Sales Management

Sales management is attainment of an organization's sales goals in an effective & efficient manner through planning, staffing, training, leading & controlling organizational resources.

In the Marketing Mix, sales broadly classifies as a part of Promotions.

As a food product and a market leader at that, MTR does not really focus on personal selling. 

However, the restaurant Namma MTR in Bangalore has  a novel concept kitchen where customers can interact with specialist chefs to learn about MTR products and watch live demonstrations. This concept kitchen also works as an ideal platform for feedback allowing the company to understand and address consumer needs.

Holistic or Sustainable Marketing

According to businessdiary.com: A marketing strategy that is developed by thinking about the business as a whole, its place in the broader economy and society, and in the lives of its customers. It attempts to develop and maintain  multiple perspectives on the company’s commercial activities.

Societal Marketing: 

MTR follows a green growth path, reducing its dependency on diesel for producing electricity and substituting with briquette boiler, becoming a water neutral company etc. 

Orkla, which owns MTR Foods, committed to remove forest destruction from the palm oil it uses in its products.

Relationship Marketing:

MTR focusses on building relationships not just with its customers, which it does by delivering the perceived value, but it also focusses on the employees. The company involved employees across the organisation in developing the new vision through various engagements like wall writing, focus groups, one-on-one interaction and workshops.

Internal Marketing:

MTR Foods has also organised a broad range of training programmes for managers and employees to build awareness, increase functional expertise and develop leadership competence. In total, 32,700 hours of training were conducted from 2010 to 2012, or 30 hours per employee. The training has included leadership and managerial development programmes, food safety, occupational health and safety, as well as interpersonal collaboration and life skills.

Integrated Marketing:
In order to increase sales and reinforce the brand, all the elements of the integrated marketing mix are taken utmost care of, like services, communication and channels.

Analyzing Business And Consumer Markets

 Markets for any product are of two kinds- consumer and business markets.

Consumer Markets:

A consumer's buying behaviour is influenced by cultural, social and personal factors.

Cultural Factors:

For these cultural differences, MTR has a range of Noth Indian and South Indian dishes in its Ready To Eat range. And also different dishes under each category.

Social Factors:

The Indian marketers classify the customer markets into different SECs (Socio Economic Classifications). According to the SECs, MTR RTE targets A 1 and A2 customers mostly and at the most B1.

Personal Factors:

It is targeted at nuclear families and above average or high income groups.

As it is food, it satisfies Physiological Needs and since it decreases cooking time, also indirectly satisfies the Social Needs in Maslow's Hierarchy of Needs. 

Buying Decision Process:

In the 5 stage model,

Problem Recognition- No time to cook, not enough training in cooking all kinds of traditional food from across the country.

Information Search- Advertisements, display in supermarkets, family/friend recommendations

Evaluation of Alternatives- There are various alternatives available in the market i.e., competitors like Maiya's, ITC etc. But MTR is the market leader.

Purchase Decision- It is the most preferred brand and hence that infuences the purchase decision.

Postpurchase Behavior- Satisfaction is high post purchase.

Business Markets:

Usually, there are no Businesses buying an MTR RTE product in bulk for use. The only B2B transactions are from the manufacturer to the dealer and from the dealer to the retailer. There are very few dealers and most of the transactions are manufacturer to retailer.

Branding

According to AMA, A brand is a customer experience represented by a collection of images and ideas; often, it refers to a symbol such as a name, logo, slogan, and design scheme. Brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relating to its use, and through the influence of advertising, design, and media commentary.

Creating a compelling, well-differentiated brand position requires a keen understanding of consumer needs and wants, company capabilities and competitive actions.

MTR as a brand promises purity, taste, heritage and vegetarian food with no preservatives.

MTR has always stayed at the top of the heap, despite tough competition because of the values it delivers, the loyalty it commands and the price, despite the superior quality.

These differentiators, specially that of a heritage brand and taste have always worked in MTR's favour. It has been constantly innovating, courtesy its research Lab, and bringing out new products and variants like the recent RTE rice meals.

Segmentation, Targeting and Positioning

Market Segmentation divides a market into well-defined slices. Each slice consists of a group of customers who share a similar set of needs and wants.
there are two broad groups to define segments;
1. Descriptive Charecteristics- Geographic, demographic and psychographic
2. Behavioral Considerations- Consumer responses to benefits,usage occassions and brands

Targeting is selectinf specific segments which the company and marketers feel could generate maximum revenue.

