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Marketing Plan

McVities Digestive
Biscuits






GROUP
No. 9
FORE School of Management
Submitted To:
Prof. Hitesh Manocha
Submitted By:
IMG 7 (GROUP NO. 9)
Ankit Goyal 073005
Debpriya De 073012
Mayank Arora 073030
Mitul Kathuria 073032
NandKishore Sharma 073034
Smridhi Khanna 073054

Page | 2
ACKNOWLEDGEMENT

We would like to extend our sincere & heartfelt obligation towards all the personages who
have helped us in this project. Without their active guidance, help, cooperation &
encouragement, we would not have made headway in the project.
We take this opportunity to express ours profound gratitude and deep regards to our
guide Prof. Hitesh Manocha for his exemplary guidance, monitoring and constant
encouragement throughout the course. The blessing, help and guidance given by him
time to time shall carry us a long way in the journey of life on which we are about to
embark.
We are obliged to FORE School of Management also for the valuable information
provided by them in their respective fields. We are grateful for their library cooperation
during the period of our project.





Thanks & Regards

Ankit Goyal
Debpriye De
Mayank Arora
Mitul Kathuria
Nand Kishore Sharma
Smridhi Khanna




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EXECUTIVE SUMMARY

Our objective of this project is to establish a Marketing Plan which would involve a product
within the sector digestive biscuits, in the biscuits industry. The group chose McVities
Digestives as the firm on which it would focus its efforts upon.
We have first done a detailed analysis of the Indian Biscuits Industry. It focuses on the
past performance of the Industry and also analyses the market trends and growth. Being
a new entrant in Indias undisputed market, McVities has seen an impressive growth
within the past 5 years, with its year-on-year growth rate being higher than that of the
biscuits industry. Mc Vities has biscuits, in the health segment, with various variants.
However, the variant in which it has been a global player is that of being the original
digestive. The group observed that United Biscuits, the parent firm of McVities India,
increased the sales of its digestives aggressively, while playing the game defensively but
intelligently. This can be observed from the fact that the entry of this new player took the
whole industry by storm, forcing other players to venture into the health segment, which
was untapped earlier.
We follow it by doing the SWOT Analysis for McVities Digestives. Then it is followed by
the description about the Indirect and Direct competitors of McVities. After that we
analyze the overall Marketing strategy of the company. Then we focus on the Action Plan
of Mcvities which consists of the Product Strategy, Pricing Strategy, Distribution Strategy,
Promotional Strategy, and Sales Force Strategy. After that we have stated the Profit &
Loss Statement of the brand.
At last we monitor and evaluate the marketing plan of Mcvities using various control
points. The group came to a conclusion that the McVities has to strengthen its hold in the
health segment of biscuits industry, not only through digestives but also through other
variants. The focus of McVities, presently, is on Tier 1 cities and once established in
these areas, the firm can look to expand in Tier 2 cities as well, along with building upon
its weaknesses such as not-so-good R&D structure and others.
This project report is an effort towards the same.










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TABLE OF CONTENTS

S. No. Contents
Page
No.
1. Mission of the Company 5
2. Segmentation, Targeting and Positioning 6
3 Identification of the Consumer needs 7
4 PESTLE Analysis 8
5 Industry/ Competitive Analysis 9
6 Market Trends & Market Growth 12
7 SWOT for the company 13
8 Indirect competitors 14
9 Major Competition 15
10 Objectives 16
11 Positioning Statement 17
12 Marketing Strategy 18
13 Product Strategy 20
14 Pricing Strategy 21
15 Distribution Strategy 22
16 Promotional Strategy 23
17 Sales Force Strategy 25
18 Profit & Loss Statement 26
19 Monitoring and evaluation of the Marketing Plan 28
20 References 33



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MISSION

McVities biscuits have been enjoyed the world over since 1850. Baked to
perfection, McVities biscuits are made with the finest, wholesome ingredients.

McVities biscuits have been enjoyed by generations for around 160 years. The first ever
Digestive biscuit was created by a new young employee, Alexander Grant. The name
Digestive was derived from its high content of baking soda as an aid to food digestion.
Over one hundred years later the McVities Digestive remains a firm favourite and is the
highest selling brand in the everyday biscuit segment.

The McVities vision is to drive long-term sustainability in the business. The core values
for McVitie encompass three key areas:

Financial: Delivering superior financial returns every year.

Environmental: Minimizing the impact on the environment.

Community: Engaging with the consumers, employees and local communities to improve
and promote health and wellbeing, education, skills development and the support of
charities.

McVitie is one of the worlds pre-eminent branded snacks businesses. McVitie holds
leading and strong positions in its core markets of the Biscuits. Moreover, they have
global appeal and a rapidly growing international business unit.

McVitie seeks to drive sustainable performance in all it does. This includes delivering
consistently on their promise to consumers, serving their customers, developing and
engaging actively with their employees, delivering superior financial results to their
owners year in year out, minimizing the impact on the environment and interacting
constructively with the communities in which they operate. They are investing in the future
whilst delivering results today.













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MARKET ANALYSIS

SEGMENTATION

Market segmentation involves grouping the various customers into segments that have
common needs or will respond similarly to a marketing action. Each segment will respond
to a different marketing mix strategy, with each offering alternate growth and profit
opportunities.





