Case Study

Rudra Foods Pvt limited is a small proprietary concern which started production and marketing of Ready mix
food in 1995. There was a rapid growth in the activities and in March, 2012, it was converted into a public
limited company with a turnover of Rs. 200 crore. Initially, the employees employed were 70 but the number
reached to 200 in March 2012. These employees worked in 10 different locations under the control of 25 team
leaders and 15 managers.
Rudra Foods is now planning to enter the South region with its new product launch in ready mix segment. After
a detailed market study, it was known that the potential for ready mix in south Market is 10,000 mt / annum and
it is expanding at the rate of 15% per annum. The consumer analysis report showed that the lifestyle in South
India has been changing as they have less time at their disposal and they prefer ready mix than the traditional
home mix.
Two leading market players already exist since 7 years Indu Foods & Santhi Foods. Indu Foods is into
premium range category wherein the price is positioned at Rs. 100 / kg. Indu Foods is well known for its
premium quality.
Santhi Foods is in the low price range category. Its price is positioned at Rs.70/kg. The sale of the company is
dropping because of various quality issues.
As per the consumer report, it is also noted that there is still an existence of conventional users who prefer the
home made mix rather than the ready mix.
The market share of with respect to the ready mix and home made mix of South India is as below:
Market

Players

Market share in

Market

share

Market

Segment

2010

in 2011

in 2012

Indu Foods

25%

30%

37%

Santhi Foods

20%

18%

14%

**Conventional users

55%

52%

49%

share

** Conventional users still use home-made mix and not ready mix.
Rudra Foods also has some existing products in South India market with respect to the snacks segment (potato
wafers, namkeen, farsan etc.) Lately, Rudra Foods has been experiencing some issues with respect to the
dealer complaints and delays in supplies regarding the existing snacks segment. The shelf life of these snacks

segments is of 3 months to be kept at room temperature with maximum 5% humidity. It is to be kept in air tight
containers away from sunlight to sustain the crispiness,
The distributors have been complaining about the inefficient servicing. There have been no regular visits by
sales person & there is an issue of irregular supplies. Currently distributors are holding 2 months inventory.
The bad debts for the company are going up in the market and lot of time is wasted on recoveries. The
Company is working on reduction in working capital and required help from sales to support this initiative.
You have recently taken the charge of South region. You have been asked to present your plan on the entry
strategy for the new product launch with the business plan for next 3 years along with your suggestions on
improving the existing snacks segment in the South India market.

Annexure 1
Data on New Product launch
Fixed

Cost

Rs. 5 crores (estimated to increase at the rate of 10% every

allocated

year)

Variable Cost

Rs. 55 / kg (estimated to increase at the rate of 5% every year)