CASE STUDY:

Winter season only made when

cold weather catamenize

Submitted to: Submitted By:

Dr. Himani Sharma Mehul Srivastava

Dept. Marketing & sales A0102209211

MBA-M&S (2009-11)

Abstract
Cold storage is the technology which is used to preserve food products over
the longer duration of time and keep them fresh and healthy, with out
losing its key contents.

Frick India Ltd. one of the leading refrigeration solution organizations

works on the turnkey projects all over the world. Frick India always focuses
on the big giants like BHEL, NTPC, Mother Diary, Vadillal etc. But they
have been less focused towards the Small Business Units (SBU) and
Moderate Business Units.

Market trend shows that people (cold storage owners) are aware about the
organizations but they been looking or using technologies of some other
brands.

Key Words
Technological Advancements, Customer Psychology, Small Business Units,
Cold Storage Owners, Market Awareness and Switching.

CASE: Winter season only made when cold weather catamenize

Cold storages are meant to preserve the perishable commodities of food
items for a longer period with retention of the original color, flavor and
taste. However, each commodity or item has certain life and they cannot
be stored even in a cold storage for indefinite period. Storage beyond
certain period may not be economical as well since payment of rent of cold
storage increases the cost of the item. Hence, cold storages are used for
high value items or when prices crash down due to bumper crop or for
such items which are grown during the season but there is a demand
round the year or for products like meat, fish or milk products which are
quickly perishable.

Cold Storage is a special kind of room, the temperature of, which is kept
very low with the help of machines and precision instruments. India is
having a unique geographical position and a wide range of soil thus
producing variety of fruits and vegetables like apples, grapes, oranges,
potatoes, chilies, ginger etc. marine products are also being produced in
large quantities due to large coastal areas. The present production level of
fruits and vegetables is more than 100 million MT and keeping in view the
growth rate of population and demand, the production of perishable
commodities is increasing every year. The cold storage facilities are the
prime infrastructural component for such perishable commodities. Besides
the role of stabilizing market prices and evenly distributing both the
demand basis and time basis, the cold storage industry renders other
advantages and benefits to both the farmers and the consumers. The
farmers get opportunity of producing cash crops to get remunerative prices.
The consumers get the supply of perishable commodities with lower
fluctuation of prices. Commercially apples, potatoes, oranges are stored on
large scale in the cold storages. Other important costly raw materials like
dry fruits, chemicals essences and processed foods like fruit juice/ pulp,
concentrate dairy products, frozen meat, fish and eggs are being stored in
cold storage to regulate marketing channels of these products.

Cold storages are being used for preservation of many food products since
long. Their location has to be strategic and they should have easy access.
Cold storages have demand all over the country. This note primarily looks
into the prospects in Assam. Assam grows many varieties of fruits and
vegetables. Consumption of meat, fish, chicken etc. is also on the higher
side. Hence, a cold storage unit seems to have good scope.
India is the largest producer of fruits and second largest producer of
vegetables in the world. In spite of that per capita availability of fruits and
vegetables is quite low because of post harvest looses which account for
about 23% to 30% of production. Besides, quality of a sizeable quantity of
produce also deteriorates by the time it reaches the consumer. This is
mainly because of perishable nature of the produce which requires a cold
chain arrangement to maintain the quality and extend the shelf life if
consumption is not meant immediately after the harvest. In the absence of
the cold storage and related cold chain facilities, the farmers are being
forced to sell their produce immediately after harvest which results in glut
situations and low price realization.
Commodity Units Capacity (lakh tonnes)
Potato 2,012 92.82
Multipurpose 447 7.63
Fruits & Vegetables 198 1.07
Meat 23 0.09
Fish 360 0.73
Meat & Fish 30 0.15
Milk & Dairy Products 272 0.68
Others 101 0.36
Table: 1 Commodity wise distribution

STATISTICS AND INFORMATION ABOUT AGRICULTURAL MARKET IN INDIA

India, with the second largest arable land in the world and diverse agro
climatic zones across the country, has tremendous production advantages
in agriculture, with the potential to cultivate a vast range of agricultural
products. India has strong base in agriculture and provides a large and
varied raw material base for food processing. We are the second largest
producer in the world.