TARGETING

McVities Digestive Biscuits aims to target its customers through the following approach


McVities Digestive is designed specially to target customers who wish to be balance
between health and taste.
With its McVities Original Digestive Biscuits, it aims at the following:

Age: From 18 years to 55 years.

Income- With a price of Rs.45/ 250 Grams, Mcvities aims at the high income
group, with an annual salary of over Rs. 8 Lacs per Year or above.

It targets the high income group in the urban population of India who are
concerned about their health.

McVities is available in different packs and sizes and at different shops.
McVities are distributed through Retailers, online shops and delivery,
departmental stores and mall shops like MORE etc.
Demographic
Age (18 years to 55
years)
Gender (Male ,
Female)
Income (Rs. 4 Lacs
per Year or above)
Education
(Professionals -
Graduates and Post
Graduates)
Geographic
Regions (All over
India)

City (Class I and
Class II cities,
Metros)
Psychographic
Lifestyle (Health
Conscious)

Personality
(Ambitious, Hard
Working)
Behavioural
User Status
(Potential Customer
and First Time
Users)
Loyalty Status
(Strong)
Readiness Stage
(Interested)
Attutude towards
Product (Positive)
Page | 7
Psycho-graphically, McVities Targets working men and women who remain
engaged in work and related activities, thus aiming to provide them nutrition
between tea breaks.

It targets health conscious people who consider health and fitness important
and mandatory.

It has introduced its new products including high fibre biscuits, chocolate
biscuits which aim at making it appealing to teenagers who wish to remain
healthy, without sacrificing on taste.

McVitie Light Digestive has only 65 kcal per biscuit making it high on fibre,
nutrition, health and taste.
POSITIONING

McVitie's is positioned as a healthy biscuit. Worldwide, the brand is positioned based on
its "Whole grain" content. Globally, the brand has the slogan "Whole Wheat at Its Heart".

McVitie's positioning in India is based on two attributes. It focuses on Health (whole grain)
and Taste. The brand has adopted the tagline "Taste Ki Nayi Language" translated to
"The new language of taste". The present tagline focuses on to Switch to a healthy habit.

Ever since, McVities has positioned itself as digestive health biscuit which is high on
fibre. It is considered as a brand which young and working professionals can relate it. The
firm is targeting people who are looking for healthy options. And, to satisfy the sweet
pallet urge, it offers an altogether different range of biscuits. Worldwide, the brand is
positioned based on its "Whole grain" content. Globally, the brand has the slogan "Whole
Wheat at Its Heart".

With Taste being one of the dimensions, it is important to understand that all brands talk
about taste at one time or the other. The powerful differentiator for McVities would have
been its global image and the quality factor which made it one of the most respected
brands in Britain. The brand should project itself as the REAL Digestive biscuit, which
invented this product category, instead of being categorized as "The Original".



CONSUMER NEEDS MET

High on Fibre which makes it Effective for digestion
Perfect snack between meals. It fills the stomach without unnecessary calories and
Fats
Nutritious with health benefits like , it provides 20% of the daily Fibre.
No Trans Fats and Additional Colours, thus keeping it purely healthy.
A Healthy substitute for other fatty products.
Can be coupled with Tea and Breakfast
McVities is now being used with a layer of cheese and vegetables, as mini crunchy
burger.



Page | 8
PESTLE FRAMEWORK

Political /Legal

Mcvities has been in India for years. It serves Biscuits to India under the Brand
name of United Biscuits which is a Brand to reckon with. The Government of
India has implemented the FSSA which stands for the Foods Safety and
Standards Authority of India. Under the FSSA, the products have to undergo a
specific level of standard, which has been set by the GOI.
Along with this Stating the Nutritional benefits and the exact quantity of
ingredients in mandatory. Packaging has also been regulated by the FSSA.

Economic

Today the Indian consumers are more discerning about Quality and Taste,
while still considering value for money
Inflation and Price rise is still an issue when it comes to the Indian Market
The market for Biscuits is highly fragmented thus increasing the pressure of
competitive prices and a trade of with quality and taste.
With large number of people becoming health conscious, the number of
players in the same market is expected to increase sharply.
A large section of people still prefer Creamy and sweet Biscuits

Social

With more and more people becoming health conscious, there are going to be
a large number of people entering the same market. Consumers are highly
concerned about their weight, calories, and intake. Thus it increases the
sensitivity of the market.
United Biscuits has a very strong presence worldwide and thus people
consider their products of upmost quality and value.

Technological

High quality packaging is gaining importance with each brand trying to make
an impact with its packaging .Sophisticated and trendy packaging makes the
biscuits attractive.
Large investments in Promotion through Social media, TVs and
Advertisements.
Integration of Health, fibre and taste.
Increase in mechanization and use of machines for standardised products


Environmental

With the growing environmental concerns, pollution levels and disposal of
wastes is of major concerns.
Factories need to be located far away from localities and residential places,
thus leading to higher transportation costs.