Positioning is the act of designing a company's offering and image to occupy a distinctive place in the minds of the target group.

As a Ready-To-Eat foods brand, MTR was primarily looking at the urban households with both the spouses working, or employed bachelors who didn't have much time to cook.
So the whole range was always targeted at the urban population.
They positioned themselves as a trademark for purity, taste and heritage and have been striving to keep the same values up.

Rural Markets are not even being targeted.

Promotions

Objective: Persuasive advertising

Development of the Campaign:

Promotions are of 2 kinds for a product.

Above The Line (ATL)

1. Television Commercials:

2. Print 

     

                                                 

Below The Line(BTL)

1. Online:

 

                                                 

2. Sponsorship:

• MTR has been sponsoring magic shows and theatre performances which resulted in high brand equity and recall. 
• Holds live demonstrations and gives out free samples to people visiting the performances, before and after the show.

Shortcomings:

• Not enough clarity on the differentiators. Though they are the market leaders, MTR till now hasn't been successful in creating an impact in the minds of its perspective consumers.
• Not enough focus on marketing.
• Doesn't explore alternate media as such. 
• NO proactive or defensive marking strategies applied.
• At most, it is position defense, trying to occupy the most desirable market space in consumers' minds.

According to a press release, MTR spent 3% of its sales revenue on advertising and marketing till 2009. It has now gradually increased to 14-16% and expected to stay that much till 2015.

MTR advertises its RTE products 14 times more in terms of average ads scheduled per day over an year.

But most of the promotional activities are concentrated on their masalas and breakfast mixes ranges as the RTE industry in India is being seen as something a little futuristic. People are not yet ready to outsource their meals, even though the urban population are embracing RTE positively. 

Being an FMCG product and more importantly, commanding the kind of value the brand offers, the forgetting rate is relatively low. But as a processed food item in India, so is the purchase frequency. Buyer turnover is also reasonable with a lot of big names already in the market and many local brands coming up.

As of now, MTR did not foray into personal or direct marketing.

Distribution Channels

According to american marketing association: distribution is 1. (economic definition) A study of how factors of production are priced in the market place, i.e., the de-termination of rents, wages, interest, and profits. 2. (marketing definition) The marketing and carrying of products to consumers. 3. (business definition) The extent of market coverage.

According to american marketing association: channel of distribution is an organized network (system) of agencies and institutions which in combination, perform all the functions required to link producers with end customers to accomplish the marketing task.

Marketing Flows In The Marketing Channel:

Consumer and Industrial Marketing Levels:

FOR MTR READY-TO-EAT

• Initially the distribution chain wasn't scientifically mapped out. Distribution was random and based on gut-feel. MTR was in 200 towns in the East and North where the brand had no equity.
• Adoption of a two-pronged distribution strategy:  “In the North, West and East, we’ve strengthened our distribution network in the top 100 cities and towns and have shut down (operations) in 70-80 towns. Simultaneously increased presence in South India where the brand is virtually a household name." says Jyotiroop Barua, Vice-President, Sales and Distribution. (www.outlookbusiness.com)
• MTR is focussing on "distribution push & advertising pull" to make its presence felt.
• Also, the consumer base for its RTE range is mostly the urban and suburban markets. So distribution is also concentrated to cities and larger towns.
• Type of distribution intensity- Intensive in Selective areas

Pricing

Product Mix Pricing:

Product Mix (AMA): The full set of products offered for sale by an organization. The product mix includes all product lines and categories. It may be defined more narrowly in specific cases to mean only that set of products in a particular product line or a particular market. 

Product Mix Pricing: When a product is a part of a product mix, a different price-setting must be considered as opposed to it being a single product..Here the Company searches for a set of prices that maximize profits on the total mix. 

At MTR, their product mix consists of :  

• MTR Snackup
• Masala Powders
• Sweet Mixes
• Breakfast Mixes
• Ready to Eat
• Ready to Cook
• Drinks
• Vermicelli
• Pure Spices
• Snack Mixes
• Meal Mixes
• Masala Pastes
• Sweets
• Pickles
• Soups

So, the pricing strategy for Ready to Eat is not completely independant. Pricing of the whole mix has to be kept in mind. 

Broadly, there are 6 situations that call for product mix pricing.

