Management Audit

Marketing Analysis of
GITS-FOOD PRODUCTS PVT. LTD.

GSN 408 Marketing Management 1
The Team
Ali Tejani# 03119386
Christopher Pangestu # 04255682
Thanapong Sirirat Usdorn # 03122204
Lecturer: Associate Professor Susan Dann
Submission Date: Wednesday 19th Dec 2001
Word Count: 3054
Queensland University of Technology – MBA
Table of Content
1.Company Overview1
2.Environment Scan2
2.1.Micro Environment
2.2.Macro Environment
2.3.Environmental Scanner
3.Market Segmentation4
4.Market Positioning Strategy7
4.1.Preparing the Positioning Strategy
4.2.Gits-Food instant product position to several variables
5.Market Research.9
5.1.Monitoring for Marketing Problem
5.2.Design methodology
6.Customer Buying Trends11
6.1.Key Aspects of customer buying behaviour (Customer Trends)
6.2.Factors influencing customer-buying behaviour
7.References14
1.Company Overview
Started as a small family enterprise by H.Z. Gilani and A.K.Tejani in 1963 Gits-Food Corporation produces and supplies ethnic Indian cuisine for the world. The products include assortments of popular ready to cook instant food. Gits-Foods mission is being committed towards providing ever-increasing levels of customer satisfaction, by offering the highest quality in its products and services (2001, http://www.gitsfood.com). This mission originated when partners H.Z. Gilani and A.K. Tejani created Gits-Food Corporation in India. Presently, Gits-Food thrives on its ability to produce cost effective foods for the world. Gits-Food corporate office at Bombay oversees its food production plant in Pune. Gits-Food is a growing company with an approximate annual turnover of $20 million AUD. The approximate retail value for a typical Gits food product is between $0.52 AUD to $2.72 AUD.


There are approximately 300 employees working for Gits-Food. Of these employees 25 of them are managers, 100 of them are plant workers and the rest are employed in management and office sectors. This workforce is responsible for overseeing the plants production of 400 tons of Indian cuisine mix per year. (2001, e-mail DT: 9.12.01)
Gits-Food promotes its products both nationally and internationally. It has a strong product distribution network presently, which consist of depots and C & F agents in the major Indian states. There are 600 distributors located across India and a strong sales force providing the cutting edge in marketing. Gits-Food has developed a strong export market in the Middle East, U.K, USA, Europe, Canada and Australia.
Gits-Food has been successful in focusing on the Asian community living abroad and is currently broadening its target group to include non-Asians as well. Gits-Food is continuously putting in efforts to strengthen their marketing distribution network.
Consumer satisfaction remains Gits-Foods hallmark as it ventures to new destinations ahead. (2001, http://www.Gits-Food.com)
2.Environmental scan
General Environment
The country of India is an ever-changing dynamic environment .The political system and the economy in India is unreliable. These changes have an affect on the marketing managements ability to create and sustain the right type of marketing mix. (J R McCOLL-Kennedy & G C Kiel 2000,p54)
2.1.Micro Environment
Competitors
Weikfield group acts as a competitor at the national level .At the regional stage in southern India, it faces competition from M.T.R and M.K organizations. Local players in unorganized business sectors add an increased amount of competition for Gits-Food.
Customers
Agents appointed all over India act as representatives of the company and stock Gits-Foods products. These agents cater to about 450 to 500 distributors spread throughout 14 states of India. (2001, http://www.gitsfood.com)
Gits also has appointed importers of ethnic foods worldwide.


Suppliers
Gits-Food has formed relationships with agro based suppliers and packaging materials suppliers to enable them to acquire there raw materials regularly.
2.2.Macro Environment
Technology
Gits-Food primary concern is quality, Gits-Food commitment that necessitates consistent investment in Technology and modern equipment. Gits-Food products are manufactured by automatic machines in strictly hygienic conditions at plants in Pune and Nasik. (2001, http://www.gitsfood.com)
Legal and Political
Legal and Political system in India being unreliable affect the marketing decisions of Gits-Food. There are many government requirements that have to be met, which influence the pricing, distribution and advertising.
Economic
The economy in India being under recession, the total income and purchasing power of the consumers reduces due to which the volume of sales decline, the company has to cut budgets in all the departments including the marketing department. This is one of the major difficulties that Gits-Food faces. As a part of theyre on going efforts they are continuously trying to solve these problems.