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INDUSTRY/ COMPETITIVE ANALYSIS
The biscuit market in India is estimated to be Rs 14,000Crore (Year 2012-2013) and the
industry is also gearing up to aggressively tap the medium and premium segment within
the country over the next couple of years.
Per Capita Consumption of Biscuits in the country is only 1.8 kg, as compared to 2.5 kg to
5.5 kg in South East Asian countries and European countries, and 7.5 kg in USA.
The biscuit industry in India witnessed annual growth as below in the last couple of years
2008-09 - 16%
2009-10 - 14%
2010-11 - 11%
2011-12 - 11%
2012-13 - 09% (April-September 2012)
While the growth rate has been stagnating during last 4 years, it picked up momentum
during the 2008-09 mainly on account of exemption from Central Excise Duty on biscuits

(Resources - Indian Biscuit Manufacturs Association)
IBMA estimates annual growth in the range of 15% to 18% and above in the event of
reduction in the rate of VAT on Biscuits to 5%.Imposition of Value Added Tax (VAT) by
the State Governments @ 13.5% compared to VAT at 5% or 0% levied on other similar
food products has adversely affected biscuit industry.
0
2
4
6
8
10
12
14
16
Biscuit Industry Growth Rate (%)
Biscuit Industry Growth Rate
(%)
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(Resources - Indian Biscuit Manufacturs Association)
Pattern of Biscuit Consumption (On Zonal basis) in the country are as below:

Northern Zone 25%
Western Zone 23%
Southern Zone 24%
East and North East Zone 28%

Annual Production (Lakh Metric Tonnes)
2008-09 - 17.50
2009-10 - 18.50
2010-11 - 19.00
2011-12 - 20.50
2012-13 - 10.50 (April to September 2012)
(Resources - Indian Biscuit Manufacturs Association)
Exports of Biscuit was 14% of the annual production during the year 2010-11 which
declined to around 12.5% in 2011-12.

Imports of biscuits into India (mainly high end products) has not shown any significant
growth during the last five years and has not affected production/sales by the Indian
Biscuit industry.


0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
Biscuit Industry in Crore (Rs.)
Biscuit Industry in Crore (Rs.)
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Rural-Urban penetration of Biscuit:

Urban Market: 75% to 85%
Rural Market: 50% to 65%

Main Categories of Biscuits are broadly as under:

Glucose,
Marie,
Sweet and Salty
Cream Milk
Digestive

Market Share

Marie Rs. 3500 Crore
Glucose Rs. 3700 Crore
Cream Biscuit Rs. 4600 Crore
Digestive Rs. 500 Crore
Others Rs. 1700 Crore



Popular Brands of Biscuits in the country are, Britannia, Parle, Priyagold, Anmol,
Sunfeast, Biskfarm, Dukes, Cremica, Priya, Mcvities, Veeramani, Bonn, Bhagwati, Raja,
Madhabi, Nezone, Nalanda, etc.











Sales Figure
Marie
Glucose
Cream
Others
Digestive
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MARKET TRENDS & GROWTH


Market Share of leading Organized Biscuit Manufacturer (2012-13):


Parle 40%
Britannia 38%
Sunfeast 12%
PriyaGold 5%
Others 5%


(Resource Economic Times)

Market share of Britannia has declined from 47% (2010-11) to 38% (2012-13). In volume
terms in glucose segment, according to MotilalOswal research data, Britannia has seen a
drop in market share to 8.6 per cent in the year 2012-13 from 12 per cent in 2010-11.
Similarly, ITC has seen a dip in share to eight per cent in 2012-13 from 9.2 per cent in
2010-11. Parle Products has increased in market share (volume) to 79.3 per cent from 75
per cent in 2010-11.

The organized and unorganized sector of the biscuit industry is in the proportion of
70%:30% ratio.


Market Share
Britannia
Parle
Sunfeast
PriyaGold
McVities
Others
Sales
Organized
Unorganized
Page | 13
SWOT ANALYSIS

SWOT analysis can provide a framework for identifying and analysing strengths,
weaknesses, opportunities, and threat. This can also provide an impetus to analyse a
situation and develop suitable strategies and tactics, a basis for assessing core
capabilities and competences. Moreover, this can provide the evidence for, and cultural
key to change and a stimulus to participation in a group experience.
Strength
McVities has a Wide Brand offering with markets in plain digestives, bourbons and
digestive cream biscuits. It has a strong food hold in Biscuit industry, and high rates of
business survival, with 100% growth against the market rate of 70%. 20% of digestive
biscuits market share is captured by McVities, with major existing food cluster to build
upon.
Weakness
McVities has a geo-graphical concentration in urban areas only, and doesnt plan or
intend to focus on the rural areas. In the urban areas, the target audience is the people
belonging to niche category. Products recalls, low exploitation of the Internet and ICT,
lack of R&D and fragmented enterprise support are some of the other weaknesses of
McVities digestive biscuits.
Opportunities
There is a huge potential in the emerging markets like India, and this is evident from its
growth, which is higher than that of the average market growth since the launch of
digestives biscuits. Another opportunity for the firm can be to increase its Sourcing from
Low Cost Countries, thereby increasing the profitability. There is also a growing demand
in the snacks and savoury market, which can be looked over by the firm in future. Due to
healthy market environment, the firm can also look for diversification& expansion in the
already existing variants and new products, respectively. With just 5 years of operations in
India, and not-so-good R&D, the firm can further look for development in technology
Threats
Global Economic Slowdown & Highly Competitive Environment are some of the most
damaging threats for the firm, which is at a nascent stage in India. The Strict Government
Regulations can also act a barrier to the firms future prospects. The latest
recommendations on saturated fat and added sugar announced by the respective
government agency urge industry to continue on the reformulation quest. There have
been Threats from Indirect Competitors as well







Page | 14
INDIRECT COMPETITORS OF MCVITIES


Quaker Oats

Strengths:
Established brand and having lots of oats product line.
Quaker Oatmeal can help lower your total cholesterol, and LDL ("bad") cholesterol, and
that can help keep your arteries clean and healthy.

