuits

75/-(available in 250gms, 400gms)

3. Jam Centre

75/-(available in 250gms, 400gms)

4. Custard

75/-(available in 250gms, 400gms)

5. Chocolate Marble

75/-(available in 250gms, 400gms)

6. Orange

75/-(available in 250gms, 400gms)

7. Coconut Macroon

95/-(available in 200gms, 350gms)

8. Chocolate Walnut

120/-(available in 250gms, 400gms)

9. Pure Chocolate Cashew

120/-(available in 250gms, 400gms)

10. Butter Pista

130/-(available in 250gms, 400gms)

11. Almond Cookies

130/-(available in 250gms, 400gms)

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Rusk 1. Milk Rusk (round)

70/- (available in 200gms, 400gms)

2. Milk Rusk (oval)

70/- (available in 200gms, 400gms)

3. Saunf Rusk

70/- (available in 200gms, 400gms)

4. Jeera Rusk

70/- (available in 200gms, 400gms)

5. Cardamom Rusk

75/- (available in 200gms, 400gms)

CAKES 1. Cake Muffills

10/- (available in 35 g)

2. Bar Cake (Fruit/Chocolates)

15/- (available in 60 g)

3. Chunk Cake

10/- (available in 35 g)

4. Cake- Nut & Raisin Romance

20/- (available in 60 g)

Dairy Products 1. Britannia Cow Ghee

305/- (available in 500ml)

2. Butter

255/- (available in 500 g)

3. Classic Cheese Spreads

85/- (available in 180 g)

4. Britannia Asli Pepper Cheese Spread

85/- (available in 180 g)

5. Cheese Cubes

125/- (available in 250 g)

6. Mozzarella Cheese Block

140/- (available in 200 g)

7. Low Fat Cheese Slices

155/- (available in 200 g)

8. Natural Cheddar Cheese Block

199/- (available in 200 g)

9. Cream Cheese

199/- (available in 180 g)

10. Plain Cheese Slices

350/- (available in 480 g)

BREADS 1.

Britannia Bread Multigrain

40/- (available in 450 g)

2.

Britannia Brown Bread

30/- (available in 400 g)

3.

Britannia 100% Whole Wheat

20/- (available in 250 g)

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MARKETING MIX OF BRITANNIA INDUSTRIES LIMITED. PRODUCTS:

PRICE:

PROMOTION:

PLACE:

Product Variety

List price

Sales Promotion

Locations

Quality

Discounts

Advertising

Inventory

Design

Allowances

Direct marketing

Transport

Public Relation

Channels

Features Brand Name

Coverage

Packaging Sizes Returns

Marketing Strategies Retail Marketing: For retail marketing, focus should be setting up the exclusive retail outlets at malls or at local market areas. At the exclusive retail outlets all variants should be available where it could be found instantly by the customer.

Possible Location: • The strategy should be to adapt to place in every possible location where some business can be generated. Prominent places need to be chosen for the purpose like malls, educational institutions and corporate campuses, and places, which are for tourist attractions. •

Major Departmental Stores that are upcoming trend in metros, tier-I and tier-II cities is the great

opportunity. Malls that have decent running feet can be chosen in the initial phase. Special outlets can also be used at colleges and institutes where target audience is visible.

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Marketing strategies for B2B business: In the stressful world of today, organizations need to keep their representatives spurred enough with the goal that they generally give their 100%. Valuing one's diligent work is an inspiration device. Many organizations give breakfast and lunch to their representatives. On occasion organizations toss end of the week parties where they could utilize the item as new variation. Assembling organizations ought to likewise be focused on. Most of the assembling organizations host a dispatch gathering for their new items. Claim to fame breads can be utilized as heavenly nourishment there.

How to go about it: TV advertisements will not be very effective for corporate sector, as people working in big companies do not get enough time to watch TV. Instead I suggest following marketing strategies: ❖ Target customers from the corporate segment ought to be tapped and given a brief introduction on the item which won't just concentrate on the quality, estimating, medical advantages however will likewise demonstrate the measure of diligent work that goes into making it. Examining ought to be critical at this place. ❖ Early entry into long term contracts with these companies as entry barriers in this field are low and new players can come and eat the market share. ❖ Sponsoring organization occasions like venture finishing, venture launch, company supported gatherings and so forth can be exceptionally powerful as these occasions get a considerable measure of consideration of entire corporate segment. Thus, it will help in publicizing the item at a bigger scale. ❖ Newspapers will help in making the product popular in employees of the target companies. The advertisements should be very creative and should grab the attention of readers in one look. ❖ Also print advertisements must project specialty bread as a synonym of healthy & delicious food, to do this its advertisement indicate its ingredients which are healthy.

