McVities Digestive Biscuits

Marketing Management 2
By Group 9
-Ankit Goyal
-DebPriya De
-Nandkishore Sharma
-Mayank Arora
-Mitul Kathuria
-Smridhi Khanna

McVities Digestive Biscuits
Mission
McVities biscuits have been enjoyed the world over since 1850. Baked to perfection,
McVities biscuits are made with the finest, wholesome ingredients.

Vision
The McVities vision is to drive long-term sustainability in the business.

Core values
The Core Values of McVities are
1.Financial: Delivering superior financial returns every year.
2.Environmental: Minimizing the impact on the environment.
3.Community: Engaging with the consumers, employees and local communities to improve
and promote health and wellbeing, education, skills development and the support of
charities.

Industry Analysis
The organized and unorganized sector of the biscuit industry is in the proportion of
70%:30% ratio.


70%
30%
Sales
Organized
Unorganized
Growth Rate over the Years & future estimates
0
5
10
15
20
Biscuit Industry Growth Rate (%)
Biscuit Industry Growth
Rate (%)
Reduction in VAT to 5%
Or 0% from 13.5% is
expected (As compared to
similar food Products)
0
5000
10000
15000
20000
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
E
2014-15
E
2015-16
E
Biscuit Industry in Crore (Rs.)
Biscuit Industry in Crore (Rs.)


3500
3700
4600
1700
500
Sales Figure in Crores
Marie
Glucose
Cream
Others
Digestive
Market Size = Rs 14000 Crore (2012-13)
Market Share

Marie Rs. 3500 Crore
Glucose Rs. 3700 Crore
Cream Biscuit Rs. 4600 Crore
Digestive Rs. 500 Crore
Others Rs. 1700 Crore
The Biscuits Market in India
Major Market Players


38%
40%
12%
5%
5%
Market Share Britannia Parle
Sunfeast PriyaGold
McVities Others
Competitive Analysis
The biscuit market in India is estimated to be Rs 14,000Crore (Year 2012-2013) and
the industry is also gearing up to aggressively tap the medium and premium segment
within the country over the next couple of years.
The digestive market constitutes of about 3.5 percent of the total market. (Rs. 500
crores).
Currently McVities has a 25 % market share in Digestives, with Britannia being the
Market leader with 55 percent market share.





0
10
20
30
40
50
60
McVities Britannia Cremica Parle (Marie) Others
Current Market Share in Digestive Biscuits
McVities
Britannia
Cremica
Parle (Marie)
Others
Britannia- Market Leader
Goodwill and Brand name to reckon with.

Mission- To dominate the food and beverage market of India by making sure that atleast
one out of three people consume a Britannia Product.

Strong distribution network ensuring proper availability of the products even in the
remotest of areas

Innovative products for health conscious people like oats and porridge, Nutri Choice
biscuits for diabetes patients, Vita Marie Gold, etc. Large variety of Health Biscuits to
choose from.

Indias most trusted brand for 160 years with a strong brand recall .

Excellent promotional and marketing initiatives.

Priced at Rs 50 for 500 grams, it aims at the premium segment. Clan and smart packing of
product in Rectangular paper boxes.




SWOT Analysis of McVities
SWOT analysis can provide a framework for identifying and analysing strengths,
weaknesses, opportunities, and threat. This can also provide an impetus to analyse a
situation and develop suitable strategies and tactics, a basis for assessing core
capabilities and competences. Moreover, this can provide the evidence for, and
cultural key to change and a stimulus to participation in a group experience.
Strength
McVities has a Wide Brand offering with markets in plain digestives, bourbons and
digestive cream biscuits.
It has a strong food hold in Biscuit industry, and high rates of business survival,
with 100% growth against the market rate of 70%.
20% of digestive biscuits market share is captured by McVities
Weakness
McVities has a geo-graphical concentration in urban areas only, and doesnt plan or
intend to focus on the rural areas. In the urban areas, the target audience is the
people belonging to niche category.
Products recalls, low exploitation of the Internet and ICT, lack of R&D and
fragmented enterprise support are some of the other weaknesses of McVities
digestive biscuits.

SWOT ANALYSIS contd.
Opportunities
There is a huge potential in the emerging markets like India, and this is evident
from its growth, which is higher than that of the average market growth since the
launch of digestives biscuits.
There is also a growing demand in the snacks and savoury market, which can be
looked over by the firm in future.
Due to healthy market environment, the firm can also look for diversification&
expansion in the already existing variants and new products, respectively.
With just 5 years of operations in India, and not-so-good R&D, the firm can further
look for development in technology
Threats
Global Economic Slowdown & Highly Competitive Environment are some of the
most damaging threats for the firm, which is at a nascent stage in India.
The Strict Government Regulations can also act a barrier to the firms future
prospects.
The latest recommendations on saturated fat and added sugar announced by the
respective government agency urge industry to continue on the reformulation quest.
There have been Threats from Indirect Competitors as well

