Cold Storage Providing Cold Chain Solutions A MARKETING

Cold Storage. Providing Cold Chain Solutions A MARKETING STRATEGY FOR TAPPING INDIA By Shibalik Sarkar(051/2017) Shubham Ralhan(052/2017) Siddhartha Chakraborty(053/2017) Srinath N. (054/2017) Tanmay Agrawal(056/2017) Umesh Kumar(057/2017) Free Powerpoint Templates Page 1

Flow of Presentation v Objective v Industry Overview v Organization Overview v Marketing Strategies v Marketing Mix v Feedback and Control v Contingency Plan Free Powerpoint Templates Page 2

OBJECTIVES v To Understand analyze the Cold Chain sector in India v To develop Marketing Strategy for Cold Storage Pvt. Ltd. for launching its services in India Free Powerpoint Templates Page 3

INDUSTRY OVERVIEW Free Powerpoint Templates Page 4

Industry Size Source: ASSOCHAM, REED Analysis Free Powerpoint Templates Page 5

Recent Trends Free Powerpoint Templates Page 6

Factors Driving Growth in India v. Growth in organized retail v. Growth in processed food sector v. Government initiatives v. Shift towards horticultural crops v. Demand from the pharmaceutical sector Free Powerpoint Templates Page 7

MARKET ANALYSIS Free Powerpoint Templates Page 8

Type Of Market • • • The Indian cold chain market is highly fragmented. Organized players contribute only 8%– 10% of the cold chain industry market. There are 5, 381 number of total cold chain storages in India with 95% of total storage capacity under private players. 65% of India’s cold chain storage capacity is contributed by the states of Uttar Pradesh and West Bengal. With the current capacity only less than 11% of what is produced can be stored. Cold storage capacity is expected to grow at 13% per annum on a sustained basis over the next 4 years, with the organized market growing at a faster pace of 20%. Free Powerpoint Templates Page 9

Major Players in Cold Storage Logistics in India Snowman Logistics The total income for Snowman Logistics has risen sharply from Rs. 642. 1 million in the year 2012 to Rs. 2, 473. 70 million in the year 2016. ( Source: Prowess Database) Coldex Pvt. Ltd. The total income for Coldex has risen dramatically from 132. 9 million in the financial year 2013 -14 to Rs. 826. 7 million in the year 2014 -15 ( Source: Prowess Database) Fresh and Healthy Enterprise Pvt. Ltd. FHEL is a fully owned subsidiary of CONCOR-Container Corporation Of India Ltd. The income for FHEL for the past three years has been Rs. 3555. 89 million in the year 2013 -14 to Rs. 2415. 47 million in the year 2015 -16. (Source: Free Annual Report 2015 -16 of FHEL) Powerpoint Templates Page 10

Other Players in Market • R K Foodland Pvt. Ltd. • Cold. Star Logistics Pvt. Ltd. • Gati. Kausar India Ltd. Free Powerpoint Templates Page 11

PRIORITY MARKETS Source: Parliament Questions, PIB, Emerson Climate Technologies) Free Powerpoint Templates Page 12

ORGANIZATION OVERVIEW Free Powerpoint Templates Page 13

ORGANISATIONAL MISSION • The Mission that we chose for Company’s operations in India: “To create, develop and provide reliable, timely Cold storage solutions to achieve customer satisfaction. ” Free Powerpoint Templates Page 14

MACRO INFLUENCES Demographic Agriculture and allied activities accounted for a total of 45. 1% of the main workers in 2001 in Maharashtra. ( Source: Census data 2001) while similar trends are followed in Karnataka and Haryana as well. • Need for cold chain – 11% of world’s total vegetables production is accounted by India alone but India’s share in global vegetable trade is only 1. 7%. 127 Million Tonnes of milk was produced in 2011 - 12, but cold storage capacity is only available for 70, 00080, 000. Tonnes of milk‒ 20%-30% of fish production are annually wasted in India. 25, 000 unregistered slaughter houses are present in India, which generally lack chilling facilities Free Powerpoint Templates Page 15

MACRO INFLUENCES Political Government Policies: 100% FDI allowed through automatic route. Since 2011 -12, cold chain has been given the infrastructure status. Establishment of National Centre for Cold Chain. Development in 2011, to look into matters related to cold chain infrastructure. Economic Monetary and Tax Benefits: 5% concessions on import duty, service tax exemption, excise duty exemption on several items. Subsidy of over 25% to 33. 3% on the cold storage project cost. Viability Gap Funding up to 40% is provided by the Government. Growing Emphasis on Food Parks & Integrated Cold Chain Development: Proposed financial outplay for cold chain infrastructure & food parks of USD 335 Mn & USD 650 Mn respectively. Over 50%-70% capital grant on projects. Free Powerpoint Templates Page 16