We produce over

91 million tones of milk (highest in the world).

150 million tones of fruits & vegetables (second largest).
212 million tones of food grain (second largest).
485 million livestock (largest) and are significant producers of
eggs, poultry and fish.

However, processing levels are low. Conservative estimates put processing

levels in the

Fruit & Vegetables sector at 2%

Poultry 6%
Milk 35% (only 13% in modern dairies)
Marine products 8%
Buffalo meat 21%
Processing in the areas of food grains, oilseed, tea, coffee, etc., where raw
produce has perforce to be processed have the requisite levels of primary
processing. Even in these products the demands of modern food processing
sector are still emerging.

Employing over 120 lakh persons, the food processing sector though in a
nascent stage constitutes 13% of manufacturing GDP.

Gross consumption of food in India is Rs.8, 60,000 crores. Of this the

market size of primary processed food is Rs. 2, 80,000 crores whereas value
added food amounts to Rs 1, 80,000 crores. Food processing has grown at a
rate of 7.1% per annum during the period 1993-94 to 2004-05. The higher
rate of growth as compared to the Agriculture growth rate and the GDP
growth rate is indicative of the increased availability of surpluses, changing
life styles, tastes and higher disposable income with consumers. Within the
food basket the growth rate for fruits and vegetables, milk, meat and poultry
products and convenience snacks food have been higher than for staples
like sugar, pulse and grains.

And as a consumer, India with a population of 1.08 billion growing at about

1.7% per annum is a large and growing market for food products. Food is
the largest component of private consumer expenditure, accounting for as
much as 49% of the total. Further, the upward mobility of income classes
and increasing need for convenience and hygiene will drive demand for
perishable, non food staples and processed foods.

Frick India Ltd. was incorporated as a public limited company in

1962 in collaboration with Frick Company USA, one of the world's oldest
and largest manufacturers of industrial refrigeration & air-conditioning
equipment. Frick India is now independent and has diversified and
developed into one of the front-ranking companies and its equipment is
rated amongst the world's best.

Frick India has the unmatched advantage of providing a single source

responsibility for turnkey refrigeration and air-conditioning systems
covering design, manufacture, packaging, installation and service to
standard specifications as well as custom-built to meet customers' special
requirements. With collaboration and technologies from U.K., Japan,
U.S.A. and Europe Frick India can also provide on line Total Energy
Management System (TEMS) for almost all Industrial Refrigeration
Applications. The company is presently manufacturing a lot of equipment
like various types of Compressors, Condensers, Air handling units, Liquid
re-circulation pump, Ice-making equipment, Plate & blast freezers,
Packages chillers & A/C's.

Its manufacturing facilities are located at Faridabad (Haryana), an

industrial township in the periphery of the national capital & are spread
over a 25 acre multi-block complex the performance of the Company
during the current year and various other financials have already been
covered in the Directors' Report. The year 2008-09 was significant for the
Company for achieving the highest ever turnover in the history of the
Company. The profitability of the company has also increased
substantially.

Internal control systems and the adequacy

Internal control systems have been a core focus for the Company.
Effective/ adequate internal control systems are in place to ensure that all
assets are safeguarded and protected against unauthorized use and the
transactions are authorized, recorded and reported correctly. Such
controls, which are subjected to periodical review, also ensure efficiency of
operations, accuracy and promptness of financial reporting and
compliance with all applicable laws and regulations.

A regular Internal Audit System is also in place. Outside expertise is

availed to supplement internal resources. The Internal Audit Report along
with management comments thereon is reviewed by the Audit Sub-
Committee of the Board comprising of independent Directors, which also
monitors implementation of the suggestions. The Audit Sub-Committee
regularly interacts with the Statutory Auditors about the adequacy of
internal control systems and to seek suggestions.

Material Developments in human resources/ industrial relation

front

The underlying rule of Company's policy towards human resource

development is that competent and motivated manpower is the most
important factor in achieving business goals. The policies in this regard are
evolved and pursued to achieve this objective. Industrial relations
remained cordial at all locations during the year.