Perceptual Map
McVities Original Digestive
Biscuits
Cremica Digestive Biscuits
Britania Nutrichoice
Digestive Biscuits
Britania Nutrichoice 5
Grain
Parle Marie
H
i
g
h

o
n

T
a
s
t
e

Low on Nutrition/Health
H
i
g
h

o
n

T
a
s
t
e

Low on
Nutrition/Health
High on Nutriton/Health
L
o
w

o
n

T
a
s
t
e

STP for McVities
Segmentation


Demographic
Age (18 years to 55
years)
Gender (Male ,
Female)
Income (Rs. 4 Lacs
per Year or above)
Education
(Professionals -
Graduates and Post
Graduates)
Geographic
Regions (All over
India)

City (Class I and
Class II cities,
Metros)
Psychographic
Lifestyle (Health
Conscious)

Personality
(Ambitious, Hard
Working)
Behavioural
User Status
(Potential
Customer and First
Time Users)
Loyalty Status
(Strong)
Readiness Stage
(Interested)
Attutude towards
Product (Positive)
Target

McVities targets the :
High income group in the urban population of India who are concerned about their health.

Working men and women who remain engaged in work and related activities, thus aiming to
provide them nutrition between tea breaks.

Health conscious people who consider health and fitness important and mandatory.

It has introduced its new products including high fibre biscuits, chocolate biscuits which aim
at making it appealing to teenagers who wish to remain healthy, without sacrificing on taste.
Positioning

Worldwide, the brand is positioned based on its "Whole grain" content. Globally, the brand
has the slogan "Whole Wheat at Its Heart".

McVitie's positioning in India is based on two attributes: Health (whole grain)
and Taste.

The brand has adopted the tagline "Taste Ki Nayi Language" translated to "The new
language of taste". The present tagline focuses on to Switch to a healthy habit.

Inference:

With Taste being one of the dimensions, it is important to understand that all brands talk
about taste at one time or the other. The powerful differentiator for McVities would have
been its global image and the quality factor which made it one of the most respected brands
in Britain. The brand should project itself as the REAL Digestive biscuit, which invented this
product category, instead of being categorized as "The Original".

Future Objectives
Year 1 Year 2 Year 3
Targeted Growth Rate 90% 75% 50%
Targeted Revenue Rs 200 Crore Rs 350 Crore Rs 525Crore
Expected growth rate of digestive
biscuits market
60% 40% 30%
Expected size of digestive biscuits
market
Rs 800 Crore Rs 1120 Crore Rs 1456 Crore
Targeted Market Share 25% 31% 35%
McVities Digestive Biscuits will have a three-point objective:
To maintain a CAGR well above the industry growth rate over the next five years.
To achieve a market share of over 60% within the digestive biscuits market in India in the
next five years.
To achieve gross sales revenue of over Rs 2300 crores by 2019.
Positioning Statement
To health conscious customers who look for a tasty yet
healthy snack, McVities Digestive Biscuits are a perfect
blend of taste and health, providing 20 % of a days fibre
in a tasty and crispy manner, making it the most
preferred high nutrition biscuit.

-It has positioned itself as a perfect blend between health and taste. It positions itself as a
semi- sweet biscuit with 33% wheat, which makes it way healthier than other sweet
biscuits.

4 Ps
Product
McVities Digestive Biscuits are baked with whole wheat flour and the finest wholesome
ingredients.
With high level of dietary fibre, it is considered as one of the best snack in between meals.
Mcvities proves to be a favorite snack with a tossing of cheese, chocolate, jams & butter.
Has all the goodness of wheat .
High fiber content.
Crumbly texture, original flavor and satisfying nature.

Price





Lower than its immediate competitor- Britannia NutriChoise Digestive Biscuits which sells at
Rs. 50 for a 250 grams pack. As the market for digestive biscuits is relatively new
Has an advantage over Britannias Digestive biscuits for consumers trying McVities (due to
lower price) before Britannia. But Britannia's Strong Brand recall, makes it the most
preferred brand.

Weight (gm) Price(INR)
100 18
250 45
500 90
Place
McVities Digestive Biscuits supplies to all Kirana shops and departmental stores like Big
Bazar, MORE etc, thus creating high availability in the market.
Available in more than 250 towns across the country
Acquires 40 percent of its sale through modern outlets like Big Bazars.

Promotion
Advertising : Its brand ambassador is Bollywood Health Freak- Miss Bipasha Basu who
focuses on health and exercising. Their latest advertisement shows an office scene where
colleagues having biscuits other than McVities are shown as having Maida and thus
gaining weight. The tag line is Whats in your Biscuit?

Social Media : McVities uses Facebook and Twitter campaigns to promote its products. It
has a fan following of over 2.3 Lac Indians on Facebook. They organise a number of
contests where you can give in your recipes.

Cross Promotion : Cross promotions with reputed brands such as piggybacking with
Kelloggs or HUL's Taaza has also helped increase the brand's visibility.

Sales Promotion : McVities offered a number of sales promotion techniques including
giving out free plastic bowls with its 500 Gram biscuits.