1. Product Line Pricing: For the product line of Ready to Eat, the prices range from Rs.75-50 depending on the dish and the quantity offered. Typically, curries range from Rs.75-50 in 300 mg cartons, whereas the meals(rice) are typically placed at Rs.50 for a 250-300 mg carton.
2. Optional Feature Pricing: Many companies offer additional products, features and services with their main product. It is tricky because the Company should decide which features to include in the standard price and which to offer seperately. Typically for FMCG products, there are no optional features.
3. Captive Product Pricing
4. Two-Part Pricing
5. By-Product Pricing
6. Product Bundling Pricing

Typical FMCG products, specially food, does not require all the other pricing situations except Product line pricing. Product Bundling Pricing may be applied when the sales go down for individual products or when the Company has to increase sales in terms of the units sold.

MTR has Product bundling pricing for RTC products during festive seasons for the best selling products. For example,

Product

Product heirarchy includes everything right from basic needs to particular items that satisfy those needs. There are six levels of product heirarchy.

Product heirarchy

1. Need Family: The core need that underlies the existance of a product family. Here, the core need is food.

2. Product Family: All the product classes that can satisfy a core need with reasonable effectiveness.
3. Product Class: All the products having the same functional funtional coherence.
4. Product Line: Group of products that have a similar function.
5. Product Type: Share one of the several possible forms of the product.
6. Item: A distint unit distinguishable by size, price, appearance or some other attribute.

Product heirarchy of MTR RTE 

1. Need Family: Food.

2. Product Family: Packaged Foods

3. Product Class: Meal Related

4. Product Line: Ready-to-Eat

5. Product Type: South Indian

6. Item: Pongal

Setting Product Strategy

According to Kotler, a Product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information and ideas.

Product Levels: The Customer Value Hierarchy

The Company needs to address 5 product levels each of which adds more customer value. These five levels constitute a customer value hierarchy. 

Product Levels and 3 C's in the MTR RTE context

Core benefit and Customer:

The service or benefit the Customer is really looking for in RTE foods is convenience. The main aim of the company is to provide these benefits.

MTR's RTE foods are packaged conviniently and are very convinient in terms of prepapration and consumption.  

Basic product and Company:

At this second level, the Company must turn the core benefit into a basic product. It started off with RTC products, the first being the Rava Idly mix which became a huge hit. It soon ventured into RTE foods. MTR was in a sense a pioneer, offering ready-to-eat food when such products were still a novelty and not entirely a necessity in the Indian market. 

Expected product and Customer:

At the third level, the consumer normally expects a set of attributes and conditions when he buys the product and the Company prepares an expected product. Minimally, the Customer expects good quality and taste from any packaged food product. MTR is known for its recipe expertise, the choicest ingredients and the quality, taste and purity of its products. Also, competetion and brand positioning happens at this stage. Competitors like ITC, Parle etc sprung up.

Augmented product and Competetion:

At this level  the Company develops an augmented product which exceeds the Customer expectations. Competition (ITC, Haldiram's, Parle, Frito Lay) plays an important role here as products with the same or better offerings spring up. The most significant competitor in this context is ITC with its 'Kitchens Of India' range. 

Potential product, Company and Competition:

At the fifth level, the product encompasses all the augmentations and transformations the product may undergo in the future. MTR introduced RTE soups, North Indian dishes and rice meals to deal with competition.

Competetion

 The total processed foods market size this year is Rs1500 crore, out of which Ready to Cookfoodscapture Rs 1275 crore and Ready to Eat capture Rs.225 crore this year and is expected annual growth of 25 – 30% over next 5 years shows huge potential for growth by tapping a larger consumer base. 

According to Tata Strategic Management Group, the RTE market is expected to grow to Rs 2900 crore by 2015.

An analysis of the drivers explain the factors for growth of the industry including the target consumer base for RTE is expanding, organized retail displays advantages in driving RTE sales, cold chains development, and government initiatives. Indian Government is also providing more infrastructure for this sector. Excise duty is now ZERO % on RTE and 100 % tax deduction for the first 10 years for new units. This allows manufactures to bring down their prices & spreads its flavors to the world. 

The prices of most brands in this segment range from Rs25/- to Rs.40/- for a typical 285g dish. The 'Kitchens of India' range from ITC comes in a tin pack, and is priced much higher than the rest, ranging from Rs110 to Rs150 for 450g. This brand also finds its way to homes overseas, where it is mainly sent as a gift item. Purchases for overseas travel constitute almost 10% of sales in this 

category. MTR foods is the largest player in this emerging market with a near 65% share.  