Weaknesses:
- Not all like oats products because of the taste.
- Most of the Quaker product is only targeting on young adult consumer

Kellogs Cereals

Strengths:
Famous and establish corn flakes brand.
The price is affordable and good in quality.

Weakness:
The packaging designed is not attractive compare to other brands.
The companys reliance on single products.

Fibre Breads

Fibre breads are associated with qualities such as good taste, freshness, trust and
reliability. In a highly competitive market

Strengths:
Easily available.
Cheap and yet it is rich with whole grains that can consist of vitamins and minerals.

Weakness:
Short life span.

Nutritious drinks (Horlicks, Bournvitaetc)

Strengths:
Rich in vitamins and zinc.
Easy to make.

Weakness:
Expensive for malted milk drinks.








Page | 15
MAJOR COMPETION


BRITANNIA INDUSTRIES LIMITED

Major Brands: Good Day, Tiger, Marie Gold, 50- 50, Choco - Chips, Choco - nuts, Little
Hearts , Bourbon, Nice Time, Pure Magic, Milk Bikis, Jim -Jam, Cream Treats, Time Pass
etc. In the health segment, Britannia has products like NutriChoice Oat Cookies,
NutriChoiceRagi Cookies, NutriChoice Health Starter Kit, NutriChoice 5 Grain,
NutriChoice Sugar Out&NutriChoice Digestive Biscuits.

Strengths:
Britannia is currently the market leader in the organized biscuit industry.
Well defined and appealing advertisements highlighting the core value of energy
and health.
They have 6 power brands which contribute towards 80% of their sales.
Well diversified portfolio of biscuits and innovative concepts of smaller size
packets.
Only biscuit company to have removed trans-fat from all its recipes, catering to a
market with sensitive needs.

Weaknesses:
Increase in input costs in putting pressure on the prices.
Stiffer competition from other players in the segment.






















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OBJECTIVES

Year 1 Year 2 Year 3 Year 5 Year 5
Targeted CAGR 100% 80% 60% 60% 55%
Targeted Revenue Rs 200
Crore
Rs 380
Crore
Rs 576
Crore
Rs 921.6
Crore
Rs
1428.48
Crore
Expected growth rate
of digestive biscuits
market
60% 40% 30% 30% 25%
Expected size of
digestive biscuits
market
Rs 800
Crore
Rs 1120
Crore
Rs 1456
Crore
Rs 1892
Crore
Rs 2365
Crore
Targeted Market
Share
25% 34% 39.5% 48.6% 60.40


McVities Digestive Biscuits will have a three-point objective:
To maintain a CAGR well above the industry growth rate over the next five years.

To achieve a market share of over 60% within the digestive biscuits market in
India in the next five years.

To achieve gross sales revenue of over Rs 2300 crores by 2019.












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POSITIONING STATEMENT

To health conscious customers who look for a tasty yet healthy snack, McVities
Digestive Biscuits are a perfect blend of taste and health, providing 20 % of a days
fibre in a tasty and crispy manner, making it the most preferred high nutrition
biscuit.

It has positioned itself as a perfect blend between health and taste. It positions itself as a
semi- sweet biscuit with 33% wheat, which makes it way healthier than other sweet
biscuits.



The Perceptual Map






McVities
Original
Digestive
Biscuits
Cremica
Digestive
Biscuits
Britania
Nutrichoice
Digestive
Biscuits
Britania
Nutrichoice 5
Grain
H
i
g
h

o
n

T
a
s
t
e

Low on
Nutrition/Heal
th
H
i
g
h

o
n

T
a
s
t
e

Low on
Nutrition/
Health
High on Nutriton/
Health
L
o
w

o
n

T
a
s
t
e

Page | 18
MARKETING STRATEGY

Mcvities have crafted correct strategy to enter Indian biscuit market i.e. Get hold in one
niche and then expand. Mcvities Digestives are popular among health conscious
customer. McVities Digestive Biscuits always Positions themselves as a healthy biscuit,
which is high on fibre. It targets consumers of Urban India, between the age of 18-55
years. McVities, since its inception, has focused on a mix of Health & Taste. Its Unique
Selling point (USP) is its ability to provide a perfect blend of taste and health. Their
products are made up of wheat, which makes it high on fibre and nutrition.

4 Ps OF McVities

Product
McVities Digestive Biscuits are baked with whole wheat flour and the finest wholesome
ingredients. With high level of dietary fibre, it is considered as one of the best snack in
between meals. While other biscuits are made up of sugar and contain high levels of
cholesterol & Hydrogenated fats, McVities Digestive is sugar free & has no Hydrogenated
Fats. They are crispy, without any artificial flavours.
Mcvities proves to be a favourite snack with a tossing of cheese, chocolate, jams & butter.
Have all the goodness of wheat
High fiber content
Crumbly texture, original flavour and satisfying nature

Price
McVities Original Digestive Biscuits has 3 sizes 100 grams, 250 grams and 500 grams.
Their price is being INR 18, INR 45 & INR 90 respectively. With the 100 grams pack, it
aims at acquiring new customers by giving them an opportunity of trying the product at a
low price of Rupees 18.
Its Pricing is lower than its immediate competitor- Britannia NutriChoise Digestive Biscuits
which sells at Rs. 50 for a 250 grams pack. As the market for digestive biscuits is
relatively new, Mcvities has an advantage over Britannias Digestive biscuits for
consumers trying McVities (due to lower price) before Britannia.

