Submitted by : Syndi E (Section-A)

Case Study : A-One Starch Products Limited – Marketing Plan for Liquid Glucose

Introduction
A-One Starch Products Ltd. (“A-One”), a leading player in the market for Liquid glucose
(Gluco-One brand), has a milling capacity of 1,00,000 tonnes per annum. The production of
Gluco-One is dependent on the quantity of wet starch diverted for Liquid glucose, which is a
managerial decision. A-One has hadis having a reputation of being a market leader (~12%
share in the Liquid Glucose market) for its technology and product quality.

Key issues & Objectives

Gluco-one forms 18-20% of the total sales of A-One. Currently, A-One is facing the following
issues with regards to the production and marketing of Gluco-One:
1. A-One has received a few complaints pertaining toabout quality and delivery from
some of their customers, warranting actions to re-align itself as a market leader in
product quality.
2. With a higher product cost, as compared to market competitors, A-One is unable to
clearly position Gluco-One in one of the target market segments
(organized/unorganized) relative to its strengths. Commented [RS1]: This sentence is not very clear

3. A-One is unable to increase the sales of Gluco-One., as Tthe sales growth, price
realization and contribution, fluctuate depending on market conditions as liquid glucose
is a commodity product with low margins.
3.4.There were complaints about increase in prices without any prior information.
Apart from above, A-One star needs a marketing plan for Gluco-One for 1996-97 addressing
the present concerns outlined above.

Market Characteristics
S No. Characteristic Pharma Confectionery
Organized Unorganized Unorganized
Branded Non-Branded
1 Organization size Large Units Large Units Small/Large Small units
2 Demand Regular Regular Fairly regular Sporadic
3 Margins High High Medium Low
4 Order Size Bulk Bulk Medium Small
5 Price Sensitivity High Low Medium High
6 Quality Standards High High Low Low
7 Annual Demand ~20,500 ton ~35,000 ton ~58,500 ton ~6,500 tom
 Submitted by : Syndi E (Section-A)
8 Customer Size ~100 (7 large) ~3,000
Recommended Plan(s) of Action
1. Target High High-value Liquid Glucose market segment
As per Exhibit 1 and Table 4, ~13% of total customers contribute 46% of total bills. ie; ~around
200 customers out of 1500 active customers, contribute ~close to 6 crores towards revenue
(computed basis F.Y. 1995 revenue). It is evident that these 200 high paying customers are
from the organized sector and big players from the unorganized branded sector. The average
revenue per customer works out to ~close to Rs. 3 lakh (65*0.2*0.46/195). Conversely, A-one
is having to deal with ~around 1300 customers for the balance 54% of bills, which works out
to ~ around Rs. 0.5 lakh per customer (one-sixth of the average revenue from a big player).

Also, it is we can observed that there is still an un-tapped demand with customers in the
organized as well as unorganized branded sector. Hence, it is we recommended that :
 A-One consolidates its position with the bigger customers in the organized sector by
resolving quality and packing issues.
 Since A-one deals in a commodity with low differentiation and low margin, it could
focus on marketing its services like on on-time delivery, better quality, improved
logistics and superior technology for capturing the untapped demand.
 A-one can also look to re-structure its marketing team organization from a product
segregated structure to a segment segregated structure,. Tthis will address the
concern about A-One spending a lot of time in sales administration catering to needs
of too many smaller customers. Further, A-One will also be able to cater needs of high
paying customers and convert these customers into permanent customers.

A-One

Direct Dealing Direct/Agents Agents/Retailers

 Submitted by : Syndi E (Section-A)

Organized Un-Organized Branded Unorganized

2. Increase production of Liquid Glucose

The current production capacity of Gluco-One is 16,000 tonnes per year. However, The
projected demand for Liquid Glucose in 1996-97 (Exhibit 4) is 1,46,500 tonnes per year.
Considering A-one at the worst maintains its market share of 12%, the projected sales of
Gluco-One for 1996-97 would be above 17,000 tonnes. Hence, more starch could be diverted
for producing liquid glucose to meet the increased demand.

3.Explore increasing sales in South Zone

Referring to Exhibit 3, the estimated production of Liquid glucose in South Zone (46,000
tonnes/year) is insufficient to meet the existing current demand of 60,000 tonnes per year.
This production is estimated to reduce further in light of the impending increase in tapioca
prices in 1996-97. A-One already has zone-wise regional marketing office and hence would
already be conducting operations in the south through its South zone office.

As detailed in Table 1, the growth in price realization of liquid glucose grew ~around 15%
between 1993-94 and 1994-95 owing to shortage in supply. A similar trend can be expected
in the South Zone as the unorganized liquid glucose producers (Tapioca-15 units – 30,000
tonnes capacity), will stop producing if the predicted increase in prices of tapioca comes into
effect. Hence, there is potential for A-One to enhance its sales of Gluco-One in the South
Zone.

Conclusion
We recommend Mr. S.C. Jain to incorporate the following changes in the marketing plan of
Gluco-One for the financial year of 1996-97:
Mr. S.C. Jain would be well served by incorporating the following in the marketing plan of
Gluco-One for 1996-97 :

1. Resolving Resolve key quality and delivery issues to retain existing high high-value
customers of Gluco-One (Organized and Un-organized Branded segment).
 Submitted by : Syndi E (Section-A)
2. Establish a segment segregated structure for marketing team organization.
3. Allocate more starch for liquid glucose production in light of the forecasted increase
in demand/sales.
4. Tap into opportunistic demand in South Zone created due to suspension of liquid
glucose production from tapioca starch, owing to increase in tapioca prices.
4.5. Solve the issues with the logistics to improve the customer satisfaction of
customers from Pharma industry, to get more orders from them.