Emerging Issues
 Nearly 72% of the end users i.e. Cold Storage Owners they want to
switch from conventional Techniques to Modern techniques. And they
consider only those refrigeration companies whose market
 acceptability is more, where as Market Acceptability of Frick India is
26%.

 Small business unit and Moderate business unit, where First in First
out System is in practice, where there is a requirement of high cooling
refrigeration irrespective to the fact of advancement.

 Market share of blue star is 35% and this is because of their

technological edge over other cold storage companies like Kirloskar,
ICL, Frick India, Voltas etc.

 Frick India has fine grip in the market as they deal with the leading
MNC’s like L&T, VADILLAL, MOTHERDIARY, BHEL, NTPC,
ADITYA BIRLA GROUP AND MANY OTHERS. Still their presence
among the Small Business Units is quiet less.

 It has been seen that despite of Frick India’s market presence it lacks
in marketing itself among the small business units, as they are less
favorable in terms of purchasing equipments they manufacturer.

Competitive Analysis (Market Survey)

Fig: 1 Companies Preferences for Refrigeration solutions

Market acceptability and Technological

advancements

KIRLOSKAR
BLUE STAR 22%
33%

FRICK INDIA LTD

ICL 26%
19%

Fig 2: Market acceptability and technological Advancemnts

 Comparison among the Best Companies having
same products

100
90 Design
Design
80 Design

70
Technology
60
50 Technology
40 Technology

30
Services
20
Services Services
10
0
FRICK INDIA LTD. KIRLOSKAR BLUE STAR
Design 47 25 34
Technology 31 31 45
Services 22 44 21

Services Technology Design

Fig 3: Comparison among the Best Companies having same product

The market analysis clearly gives the insight of the market preferences and
its market acceptability and technological advancements of the different
organizations.

Blue Star in term of its preferences among the cold storage owners i.e.
39%, market acceptability and technological advancements i.e. 33% of the
respondents believe that it has an edge over its competitors because of
such factors.

Most of the respondents believe that Frick India Ltd. is well known among
73% of the respondents but they also believe that Frick India is less
focused towards the SBU’s & MBU’s. Frick India’s market acceptability
And technological advancements places them in the second position
among their competitors.

As a result of the market survey it can be suggested:

• FRICK INDIA is a well known brand in the market still they need to
focus on the SBU’s & MBU’s, so for that purpose they need look up for
various alternatives to promote themselves bit more through various
advertisements like contacting Cold Storage Carriers to promote Frick.

• Need to get in to contact with the small scale industries as 79% of the
cold storage owners are aware about the Frick India’s existence but not
they are not availing their product and services and deploy their market
their also, so that they come in to existence at small scale also.

• Main focus should be on marketing their product more among the

cold storage owners. As currently Blue Star is the current leader with
market share of 35% and had wide acceptance among the users nearly
33% of the respondents.
The current scenario depicts that most of the end customers prefer to go for
modern technology over the conventional one, and up gradation is the most
essential part for any industry to retain its market. Competition is fierce
today so every organization is willing to upgrade itself both mentally and
technically, in order to have an upper edge over its competitors.
Competition is one of the factors which cause any organization to work
upon to stay in the market like Pricing and Quality which is the topmost
priority of any customer. Customers demand good quality product at
negotiable price.
Customer’s i.e. cold storage users they mainly focus on Service Output
demand (SOP) i.e. value added services. Excellent Technology, Design and
Services can give any org. upper edge towards leading or capturing the
market completely. Technological advancements are necessary and these
changes attract customers to buy the product. Frick India Ltd is the second
most accepted brand after BLUESTAR.
Frick India Ltd is a well known brand among the cold storage owner. But
they need to make their presence felt in the market as Frick India only
focuses on Big giants like L&T, BHEL,NTPC, BEL, VADILLAL, MOTHER
DIARY etc. as they are less focused on SBU’s.
 QUESTIONS
QUES1. What are the key factors that make an organization to have an
upper edge over its competitors?

QUES2. Why Frick India Ltd lags behind its competitors?

QUES3. Give suggestions to Frick India Ltd. to place its product and create
its market presence among the lower units?

QUES4. Does technological advancements is necessary to retain market

presence?