Market research & Analysis for Adani

Wilmar- Fortune Chakki Fresh Atta

Under the guidance of

Prof. Tinu Jain

Submitted By-
IIM Jammu Students

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Table of Contents
Acknowledgement ................................................................................................................................. 3
Project Description ............................................................................................................................... 4
Introduction ............................................................................................................................................. 5
Consumer Behavior Towards the Brand. ...................................................................................... 6
Market Competitors: ............................................................................................................................. 7
Schemes/offers comparison: ............................................................................................................. 8
Competitor Advantages ....................................................................................................................... 9
Learnings ................................................................................................................................................10
Point of Parity .......................................................................................................................................11
In-Store Promotion.............................................................................................................................11
Packaging ................................................................................................................................................11
POP Table ................................................................................................................................................12
Analysis: ..................................................................................................................................................13
Explanation ............................................................................................................................................15
Results......................................................................................................................................................16
Recommendations:..............................................................................................................................17

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Acknowledgement
We are using this opportunity to express our gratitude to everyone who supported us
throughout the course of this Live Project. We are thankful for their aspiring guidance,
invaluably constructive criticism and friendly advice during the live project. We are sincerely
grateful to them for sharing their truthful and illuminating views on a number of issues
related to the Live Project.
At first, we would like to thank Mr. Baldeep Singh and Mr. Rohit Gupta for providing us
the opportunity to be a part of this live project launched by Adani Wilmar. Their constant
guidance and on the field experience gave us valuable insights about the functioning of FMCG
sector, retail trade and new product launch. We would also like to thank Prof. Tinu Jain, for
mentoring and guiding us throughout the project. Your constant support and encouragement
have been a source of inspiration for us and have made our efforts worthwhile.
We also want to thank our institution Indian Institute of Management, Jammu for
providing us the opportunity to work with a brand and market leader like Adani Wilmar. We
definitely learned a lot throughout the course of this project and we hope to utilize this
knowledge and experience in our future endeavors.

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Project Description
Adani Wilmar has the largest portfolio of brands in the consumer essentials edible oils
segment. The brand Fortune tops the consumer’s choice in branded edible oils. Today, the
firm is present in various categories of oils such as soya bean, sunflower, mustard, rice bran,
cottonseed, groundnut and blended oil. According to a Nielsen RSA Jan 2009 report, AWL,
the market leader, enjoys a market share of around 19 percent in the refined oils segment,
with a total revenue of Rs. 6,000 crore.
It is a popular household name in edible oil category and is readily available in local retail
shops and modern retail stores. The Company is expanding its portfolio by launching Atta
throughout India. The fortune team of Jammu planned to launch Atta in the Jammu local
market on 4th of January 2018.
The project deployed the students of IIM Jammu to launch their Chakki Fresh Atta along with
their sales agents so that students can apply the theories learned in B-School on field during
a new product launch. During the course of this project, students were made to visit the retail
shops in the entire Jammu Area. They were supposed to cover each and every retail shop
which is already selling Fortune Oil or any of their products.
The company intended to penetrate 90% of the market which was already selling Fortune
Oil through its new Atta range. We conducted market research for two areas of Jammu to
understand the on-ground status of Adani’s distribution channels under the guidance of
Adani personnel.
The following agendas during their visit to retail shops:
• Convince the retailers to keep stock of Fortune Atta with different SKUs.
• Understand the trading & marketing schemes provided by competitors.
• Lookout for loopholes in the existing supply-chain mechanism.
• Collect feedback from retailers regarding brand perception and willingness of
customers to purchase Fortune Atta.
• Record the current requirements of retailers and customers that could push up the
sales of “Fortune Atta”.
• Increase the visibility of the new product by using posters and danglers.

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Introduction
Handpicked from India’s finest wheat fields, Fortune Chakki Fresh Atta is made with 100%
Atta and 0% Maida which complements your Ghar ka Khana perfectly. You can differentiate
these fibre-rich rotis with your 5 senses - their superior quality taste, soft touch,
mesmerizing aroma and a fluffy look, so words of appreciation are bound to come your way.

Adani Wilmar Launched its Fortune Atta range in Jammu in small retail stores and modern
retail stores. The company intended to cover over 900 retail shops. There are two
distributors of Fortune in Jammu who supplies to small retail shops. The company launched
its product under two Stock Keeping Units(SKUs)-5 kg and 10 kg. The MRP of 5 kg SKU was
Rs. 180 and the MRP of 10 kg SKU was Rs. 350. The 5 kg SKU was sold to retailer at a price of
Rs. 160 and the 10 kg SKU was sold to retailer at Rs. 310 To encourage retailers to buy the
atta for the launch and to sell it to customers, the company distributed free samples of 1 kg
each to retailers for trial. Also, the company provided trade discounts to retailers.
• On purchasing a pack of 30 kg, the retailers were given a discount of Rs. 30.
• On purchasing a pack of 60 kg, the retailers were given a discount of Rs. 70.
• On purchasing a pack of 90 kg, the retailers were given a discount of Rs. 150.