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Table- 1: Showing the Nature of Outlet where Customers prefer Britannia Products Nature of outlet

No. of respondents

Percentage

Bakery

6

11.11

Cafés

11

20.37

Supermarket

13

24.08

Departmental stores

10

18.51

Retail stores

14

25.92

Total

54

100

Source: Primary Data

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SALE OF MARIE BISCUITS Table- 2: Showing the sale of Marie Biscuit People buying Marie

No. of respondents

Percentage

Yes

15

71.4

No

6

28.6

Total

21

100

Source: Primary Data

1. Metro Cash and Carry- Address- Western Edge l, Opp. Magathane Bus Depot, Western Express Highway, Borivali(E), Mumbai, Maharashtra 400066. 2. D-MART- Address- Palm Court complex, Malad Link Rd, Kanchpada, Malad West, New Link Rd, Mumbai, Maharashtra 400064. 3. Big Bazaar- Address- Growel's 101 Mall, Ground and 1st Floor, Akurli Road, Off Western Express Highway, Kandivali East, Mumbai, Maharashtra 400101. 4. Local Retail Shops – Crawford Market. Dhobitalao. Kalbadevi Market.

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PRIMARY SURVEY Study of customer buying behavior in confectionary products with respect to Britannia. SAMPLE SIZE LOCATION Type of Data Data Collection Tool Data Collection Method

30 RESPONDENTS Crawford Market & Metro Cash and Carry Primary Structured Questionnaire Survey Method

Structured Questionnaire 1. Why you prefer eating biscuits? WHY DO YOU PREFER EATING BISCUITS? Snacks 25%

Timepass 35%

Hungry 40%

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2. Which brand of Biscuits do you like to consume?

Which brand of Biscuits do you like to consume? 4%

1%

12% 33%

30%

20%

Britannia

ITC

Parle

Sunfeast

SuryaFoods

Others

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3. Which Britannia Biscuit is your favorite? Which Britannia Biscuit is your favorite? 5%

3% 20%

15%

30% 27%

Good Day

NutriChoice

Marie Gold

BurBoun

50-50

Nice Time

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4. Which Britannia Biscuit does your family prefers mostly?

WHICH BRITANNIA BISCUIT DOES YOUR FAMILY PREFERS MOSTLY? Good Day

Jim Jam

Milk Bikis

BurBoun

50-50

Choco-Chip

Tiger Crunch

6% 20%

12%

15% 23%

6%

18%

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5. Which Brand Dairy products you and your family most like to consume?

Which Brand Dairy products you and your family most like to consume?

29%

50%

21%

AMUL

BRITANNIA

MOTHER DAIRY

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6. According to your perception why do you like to consume Britannia Products?

According to your perception why do you like to consume Britannia Products? 5% 21%

15%

28% 31%

Brand Loyalty

Price

Product Varieties

Product Quality

Packaging

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COMPETITIORS: Some of the other competitor’s brand in BISCUITS are1. Parle 2. ITC 3. Surya Foods 4. Anmol Bakers 5. Sun-feast 6. Kraft 7. Surya Foods and Agro Limited (Priya Gold) 8. Other Bakeries

Some of the other competitor’s brand in BAKERY are1. BONN bread 2. 365 days 3. VLCC bread 4. Sugar n Spice 5. Breads N More

Some of the other competitor’s brand in DAIRY PRODUCTS are1. Amul 2. Nestle 3. Prabhat Dairy 4. Kwality Dairy 5. Mother Dairy

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

Distribution Network: To reach consumers at their nearest locations Britannia follows intensive distribution.

Channels are different to cover the mass markets. They are as follows: For institutional trade such as in IRCTC, flights, and hotels etc. the distribution channel is direct.

❖ Company Depot to Hotels & Flights.

The direct marketing channel of Britannia is through tie ups with corporate canteen, kiosk, railway station and coffee day express.

For Urban and Rural customers, the distribution channel is ❖ Company Depot ❖ Wholesaler/Distributer ❖ Retailer ❖ Customers

They use same channel to reach Kirana store and Provision stores so that it will be available every point. The wholesaler gets the product for 75-80% of MRP and sells to retailer for 85% of MRP. Finally, retailer sells to customer at 1.5-2% of profit margin after deducting all expenses. For Example: A 25/- Britannia Bourbon Biscuit is bought at 18/ to 19/- by the distributor who sells the same at 21/- to 22/- to the retailer. A customer eventually buys the packet at 25/- from the retailer. Sometimes if the retailer wants, can give a rebate of 1/- to the customer. SourcePrabhu Krupa- Mahatma Gandhi Road. Ville Parle East. Mumbai 400057.

