PGPM (2019-20)-Term 4

Consumer Behaviour
Individual assignment 2

How can RTE foods be marketed

better in India
Karthick S | FT203040
Need for food

After good food, one can forgive anybody. Food is the third most essential thing to live

after air and water. Good nutrition in food is very important to maintain a healthy lifestyle. In

today’s fast-changing world, our lifestyle has been changed so much that we prefer to spend

only minimal time on eating. The Indian food market is huge and it is about two-thirds of the

Indian retail market.

RTE MARKET

In India, ready to eat foods is a huge untapped market. When the food industry grows

at 12% CAGR, RTE industry, which is a segment of the food industry shows an enormous

growth rate of 25%. India also has an abundance of milt, cashew, nuts and other fruits which

gives an added advantage in terms of availability of resources for food manufacturers and

processors to sell their products. The only need right now is to build a better food processing

infrastructure coupled with an effective marketing strategy.

Dual Income consumers and their changing lifestyle

Gone are the days when Indian families thrived with only one earning member in the

family. Due to urbanization, one member earning a normal salary is not able to satisfy the needs

of the entire family. Therefore, both the husband and the wife of the urban nuclear family goes

for a job.

Typically, in this kind of a family where both parents are working, the need for easy to

prepare and easy to eat foods arise. This changing lifestyle is one of the positive sways for

RTE manufacturers for growth.

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The emergence of tier 1 and tier 2 cities

India is not the same when it was 20 years back. The infrastructure has really improved,

which has paved the way for e-commerce giants and processed food manufacturers to connect

well to tier 1 and tier 2 cities of the country. With good infrastructure comes a good

distribution network. Also, report says that there is a growth in spending on food consumed

away from home. A person’s income in a tier 1 city increases 3.3 per cent quarter on quarter,

which enables him/her to spend and try more variety on food.

Supermarket trend

With the advent of modern retail, the ability to store the product for long and sell it

has increased. Also, supermarkets and hypermarkets operate in chains across the country and

they are able to get supplies at a far cheaper rate from the farmers. Hence, they are also able

to sell their products at a lower price for consumers.

Limited cooking time

Although food is considered as one of the most fundamental things for life, people

allocate minimal time for cooking. They are interested in having food, but not interested in

preparing food. This behaviour is now observed across the country. One of the obvious

reasons for this is that they are living a busy life. But, another hidden reason is that the majority

of consumers don’t cook not only because they don’t have time for cooking, but also they

don’t like cooking anymore. They have more options in the modern world to spend their time

on. They wanted to spend time on swimming, cycling, gymnastics, singing, dancing etc.

CUSTOMER EXPECTATIONS ON FOOD

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Convenience

The food must be easy to prepare. This includes labelling with cooking directions

mentioned in a simple manner which the customer can understand and follow it to get the food

eatable. In RTE, maximum that a customer can do is heating the food before eating.

Next, the food must be easy to consume. This means that it must be easy to digest and

should not contribute to stomach issues. Another import thing is accessibility. The customer

must be able to buy the product easily in the nearest available store.

Health benefits

Ready to eat foods are mostly consumed for satisfying the energy requirement.

Therefore, it is very important to satisfy the hunger of the customer. After all, that is the

objective of any food. Next important thing is obesity control. Consumers nowadays are

becoming more aware of the intake of fat content that they take. So, health has become an

important aspect and consumers are willing to buy only healthy products.

Understanding the Indian RTE customer

Consumption of food has steadily shifted from home to away from home. Customers

are also variety seeking. They cannot consume the same food every day. The food menu

chosen depends on the behaviour, mood and the attitude towards eating choices. One more

interesting thing to note is that the consumption of vegetables and fruits have decreased

over the last few years. This clearly tells us that customers have a positive sway of emotion

towards RTE foods. Therefore, if RTE foods are manufactured, packed and marketed as per

the needs of the customers, there is no doubt that it will succeed.

Perception of quality

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 Even though the true value of the food cannot be accurately verified by an average

customer, perceived value plays a very important role in the success of a product. An RTE food

manufacturer must give utmost importance to high sensory quality and must also provide

importance to certain specific benefits in terms of energy, fat content, safety and

environment.