Weight (gm) INR
100 18
250 45
500 90


Page | 19
Place
McVities focuses on the urban market in India. Its strong distribution network allows it to
offer a competitive price in the market. McVities Digestive Biscuits supplies to all Kirana
shops and departmental stores like Big Bazar, MORE etc, thus creating high availability in
the market.
Available in more than 250 towns across the country
Uses its own distribution network
Supplies to all renowned retail stores and kirana shops

Promotion
McVities has been investing huge amounts in developing campaigns for promotion and
awareness of its product.
Advertising - Its brand ambassador is Bollywood Health Freak- Miss Bipasha Basu who
focuses on health and exercising. Their latest advertisement shows an office scene where
colleagues having biscuits other than McVities are shown as having Maida and thus
gaining weight. While Bipasha Basu is shown as a healthy & energetic lady with a fit
body, who eats McVities Digestive Biscuits. The advertisement focuses on the nutritional
value of the biscuit- namely its ingredients (Bran, wheat etc). The tag line is Whats in
your Biscuit?
Social Media - McVities uses Facebook and Twitter campaigns to promote its products. It
has a fan following of over 2.3 Lac Indians on Facebook. They organise a number of
contests where you can give in your recipes. This section is called as the Recipe with
McVities and attracts a large degree of interaction amongst its consumers. On Twitter too
the fan following is high with contest being organized frequently. The latest one talked
about answering questions on McVities in the best possible manner. On social media, it
involves the following activities:
o Recipe of the week
o Healthy Tuesday: a health tip is given every Tuesday
o Wacky Wednesday: They share jokes pertaining to the biscuits/ingredients
o Travelogue contests: Cash prizes and awards are given to the lucky winners of
the contests

Cross Promotion - Cross promotions with reputed brands such as piggybacking with
Kelloggs or HUL's Taaza has also helped increase the brand's visibility. Its tie up with
HUL has been one of the most successful tie up, rewarding it with high sales and greater
visibility.
Sales Promotion - McVities offered a number of sales promotion techniques including
giving out free plastic bowls with its 500 Gram biscuits.


Page | 20
PRODUCT STRATEGY

Product Development System

Mc Vities product development system has allowed the firm to come up with new and
better products on a consistent basis. It is structured, yet has afforded enough room for
the company's engineers and researchers to realize their best product-development
ideas. The product and development system is based around research and development
(R&D) management, a system of producing new products and services. The R&D system
of Mc Vities India is not so good, but given the rise in its demand; popularity & credibility,
there is a huge opportunity for the firm to improve upon it.

Product Line

A company's product strategy can be based on a diversified product line. Product
diversification can be be achieved by having similar products that are slightly modified to
better suit different customer groups.

United Biscuits offers nine variants under the Mc Vitie's umbrella including oats, cookies,
fruit- based cookies, bourbon, marie and cream biscuits. Mc Vities has a varied product
line under the digestives market with Mc Vities Digestives being the flagship brand of the
firm. With content such as Whole-wheat flour and no artificial flavours or colors, along with
high fibre, the biscuit was given up a thumbs-up by those who loved their biscuits to go
with heir tea.

The Mc Vities butter cookies is another line of product which, apt for the name, just melts
in the mouth and is crispy & yummy. They are also rich in calcium and has no trans-fats
again. The product was perceived as, just like its tag, Simply Butterlicious.

Hobnobs, with the goodness of natural honey, oats and whole-wheat is another line of Mc
Vities which is considered healthy and yummy. Mcvities introduced the wonderful recipe
of hobnobs in 1984. Since then it has perfected the art of baking a delightful oats biscuits
complete in its goodness of natural ingredients. The main content of the Hobnobs are
Oats, for a healthy heart; Whole-wheat, for a strong and fit body and Honey, for overall
health. The public perception of the product was very positive with the belief that they can
have biscuits, which are super delicious & healthy, anytime of the day. The cream biscuits
are also very appreciated by those who are cream biscuit buffs and also looking for a
healthy option.














Page | 21
PRICING STRATEGY

One of the challenges for McVitie's Digestive is pricing. With the price of Rs 45/250 gm
pack, the biscuit lies in the premium range segment and a large portion of people may not
be able to afford it. Some of the popular biscuits in the country are in the range of Rs 15-
20 for a 200 gm pack. However, it has to be noticed that though the firm is in the premium
range, it is affordable as the target audience is SEC A and A+ categories. Biscuits are an
important part of a family's monthly basket and a product that is consumed daily. But, at
the end, it will be a matter of making healthier choices.

Price objective
The pricing objective is to sustain the sale of our product and earn profits while
acquiring a substantial market share.

Demand
Our product is catering to high income market segment consumers who want a
balance between health and taste.
Therefore, the consumer will be ready to pay a high price for a product which can
offer them both taste and quality.