Direct Competetion 

Maiyya's

Satnam Overseas 

ITC

Tasty Bites

GCMMF

Haldiram

other local players.

Indirect Competetion

Ready To Cook category products and players like

Gits

ITC 

Bambino

Kohinoor Foods

Marketing Mix

Marketing Mix (AMA Definition):  Marketing Mix is a mix of controllable marketing variables that the firm uses to pursue the desired level of sales in the target market.

According to Kotler, McCarthy classifies marketing mix tools as four broad kinds-the four P’s of marketing-

1.      1. Product
2.      2. Price
3.     3.  Promotion
4.   4. Place 

  
       In service marketing, however, the four P's have been expanded to seven P's to address the different nature of services.

       A general marketing strategy:

     For MTR Ready-to-Eat,

     Target Group: 

    The urban market where both the husband and wife are working and are pressed for time.

    Positioning: 

Life Cycle Concepts

Industry Life Cycle

In the processed food industry, the Ready To Eat segment,

 Research and Development: "Retort Technology" developed by Defence Food 

Research Laboratory (DRFL) introduced the concept of packaged food in 1961

Introduction: The Ready To Eat segment (apart from cup noodles) were introduced in the 1990's

Growth: The industry has been experiencing growth only since 2002.

The RTE segment in India is still in the growth phase. 

Product Life Cycle

MTR has been the pioneer in this industry. It introduced the concept of Ready To Cook and Ready To Eat food products. Seeing the immense potential, other players (competition) like ITC etc have forayed into the industry.

Customer Value And Benefits

At the top of every modern Organization chart, unlike the traditional ones, is the customer. Customers are the only reason we build factories, hire empployees, schedule meetings and engage in any business activity. Without customers, there is no business. The customer is the true "profit center".

Customers today expect companies to do more than connect with them, more than satisfy them, and even more than delight them. They expect companies to listen and respond to them.

Customer Perceived Value:

Customers tend to be value maximizers. They estimate which offer they believe will deliver the most perceived value and act on it. If the offer lives upto expectation affects customer satisfaction and the probability of the purchase again.

Customer Perceived Value is the difference between the prospective customer's evaluation of all the benefits and costs of an offering and the perceived alternatives.

Time Cost is minimal. That is the USP of an RTE product.

Energy Cost is also minimal as there is negligible or no work done to make a RTE dish.

Psychological Cost is

Monetary Cost is Rs.50 for a 300gm carton.

Image Benefit is high as MTR is synonymous with Purity and rich heritage. It is also the market leader.

Personnel Benefit is negligible as there is no personnel involved and it is a FMCG product.

Services Benefit is also negligible since it is food and no services are required.

Product Benefit is high. It gives taste, quality, time efficiency and traditional food.

Delivering High Customer Value: 

Customers have varying degrees of loyalty to specific brands. MTR commands high brand loyalty. The core positioning is purity, but the buyer is promised a lot more than just safe food. The Value Proposition is fast, healthy, vegetarian, safe, hassle free, time saving food.

Maximizing Customer Lifetime Value 

The concept implies that a company could improve its profits by "firing" its worst customers. The company's largest customers generally yeild the most profit and smallest have very less. Buut MTR RTE does not have any offers for longtime customers.

Customer Decision Making

Target Group

Although it is a product directed at everybody, the main target groups are:

1. Busy/ Working Urban class
2. Bachelors
3. The health conscious
4. Old people who cannot cook for themselves
5. Young people with a keenness to try different cuisines
6. NRIs

Why Ready To Eat

• Globalization of Indian food and its culture are the core factors for popularization of ready to eat foods. 
• Main motivation for these ready to eat foods is fast growing foreign market.
• Retail outlet culture is now growing rapidly in India. 
• Shelf life of these foods are at least 12-18 months.
• Quality, Taste and Flavor of these foods remains as good as fresh up to the expiry date.
• Women wanting to spend more time out of the kitchen.
• More working bachelors staying away from homes.
• Cost effective in comparison to the Indian cuisine served by the restaurants in foreign countries. 

