Monginis… The Cake Shop PDF

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1 Monginis… The Cake Shop 1 2 History: - Today's reputed Monginis brand name, originated as a single Italian bakery, at Mumbai's Fort area, over a hundred years ago. The Monginis Catering Service, as it was then known, was largely responsible for the success of most European weddings held in...

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Monginis… The Cake Shop Bhavesh Sharma

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Monginis… The Cake Shop

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History: Today's reputed Monginis brand name, originated as a single Italian bakery, at Mumbai's Fort area, over a hundred years ago. The Monginis Catering Service, as it was then known, was largely responsible for the success of most European weddings held in Mumbai city at that time. However after it was bought over by the Khorakhiwala's in the 1960s, the brand has grown remarkably in the form of the hugely-successful Monginis Cake Shop franchise network being run all over India today. The credit of this goes to Mr. H.T.Khorakhiwala Founder President of India's National Association of The Baking Industry, who spearheaded the operations that resulted in the establishment of the first Monginis Cake Shop in 1971. From being a single shop then, to the highly-evolved franchise network of nearly two hundred stores across India, Monginis has sure come a long way. At a sprawling headquarters in Mumbai's north-western suburbs, the organization today owns state-of-theart manufacturing facilities, to produce a whole range of cakes and bakery products - both packaged and oven-fresh. Also now its into : Celebration Cakes, Cookies, Specialty Breads, Chocolates, Snack Foods and Savories. Monginis are also into Party Decoration, from supplying buntings to disposable-plates and party take-home gifts. Vision at Monginis :To supply the best quality products with value for money, to continue maintaining national leadership in cakes with a presence in all towns, across the country, to develop human resources. In keeping with these objectives, Monginis follows a simple "doughnut principle" whereby the customer remains that most important consideration around which all

other activities revolve . This is done , by creating value-for- money products without compromising on quality in terms of taste or appearance. It's been the main reason for its rise as a retail franchise network of nearly two fifty outlets across India alone, resulting in their acquiring market leadership in the cake industry and the largest food store chain in India.

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Monginis

challenge was to extend the brand and reposition it in India. Its plans were to focus

mainly on cakes and go for an aggressive growth strategy. Monginis chose the franchising route and evolved a comprehensive marketing strategy including the launch, pricing, ad agency selection and sales & distribution. Monginis decided to opt a customer orientation and positive perception management. A strong campaign was supported by periodic promotions. Internally too, Monginis advocated a complete overhaul, dividing operations into distinct strategic business units and independent profit centers. The results led to a national brand presence - over 70% growth in the number of cake shops to 184 and an increase of manufacturing

franchisees

from

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Monginis Foods Ltd (MFL) is embarking on a major marketing and distribution initiative to woo pastry lovers. To support the strategy, Monginis has chalked out a distribution plan to be executed through two strategic business units (SBUs)-one SBU will deal through exclusive Monginis cake shops and the other outside the Monginis universe. SBU-I currently deals with 253 cake shops in the country - spread out in Mumbai, Calcutta, Pune, Hyderabad, Rajkot, Goa, Nasik, Baroda and Jaipur. This unit deals with merchandising of a full range of cakes, pastries, savouries and birthday accessories. The price for pastries ranges from Rs 8 to Rs 15 and birthday cakes from Rs 200 to Rs 350 for a kg. SBU-II comprises packaged products like slice cakes, icecream cakes and mawa (cup) cakes. The price for slice cake ranges from Rs 5 to Rs 40, while that for icecream cakes is from Rs 20 to Rs 50. The products under SBU-I are perishable and last for a day or two. Against this, the packaged products under SBU-II have a long shelf-life and is meant to last for as long as 40 days. As part of the SBUs, the company has also appointed two sales managers in Mumbai. In setting up the SBUs, MFL carried out a pricing strategy which caters to the upper middle class and is termed `Value for Money'. Not only is the company a pioneer in franchise cake shops; it is also giving out manufacturing franchises across the country. One Monginis franchisee in one city manufactures products for 25 to 30 outlets. In fact, 25 to 30 outlets develop mini-outlets to cater to both the mass and premium- end segments.