Breakfast buying decisions

Generally, breakfast buying decisions for the entire family are made by the housewives.

Therefore, housewives become major influencers in deciding the product that will occupy

their kitchen shelf space. Many ready to eat products such as cereal bars, digestive biscuits,

bread etc have been able to occupy the Indian kitchen shelf only because of their ability to

influence the homemakers.

It is not enough just to occupy the retail shelf space. Companies must find ways to

occupy the kitchen shelf space as well.

MARKETING MESSAGE

The marketing message of an RTE must contain the following.

1. Taste/sensory appeal- The most important attribute to be considered in RTE foods,

irrespective of the product is taste. Only if the product tastes good, other factors will

even be considered. In addition to being tasty, it should also satisfy the sensory appeal,

i.e smell good factor.

2. Health factor (Natural content)-The next important thing to be included in a

marketing message is about the natural content without any additives.

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 3. Mood factor – Once a customer understands a product is tasty and healthy, the next is

the mood factor associated with it. It should be promoted in a way such that the

consumption of food helps the customer to feel relaxed and good.

4. Packaging- Packaging must be environment-friendly. This gives a feeling that there is

no harm being done to the environment and eliminates the guilt factor

Motivation drivers

The following are the values that can be used to induce motivation for the customer to

purchase and consumer RTE foods.

o Taste

o Easy preparation

o Easy consumption

o Healthy food

o Safety

o Cleanliness

o Feel good factor

o Affordability

o Familiarity

ADVERTISING

Advertising is one of the most popular and major means of competition in the RTE

industry. If we look at the average advertisement to net sales ratio in RTE, it is a whopping

13%. This means 13% of the total revenue of RTE brands are spent only on advertisements

when the food industry on an average spends only 2-4%

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 Even though the entire family consumes RTE food, research suggests that separate

advertisements must be targeted for men and women. The advertisement for women must

contain features such as less sugar and fat content which they look for whereas the

advertisement for men must focus more on the vitamin offering.

For increasing consumption among children, the ads must target their mothers by

positioning the product based on hedonic aspects such as the willingness of the mother to

satisfy the hunger of her child.

OTHER PROMOTION STRATEGIES

Celebrity chefs- can be used to promote awareness and include classical conditioning

by which, over time, even if the celebrity is not endorsing the product, we are able to relate the

product to the celebrity.

Focus on traditional menus- Shifting customers from traditional menus is too much

to ask. As these menus are prevalent for so long, it is very difficult for them to switch to a

modern menu. Therefore, offering the same food which is easy to prepare and easy to consume

is what will shift the behaviour towards RTE

Media penetration- Extensive media penetration with a large number of insertions will

help to create an impact on the minds of the customers.

Awareness creation- RTE manufacturers need to create awareness about the food,

about cooking and certifications which proves the quality of the product.

Packaging- Customers are knowledgeable. They already have secondary information.

They will use this to compare with the ingredients printed on the label.

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RTE brands and their products

Each RTE brand has its own unique offering. For example,

MTR- MTR foods are leaders in authentic Indian curries, gravies and rice. They are focused

on selling traditional menus which are easy to prepare and consume

Haldirams- Focus on traditional Indian sweets and snacks. They have a dedicated online portal

to purchase RTE products.

Nestle-Nestle’s products like real fruit yoghurts are more towards offering a healthy breakfast

which is simple to prepare just by adding milk.

Other brands

Amul-Pure ghee, processed cheese, mithae gulab jamuns

ITC- Kitchens of India

ITC-Aashirvaad

PepsiCo, Cavinkare.

Conclusion:

Knowingly or unknowingly, we are already consuming a lot of ready to eat food items.

For instance, mostly tea is consumed out of the home. It constitutes about 94 % of the total

out of home hot drink consumption. But generally, we do not feel that we are actually

consuming it as an RTE product. That is the level of trust that has been created within us. All

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the variables discussed above are helping to create this trust level which could then lead to

higher consumption and eventually higher market share.

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