Britannia Nutrichoice report PDF

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Markeeting Management Report on Britannia Nutrichoice...

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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 ......................................................................................................................................................... 11 Conclusion ......................................................................................................................................................... 13 References ......................................................................................................................................................... 14 Annexure ........................................................................................................................................................... 15

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 when it was compared with other tasty alternatives available in the market. Its main consumers were limited to those who had special health concerns. In 2005 due to the change in management, the entire marketing strategy underwent a radical overhauling. Britannia NutriChoice changed its focus from simple “Eat healthy” to “Health, taste and happiness”. Several new 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.

Overview of the Brand ‘NutriChoice’ Britannia NutriChoice is one of India’s leading health brands today, infusing a change in the way Indians think and 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 has a belief that small yet smart food choices can play in enabling its consumers to get more out of their everyday lives. With this hope Britannia has developed a unique range of healthy snacking choices under the umbrella of the brand NutriChoice that can meet in-between cravings and nutrition needs of a diverse set of consumers. According to Britannia, the health and nutrition space in the Indian market, way back in 2005 had not been tapped sufficiently and the company realised that introduction of a product in this space could act as a growth driver for it. Currently, where brands such as Marie Gold and Milk Bikis have been consistent since decades, NutriChoice emerged as a dark horse. When they conceived the idea of establishing themselves into the health segment, the initial plan was to create and market a milk-based drink named Anlene, which was targeted at Indian women suffering from osteoporosis. However, the idea had to be withdrawn during the test phase of product in the Eastern Region. The product Anlene failed and the company analysed that although Indians were becoming health conscious but their mind space was ruled by more common and fatal diseases such as heart diseases and diabetes. Gradually, they also started to focus on healthy stomach. Says Bali, " We opted to use what we have whether a brand, consumer insight or way to market and suffuse that with health propositions." NutriChoice is basically built around Britannia’s philosophy of “Eat healthy and think better”. In addition to the economic progress, India’s increasingly urbanizing lifestyles have brought along erratic schedules, empty calories 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, Arrowroot Lite Crackers, Diabetic Friendly snacks(Oats and Ragi biscuits) and the recently launched line of healthy crisps viz. Multigrain Thins. NutriChoice was revamped in 2005, due to change of management, leading to some strategic changes in terms 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 Segmentation With the concept of a new product in mind, Britannia started with market segmentation, identified target markets and tailor made their positioning strategy to reach out to consumers. The broad categories under which a market is segmented are:    

Geographic Variables Demographic Variables Behavioural Variables Psychographic Variables

Geographic Segmentation The 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 didn’t try to segment based on region because they didn’t try to appeal to any of the regional eccentricities of the various regions in India. Britannia did not intend to divide the market on 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 is different from those in urban market and hence taking into consideration the attributes of the product, the rural and urban divide becomes essential.

Demographic Segmentation Some of the factors relevant to Britannia for NutriChoice were:

Age

Health

Education

Income

Occupation

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

The daily routine lifestyle >Eating Habits

Interest

Opinion

>Do they prefer taste over health?

>Do they think they are healthy?

>Are people willing to pay higher price for healthy products?

>Do they feel guilty on having snacks between meals?

According to the market survey conducted for the report (questionnaire attached as Annexure), out of the 51 respondents, following figure shows the leisure time activity of the respondents.

Attribute Average rating score 3.24 Nutritional Value 3.96 Taste Price 3.38

According to the market survey conducted for the report (questionnaire attached as Annexure), out of the 51 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 leisure time. 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 to various attributes. The ratings show the preference order of average Indian consumer for the three attributes in the order of taste, price and nutritional value.

Targeting Based on the segments identified in the previous step, we tried to analyze the targeting strategy of NutriChoice 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 the degree of rivalry is very high and limited product differentiation leads to buyer mobility. Due to aggressive marketing and pricing, new entrants find it difficult to compete.

Buyer Power Buyer power is weak as loss of any one buyer is unlikely to cause any significant effect on the producer’s revenues. However, even though revenue generated by one consumer is low, collectively they represent a wide 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. Food products targeted for health conscious people can justify high price levels due to high product differentiation and also weaken buyer power due to lack of alternatives. Supplier Power Suppliers include farmers, agricultural cooperatives and sugar manufacturers. Large manufacturers often either maintain strong relationships with suppliers or go for M&A for vertical integration to offset the danger of sourcing and price fluctuations. This strengthens manufacturers standing in relation to suppliers. Leading manufacturers 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 to contest with manufacturers of other industries and also retailers due to the same raw material being sourced. 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 and penetrative 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 forms an 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 awareness among consumers undertaken by the company can ensure low threat of substitutes. The company can enjoy the first mover advantage by being the first ones to enter into the segment and reduce the threat of substitutes. Degree of Rivalry Competition is often fierce within the food industry. There are a large numbers large competitors like Parle and ITC, and hence Britannia faces a strong competition. In addition there exists a large number of small and independent manufacturers operating alongside these large players. Consumers face zero switching costs, which means that manufacturers need to secure consumer loyalty by attempting high product differentiation. By targeting a niche product segment, a company can afford to increase prices and command brand loyalty. Based on the above analysis we identify target of Nutrichoice as middle to high income, middle aged, 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. We referred to the census data for India to find the population distribution between rural and urban India. The

distribution is given below. Of the 1.2 Billion people in India only about 28% live in urban cities with access to modern 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 the urban population belong to the 20 to 59 age group.

