unilever business challenge - what happens when it enters food retail

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INSTRUCTIONS: 1. Fill in the parts completely. 2. Please cite all your sources. 3. This document must not exceed 5 pages in total, including the cover page. IMPORTANT: Please follow the format specified below to submit your template FONT: Calibri Size 11 Margin: Normal, i.e. DO NOT alter the margin or the width of the box in this template Citation: Please cite any sources of reference and data either in the text, as footnote or at the end of the template Graphics: You can insert any graphics if necessary; however please do not exceed the total of 5 pages 4. To help you kick-start your preparation, we have provided you with a supplementary deck containing definitions of terms (for example, D&E markets) and examples. Please use them as references only. You should research further and formulate your idea independently. 5. See example template to have a general idea of how to fill this template. However, the example is very brief; you should substantiate your idea as far as you can while being clear and concise. APPLICANT INFORMATION: NAME: MUTHU KUMAAR THANGAVELU SCHOOL: WEE KIM WEE SCHOOL OF COMMUNICATION AND INFORMATION, NANYANG TECHNOLOGICAL UNIVERSITY DEGREE: MSc, KNOWLEDGE MANAGEMENT EXPECTED DATE OF GRADUATION: 30, MAY 2012 EMAIL: [email protected] MOBILE NUMBER: 85044078 PARTICIPATION IN OTHER BUSINESS CASE COMPETITIONS: <2008 – International tech fest, DAKSH, SASTRA University, India – Event: Dream factory, Idea: Technology based crowd management system; 2011 – Innovation Insurance contest, Accenture Technology

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Page 1: Unilever Business challenge - What happens when it enters food retail

INSTRUCTIONS:1. Fill in the parts completely.2. Please cite all your sources.3. This document must not exceed 5 pages in total, including the cover page.

IMPORTANT: Please follow the format specified below to submit your templateFONT: Calibri Size 11Margin: Normal, i.e. DO NOT alter the margin or the width of the box in this templateCitation: Please cite any sources of reference and data either in the text, as footnote or at the end of the templateGraphics: You can insert any graphics if necessary; however please do not exceed the total of 5 pages

4. To help you kick-start your preparation, we have provided you with a supplementary deck containing definitions of terms (for example, D&E markets) and examples. Please use them as references only. You should research further and formulate your idea independently.

5. See example template to have a general idea of how to fill this template. However, the example is very brief; you should substantiate your idea as far as you can while being clear and concise.

APPLICANT INFORMATION:NAME: MUTHU KUMAAR THANGAVELUSCHOOL: WEE KIM WEE SCHOOL OF COMMUNICATION AND INFORMATION, NANYANG TECHNOLOGICAL UNIVERSITYDEGREE: MSc, KNOWLEDGE MANAGEMENTEXPECTED DATE OF GRADUATION: 30, MAY 2012EMAIL: [email protected] NUMBER: 85044078PARTICIPATION IN OTHER BUSINESS CASE COMPETITIONS: <2008 – International tech fest, DAKSH, SASTRA University, India – Event: Dream factory, Idea: Technology based crowd management system; 2011 – Innovation Insurance contest, Accenture Technology Solutions, India - Event: New Insurance product design based on emerging markets, Idea: Time and Effort Insurance and its implementation strategies> IDEA TITLE: <Big 6 Project: NUTRI-GIVE>

“Winning in the Developing & Emerging (D&E) markets is key to achieving Unilever’s vision to double the size of our business while reducing our environmental impact.”

To achieve this vision, by leveraging on upcoming trends, develop a new innovation using an existing Unilever brand to meet an unmet consumer need of the D&E markets

Page 2: Unilever Business challenge - What happens when it enters food retail

PART 1 – Paint the scenarioGeographical Scope:

Which D&E market (country or region) are you addressing the needs of? Give a brief elaboration of relevant macro trends of the selected geography.