Product Strategy
Product Development System
Allowed the firm to come up with new and better products on a consistent basis.
Structured yet afforded enough room for realizing the best product-development
ideas.
The product and development system is based around research and development
(R&D) management.
The R&D system of Mc Vities India is not so good, but given the rise in its
demand; popularity & credibility, there is a huge opportunity for the firm to
improve upon it.
Product Line
Diversified Product Line
Nine variants including oats, cookies, fruit- based cookies, bourbon, marie and cream
biscuits.
Flagship brand: Digestives
Hobnobs:
Another line with the goodness of natural honey, oats and whole-wheat.
Positive public perception
The cream biscuits are also very appreciated by those who are cream biscuit buffs and
also looking for a healthy option.

Pricing Strategy
Our product is catering to high income market segment consumers who want a
balance between health and taste

Set the price of the product between the Price Ceiling (competitors) and Price
Floor (breakeven price)

Going-rate Pricing Method wherein price of a product is based upon competitors prices
Final price
Rs 18 for 100gm,
Rs 45 for 250gm
Rs 90 for 500gm.

Going forward, once we establish a better brand name and acquire considerable market share,
we can increase the prices and bring them to the level of competitor
Distribution Strategy
The distribution network of McVities Digestive Biscuits will have three tiers as listed below:
Manufacturing Units: There will be a manufacturing unit with an adjoining storage depot in each
of the major geographical zones, north, south, east and west, preferably near Delhi, Chennai,
Mumbai and Kolkata to supply the distributers in the respective zones.
Wholesalers/Distributers: There will be 4 wholesalers in every tier 1 city and 1 wholesaler in
every tier 2 city.
Retailers: McVities products are available in around 80000 stores across the country. Our objective
will be to take the number up to around 150,000, with greater focus on tier 1 and tier 2 cities.

Manufacturing Unit
Wholesaler/Distributor(2-5%)
Retailer(15% margin)
Customer


Distribution Strategy(Contd..)
Tier 1 Cities Tier 2 Cities Tier 3 Total
Manufacturing Units Planned 4 0 0 0
No. of Distributers/Wholesalers
targeted
32 60 0 92
Number of Retailers planned 60000 60000 30000 150000
Promotional Strategy
Objective :
To create awareness of the McVities digestive biscuits, among the consumers and to
position them in the minds of the premium segment people, who are looking for enjoying
the biscuits, with health and nutrition as the primary motive of purchase.

Present Communication Design
United Biscuits integrating all the marketing communication channels such as, events &
experiences, TV, print, social media and the PR.
Doubled marketing spends for 2013.
Use of print & electronic media along with several on ground activities to reach out to
its target audience.
Television Advertisements
Leveraging social media like Youtube, Facebook etc.
Promoting through events and experiences to create brand related interactions with
customers.
Proposed Communication Design

Setting up kiosks in the premium segment malls
Promotion at kiosks through contests.
-Goodies
-Giving away the sample product for taste
-Generate press release for the product

Discussions to be initiated by the company itself on their various social media pages and
accounts.

Focus more on presenting the factual information about the advantages of McVities
digestives over the digestives of other brands. These advertisements can be aired on
entertainment; sports channels and news channels.

PR management
-Online product reviews and recommendations.
-High level of credibility

Promotional Strategy(Contd..)
Communication Mix
After analyzing the promotion strategy we can now decide upon prioritization of
the communication channels so as to increase the maximum consumer reach. Out
of the total budget of advertising and promotion the following breakup can be
devised

27%
40%
10%
23%
Communication mix
PR
TV
Social media
Events
Sales Force Strategy
McVities have a sales force of approximately 200 employees and a marketing
group of 40 employees in India.
It is available in more than 250 towns across the country.
Each sales force works with a sales support staff responsible for establishing trade
channel and customer management strategies.
They generally sell their products on an order-by-order basis and do not enter into
long-term contracts to supply the products.

Sales Force Structure

Their sales force consisted of few teams which consistently focus on the primary
product i.e. McVities Digestives and dedicated to support the major customers of
the brand.
They have a field sales operation responsible for supporting wholesalers and their
customers at a local level.
They also have a brand management team responsible for developing brand
strategies, new products and product-line extensions and for marketing activities,
such as advertising, sponsorship programs and consumer public relations.

Profit & Loss Statement (In Rs. Crore)
2014 2015 2016
Income
Sales Turnover 200.00 350.00 525.00
Excise Duty 3.00 5.25 7.88
Net Sales 197.00 344.75 517.12
Other Income 1.95 3.4 5.11
Total Income 199.31 348.79 523.19
Expenditure
Raw Materials 124.25 217.43 326.15
Power & Fuel Cost 1.83 3.21 4.81
Employee Cost 5.04 8.81 13.22
Other Manufacturing Expenses 17.70 31 46.45
Selling and Admin Expenses
Miscellaneous Expenses 35.60 62.3 93.44
Total Expenses 184.42 322.74 484
PBDIT 14.89 26.05 68.33
Interest 1.32 2.31 6
PBDT 13.56 23.73 62.3
Depreciation 2.00 3.50 9.2
Profit Before Tax 11.56 20.23 53.1
Extra-ordinary items 0.10 0.17 0.46
PBT (Post Extra-ord Items) 11.66 20.40 53.56
Tax 3.45 6.03 15.85
Reported Net Profit 8.21 14.36 37.70
27

Thank you