Competitors price mix
The major competitor of our product is Britannia Nutrichoice Hifibre biscuit. It is
made with 50% whole-wheat and packed with added fibre i.e. 10% of our daily
dietary needs.
It is priced at Rs 20 for 100gm and Rs 50 for 250gm.

Pricing method
We have to set the price of our product between the Price Ceiling and Price Floor
for our product.
(Assumption: Price Ceiling is the maximum value the competitors offer because if
prices go beyond it, then the demand will fall. Price Floor is the break-even price
for our product because if we set our price below this price, then we will incur
losses.)
We have to use Going-rate Pricing Method in which price of a product is based
upon competitors prices. Also, as McVities is relatively a new brand in the Indian
market as compared to Britannia so the price must be lesser than Britannias
product until it gains a brand image and a substantial share in the Indian market.

Final price
Based on the above analysis, the price of Rs 18 for 100gm, Rs 45 for 250gm and
Rs 90 for 500gm is aptly set.






Page | 22
DISTRIBUTION STRATEGY

The distribution network of McVities Digestive Biscuits will have three tiers as listed
below:
1. Manufacturing Units: There will be a manufacturing unit with an adjoining
storage depot in each of the major geographical zones, north, south, east and
west, preferably near Delhi, Chennai, Mumbai and Kolkata to supply the
distributers in the respective zones.

2. Wholesalers/Distributers: There will be 4 wholesalers in every tier 1 city and 1
wholesaler in every tier 2 city.

3. Retailers: McVities products are available in around 80000 stores across the
country. Our objective will be to take the number up to around 150,000, with
greater focus on tier 1 and tier 2 cities.



Tier 1
Cities
Tier 2
Cities
Tier 3 Total
Manufacturing Units Planned 4 0 0 0
No. of Distributers/Wholesalers
targeted
32 60 0 92
Number of Retailers planned 60000 60000 30000 150000



Page | 23
PROMOTIONAL STRATEGY

Objective

To create awareness of the McVities digestive biscuits, among the consumers and to
position them in the minds of the premium segment people, who are looking for enjoying
the biscuits, with health and nutrition as the primary motive of purchase.

Communication Design
The main aim of the parent firm United Biscuits, is to create awareness about the product
in the target segment. With United Biscuits starting its operations in India in 2009-10, it
has to integrate all the marketing communication channels such as, events &
experiences, TV, print, social media, and the PR to create awareness about the new
product. McVitie's Digestive is using print, electronic media along with several on ground
activities to reach out to its target audience, and has doubled its marketing spends for
2013. It is available in more than 250 towns across the country. The most logical way to
promote this product successfully and efficiently is with the methodology of using
Television Advertisements, leveraging social media like Youtube, Facebook etc. and
most importantly promoting through events and experiences to create brand related
interactions with customers.

1. The firm can set up kiosks in the premium segment malls such as, Ambience
mall, DLF Promenade and many more to give information about the product.

2. It can promote the create awareness and hype about the product by
conducting contests etc at the kiosks so that more people gather to see and,
henceforth, taste the product. This would also lead to generating a press
release about the product.

3. Creating a Gartner Hype can be effectively done by using video
advertisements and teasers on TV, Youtube and Facebook.

4. Discussions, in order to reach out to the customers efficiently, should also be
initiated by the company itself on their various social media pages and
accounts.

5. The advertisements should focus more on presenting the factual information
about the advantages of Mc Vities digestives over the digestives of other
brands. These advertisements can be aired on entertainment; sports channels;
and news channels.

6. Another important aspect is the PR management. As the product lies in the
premium segment, it is the product reviews and recommendations on the
internet that would lead to higher selling of the product. Also, the level of
credibility is high in case of advertising by PR hence as a new premium
product PR can be termed as the backbone of the marketing in case of
products such as Mc Vities digestives.


Page | 24
Communication Mix
After analyzing the promotion strategy we can now decide upon prioritization of
the communication channels so as to increase the maximum consumer reach. Out
of the total budget of advertising and promotion the following breakup can be
devised:


















27%
40%
10%
23%
Communication mix
PR
TV
Social media
Events
Page | 25
SALES FORCE STRATEGY

Sales force of a company is the lifeline in its distribution channel. Sales managers must
be able to craft strategy and communicate it to the sales team in order to win the right
kind of business and achieve growth targets for the business.
McVities have a sales force of approximately 200 employees and a marketing group
of 40 employees in India. It is available in more than 250 towns across the country.
Each sales force works with a sales support staff responsible for establishing trade
channel and customer management strategies.
They generally sell their products on an order-by-order basis and do not enter into
long-term contracts to supply the products.
To create brand awareness, build customer loyalty and stimulate demand for their
product, they devote substantial resources to marketing the McVities Digestives.
They are using the advertising route to promote the popularity of their product and
create awareness in the market. They advertise the McVities Digestives through
television, radio and print media and in the last three years, they have done four
television campaigns.
McVitie's Digestive is also using electronic media along with several on ground
activities to reach out to its target audience.