Physical
Gits-Food is also very much committed in protecting the environment. They recycle all their wastes and re-use them. All of their raw materials and supplies, such as packing materials etc are collected and recycled for further use.


2.3.Environmental scanner
Gits-Food has employed environmental scanners who identify opportunities and predict likely trends and changes in the microenvironment. This helps the company to develop a plan to over come negative trends and also use positive trends to benefit the company.


If Gits-Food can pin point that there could be a possibility that exports could decline in the future and that this trend could persist for while, the company can develop a plan to cope with the negative trend by modifying or changing there export policies. And the company can also identify certain emerging opportunities in the environment and modify their existing products and introduce a new marketing plan.


3.Market Segmentation
Since Gits-Food is the instant food that particularly made for those who do not want to spend too much time in preparing and cooking food, therefore the generic variable that would be analysed are demographic, psycho-graphic and behaviouristic variables (Kotler, Armstrong et al,2002). These three specific variables give the influences to the Gits-Foods product directly or indirectly.


Gits-Food focuses on:
Demographicfamily size, single or working couple with or with out children, moderate or high income, white or blue collars, and particularly for Indian ethnic locally and internationally.
Psychographicactive individual, easy going and work-oriented person, holidays activities, community, family and recreation.


Behaviouristicoccasion purchaser like for recreational event or holiday pack, loyal buyers for everyday or occasionally usage and benefit sought for healthy food.


In summarising the target segment, the team uses the Seven-Step process to analyse the circumstances and advantages of each segment, which is possible to generate the most benefit to the company.


Seven-Step process for selecting target market (McColl-Kennedy, Janet R. and Kiel, Geoffrey C. 2000, Chp 8: 262)
1.Target a generic Market
The generic market is Indian ethnic all over the world and to those who loves Indian cuisine.


2.Analyse benefits desired in the generic market
Benefits desired from product:
XGood Taste
XModerate price
XGood, aesthetic and efficient packaging
XEasy to prepare
XGood quality
3.Remove qualifying benefits
The common benefits to the market:
XGood taste
XModerate price
XGood quality
4.Group remaining benefit into segments
Remaining benefits are Good, aesthetic & efficient packaging and Easy to prepare.

XGood, aesthetic and efficient packaging:
i.Durable: can be carried and stored easily, long term storing.

ii.Packaging size: small, medium, and large.

iii.Colourful: attracts kids
iv.Elegant: entices the mid and mature age
XEasy to prepare:
i.Very easy: easy to follow the serving direction.

ii.Quick preparation: preparation time no more than 5, 10 or 15 minutes.

iii.Ingredients are provided and complete: not necessarily to add the main ingredients.
5.Enumerate customers characteristics of segments
The team enumerates customers into 3 segments:
XLower Level Income
Income: $ 3,600 V 9,600/annum
Blue-collar
Assumed the double income in family is 80%, because more of the low-income family requires both of the couple working to fulfil the family needs.


XMiddle Level Income
Income: $ 9,600 V 24,000/annum
White and blue-collars
Assumed the double income in family is 72%. Couples who works in Mid-income family are more because of they possessed higher education and degree.


XHigh Level Income
Income: more than $ 24,000/annum
White-collar
Assumed the double income in family is 35%. Spouse in High-Income family prone not to be working because of the economic sufficiency. They tend to be housewife and taking care of the family.


6.Evaluate the potential of the segments
The condition of family size and family life cycle are changing. Most of the modern families only consist of 2 parents and 2 children at the most.Mature married people, young or mature single, a higher family income in terms of double income in family is the fact of current situation that Gits-Food would consider as the advantages.

Equality between men and women in many values, and the equality of the opportunity in society and occupation have changed the life style and the living behaviour of the society. Individualistic becomes one of the characteristics. Feeling of freedom and easygoing life are the principles that are admitted by many people in doing their lives.

All of these factors will be the potential market for Gits-Food instant products.
Pre-market research would be conducted to assist the market segmentation, particularly in determining the potential market and the forecasting.


7.Select the market segment(s) and an appropriate marketing strategy
The team proposes the selected segment, as the Mid-High Level income with most of them is single or family with dual-income.
Family with dual-income or single people has the characteristics as busy individual, practical, enjoy life, easy going, joined community, good income to afford the long-term buying behaviour, creates savings and possess the good quality of living.