In addition to these offers, the company was willing to provide an additional discount of Rs.
10 to the retailer on returning the packaging sack.
The retailers were familiar with the brand and were happy with the promotions offered as
it gave them more margin than ITC’s Aashirvaad.

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Consumer Behavior Towards the Brand.
In order to understand the behavior of the consumer towards the Atta which fortune has
launched we divided the consumers into 2 groups i.e.
• Group 1-who were existing consumers of the other products of Adani Willmar
specifically of the fortune brand.
• Group 2-others who were not using the product or were not even aware of the brand.

Group 1- Amongst the first category, it was comparatively easier to sell the product as the
consumers were happy and well versed with the other products specially the fortune oil.
These set of audience were triggered to make a purchase just after they got to know about
the product either through banners/posters/ad’s/etc. or when the shopkeeper introduced
the product.

The company can easily monetize on this set of consumers by increasing their product
awareness. Another point to be noted here was that once a Consumer had bought a product
it was noted that he/she himself/herself came for a repeat purchase, which indicates the
high level of product acceptance amongst these users.

Group 2- The second set of consumers were the ones who required a lot of persuasion and
were the difficult ones to convince. These were majorly consuming either P-Mark or Amar,
and the pricing and the local connect/network of these companies were the main reasons
why these consumers were not ready to try our product. Most of these consumers relied on
the shopkeeper’s advice due to lack of knowledge/brand awareness. These were usually the
lower earning segment of the society and the due to high margins on other brands the
shopkeeper directed this demand to other brands.

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Market Competitors:
The major competitor for Adani Wilmar are as follows:
• Aashirvaad
• P-mark
• Shakti Bhog
• Amar
• Patanjali

Major competition in Jammu market is between Aashirvaad and P-mark. Aashirvaad has a
major market share and it has a point of sale of almost 30 on counter whereas P-mark is one
of the local brand which is famous in Jammu for being price competitive and by being the
only ISI certified product available. Patanjali on the other hand is constantly losing its market
share is in declining face in Jammu and overall perspective of patanjali in market is not good
for quality.
Amar is also a local based brand in Jammu and has a low price in market compared to other
brands. Its targeting and positioning has been directed to low income group consumers.

Other than that loose flour is also of the competition though Adani Wilmar need not worry
of it as they have whole different range of customers.

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Schemes/offers comparison:

• Aashirvaad gives target to each distributor and dealer pertaining them to higher
margin on completion of target with foreign trips. On retailer side, they mostly get a
10-kg pack of Aashirvaad at Rs. 305-310 and can sell them up to Rs. 385. Norma
market price is around 340 which gives them a margin of 35-40 rupee per 10 kg bag.
• P-mark is a local based manufacturer and hence it doesn’t deal with distributor while
directly sells to dealer. It has QPS - Quantity Promotion Schemes where it sells 5 Kg
wheat flour free on purchase of 30 Kgs.
• Shakti Bhog and Amar also have discounted schemes and they also deal directly with
dealer rather than distributor in market. They sell a 10 Kg pack at a price of Rs. 270-
2855 in market which can be sold by retailer rather at Rs. 250. For dealers they gave
margin of 3-5% depending on the volume they sell.
• Patanjali has its exclusive store and rather declining market share it mostly sells its
volume through its own store but due to low presence it goes through distributor to
retailer where it gives a 2-3% margin to distributor and sells at price of Rs. 300 to
retailer who can sell them up to Rs. 350 in market.

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Competitor Advantages
Competitor analysis summary is as follows:

Aashirvaad has a higher MRP which enabled it to offer the retailers a comparatively higher
margin. This compulses the retailer ensures that the retailer filled the majority of the shelf
space, which it would have offered to a premium brand, with Aashirwaad.

2) Also since Aashirwaad had a good awareness/popularity amongst the consumers the
retailer need not push the product. In addition to this it also spends a lot on advertising
within the premise of the retailer.

3)Amar and P-mark had an entirely different strategy to capture the market i.e. the relied-
on pricing so as to expand and maintain their consumer base.

4)These brands were able to do this because of their local presence which helped in reducing
the overall cost since they didn’t pay the intercity taxes and other transportation cost like
the other brands.

5)Also Amar and P-mark have capitalized the market share using the connect with the
consumers of being a local brand.