What Its All About

The Ready-To-Eat Market in India

 Processed foods industry is opening a new window in world scenario as far as taste & acceptance is concerned. The retort processed foods do not require rehydration or cooking and can be consumed straight from the pouch with or without pre-warming, depending upon the requirement of the users and the weather conditions. Today, almost all companies in food processing sector using "Retort Technology" developed by Defence Food Research Laboratory (DRFL). Up until a few years back, the RTE foods market had not really provided any options beyond the Cup O Noodles produced by Indo-Nissin.

The Indian Ready to Eat (RTE) and Ready to Cook (RTC) food segment has emerged from its early days of being a fringe alternative to home cooked meal or to eating out. 
Further, the growth of modern retail has provided unprecedented brand and category visibility to convenience foods. Also, technological advancements in packaging and flavor science have brought RTE and RTC foods centre-stage among urban Indians. 

The market of processed food industry in India has been a new concept which is in its nascent stage. The total processed foods market size this year is Rs1500 crore, out of which Ready to Cook foods capture Rs 1275 crore and Ready to Eat capture Rs.225 crore this year and is expected annual growth of 25 – 30% over next 5 years shows huge potential for growth by tapping a larger consumer base. 

An analysis of the drivers explain the factors for growth of the industry including the target consumer base for RTE is expanding, organized retail displays advantages in driving RTE sales, cold chains development, and government initiatives. Indian Government is also providing more 
infrastructure for this sector. Excise duty is now ZERO % on RTE and 100 % tax deduction for the first 10 years for new units. This allows manufactures to bring down their prices & spreads its flavors to the world. The prices of most brands in this segment range from Rs25/- to Rs.40/- for a typical 285g dish.  Purchases for overseas travel constitute almost 10% of sales in this category. MTR foods is the largest player in this emerging market with a near 65% share. The rest of the market is made up of Satnam Overseas, ITC, Tasty Bites, GCMMF, Haldiram and other local players. 

The MTR Ready-To-Eat Range

MTR foods Pvt Ltd flagship brand MTR is amonst the top 5 processed food manufacturers in India having turnover estimated at US$ 261 million with the export market accounting for approximately 10% of MTR's total sales. MTR, proud of its rich heritage, tradition of food and hospitality began in 1924 with the establishment of the MTR by the Maiya family in Bangalore. The restaurant is a city landmark today and people still stand in queue to savour its unique, completely authentic dishes. 

Then in 1975 the Maiyas diversified into the business of convinience foods and instant mixes. As business expanded modernization and state-of-art facilities including dedicated Lab and printing and packaging facilities were added. MTR is an ISO 9002 and HACCP certified company which stresses that its products are 100 percent vegetarian and contain absolutely no preservatives. 

The company was recently acquired by Orkla, a Norway based company for US$80 million. After establishing itself in the south, MTR is developing its brand in the west and north Indian markets in line with the rapid expansion of its product line. MTR manufacture, market and export a wide range of packaged foods to global markets that include USA, UK, Australia, New Zealand, Malaysia, Singapore, UAE, Japan and Oman. Starting with the legendary MTR restaurant in Bangalore, India‘s silicon valley, now offer 'complete meal solutions'. Its wide range of products include Ready to Eat curries and rice, Ready to Cook gravies, frozen foods, ice cream, instant snack and dessert mixes, spices and a variety of accompaniments like pickles and papads.

Its deep understanding of culinary expectations and needs has resulted in many new and innovative products. Its investments in infrastructure and technology ensure them to scale rapidly and consumers across the globe count on to bring them all-natural, wholesome and delicious food that is also convenient and no-fuss. The RTE range currently comprises 22 Indian curries, gravies and rice.

 In sync with product innovations, the company has also expanded retail presence significantly;
contemporary Namma MTR‘ is MTR's retail chain that allows customers to experience the wide MTR range. Namma MTR is split into three sections. One section showcases the entire range of products. The second section is a novel concept kitchen where customers can interact with specialist chefs to learn about MTR products and watch live demonstrations. This concept kitchen also
works as an ideal platform for feedback allowing the company to understand and address consumer needs The third section offers a variety of fast food — one can either eat here or get a quick take-away from the express counter and MTR kiosks now serve consumers across Bangalore and Chennai. 

Preparation is really easy and hassle free. One needs to just put the aluminium cover with its contents into boiling water for 2 minutes, or empty the contents into a dish and place it on the stove or the microwave for 2 minutes.