Therefore from these variables and factors, the team tries to approach the market by using the multiple segmentation, where Gits-Food could focus on more than one segment (demographic, psychographic, behaviouristic).


Gits-Food can be classified into three kinds of instant product:
1.Starter, Main Course and Dessert
2.Snacks
3.Dairy Products
The team assists the selected segment by using the undifferentiated marketing strategy approach for instant food instead of differentiated strategy because Gits-Foods product can be classified into one character as instant food products.
The reason that the team focuses on more than one segment is because the consumers of Gits-Food are varied. Spreading into each demographic, psychographic and behaviouristic segment, which can be defined like busy, practical & working people, related with their lifestyle and occasionally event purchasers.

Based on the selected segment, Gits-Food will define the position and marketing mix to the market.


4.Market Positioning Strategy
As Gits-Food has been developed and established its market since 1963, the stage of several products life cycle might be matured. Gits-Food should anticipate this threat by always introducing new products to the market. Diversification and customisation of products is one of the strategies. Each kind of product has its kind of position in the market. But at this discussion, the team will position Gits-Food as the instant product.


4.1.Preparing the Positioning Strategy, Gits-Food uses the following steps (McColl-Kennedy, Janet R. and Kiel, Geoffrey C. 2000, Chp 8: 266)
1.Identify a set of possible competitive advantages
XEstablished market share local and international
XSpecialized and expert in Indian Cuisines
XGood taste, healthy and quality of all products
XModerate prices
XContinuous supply in market
XEasy to prepare
2.Select the appropriate competitive advantage(s)
XGood taste, healthy and quality
XModerate prices
XEasy to prepare
3.Effectively communicate and delivery the position to the consumer
XUse an appropriate marketing mix in implementing the plan. Production, pricing, delivery systems and promotion will take place to deliver the product to market.
In controlling the progress, Gits-Food will use the marketing tools like Sales performance Analysis, Marketing profitability analysis and Marketing audit.


4.2.Gits Instant Food product position to several variables.


1.Product attributes variable:
Which is promoting its delicious taste, healthy, easy to prepare at moderate price.


2.Purchase occasion variable:
Which is targeting to the rest and relax time, recreational time, community gatherings and holiday trips
The Position would be:
To all Indian Cuisines lovers wherever you are, the delicious Gits-Food is the Cuisines that always make you feel at home without any hassle to prepare or to worry about.


5.Market Research
Marketing research plays an important role in todays business. The function of marketing research is to link the customer, an organisation and the public to the marketer through information. By providing marketing information, an organisation can reduce some of the risks involved in marketing decision. (Proctor, T. 2000)
5.1Monitoring for Marketing Problem
For years Gits-Food has been producing a wide range of instant food products for the consumer market. Last year, the company launched a new dairy product into the market. Although the company believes that the new dairy product is high quality and tasty, unfortunately the sales performance are lower than expected. The mistake might come from the price, distribution or promotion that has not been solved. To overcome this problem, a marketing research team (the team) of Gits-Food is responsible for conducting a marketing research. The research is concerned with collecting the specific data to focus on consumer decisions. The methodologies to be used in this research are highlighted in the following proposal.


Source of data
According to the product problem, the team needs to collect both secondary data and primary data.
1) Secondary data Because the new product has been launched, the product data already exists. The team can collect a large amount of secondary data. The team divides secondary data into two categories: internal and external sources.

XInternal data. The data inside Gits-Food includes sales, expenditures, advertising, inventory records, cost, prices and so on.
XExternal data comes from a variety of sources outside an organisation. There are various external sources such as published materials, databases from government sources, industry sources, reports from institutes and so on. Gits-Food uses secondary data because it is timely and low cost. (McColl-Kennedy, Janet R. and Kiel, Geoffrey C. 2000:167-169)
2)Primary data The team can collect primary data to solve a specific problem and help to make decisions. To gain the primary data, the team needs to design the methodology.
5.2Design methodology
To design the research methodology, the team focuses on two research categories.


1)Quantitative research (or survey research) is used with standard questions that request replies in number. The team will use two types of survey:
XA personal interview survey- asking the questions face to face by an interviewer. The survey research generally done by the team through house to house. The team will focus to the housewives by which they are educated and also get a feedback of the potential customers view. By this survey, the team can track useful information to develop the tastes and predict the trend.

