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Principles of Marketing: Case 1: Cargill India Pvt. LTD

This document provides a case study analysis of Cargill India Pvt. Ltd.'s potential entry into the consumer business-to-consumer (B2C) market in India. It outlines Cargill's background, the Indian edible oil market context, competitors, customers, and recommendations. Key points include: Cargill wants to expand from its business-to-business (B2B) expertise into the B2C market to improve revenue stability; the Indian edible oil market is growing but fragmented; and recommendations cover product strategy, pricing, placement, and promotion approaches.

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Vasu Gandhi
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234 views9 pages

Principles of Marketing: Case 1: Cargill India Pvt. LTD

This document provides a case study analysis of Cargill India Pvt. Ltd.'s potential entry into the consumer business-to-consumer (B2C) market in India. It outlines Cargill's background, the Indian edible oil market context, competitors, customers, and recommendations. Key points include: Cargill wants to expand from its business-to-business (B2B) expertise into the B2C market to improve revenue stability; the Indian edible oil market is growing but fragmented; and recommendations cover product strategy, pricing, placement, and promotion approaches.

Uploaded by

Vasu Gandhi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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PRINCIPLES OF

MARKETING
Case 1: Cargill India Pvt. Ltd.
Presented By: Group 4
Shashank
Tripathi
Rajan Mittal
Bhavuk Pujara
Vasu Gandhi
Chinmey
Kakkar

(16PGIM12)
(16PGIM20)
(16PGIM21)
(16PGIM24)
(16PGIM26)

CASE SUMMARY

Cargill Inc
US based Conglomerate of food, agricultural, financial and industrial products
Worldwide expertise in B2B products and service

Cargill India

Wants to Expand in B2C channel


Seeking Improvement in contribution to global revenues
Experimental First phase implementation of B2C sales in India and planned rollout in global geographies accordingly
Strong player in B2B industry and had already moved in and out of B2C model
in 2000
Short term goal Edible oil Market; Long term Goal Packaged food market

PROBLEM STATEMENT

Market
Strategy
Sales and
Distribution
Finance
Operations

Tastes and Preferences varied across regions


Ability of Cargill India to establish brand
Competition from Leading Players and Local Markets
Product Over-Pricing
Profitability
Tactical issues between advertising and promotions
Inadequate and Expensive supply chain
Satisfying the demand of B2C channel which was 7 folds of B2B
channel
Volatile Forex market

Capacity Utilization

COMPETITORS
Home Grown Companies such as ITC. Britannia and multi-national brands such as Unilever,
PepsiCo, Con-

Agra foods and general mills

Six major players- Adani-Wilmar, Ruchi Group, Gokul Refoil and Solvent Ltd, Marico, Bunge India
Penetration of market by foreign players by acquiring local brands.
New companies face very low entry barrier due to low capital and technical needs.
Government thrust for home grown players to bring down imports and reduce inflation in edible oil
market.
Kirana shops producing own edible oils in small quantity have high advantage due to adaptability
towards the Indian customers taste.

CUSTOMERS
Second most populous country in the world with a high amount of young population which has
a high propensity to consume
Large amount of consumption at home making B2C a lucrative market
Value for money was a major driver of consumer choice
The packaged oil segment accounted for about 25% of domestic consumption
Domestic consumption likely to go up due to urbanization and growing quality consciousness
among customers
Taste building was not easy in India. Tastes and preferences varied across regions

CONTEXT

Want to enter into B2C market to streamline volatile revenues

Stringent Govt. Norms differentiated tariffs reduced from 30% to 5%

Indian market is dependent on import of edible oils

Indian retail market estimated at $364 million in 2005, accounting for 44% of GDP with 45% in the food and
grocery category

Indias retail sector is not organized. 95% of retail activity was conducted through traditional retail. Market was
fragmented

India was the fifth largest producer of oilseeds in the world

The industry as a whole was growing at a steady CAGR of 4.43% since 2001

Volatility in industry due to changing commodity prices, erratic harvests, companies depending on imports
dependent on foreign exchange

Low investment venture and hence easy to enter

COMPANY
Cargill Inc.
Established in 1865 in IOWA by William Wallace Cargill.
90% of the stock hold by founding family
Employment for 1,40,000 people all over the world
$70 billion global revenues
Major Segments- food, agriculture, finance and industry
Known for its B2B model
Cargill India Pvt. Ltd.
Entered into Indian market in 1987
Employed 2000 people nation wides in plant, offices, depots and warehouses
$5.67 billion revenues

COLLABORATORS

Collaboration with farmers through Saathi initiative


Collaboration with government to reduce the pressure on imports
Better collaboration to leverage established distribution networks

RECOMMENDATIONS
Product
Focus on 3 categories of products i.e. Palm, Soyabean and Mustard Oil as per the edible oil
consumption patterns
Diversification of Products based on quality and price
Premium grade oil being imported since 1990
Price
Capitalize on established Economies of Scales & Manufacturing Capacity resulting in lower production
cost
Expansion of customer base in rural areas by offering discounts to farmers dealing with saathi
centres
Reduce transportation and logistics cost by catering to eastern, western and southern parts of India
using current network of established manufacturing plants in Paradip, Kandla and Kurkumbh
Place
respectively.
Strategically placing premium products in urban areas and low price products in rural areas
Capitalize on current network of 150000 retail outlets and initiate product sales from these outlets
Promotion
Performance Marketing Forecast relationship with farmers so as to build reputation among rural
areas (saathi initiative)
Relationship Marketing Capitalize on existing relationship with customers, vendors, B2B clients, and
incentivizing own employees to use our products

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