D&E market : India – the Big 6 cities (Bangalore, Mumbai, Chennai, Hyderabad, Kolkata, Delhi)

Key Consideration: Most companies in Big 6 cities are based on outsourced software development, IT infrastructure maintenance projects, BPOs and call centres operating for the clients of United Kingdom, United States and Australia. Key Enabler: Time difference of the client’s geographic location with IST (Indian Standard Time)UK (+5.5 hours), US (+10.5 to 13 hours), AUS (- 5 to 7 hours)Macro trend evolved: Due to this time difference in the operating hours of the clients, Big 6 population suffers at least a drag of 3 to 4 hours from their regular shift as such from 9AM to 6 PM, as most of the issues, discussions, resolution calls and hand over meetings tend to happen only during the common overlapping time particularly in the evenings after 6 PM till 10PM in India. Also the organizational culture here strongly supports it, where there is never a ‘NO’ to your boss. [Source: My real experience in Accenture Technology Solutions, Bangalore from 2010 to 2011]Business Driver: This macro trend led to a new food consumption pattern due to lack of time for food preparation at home when both of them in a family work and thus creating a thriving market for sophisticated fast food centres like McDonalds, KFC, Pizza hut, Dominos which operate till 12PM and open early in the mornings too.

Upcoming Consumer Trends and Insights: Describe the consumer trends (e.g. Purchasing behaviour, consumption behaviour, etc) in

your chosen geography. Make sure it is clear and sufficiently detailed.

What do you think are the underlying reasons for the consumer trends observed?Show us your train of thought and assumptions in coming up with these deeper insights.

Source of Influence: Well established Global Delivery Centres for IT in the Big 6 citiesTarget Customers: IT and BPO Workforce and their family (More than 60 percent of India's population, or 700 million people are under the age of 30-a prime target for fast-food)[Source: Reuters business article, 2011, http://in.reuters.com/article/2011/0 4/28/india-fastfood-idINL3E7FR0LY20110428]Customer Demographics: Age group (15 to 35), family income (above 30000 INR per month) or Bachelor’s income (above 20000 INR per month)Customer’s affordability: 25 to 70 INR per mealConsumption behaviour: Burgers and potato fries from McDonalds, KFC with COKE/ PEPSI for late breakfasts and dinners, Pizzas from Dominos and Pizza huts in the late evenings.Consumption Issues with health: This behaviour has recently been reported as ‘less healthy’ if the higher calories gained with a meal are not properly expended. Most people with this routine eating style suffer from obesity, diabetes or high blood pressure. Healthier consumption need: Enhanced vegetable consumption for vitamins, usage of vegetable oils, zero trans fat, low fat Mayonnaise, low fat milk, low sugar drinks, low carbohydrate foods Purchase type: Instant meal packages with minimal waiting time on order

Needs and Wants:

Page 3: Unilever Business challenge - What happens when it enters food retail

What are the needs and wants of the consumers in the market you have chosen? From these needs and wants, can you identify any business opportunities for Unilever?

Needs: IT, BPO workforce and their children suffering from lack of time due to routine tasks of operation with clients having significant time differences across geographies need a shift to a much healthier eating style where there is a balanced diet with proper nutrition.Wants: Healthy, tasty, affordable price, minimal waiting time for consumption, high availability, sophisticated packaging Business Opportunities for Unilever:To exploit the value of the global and local (Indian) Unilever food brands by extending the product line to instant prepared food. Hindustan Unilever’s Contribution to different sectors in India

Home & Personal Care 74.3 %Food & Beverage 16.2 %Exports 7.3 %Others (Chemicals, water) 2.2 %

Significant Food brands offered by Hindustan Unilever and their current market shareOffering Key brands Market ShareTea Red label, Taaza, Brookebond 30.6%Coffee Bru 44.0%Jams Kissan 66.5%Soups Knorr 55%

Ketchup Kissan 28.1%

[Source: Unilever Annual Report 2010 – Unilever website]Other food brands offered by Hindustan Unilever which do not hold a significant market share are

Brand OfferingModern Bread Variants Atta shakthi, whole wheat and

brown bread Annapurna Atta, saltLipton Green and Ice teaKnorr Whole grain Noodles and Pasta

Global Unilever food brands which can penetrate Indian market with a high success rate as shown by the latest consumption trend and increasing health consciousness

Brand OfferingSkippys low fat peanut butterBlue Band, Rama Zero trans MargarineHellmann Low cholesterol MayonnaiseBecel pro·activ milk, Becel pro·activ yoghurt Low cholesterol milk and yoghurt

The whole idea is to address the recent consumption trend observed in the Big 6 cities with healthier, economical and nutritive breakfast and dinner packages with the above global and Indian food brands of Unilever.This not only is profitable, but also a chance to expand the food and beverage market in India by introducing the global brands as mentioned above after analysing the reach of the products prepared with these brands over a period of time.The product enforcing ‘Sustainable living plan’ with a public health concern to fight obesity and cardio vascular diseases creates an emotional linkage with the brand which will have a positive impact on its equity and share price.