MACRO INFLUENCES Technological From the implementation of temperature monitoring to the optimization of product put-away and selection, technology has and always will be an industry game changer. The challenge the cold chain logistics providers face is leveraging that technology to bring efficiency and optimization opportunities to our customers’ businesses. Refrigeration Controls: Automation can greatly improve refrigeration efficiency and optimize energy use. Energy Efficiency: Under-floor heating systems, adjacent room temperatures and LED lighting can influence and improve energy efficiency. The building’s orientation can also improve energy efficiency of the unit. Electrical Utilities: Power loss in cold storage facility can lead to significant financial losses. Design considerations for electrical utilities should include electrical voltages, reliability and redundancy of supply, standby generation, etc. Free Powerpoint Templates Page 17

MICRO INFLUENCES Intermediaries: As the company is a new entrant into the Indian market, it does not have an existing base of relations in the market with the farmers and other players which can hamper its growth. Competitors: The market has already established players like Coldex, Snowman Logistics, FHEL India etc. which might hinder the company’s entry into the market. Customers: The Indian customer basically the farmers are not trustworthy to avail services of new market players that easily and to convince them to come for the company will be challenge. Free Powerpoint Templates Page 18

Categories in which the Organisation operates Internationally the company offers chain support for cold Fruits and Vegetables Dairy Products Pharmaceuticals Frozen Food Poultry and Sea-food In India to begin with, the company would mainly be focusing on providing cold chain logistic support for Fruits and Vegetables and Dairy Products in the states of Maharashtra and Karnataka. Free Powerpoint Templates Page 19

SWOT ANALYSIS • • • • Strengths. Presence of huge market potential Low advertising cost – advertisements can be done via sales calls, industry connections, online business-tobusiness and business-to-consumers portal Weaknesses – Low brand recognition Late entry in the market No intermediary network to promote its services Opportunity – Indian cold storage industry is expected to grow at CAGR(compounded annual growth rate) of 26% over the next few years Government is in favour of new entrants into the markets Government subsidy schemes to support entry into the market Threats – Shortages of power Duplication of technology Negative word of mouth can effect reputation and brand image Free Powerpoint Templates Page 20

MARKETING STRATEGY Free Powerpoint Templates Page 21

Segmentation ●Geographic Division on the basis of states with the highest to lowest storage capacity ●Demographic Division on the basis of age and occupation Free Powerpoint Templates Page 22

● Behavioural – Based on the amount of engagement of the consumers with the industry – heavy users, moderate users, and light users ● Current Customer – All the consumers from the developed states who are engaged in producing food grains, fruits and vegetables, dairy products etc. All the distributors who wish to store and preserve their goods for a long time ● Non users Rural India relatively untapped market with low penetration levels Free Powerpoint Templates Page 23

Targeting ● Geographic – We will be focusing on 3 states with the least amount of storage capacity in India viz. ∙Maharashtra ∙Karnataka ∙Haryana ● Demographic – Targeting population depending on age groups Focus on people engaged in agriculture and allied activities for living ● Behavioural – Focus on heavy and moderate users Free Powerpoint Templates Page 24

Positioning Our plans for image positioning of the product is : ∙ Affordable ∙ Reliable ∙ Timely Free Powerpoint Templates Page 25

MARKETING MIX Free Powerpoint Templates Page 26

Product – Fruits – Apples, oranges, mangoes, pine apples, Blackberries, strawberries, cherries etc. Vegetables – carrots, cabbage, sprouts, broccoli, cauliflower, cucumbers, corn, chilies etc Dairy Products – Milk products such as curd, cheese, butter, yogurt, ghee etc Free Powerpoint Templates Page 27

Place– Headquarters will be based in Mumbai. The target places for first year would be Maharashtra, Haryana, Karnataka and cold storages would be set up in Sonipat(Haryana), Aurangabad(Maharashtra), Bengaluru. The cold storages would accept products from all over the mentioned states. Free Powerpoint Templates Page 28

Price – Initial price (for at least 6 months) for the services would be 10% lower than the market price to attract customers. The company will start giving special discounts and other offers to loyal customers there after. Free Powerpoint Templates Page 29

Promotion – Advertisement would be done via sales calls, industry connections, online business-to-business and business-toconsumers portal. Free Powerpoint Templates Page 30

Feedback and Control • • We believe in highest level of customer satisfaction and for that we have in place our dedicated CRM systems. Implement the feedback given as soon as possible and deliver best possible services to the customers. Free Powerpoint Templates Page 31

Capital Expenditure for the Project Free Powerpoint Templates Page 32

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Contingency Plans o We will work on our plans of collaborations with other Indian companies, so that we can enter the market as a joint venture and can win the trust of the consumer with a better known local name o We will try to revamp and make our advertising more aggressive, so that we can firmly place our brand into consumer’s mind o In case of any unforeseen situation requiring financial support, a portion of profits would be dedicated to create a reserve that can also be used for unit modernisation Free Powerpoint Templates Page 36

References and Bibliography • • • IBEF. org Census data ASSOCHAM website “Marketing Management” by Philip Kotler Prowess IQ database Free Powerpoint Templates Page 37