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Britannia SWOT Analysis Strengths

1. Britannia has been around 120 years in the industry 2. Britannia is one of India’s most trusted brand with strong brand recall 3. Wide range of bakery products like biscuits, rusks, cakes and dairy products like milk, butter, cheese, etc. 4. Strong distribution network ensuring proper availability of the products even in the remotest of areas 5. Britannia has a major share in biscuits industry 6. Marketing and advertising efficiency 7. Innovative products for health-conscious people like oats and porridge, Britannia Nutri Choice biscuits for diabetes patients, Vita Marie Gold, etc. 8. Strong presence in rural markets 9. Products for all food and snacks segments is a big boon for Britannia

Weaknesses

1.Lower market share for Britannia in dairy segment 2.Heavy expenditure on advertising and marketing 3.Similar products produced by many companies means high brand switching

Opportunities

1. Increase in purchasing power of people in India 2. Increase its share in the dairy industry 3. Product line extension can benefit Britannia as the company has loyal customers 4.Expansion in other countries

Threats

1.Lower price offering competitors can affect Britannia's market share 2.Local dairies and bakeries can cause business losses 3.Inflation can cause fall in sales and revenue 4.Rise in cost of raw materials

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COST SHEET OF BRITANNIA BREAD PROFORMA OF COST SHEET Cost sheet for every 1lac units produced and sold. Cost Per Unit Quantity Manufactured

1

100000

Quantity sold

1

100000

CPU(Rs) DIRECT COST Raw materials consumed Opening stock of raw materials

0

Purchases of Raw Materials

5.805

(-) Closing stock of Raw Materials

0

Materials Consumed

5.805

Direct labour/wages

0.124

Direct cost/expenses

0.2415 PRIME COST

6.1705

INDIRECT COST Factory/Works Overheads Indirect labour

0.122

Depreciation on Machinery

0.675

Works Overheads

0.05204

Cost of Maintanence

0.0589

Other Factory Expenses

0.0282

Supervisors Salary

0.0385

Power & Fuel

0.5678 1.54244

Total Overheads FACTORY COST/WORKS COST

7.71294

Office and Administrative Overheads Depreciation on office furniture@7%

0.0281

Office Rent

0.0585

19

Salary to Staff

0.089

Office and General Expenses

0.0257

Telephone expenses

0.0219

Electricity and Lightings

0.03123

Printing and stationary

0.00294

Total Office and Administrative Overheads

0.25737

COST OF GOODS SOLD

7.97031

Selling and Administrative Overheads Sales Commission

0.705

Salary of Salesman

0.1

Carriage Outward

0.12798

Sales Expenses

0.057 0.98998

Total Selling and Administrative Overheads COST OF SALES

8.96029

PROFITS

1.03971

SALES

10

Raw Materials Cost Flour

3.756

Water

0.892

Yeast

0.6789

Salt

0.4781

Raw Materials per unit

5.805

20

NOTE The Value are determined on the basis of apportionment as the company produces more than one product (including fixed cost) Cost sheet for every 1lac units produced and sold. Some of the above Values are estimated

COST SHEET ANALYSIS Direct Cost:

Direct materials To manufacture one unit of bread the following RAW MATERIALS are required. Flour Water Yeast Salt

Direct labor/wages: Direct labor/Wages amount to Rs. 0.124 per unit which is approximately 2.009% of the PRIME COST. This percentage is low because a good amount of work is automated as a result of which Human resources are diverted to more productive areas such as SALES and MARKETING. Direct cost/expenses: Direct cost includes costs incurred in bringing the raw materials into the factory which is Carriage inward. It also includes the amount paid loading unloading charges and other petty expenses.

Indirect Costs:

Factory Overheads: The Factory Overheads includes the indirect labor, Depreciation on Machinery, Works Overheads, Cost of Maintenance, Other Factory Expenses, supervisors Salary and Power & Fuel.

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•

Indirect labor: The amount of indirect labor is Rs. 0.122 per unit. This value includes sweeper charges, support staff etc. Depreciation on machinery: The depreciation is calculated on the basis of WDV calculated @ 10% p.a. This value amounts to around 43.7% of the FACTORY OVERHEADS. The percentage high because of the level automation and technology used for production.

•

Power: Per unit power and fuel consumpt...