EXECUTIVE SUMMARY

We have conducted our assignment on Chetran foods, which is situated in Wanowri. They manufacture their own products at their factory in Wanowri. They don't have any distributed appointed. They directly distributed their products to retailers. They have product line Soya milk, Soya paneer (Tofu), Soya Raita and other Soya products. Recently they have launched Soya Lassi. They don't have cold storage or refrigerated vans. They deliver in cool thermal box. Which is provided to all their delivery vehicles. They have their own delivery vehicle. They have driver who are given commission on every sale they make. Some times they appoint driver on daily basis. The problem they are mainly facing is like product awareness and taste change. Though soya milk is healthier as compared to normal milk but people are not aware of that and those who are aware and accepting because of the taste. Sometimes they face problems like products are not properly displayed in retailers outlet. Some times they also face problems of defected products, which they have to replace. Some times they also face problems of government policy change. Like they faced in soya milk. Government disallowed use of color in milk. This decreased sale for all flavors of soya milk. They have around 250 retail outlets. Their target customers are those who buy from retailers and corporates and canteens who require Tofu. Out of all retailers their main counter sale is at Dorabjee.

OVERVIEW OF FIRM
Chetran Foods is leading market player in soya products. Company was established by Ranjit Singh Pal. Ranjit Pal first discovered soymilk and tofu (soya paneer) on a trip to Japan in 1980. In 1998, Pal bought his first soy cow a machine that produces soymilk from soybean and water. At that time people were not so healthconscious and very few people were aware of the benefit of soy products. In addition to soymilk, Pal started making tofu both regular and flavoured with herbs, coriander and chillies. With the help of his sons Chetan and Ranvir, he began to distribute free soy-based recipe books and cooked goodies like matar paneer and soy kofta and patties at supermarkets. Slowly, orders started pouring in for his products. Today, Chetrans extensive product range includes soymilk, regular and flavoured; regular and herbal tofu; garlic tofu spread; eggless soy mayonnaise; soy yoghurt, plain and flavoured; soy patties and kofta; and healthy-for-the-heart soy chakka (curd with water removed). Initially they started to give free soya milk to slum dwellers, which created product awareness. Their main competitors are big brands like Godrej and other. There are some local manufacturers also. But only soya products manufacturers are not their competitors. For Tofu paneer manufacturers are also their competitors. For soya milk normal flavored milk manufacturers are their competitors. For lassi, local lassi manufacturers and big brands like Danone and other are their competitors. Today they are the leading soya products manufacturers in Pune market. Price of their products are:- Soya milk 30/40 rs per litre. Tofu is priced at 72 rs per kg and herbal tofu at 100 rs per kg. They have launched new product Lassi that is priced at 12 rs a pack. They give huge margin for to retailers of an average of 40%. They have not appointed distributors because of less shelf life of the products other than Soya milk. Instead they give commission to their delivery boys. They wanted their delivery boys to push their products and generate new retail outlets.

CURRENT CHANNEL

Manufacturing unit

delivery boys

superstore/ retailers

consumer

Company has only one distribution channel i.e they will manufacture at there Wanowri. Then their delivery boy will distribute to specific retailers. They have divided retailers according to area. Each area have specified delivery boy with 3wheeler vehicle. Each of they covers around 10 to 12 retailers and bulk suppliers each day. Delivery boys visit to each retailer on alternate day. They said delivery channel should be as small as possible because product is perishable. Only soya milk can have longer delivery channel because it has got longer shelf life. Company is in the stage of development. Slowly there is increase in the awareness in soya product. Company has not appointed any distributor but company is solely depended upon retailers. They also have to push the product in the market hence power is in the hand of retailers and consumers. They have the very short channel. There are only delivery boy and then super markets and retailers. They give sufficient margin to retailers to push their products to customers. The most important chain of in distribution channel is between delivery boys and retailers/ super market. This is the important chain because, this is perishable product and product awareness is not there in market so high margin is given to retailers. If proper margin is not given they will not be willing to keep the product in their shops. Most of sale is on credit. Super market sale is on credit and some of the retailers sale on credit and rest is in cash.