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In addition to these new schemes, MFL plans to expand the number of retail cake shops from the current 253 to around 1,200 by the end of 2005. The company plans to offer new designer varieties in pastries such as a doll, a duck and a rabbit embedded at the top of a pastry. Also, as part of its promotional scheme, the company plans to obtain a database of one lakh customers by getting their date of birth and wedding anniversary dates. The company will be posting personalised greetings on these occasions. Monginis is authorised to produce cakes in shapes of Walt Disney Characters since Monginis is the authorised licensee of Walt Disney. Monginis has two units in Mumbai - one at Versova and the other at Bhandup. MFL's market share stands at 50 per cent in Mumbai and 70 per cent in other metro cities in the Rs 70-crore cake market in India. In fact, it expects the pastry market to grow from 15 per cent in the current year to 25 per cent by the end of 2002. MFL expects to increase its turnover from Rs 50 crore for 1999-2000 to Rs 200 crore by the end of 2002.

Monginis Packs A Slew Of Initiatives This Summer To Push Brand Visibility :Ushering in the summer, Monginis Foods Ltd is planning to roll out a slew of marketing and promotional initiatives to promote its existing as well as new products. As part of the marketing strategy, they are planning to enhance the brand visibility for Monginis at outlets by setting up special Monginis lollipops. In fact, Monginis lollipops are a signage of Monginis in the shape of a lollipop. In addition, the company is also planning to focus on school promotions to promote its existing range of bar cakes and slice cakes in the Indian market place. They are targeting 600 schools to reach out to children.The promotional campaign will involve three steps. One, schools will be enrolled and approached, second, schools will be given an opportunity to visit Monginis factory for an entire day. This promotional campaign will continue from April 2002 to March 2003. As a third step, there will be hosting of drawing contests and quiz contests. They have recently launched ‘Monginis Brownies’ priced at Rs 5 at all our cake shops in Mumbai.The company recently launched ‘Monginis Khari’ in a mid-sized pack priced at Rs 20. Further, the company also plans to introduce new exotic varieties in fresh cream cakes targeted at SEC A & B priced between Rs 100 and Rs 300 soon. In order to position ‘Monginis’ as a strong cake brand, which offers the benefit of being soft and fresh, the company recently released a television commercial. Monginis has grown 614 per cent in the past five years and is about to touch Rs 100 crore by 2004-end, through strong marketing initiatives. They also have products at a large number of price points to ensure maximum availability. According to Mr. Jagdeep Kapoor, managing director, Samsika Marketing Consultants Pvt Ltd—the brand marketing strategy

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consultants for Monginis— the objective is to build the Monginis brand with a clear target of 1,000 franchise cake shops. From a level of 37 a few years ago, it has crossed 300 cake shops. Monginis has already set up many cake shops in west and east. Now, these cake shops are being set up in the North also. Thus, manufacturing franchisees for Monginis have grown from one to 12 in the past few years. Sales and distribution marketing initiatives have worked well with the brand’s expansion into new areas like Pune, Nashik, Goa, Baroda, Rajkot, Kolkata and Hyderabad.

Some new branding & promotional strategies It plans to organise a ‘colouring contest’ for school students. After the colouring is done, it will collect these forms from them and in return send them Monginis greeting cards along with a 10 per cent discount on purchase of any Monginis cake. Cashing in on the World Cup Cricket fever, the company plans to introduce new retailing initiatives at all its cake shops across the country .As part of the new initiative, a customer who enters a Monginis cake shop can avail of a World Cup Cricket calendar. During World Cup Cricket, it also plans to introduce three new customised cakes. As part of its co-branding strategy, the company is currently in talks with Hindustan Lever Ltd’s ‘Lipton’ and ‘Nestle’ in order to enter into a new co-branded strategic tie-up with them in the near future. The existing co-branded strategy with Coca-Cola has taken off well wherein Monginis offers meal combo consumer promotion on a periodic basis every year. Monginis is planning to roll out its new snack product called ‘Monginis Munchin’ nationally in over 2,000 retail outlets by mid-2004.