Sales Force Structure
United Biscuits still have only one brand (McVities) in India despite being here for over
three years. They have rolled out sub-brands under variants like digestive creams and
bourbons because they are testing a 'no added sugar' variant. In many markets, they
sell brands like Jacob's crackers and Twiglets snacks. But in India, right now, they are
measuring the scale to go into many more stores. Therefore, their sales force
consisted of few teams which consistently focus on the primary product i.e. McVities
Digestives and dedicated to support the major customers of the brand.
They have a field sales operation responsible for supporting wholesalers and their
customers at a local level.
They also have a brand management team responsible for developing brand
strategies, new products and product-line extensions and for marketing activities, such
as advertising, sponsorship programs and consumer public relations.
According to Jayant Kapre, president, United Biscuits - Their job is to pull the right levers.
The Indian team has been working very hard at merchandising. They're slowly building
consumer preference. Advertising has really worked for McVities. Biscuit is more
competitive than most food categories. But they're finding that consumers are accepting
new products faster. Digestive Market is still less in India, but the good news is that the
category exists in every single market.

India is a very large country and McVities is relatively new. Therefore, they dont have any
plans to expand into rural India. They're going to stick to a dense urban population range
till they're confident of penetrating distribution deeper. There's still so much growth to go
after in urban markets. The sales have crossed 100 crore within four years which is very
good. India is a strategic market for United Biscuits, the largest in Asia and the sales force
is growing year by year according to the consumer demands and productivity of the
product.
Page | 26
PROFIT & LOSS STATEMENT

(Amount in Rs. Crores)

2014 2015 2016 2017 2018
Income

Sales Turnover 200.00 380.00 575.00 920.00 1430.00
Excise Duty 3.00 5.70 8.63 13.81 21.47
Net Sales 197.00 374.30 566.37 906.19 1408.53
Other Income 1.95 3.70 5.60 8.96 13.92
Stock Adjustments 0.37 0.69 1.05 1.68 2.61
Total Income 199.31 378.69 573.02 916.83 1425.07
Expenditure

Raw Materials 124.25 236.07 357.22 571.55 888.39
Power & Fuel Cost 1.83 3.49 5.27 8.44 13.12
Employee Cost 5.04 9.57 14.48 23.17 36.01
Other
Manufacturing
Expenses
17.70 33.64 50.90 81.44 126.58
Selling and Admin
Expenses
Miscellaneous
Expenses
35.60 67.63 102.34 163.75 254.52
Preoperative
ExpCapitalised
Total Expenses 184.42 350.40 530.21 848.34 1318.62


Operating Profit 12.94 24.59 70.69 59.53 92.53
PBDIT 14.89 28.29 81.33 68.48 106.45
Interest 1.32 2.52 7.24 6.09 9.47
PBDT 13.56 25.77 74.09 62.39 96.98
Depreciation 2.00 3.81 10.94 9.22 14.33
Other Written Off

0.00 0.00 0.00 0.00
Profit Before Tax 11.56 21.96 63.14 53.17 82.65
Extra-ordinary
items
0.10 0.19 0.55 0.46 0.72
PBT (Post Extra-
ord Items)
11.66 22.15 63.69 53.63 83.37
Tax 3.45 6.56 18.85 15.87 24.67
Reported Net Profit 8.21 15.60 44.84 37.76 58.69
Total Value
Addition
60.17 114.33 328.69 276.79 430.23
Page | 27

Preference
Dividend

Equity Dividend 3.57 6.78 19.49 16.41 25.51
Corporate Dividend
Tax
0.61 1.15 3.31 2.79 4.34
Per share data (annualized)


Shares in issue
(lakhs)
41.95 79.71 229.18 192.99 299.97
Earnings Per
Share (Rs)
0.69 1.31 3.75 3.16 4.91
Equity Dividend
(%)
14.92 28.34 81.49 68.62 106.66
Book Value (Rs) 1.88 3.58 10.29 8.66 13.46






















Page | 28
MONITORING, EVALUATION AND CONTOLLING THE MARKETING PLAN

It is the task of management to ensure that the marketing plan is carefully monitored,
evaluated and controlled. Typical controls involve setting standards of performance,
evaluating actual performance against standards and, if the deviations are intolerable,
taking corrective action. Marketing planning can be seen as a cycle, which begins with
clear objectives that set out what the marketer intends to achieve, and ending with a
feedback mechanism in order that the objectives can be evaluated, a course of corrective
action can be taken (if there are deviations from plans) and the organization can monitor
its usage of resources.

Figure: The planning execution and control cycle
Marketing controls
Marketing control involves setting a desired standard, measuring deviations from the
standard and taking the appropriate action. In many cases the standard is expressed in
terms of budgets and any substantial deviation from budget is investigated. Since not all
deviations are significant, parameters are set for allowable deviations and only those
exceeding these parameters are investigated. There are four types of marketing control:
the annual plan control, profitability control, efficiency control and strategic control.

Figure: The different levels of marketing controls

Page | 29
Type of
Control
Prime
Responsibility
Purpose of Control Approaches
Annual plan
control
Top
management
Middle
management
To examine whether
the results are being
achieved
Sales analysis
Market-share analysis
Sales-to-expense
ratios
Financial analysis
Attitude tracking
Profitability
control
Marketing
controller
To examine where the
company is making
and losing money
Profitability by product
territory
Customer group trade
Channel order size
Efficiency
control
Line and staff
management
Marketing
controller
To evaluate and
improve the spending
efficiency and impact of
marketing expenditures
Efficiency of sales
force
Advertising sales
promotion distribution
Strategic
control
Top
management
Marketing
auditor
To examine whether
the company is
pursuing its best
opportunities with
respect to markets,
products, and channels
Marketing
effectiveness rating
instrument
Marketing audit
Table: Types of marketing control

Marketing plan control
The purpose of the annual plan control is to ensure that the company achieves the sales,
profits and other goals established by the marketing plan. It is, therefore, an operational
control plan. This type of control applies to all levels of the organization and the process.