PROBLEMS WITH CURRENT CHANNEL

Dedicated person for market development:They are expecting their delivery boys to tap new retailers. But these delivery boys are not educated and much motivated towards are job. Hence we suggest them to hire a market development-marketing employees. He will go with the different delivery vehicles on each day. He should be paid on salary cum commission basis. Commission should be on every new retailer. How he would be beneficial:Salary to the marketing guy: 12000 rs + commission. Expected business he will bring every month of 15 new retailers. Expected business from each retailer 500. Expected business from new retailer is more than 15000 rs. Plus benefit of increase in market presence. How we are saying hierarchy should be:

director

market development guy

delivery boys

factory employees

In this there will be addition of a new guy who will tap new retailers and super market stores. Everything will be under the control of directors.

This is the one major problem we found in their existing distribution channel. They had launched new product called Soya Lassi. Our assignment was to design the new channel for the product lassi.

CHANNEL FOR LASSI:

We suggest them two channels for lassi. 1) Existing channel: They should start selling lassi from their existing channel. This will increase their product portfolio and that will benefit them to tap new retail outlet. This will also increase their product folio in the existing store and increase the brand image.

Manufacturing unit

delivery boys

superstore/ retailers

consumer

2) New channel to directly bulk buyers: We were asked to launch the lassi in new channel i.e we were asked to tap new bulk purchaser and to find out the problems with soya lassi. So the new channel was:

manufacturer

delivery boys

institutions

In these new channel institutions means those who will purchase in bulk and sell in their outlets. Those are like neera shops, food restaurants like supreme, katakir missal, college canteen; railway station and bus stand food stall, gyms. We had made different channel for these because they will sale much more than retail stores and super market. Hence out of above given options we carried out our sample test run at neera shops, supreme, katakir, railway station and college canteen.

PROBLEMS WITH LAUNCH OF LASSI: 1) MRP PROBLEM:

MRP on their pack was 12 rs and they were providing it to them for 8 rs. But some outlets like neera outlet and station and bus stand stall wanted high MRP printed. Neera stall wanted at least MRP of 15 rs and Station and bus stand food stall outlets wanted MRP of at least 18 rs. Station and bus stand stall was already selling lassi, which was having printed price of 18 rs, and he was selling for 20 rs. He was getting this for 8 rs.

Solution: They should provide different packaging to such institution that wants high MRP printed. There will be totally different packaging for retail outlets and these institutions.

We also gave option to neera outlets that you buy institutional pack, which will be cheaper also, and you provide it in your glass at any MRP. But they cant provide in same glass of neera because of lack proper washing facility. Hence second solution to it was to provide a glass also with that. Same glass can be also provided if we tap some gym canteens so that they can also sell at any price. If they tie up with any such branded gym or other institution, and then you can also provide co branded paper glasses. That will also work as the branding of Chetran Foods. But these glasses providing technique will not work with bus stand stalls because they want sell quickly and consumer also wants to drink through pouch because of the moving bus problem. Then in this case we will have to provide the different packaging with high MRP.

2) PROBLEM OF TASTE AND THICKNESS:

We had given a free sample to a customer at neera shop and was not easily accepting the taste of lassi. One customer was having problem with thickness. He was saying that this lassi is less thick than normal. Solution: First obvious solution is try to make it more thick and taste it more like a normal lassi. Second option is to provide a free sample and free tasting counters at various places and aware people about the product. This will again also increase the product awareness of all soya products.

DIRECTION FOR FUTURE:

Currently they are operating on very small scale as compared to Godrej. But they are doing best with current market scenario. Today there is less awareness about the soya product. There will be more awareness in future. Today they have the highest market capture in pune. To continue the same they start branding and continuously increasing their product portfolio. We don't think they need any dealership or cold storage in pune since they will be delivering directly to retailers. In short course they should start publishing articles in papers continuously in local papers. That will increase soya product awareness and high lite their companies name in papers. Over the period of five year we want to them expand to new cities. Cities like Bombay, Ahmadnagar. Firstly they should appoint the distributor for milk and once it well established then they could start supplying other products. Though shelf life is less but that can be managed because short distance of transportation. Firstly should start supplying to super stores and then start to supply local big retailers over there. Today they are in the stage of development but over the period of 5 years they will grow rapidly and that will help them to increase their operating profit. We want different distribution channel for Pune and other cities. For Pune current channel will do well and that will also maintain their profit margin. For other cities we want:

manufacturer

distributor

retailers

customers.

In other cities they can ask distributor to develop the market or they can appoint same market development person as we have suggested for Pune.