The Untravelled Zones :Last year in

Christmas Monginis made a foray in Konkan in Maharashtra and Karwar in

Karnataka. Goa-based New Millennium Bakers who began as Goa franchisees for Monginis two years back will pursue these new markets in these regions beyond the Goa borders. In Goa, which has a rich tradition for cake, Monginis is now a well-established brand with 16 specialised shops. Monginis’s aggressive marketing strategy focuses on children, particularly the school going kids. Their birthday parties and the daily school tiffins are targeted.

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Monginis trophy for 60 schools multi-intelligence competition, kids festival to promote talent have kept the kids into focus. Theme parties for children's birthdays get immense response

The wide price range for bakery products from Rs. 2.5 till Rs. 2500 and flexibility for modifying the taste to the local taste even taking into consideration consumer recipes are the other reasons for the success of the brand. Today the credit of popularising a totally western food concept in the country goes to Monginis - stirring up the right mix of picks by children between the age group of 4-13 years The Monginis group’s investment in their franchise model are limited to supply chain and manufacturing of food products. The group adopts a dealership route to expand its retail chain. The dealers lease, invest or buy out the shop space. They will also invest in the decor and relevant equipments. All the dealers are trained. The training focuses on the business module, inventory management and attractive display of food products. It has restaurant chains like Roti, Dosa-diner, Tendulkars, China Joe and premium cakes and confectionery chain — Birdy’s as it’s major threats.

Monginis cake shops in Mumbai have gone national very successfully using Jagdeep Kapoor, brand-builder and managing director of Samsika Marketing Consultants as the whetstone.

Franchisee example: Surya

Monginis

Cake

Shop

Birthdays are always a special time, full of laughter; they are a day to celebrate that special person in your life. Surya Monginis Cake Shop is having the franchisee of monginis cakes pvt ltd. Cakes are offered into different shapes, designs, flavours that make a person feel very Special, happy & excited about it. The biggest chain of cakes in Mumbai having network of 120 shops. All cakes, butter creams and fillings are made from scratch, from the freshest ingredients. They try to use as many organic ingredients as possible to ensure the highest quality and best taste. Monginis cakes are always supplied fresh. The rates are

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very competitive due to heavy quantity manufactured. High quality and a reasonable price is the main motto of monginis. The in-house of Surya Monginis cake shop provides sitting arrangements to their customers to have snacks and be settled in a cool atmosphere. They also provide free home delivery in near by areas at no extra costs. The Website & The Online Cake Shop : The Rs 52-crore Monginis Foods Ltd. is putting up a website of its own. Now why would a cake shop put up a website? Because although it positions itself as "The Cake Shop", Monginis is expanding as a chain across the country. It wants to be the national 'cake shop' retail boutique, occupying its own niche. Starting out as a cake brand that sold out of Mumbai's Akbarally's department store a long time ago, it's now a cake and savouries chain across six cities--Mumbai, Calcutta, Hyderabad, Pune, Nashik and Rajkot. Its cake outlets currently number just over 200. As many as 40 of them opened only last year. Seven cake factories are already up and running and four more are in various stages of completion at Baroda, Ahmedabad, Jaipur and Goa. That adds four more cities to the six for this year. All factories and outlets are franchises, and Zoher Khorakiwala, chairman and managing director of Monginis Foods, believes this is the best way to expand. Being a small company, Monginis cannot really afford to go for the huge investments that own-shops and factories would require. Besides, local tastes vary widely. The best way to deal with this is to have local people making and selling Monginis products. Monginis' acceptance beyond Mumbai has been good enough for the company to start thinking about aggressive expansion. Since its products are priced lower than those that sell out of shops like of Taj Birdy's and Croissants, etc., it is managing to draw crowds.