Figure: The annual plan control process




Page | 30
Sales analysis
Actual sales can be compared to sales targets and budgets and an analysis of any
variance between the two would be carefully examined. Sales analysis centers interest
upon the relative contribution of different factors to a gap in sales performance. Say, for
example, that the managing director of the Mcvities is told by the marketing manager that
sales are up half a million units on the target and that revenues are five percent above
budget, this would be cause for celebration. Or would it? Before answering this question
the managing director would wish to look at these figures a little more analytically.
Although sales have exceeded expectations, but if the planned price was not achieved
and so the product made a lower contribution than expected. In this case the price
mechanism would need investigating as would the estimates of market share. Whilst the
Mcvities recorded an increase in sales of ten percent, the market as a whole was twenty
percent above target. Seen in this light, there is more cause for concern than for
celebration.
Market share analysis
Market share analysis shows how well the organization is doing vis-a-vis competitors. The
first step is to determine market share, either by absolute measures (overall market
share) or relative to main competition (relative share), or to leading competitor (relative to
market leader share). The second step is to analyze market share movements.
Market expense to sales ratio
The marketing expense to sales ratio is used to ascertain whether the organization is
spending too much or too little on marketing in order to achieve its sales goals. The
marketing expense to sales ratio can be made up of a number of components such as
sales force size to sales, advertising to sales, sales promotion to sales, marketing
research to sales and sales administration to sales. The monitoring procedure involves
determining an acceptable level (or standard) and by using a variety of charting devices
(control chart or expense to sales deviation chart) look at actual to budgeted expenditure.
Customer attitude tracking
Whilst most of the control techniques described so far have been quantitative in nature,
customer attitude tracking studies give qualitative information. The main customer attitude
tracking measures are complaint or suggestion schemes, customer panels or customer
surveys. These can be very useful in revealing what customers feel about the
organization, its products, services and behavior towards society as a whole.
Profitability control
Besides annual plan control, Mcvities needs to measure the profitability of its various
products, territories, customer groups, trade channels and order sizes. This information
will help management determine whether any products or marketing activity should be
expanded, reduced or eliminated.


Page | 31
Marketing profitability analysis
This consists of starting from the target profit plan and then applying the control measure -
marketing profitability analysis. Assume the manager of a line of baked products is setting
his/her annual plan. Further assume that it is believed that:
Demand conditions will be the same next year as this year
There will be no change in marketing strategy
The price set will reflect only changes in input costs and not competitive activity
The manager's interest is in making satisfactory not optimal profits.
In theory the manager should devise a plan intended to optimize the sales response
function. A sales response function forecasts the likely sales volume during a specified
period associated with different levels of one or more marketing mix elements. Typically
he/she should assess the sales which would be generated by ever increasing amounts of
marketing expenditure until the point of diminishing returns is reached.
Efficiency Control
If the profitability analysis reveals that the company is earning poor profits in connection
with certain products, territories or markets, the question is whether there are more
efficient ways to manage the sales force, advertising, sales promotion and distribution in
connection with these poor performing entities.
Sales force efficiency
Average number of calls per salesperson per day
Average sales call time per contact
Average revenue per sales call
Average cost per sales call
Percentage of orders per 100 sales calls
Number of new customers per period
Number of lost customers per period
Sales force cost as a percentage of total sales.
Advertising efficiency
Difficult as it is, the marketer should try and track the following:
Advertising cost per thousand buyers reached overall, for each media category,
and each media vehicle
Percentage of audience who noted, saw/associated, and read most for each
media vehicle
Consumer opinions on the advertisement content and effectiveness before/after
measures of attitude towards the product
Number of inquiries stimulated by the advertisement
Cost per inquiry.



Page | 32
Sales promotion efficiency
Track should be kept of each sales promotion campaign and its impact on sales:
Percentage of sales sold on the offer
Display cost per $ sales
Percentage of coupons redeemed
Number of inquiries resulting from the demonstration.
Distribution efficiency
This will enable the marketer to search for economies in distribution. Measures are mainly
taken through statistical/operational research methods:
Inventory control
Warehouse location
Transportation methods - optimum routing, scheduling, loading, unloading.
Monitoring and control enables marketing management to address two vital questions:
are resources being used effectively and is there a better way of using them? In
answering these questions much waste can be removed from marketing activities and
functions.


















Page | 33
REFERENCES


Books

Marketing Management by Philip Kotler


Websites

1. www.unitedbiscuits.com

2. www.thehindubusinessline

3. www.indianmirror.com/indian-industries/biscuit

4. www.britannia.co.in

5. www.parleproducts.com

6. www.biscuitfederation.com

7. business.mapsofindia.com/india-industry/biscuits

8. businesstoday.intoday.in/story/parle-diversifies-from-biscuits-tosnacks

9. articles.economictimes.indiatimes.com



Research Papers

1. Kainth (2010) Indian Biscuit Industry India