Page 4: Unilever Business challenge - What happens when it enters food retail

PART 2 – Your Business Idea

Page 5: Unilever Business challenge - What happens when it enters food retail

Explanation of Idea: Is your innovation idea based on a new product, process or a campaign to meet the needs of

the consumers? Convince us that your idea will be a success.

New Product: ‘NUTRI-GIVE’ products are healthy breakfast and dinner packages offered by automated Unilever vending machines, prepared with existing food & beverage brands in India as well as a few global health brands. Unilever’s business advantage: Market expansion particularly in the food & beverage sector by introducing more global brands into Indian market.Closest Competitor: Subway (vitamin enriched breads and fresh vegetable ingredients), but Unilever is capable of offering not just a healthy product, but a total health experience, one of its mission.More than a product – Encourage sustainable living:Key Enabler: The choice of automated vending machine is not to cut down manual labour costs in India, but to improve the customer communication channel with rapid digitization and access to mobile computing devices (sophisticated mobile phones with internet access and good information processing and push/pull capabilities) in the Big 6 cities.Online Hindustan Unilever health community: Invite target customers, health experts, doctors, food scientists, Unilever process and product engineers in the food & beverage sector to participate on the health issues discussions, the ways to overcome and balanced diet composition.Target customer’s health profile: Allow target customers to create a health profile with an access code by which they can use the Unilever’s common health dashboard to calculate their health index for the day by inputting the consumed food items. Feedback requests can be raised and health tips will be shared by the experts. Also this profile can be accessed by the Unilever vending machine with remote database connectivity through wireless networks.This wireless connectivity can also be used to track the available product stock in real time from the remote supplier’s desk.Rule Based Meal Suggestions: When the user opts for this kind of meal, the machine identifies the user with the access code, it analyzes the previous consumption pattern if any or it can prompt the user to enter them and suggests the most suitable breakfast or dinner package by referring the health dictionary prescribed by the doctors and health experts. ‘NUTRI-GIVE’ meal packages: (Food & Beverage Combo based on nutrition index)

Food BeveragesModern bread variant Sandwich with Kissan Jam and fresh fruit slices

Knorr vegetable soupBecel pro·activ milkBecel pro·activ yoghurtTea variants ( Lipton green & ice tea,Red label, Taaza, Brookebond tea)Coffee (Bru)

Modern bread variant Sandwich with blue band margarine, ketch up and fresh vegetablesModern bread variant Sandwich with Hellman mayonnaise, ketch up and fresh vegetablesModern bread variant Sandwich with Skippys low fat Peanut butter and fresh vegetablesKnorr whole grain vegetable noodles / PastaAnnapurna Atta Vegetable Roll

Execution Plans: How would you propose to execute your idea/innovation? Share with us your activation plans as

well as potential resources that will be required.

1) Market Research:- Identify the taste, flavour, and variety of possible product mixes, health consciousness, internet community usability and awareness with surveys, interviews and discussions in focus groups.High market research accuracy can be expected as the target customer segment is capable of revealing highly accurate local market and demand information due to higher educational standards.-Deciding the Marketing strategyRight Place (malls close to IT and BPO companies, Cafeteria of these companies, inside business parks, bus and train interchanges – Hasty health conscious consumers suffering from lack of time)Right Promotion (during launch and initial days to facilitate viral marketing – cross selling with most popular Unilever brands in the market)Right Price (cost leadership compared to its competitors McDonalds, KFC, Subway, Pizza huts – 20 to 40 per meal for ‘broader customer coverage’)

Page 6: Unilever Business challenge - What happens when it enters food retail

Promotes sustainable and healthy living style, in particular, food consumption style in the target consumer group meeting their demands as well as the health specifications and benchmarks.