Fresh & Easy

Fresh & Easy

A sw in i N a sre e n B h u va n a m b ig a i A bheek N ith in S a u ra b h K u m a r C handy Jo h in d

F&V Characteristics • • • • • • •

Perishability of products Seasonability of production Bulkiness of products Quality variation of products Irregular supply of products Small Holdings size Scattered production processing

Rising F&V Consumption • • • • • • • • •

Rising income / Economic growth India’s burgeoning middle-class Substantial rise of the youth population Demographical changes Health awareness Increased literacy New diseases prevalence Trade liberalization /Globalization Development of better infrastructure & transit facilities

Constraints in F&V Marketing • Lack of basic infrastructure viz.cool chains, logistics and supply chain management • Lack of proper grading and quality control system • Scattered productions • Lack of unity and organization skill among the farming community • Inefficient & Imperfect markets • Lack of consumer packaging • Lack of forward & backward linkages • Ignorance to new methods of cultivation • Perishability and Storability • Freight charges • Long marketing channel

F&V Statistics • • • • • • • •

India – 2nd largest producer of F&V 90 million tonnes of vegetables every year 40 million tonnes of fruit every year Market size for F&V in India : Rs 145,000 crores Organised retail in this segment : 300 crores (2%) F&V constitute about 22% of the average monthly household consumption expenditure in urban areas Annual Growth Rate – 10-13% Wastage : 25-30% of the total produce

Company Mission Mission Statement: • Our mission is serving the customers through best services. Our Core Values: • To achieve maximum customer satisfaction. • To deliver quality services to customers. • Practice what we preach: honesty, integrity and ethics 

O rg a n isa tio n a l S tru ctu re

Nature of Service • Home Delivery of F&V – Phone, SMS, Internet

• Quality Assurance with Cash back Guarantee • Healthy Food items for consumers

Chennai • Estimated Population – 9.25lakhs in 2009 • Literacy Rate – 85% • 60% population middleclass or upper middle class

Wholesale Price @ Chennai • Apple – Rs.62.14/Kg • Banana – Rs.15.22/Kg • Lemon – Rs.9.79/Kg • Mosambi – Rs.18.82/Kg • Mango – Rs.22.28/Kg

• •

• Brinjal – Rs.8.12/Kg • Cabbage – Rs.3.02/Kg • Cauliflower – Rs.8.28/Kg • Onion – Rs.7.73/Kg

•

Data from NHB Market Database 2008

Cost Factors • HR – Office Activities/Order Processing – 3*Rs.60000 p.a – Delivery Team – 5*Rs.72000 p.a + Profit Based Incentives – Sales Team – 2*Rs. 102000 p.a + Target Based Incentives – Total Cost – Rs.742000 p.a

• Assets – – – –

Computer – 2*Rs. 15000 Phone – 10*Rs.1000 + Rs.3600 p.a Mopeds – 5*Rs.15000 p.a Office Rent – Rs.84000 p.a

Cost Factors • Marketing Expenses – Promotional Activities Ads – Rs.400000 – BTL Activities – Rs.200000

• Other Expenses – Stationery – Rs.50000 – Uniforms – Rs.5000 – Packaging – Rs.20ps/Unit

Break Even • Margin – B2B - 7% – B2C – 22%

• Breakeven – 240 Tonnes (optimistic) – 360 Tonnes (pessimisitic) 

Sources of Financing • Partners Funding • Loans from Banks if and when necessary

Product Assortments • Minimum Order Quantity - 2 Kg • Individual Ordering • Pre-packed Kits – Offers further discounts

Payment Options • • • •

Credit Card Payment – Online/Phone Cash on delivery of goods Branded gift vouchers of Home Fresh Prepaid Options

Marketing Channel Options Option I

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Option II

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Customers • B2B – Hospitals – Schools/Colleges – Hotels/Restaurants

• B2C – Individual Customer – Flats/Residential Organisation

Strategies Strategy Services Pricing Distribution Promotion Strengths Weakness

Home Fresh Home Deliver Phone, Internet Order Market SMS Price or + Small Premium Direct Selling Print & Visual Media BTL Activities – Road shows, Inventory Pamphlet Distribution Quality Lack of trust Initial Attractive Offers Door Delivery Perishable Branded Healthy Packaging Packaging Problems

STP • Market Segments – – – – –

<25 25-35 35-45 45-55 >55

• Target Segments – 25-35 & 35-45 : Office going & very busy households

• Positioning – Healthy, Quality & Convenience

PLC INTRODUCTION

Product Strategy Distribution Strategy

Promotion Strategy Pricing Strategy

Limited variants Seasonal changes Limited area wide distribution

GROWTH More item variants Expanded distribution. Longterm relations

Awareness. Aggressive ads. Stimulate Stimulate demand.Sampling demand Higher/recoup development costs

Fall as result of competition & efficient production.

MATURITY

DECLINE

Large number Eliminate of items. unprofitable items Extensive. Margins drop.

Advertise. Promote heavily Prices fall (usually).

Phase out unprofitable nodes Phase out promotion Prices stabilize at low level.

Marketing Practices • Emphasize quality—fresh produce, clean salespeople • Use distinctive signs, packaging, and clothing to help build customer recognition • Keep our ears open for new ideas about what customers want to buy. • Protect product freshness; sell as quickly as possible • Set prices in round figures to speed up sales and reduce problems with making change. • Clearly label items and prices. • Smile; be friendly; give a special greeting to repeat customers.