XInteractive research- using interactive questions via the Internet.
A sampling plan is important to do for a survey research because a full survey is costly in both time and money to contact all people in the population.
XA non-probability sample -The team chooses the sample that is unknown of being selected, so this sample can avoid a sampling error.
XThe non-probability samples are composed of two types: convenience sample-friends and relatives, and a quota sample-group interview of selected people or family. (McColl-Kennedy, Janet R. and Kiel, Geoffrey C. 2000: 187)
2)Qualitative research A qualitative research provides descriptions, explanations and reasons. The question is open-ended and answers can range widely. (Proctor, T. 2000: 236)
XA focus group can provide in-depth analysis of consumer behaviour. A small group of consumers can discuss specific issues such as product prices, product quality and taste, packaging, advertising and so on.
XA projective technique can be used to determine consumer behaviour. For example, the team can put major instant food brand names to the subject discussion and ask them to respond with the first thought that comes to consumers mind.


6.Customer Buying Trends
Consumer buying behaviour deals with how and why consumers make choices. Both questions are relevant, because marketers need to identify variables influencing consumer decisions. (Neal, C., Quester, P. and Hawkins, D. 2000: 2)
6.1Key Aspects of customer buying behaviour (Customer Trends)
XChanging in family size and family life cycle- The family size tends to be smaller and the number of women who works outside is increasing, so they do not have much time to prepare their own food. For this reason, a convenience of instant food products can suit their new lifestyles.

XChanging in consumption behaviour- Because Marketing and Education are pervading the people lives; the customers tend to become better consumers. They learn to buy the benefits of the products more than the features, that is, the customer demand for instant food is nutritious, high rank, good quality and tastes and reasonable prices.

XA concern about environmentally friendly- Many customers do not only buys the products that value for money, but they also buy the environmentally friendly products such as a recycled packaging and a non-animal test product.


Moreover, Gits-Food also concentrates on two forms of customer decision-making.

XRoutine decision-making The customer relies on their experiences and learns to buy the product without a decision being required. Gits-Food focuses to the routine customer because they frequently purchase the products of low risk and higher value, so they tend to be loyal to a Gits-Food brand.

XLimited problem solving It occurs when the customer might have strong preference for the brand or the firm, but the customer might not have a store in their minds. Then the customer requires searching many stores that carry that product items. (McColl-Kennedy, Janet R. and Kiel, Geoffrey C. 2000: 84)
6.2Factors influencing customer buying behaviour
There are four factors that influence the customer buying behaviour and also that influence the marketing of Gits-Food products.


1)Marketer-dominated stimuli
The marketing mixes (5Ps) are used to influence customer decision-making. In case of Gits-Food, marketers help potential consumer to recognise that they have a need or want for instant food product, provide product information, help them to make a choice and reinforce that choice to reduce cognitive dissonance. (McColl-Kennedy, Janet R. and Kiel Geoffrey C. 2000: 84)
2)Social Factors
There are some social factors that influence the customer decision- making.

XA reference group -A group that has direct and indirect influence on a persons attitude or behaviour, including the family, a peer group or aspiration groups.

XFamily -Because most people are belongs to their family in their lifetime, so the families influence customer consumption-decision. For this reason, Gits-Food focuses on the women and the housewives.



FIGURE 1 Customer decision-making model (source: Marketing: A Strategic Approach 2000)
3)Individual Factors
A consumers decisions are also influenced by the individual characteristics.
XLearning- Consumers always learn from their experiences in the market place, and this knowledge influences consumption decision. (McColl-Kennedy, Janet R. and Kiel, Geoffrey C. 2000: 102)
XLife Style- Gits-Food focuses on how people spend their interests and activities, and by their opinions.
4)Situational Factors
The situational factors influence the customers decision- making in different ways such as occasion to buy, the time or the weather to buy, a sales posters and crowding in a store, and the amount or lack of money in the customers hand.


7. References
XMc Coll-Kennedy, Janet R. and Kiel, Geoffrey C. (2000), Marketing: A Strategic Approach, Nelson: Melbourne
XNeal, C. Quester, P. and Hawkins, D. (2000), Consumer Behaviour: Implications for Marketing Strategy, McGraw-Hill: Sydney
XProctor, T. (2000), Essentials of Marketing Research, Prentice Hall: London
Xhttp://www.gitsfood.com/2001
XInterview and questionnaires by email and phone to Pune, India.

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