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Learnings

Through this live project we gained an understanding of distribution channels of Adnani, one
of the major FMCG players in India. We visited two distribution centers who had split up
Jammu into two areas Jammu 1 and Jammu 2. The second step was to accompany the sales
representative and visited various shops. A lot of key insights were gained in retailer-
distributor partnerships. Retailers discussed about the various kinds of promotion strategies
and the different ways they source their products. These interactions gave us a practical
sense of how various pricing and promotion strategies are deployed.
Apart from that, we also saw how packaging plays an important part in conveying the
positioning of the product. The current players in the market are using jute packaging for
wheat whereas the ones targeting to the premium segment used a laminated polyester
packaging.
Wheat as a commodity is used by all the classes of people, hence it had a very unique value
proposition among all the other commodities. From our market research, we observed that
P-mark and Amar had maximum market penetration relative to the other competitors. These
brands have positioned themselves on the basis of cost leadership strategy.
Aashirvaad atta, has positioned itself as a premium product. It has high brand recall and
recognition amongst its consumers. Aashirvaad is mostly being used by the high-end
customers. It offers the highest margin for 10kg SKU to the retailer (MRP- 385/-, PTR- 310/).
When retailers were pushing Fortune atta, there was some cannibalization of Aashirvaad
sales.
We also observed that wheat being a commodity is price sensitive. Retailers were
apprehensive to order fortune atta as it had not yet been advertised. Schemes for rat cutting
were not deemed to be competitive. The opportunity cost of forgoing storage space and shelf
space for fortune atta was perceived as high. This was as the retailers they were getting a
comparatively lower margin.

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Point of Parity
Points of parity are those elements that are considered mandatory for a brand to be
considered a legitimate competitor in its specific category. It is what makes consumer
consider your brand, along with your competitors.
Through this live project we tried to understand the POP of all existing competitors of Adani
in Jammu. We have considered three elements (In-Store promotion, SKU, Packaging) for
comparing existing competitors.

In-Store Promotion
We have classified in-store promotion into four categories banners, stickers, dangler and
balloons. Through our market study we found out that P-mark, Amar and Shakti bhog do not
use either of the store promotion technique. Whereas Aashirvaad and Patanjali being
premium brands use banners and stickers for In-store promotions.
SKU: All five brands have two variants of 5 kg and 10 kg available in the market.

Packaging
Atta is available in two different packaging (laminated polyester, jute bag) in the market.
Aashirvaad and Patanjali sell their product in just laminated polyester bag to reflect
premium offering to their customers. Whereas P-mark, Amar and Shakti bhog sell their
product in both packaging in order to cater to premium as well as low income group
customers.

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 POP Table

Competitor In-Store promotion SKU Packaging

Banners Stickers Danglers Balloons 5 10 Laminated Jute

KG KG polyester bag

Aashirvad Yes Yes No No Yes Yes Yes No

Patanjali Yes Yes No No Yes Yes Yes No

P mark No No No No Yes Yes Yes Yes

Amar No No No No Yes Yes Yes Yes

Shakti Bhog No No No No Yes Yes Yes Yes

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Analysis:

• As per the initial launch of Fortune Atta, the atta has been successfully placed at 64
out of 249 retail stores that were covered, i.e. a market penetration rate of 25.7% for
the 5Kg SKU. Similarly, for the 10 KG SKU, the atta has been successfully placed at 102
retail stores giving a market penetration rate of 40.96%. Overall Fortune Atta in its
initial launch, has been placed in a total of 122 retail stores ensuring an impressive
achievement with an overall market penetration rate of a staggering 48.99%.

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 • This market penetration is expected to increase gradually as many stores were
willing to accept Fortune Atta in their stores from the upcoming procurement cycle,
which ensures further increase in sales and market penetration in future.
• As per the market review of 5Kg SKU segment, it was noted that before the launch of
Fortune Atta, among the existing players in market, Aashirvaad atta is undoubtedly
the largest player of the market with 48% market share, followed by P-Mark with
25% market share and holds the 2nd most preferred brand in 5Kg SKU segment. The
other players are Amar with 15%, Patanjali with 7% & Shaktibhog with 5% market
share.
• Similarly, as per the market review of 10Kg SKU segment, it was noted that before the
launch of Fortune Atta, among the existing players in market, Aashirvaad atta is again
the most preferred major player of the market with 47% market share, followed by
P-Mark with 24% market share and holds the 2nd most preferred brand in 5Kg SKU
segment. The other players are Amar with 14%, Patanjali with 10% & Shaktibhog
with 5% market share.
• Since fortune has just entered the market the current market shares of all the
companies are subjected to change as Fortune has a good chance to further penetrate
into market due to high customer resonance because of existing Fortune Oil.