Expansion strategies :As for expansion, the grand plan is 1,000 shops across 40 cities in about six years' time. In four years, Monginis is targeting 700 shops. The idea is to keep the outlets small -- between 150 and 300 sq ft. Khorakiwala doesn't see the sense in expanding his shop scope to sit-in eateries. They do add a few tables if the shop size is a little big. But viability is important; they have the maximum returns per square foot amongst food boutiques .In the overall view of how Indian retailing will evolve, we as a group have no doubt that Monginis will grow and be profitable. Boutique chains will prosper, survive and thrive. It's the mid-level shops that are neither here nor there that will find the going getting tougher and tougher.

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Monginis is working hard at brand building. At the front end, it is taking a serious re-look at the vision statement. And product upgradation and range addition -- such as the cream range in cakes, and more kinds of packaged products -- are already happening. At the back end, it is currently conducting a business process re-engineering study. Monginis officals strongly feel that their franchise managers have to be more technically-oriented.

Monginis is going to target NRIs, who can send in orders for cake gifting to relatives and friends in India. How the payment system will be handled for this is still to be figured out, of course. In the meanwhile, Monginis is working out a deal with a Pune-based company that caters to exactly such NRI orders. Getting cakes delivered will be a first for the Pune Company. Monginis will take up the delivery responsibility, and the Pune company will pay it for the cakes. But Monginis has to pay the excise for the delivery, which is something yet has to be sorted out. Monginis is very open to other such relationships, if anyone's interested. Of course, Khorakiwala admits that the company has to gear up internally for web-based operations first. But the plans are rolling, getting fine-tuned. Khorakiwala is not unhappy at all with the way things have gone so far.

A Little About The Franchisee Model :The real business model as approved by Monginis Foods Ltd (MFL) - Experts feel that the real franchise business model for India is far different from that of the Western system. The following are a few basics that are applicable in any environment: Limited unit level earnings Volume driven Long gestation Best combined with owned operations Initially requires equity; leveraging and gains come later Brand value benefit - future cash flows, coverage, visibility Continued research and development Unit/master franchising National/international franchising Plan consolidation phase

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The Products: 

Overseas Products: Family Cakes :Chocolate

Butter

Pineapple

Pizza :

Base

Mini

Big

Italino

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New Product Launch : The company plans to launch new products every month and the incentives are given to the franchisees on the sales basis.

Monginis penetrates the cakes segments with the launch of TOPPINGS: To further reinforce it’s stranglehold on the Indian cakes market, Monginis has launched Monginis Toppings a range of do-it-yourself products for those who want to bake their cake and eat it too.

These products can be broadly classified into three categories: Pre-Mix: includes Jelly Crystals, Custard Powder, Icing sugar, Cake Mix , etc

Decorative toppings: includes Icing tubes, Icing flowers, choco-chips, Treasure balls , Cherries ,etc . This category was never before made available by any Indian brand on shop shelves. It will enable the cake lovers to decorate their sponge cakes according to their desires.

Liquid decorative: includes Chocolate sauce, Strawberry crush, Mango crush, Liquid Caramel at the disposal of the home makers who want the value added cakes, desserts and ice – creams on their tables. Monginis is hence looking forward at exploiting the display space in the premium stores .The bright and colorful packing is bound to attract the customers .The Monginis Toppings can give the customers another reason to celebrate.

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Confectionery Terms: Marzipan: A mix of sugar and almonds that can be replaced by other nuts or kernels such as cashewnuts Gianduja: A composition of roasted almonds, icing sugar and couverture and cocoa butter. The nuts and icing sugar are first ground into paste and then the melted couverture is added to it .It is then allowed to set and then powdered till smooth. Praline: Mix of the melted sugar and almond flakes or groundnuts. Couverture : Chocolate made with at least 30 % cocoa butter to give high gloss used to cover sweets and cakes . Ganache : A blend of fresh cream and couverture Rolled Fondant : Mix of Icing sugar , water , liquid glucose and veg Gelatine .

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