For education profile, we investigated the distribution of graduates in urban population. The figures are shown 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 reducing the poverty, India has managed to create a large middle class in the past decade. Below we have shared data from the McKinsey Global Institute.

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

As indicated above in 2005 the Indian middle class was still relatively small, approximately 5% of the total population. However based on assumptions on the growth rate at that time, the middle class was slated to expand to 22% of the total population by 2015 and 41% by 2025. Also the percentage of people with household income below 90000 is going to reduce drastically in the next few years. In 2005 the number of households with high income was slated to almost triple by 2025. Over the medium to long-term, this provides several opportunities for marketers of niche products targeted for the high income people living in metros. Additionally, India has 50.8 million people suffering from diabetes and by 2030, nearly 9 per cent of the country's population is likely to be affected by diabetes. (Source: Indian Express) This forms a very niche market 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 Datamonitor Consumer Survey, 2009. The question asked to people was to what extent they agreed that snacking inbetween 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% of the population felt guilty of in-between meals. The second question was, to what extent did the people read the information on product packaging to help them make choices. The result is shown below.

Source: Datamonitor Consumer Survey 2009

Differentiation Based on segmentation and targeting approach, Britannia tried to differentiate NutriChoice to create a new position in the market. While McVitie's have launched their digestive biscuits as the first ever digestive biscuit, 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. Indians’ perceptions have changed over time and are now willing to pay for nutritious food. From sharing of healthy recipes to promoting innovative health campaigns, it has marked its presence with its high engagement with the targeted calorie-conscious consumers. Over a period of time, its packaging and advertising communicated the inclusion of key ingredients and their associated health benefits—for example the benefits of arrowroot, fibre and whole grain were highlighted prominently in promotion of the products. This not only differentiated the brand from other competing brands, 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, Britannia targeted NutriChoice as a consumer product but with health benefits. The packaging used natural colours and consisted of imagery of its constituents to distinguish itself. This has given the brand unique image in the eyes of the consumers in a way that they relate the NutriChoice products with nature and health. Differentiating Attribute Nutritional Value Taste Price Crispiness Presentation Trust

NutriChoice High on health aspect, promoted as “Health Biscuit of India” Wide range of products available in different flavors Competitive pricing as compared to other biscuits in “Health Biscuit” section Variety of products from soft to crunchy to cater to various market segments Use of natural colors and imagery to distinguish the brand Britannia in itself is a trusted brand which differentiates it from competitors

The following perceptual maps try to capture their differentiation strategy

Positioning In 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 brand Nutrichoice were put under the category “health and nutrition” while the rest of Britannia products were

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 of NutriChoice 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 since 2005 many new products have been launched under this brand and positioning strategies have changed from time to time. The company took several initiatives to cater to the diverse consumer segments by repositioning the products under the NutriChoice brand. A few such notable positioning endeavours by which the products were re-imaged are: 1. ‘Health plus taste plus happiness’ positioning: To outgo the staid taste of the earlier products and come 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 a low-sugar biscuit. The brand was made crispier and tastier, and was re-launched as NutriChoice Classic Lite Cracker. In addition, another variant of this brand, NutriChoice Nature Spice Cracker, was introduced 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 and they often end up eating unhealthy things. This hunger curbs can be met with an healthy alternative. 5 Grain NutriBix with the punch line “Bhook bhgagayo kuch healthy khao” actually focuses on this concept. 3. Diabetic friendly snacks: Studies show that products with high fibre or whole grain to fight a number 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 two variants “oats” and “ragi”. 4. Snacks to meet the busy life style of the urban population: out of home consumptions such as at the workplace or while travelling became easy after the NutriChoice launched the 5 Grain biscuits in ‘pocket-sized meals’ to achieve portion control and make them more convenient for anywhere /anytime consumption. 5. Alternative to fried snacks: Britannia realised through market research, that Indians just love spicy snacks and have a special weakness for them. However, the growing urban population has become highly health conscious. So Britannia came up with an option for a spicy / tangy yet healthy non fried, low fat version , “Nutrichoice multigrain thins”, a family time snack w...