Fortune Aashirvad P-Mark Amar Patanjali Shaktibhog

Market Size (No. of 900 1500 1800
Shops in
Jammu)
SKU 1 KG NA NA NA NA NA NA
5 KG Yes Yes Yes Yes Yes Yes
10 KG Yes Yes Yes Yes Yes Yes
Price 1 KG NA NA NA NA NA NA
5 KG Rs. 180 Rs. 200 Rs. 185 Rs. 175 Rs. 165 Rs. 195
10 KG Rs. 350 Rs. 385 Rs. 285 Rs. 325 Rs. 320 Rs. 375

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 PTR* 1 KG
5 KG Rs. 153- Rs. 158- Rs. 159- Rs. 158-163
160 170 165

10 KG Rs. 291- Rs. 300- Rs. 232- Rs. 295-310

297 325 245
Retail 1 KG
Margin 5 KG Rs. 20-27 Rs. 30-42 Rs. 20-26 Rs. 32-40
10 KG Rs. 53-59 Rs. 60-85 Rs. 40-53 Rs. 65-80

Acronyms:
SKU: Stock Keeping Unit
PTR*: Price To Retailer(Approximated)

Explanation
Table 2 organizes data related to the major competitor brands as well as Fortune in the
Jammu market and the analysis of the same data points is done subsequently.
• Market Size represents the universe of shops each company caters to in the Jammu
market.
• Stock Keeping Units are categorized into 1,5,10 Kg for each company. 5 and 10 Kg
SKUs were widely available; 1 Kg SKU was missing in most of the shops thus there is
an opportunity to capture market especially in this category.
• Price is the Maximum Retail Price printed on bags for each category of SKU for every
company.
• Approximated Price To Retailer is the actual Price that the retailer has to pay. It takes
into account various Quantity Purchase Schemes run by each company for every SKU
category.
• Retail Margin is the difference between Price and PTR*. It is the maximum amount a
retailer can earn for each SKU category.

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Results
We have closely analyzed five competitors for Fortune Atta in the Jammu region, which
covers close to 900 shops. After the detailed analysis of the data collected from the retailers
and distributors, we have found that Retailers do have a major part in selling the product.
So, margin for retailers played a huge part especially when entering with new product in a
market where there are other major players already well established.
Aashirvaad, one of our major competitors has bigger margin for retailers thus it is preferred
and recommended by the retailers to the consumers. The MRP of the product has risen by
forty rupees and the entire amount goes to the retailer. So, the retailer now has the option of
reducing the MRP and selling at a reduced price than shown in the packet, but at a higher
margin than earlier.
Local players like Amar and P-Mark, which is considered economical, has a steady customer
base for their products, because they are locally sourced and produced. The market size for
both the products are shown below compared to our Fortune Atta market size.

Some of the major finding for P-Mark was that they do not have a distributor and covers
1500 shops in Jammu. In a single are the are covering 20 – 25 shops. They have a wholesaler
who is contacted directly by the retailers. While AMAR is covering 1800 shops in Jammu and
in a single area, they cover 30 – 35 shops.
Considering these statistics, we can easily assume that for market penetration we do need to
compete with the local brands, which does have a huge presence and more reach.

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Recommendations:
From our detailed study and analysis, we have found that retailers do have a huge impact on
the sale of our product. Higher margin for the retailers depending on the sales can be thought
as a way forward. Our current strategy of reducing price per sack has found a lot of
acceptance among the retailers. If we could carry on offers like this forward we can establish
a good relationship among the retailers and in fact boost our sales for Fortune Atta.
For Super stores, we need to have a different strategy as they will be having more sales, we
need to incentivize them accordingly. Additional margin sharing up to one percent can be
considered for super stores where the sales volume exceeds a prerequisite volume. The same
strategy is being used by our competitors and stores do expect that from Fortune as well.
Adding a new SKU of 1 Kg will hugely impact our sales volume as Aashirvaad has not yet
introduced the same in the Jammu market. With introduction of small SKU, we can target
college students, hostellers, young working professionals etc. Their main purpose is brand
and convenience and a higher MRP will not affect our sales volume in a negative manner.
Some of the local players do have 1KG SKU, we can easily compete with them due to the
brand image and value.
We need to create a demand pull from the customers end by proper marketing strategy,
proper positioning and advertisement strategy. Till now we have tried offer to the retailers,
but we need to come up with some customer offers as well. Some other Fortune product can
be bundled together with our Fortune Atta. Such kind of sales promotion strategy can be
introduced so that we can get the customers accustomed to our product.

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