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MTR Foods-A Case Study

MTR foods is a successful company due to continuous marketing activities by focusing on the customer’s requirements and creating products satisfying the customer’s wants and demands. In past MTR foods (erstwhile MTR Tiffins) was doing marketing activity in emergency situations by introducing new and different products as MTR masala powders. It shows that the legacy of the MTR company as Marketing Orientation by catering to the needs of customers and providing products matching with their needs. It is a truth and reality that any business entity doesn’t operate in isolation.

It will be driven by environment parameters Known as SLEPT factors. S-Social L-Legal, E-Economical, P-Political T-technological. MTR foods operated in the food industry environment with its USP as the quality of their products to attract and retain customers.

Marketing Strategy of MTR Foods

Any company or business unit is successful in strategy when it is able to map its internal resources with the external environment and create value for customers in the processing revenue to the company. Here MTR company has a legacy of “Marketing strategy thinking” in the food industry for seven and a half decades.

In this context MTR company’s ability to identify opportunity from the dynamic external environment (SLEPT) and providing a gamut of successful business reorientation by evolution from MTR Tiffin’s MTR foods by creating products like Ready-To-Make (RTM) Masala ingredients, Ready to cook (RTC) like upma, idli, dosa, etc. We can say that MTR is a marketing marvel because of its ability to understand the industry environment demand drivers that dominate food industry i.e. food habits and food consumption of consumer, and based on that, was able to create appropriate the marketing mix of elements -4Ps Product, Price, place, and promotion.

THE INDIAN FOOD INDUSTRY ENVIRONMENT:

The Indian food industry growth is increasing every year. An opportunity for the immense potential for value addition, particularly within the food processing industry, the food sector has emerged as a high-growth and high-profit sector. The food industry, which is currently valued at the US $ 39.71 billion!, is expected to grow at a Compounded Annual Growth Rate (CAGR) of 11 % to the US $ 65.4 billion by 2018(Data Taken from IBEF). Food and grocery account for around 31 % of India’s consumption basket. Accounting for about 32 % of the country’s total food market, The Government of India has been instrumental in the growth and development of the food processing industry. The government through the Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments in the business.

It has approved proposals for joint ventures (JV), foreign collaborations, and industrial. The Indian food processing industry accounts for 32 % of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export, and expected growth. It contributes around 14 % of manufacturing Gross Domestic Product (GDP), 13 % of India’s exports and 6 % of the total industrial investment. Indian foodservice industry is expected to reach the US $ 78 billion by 2018 (International Monetary Fund). The Indian gourmet food market is currently valued at the US $ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 %. India’s organic food market is expected to increase by three times by 2020.

Food Industry & Trends The online food ordering business in India is in its nascent stage, but witnessing exponential growth. The organized food business in India is worth US $ 48 billion, of which food delivery is valued at the US $ 15 billion. With online food delivery players like FoodPanda, Zomato, TinyOwl, and Swiggy building scale through partnerships, the organised food business has a huge potential and a promising future. The online food delivery industry grew at 150 % year-on-year with an estimated Gross Merchandise Value (GMV) of US $ 300 million in 2016.

MTR foods Turnover?

According to the data provided by the Department of Industrial Policies and Promotion (DIPP), the food processing sector in India has received around the US $ 7.47 billion worth of Foreign Direct Investment (FDI) during the period April 2000-December 2016. The Confederation of Indian Industry (CII) estimates that the food processing sectors have the potential to attract as much as the US $ 33 billion of investment over the next 10 years and also to generate employment of nine million person-days. Mr Tomasz Lukaszuk, the Ambassador of the Republic of Poland, had also highlighted the keen interest shown by Polish companies looking for opportunities in India to expand collaboration and invest in food processing.

Government Initiatives Food sector. There are various government initiatives taken to support the Indian food industry in recent budgets so that an economic fillip given to this industry. The gamut of operations areas covered are from quality control, regulations to the promotional board of investment from FDI, and encouraging entrepreneurs in this industry. This government initiative gives a direction to industry to sustain in long-term with particulars quality standards.

MTR COMPANY HISTORY:  (MTR FOODS MAVALLI – TIFFIN ROOMS TO MTR FOODS)

The Mavalli Tiffin Rooms (commonly known as MTR) is the brand name of a food-related enterprise located in India. Having its origin in the city of Bangalore, it has a restaurant located on the Lal Bagh Road in Bangalore and 6 other branches in the city, as well as one each in Singapore, Dubai, and Muscat. MTR also claims to be the inventor of the popular South-Indian breakfast item, Rava Idli. MTR was founded as a restaurant by Yagnanarayana Maiya and his brothers in 1924. In the mid-1970s when India was under emergency, a Food Control Act was introduced which mandated that food was to be sold at very low prices. This move made it difficult for MTR to maintain high standards in its restaurant business and forced it to diversify into the instant food business, selling ready-to-eat snacks such as chutneys and rasams.

Since the 1970s, MTR has expanded and diversified, with MTR Department Stores opened next to the restaurant, and an outlet opened in Chennai. Currently, the MTR brand represents two separate entities; the MTR restaurant business and MTR Foods, the pre-packaged food business. MTR Restaurant is a vegetarian restaurant located in Bangalore, India. It was founded in 1924. It has also been featured on television in the global travel-related series, Globe Trekker. The food served at the MTR is a regular, wholesome Karnataka Brahmin fare and has its origins in the Udupi Brahmin cuisine of the coastal region of Karnataka. The decor is outdated, as more attention is paid to cleanliness and food quality than ambience. For many years, the customers entered the restaurant through the kitchen so that they would be able to satisfy themselves about the restaurant’s cleanliness before they ate there.

MTR Foods and Worldwar

During World War II, MTR found it difficult to make idlis since rice was in short supply. According to MTR, they experimented with semolina instead of rice and thus invented the very popular breakfast item of Rava Idli. MTR also holds a record of being the first fast food restaurant in the world to serve 21,000 customers in seven hours. MTR restaurant is currently headed by Hemamalini Maiya, Vikram Maiya, and Arvind Maiya (grandchildren of Yajnanarayana Maiya). One uniqueness of this restaurant is that silver tumblers are used to serve beverages. This restaurant was closed in the period of Indian emergency (the mid-1970s) when the Food Control Act made it non-profitable to serve food items until it was reopened in 1984. To save the jobs during the time it was closed, MTR started selling spices and roasted flour mixes. That was the beginning of its entry into the convenience and instant food business, and in a sense, a turning point. MTR Foods was headed by Sadanand Maiya (son of Yajnanarayana Maiya) until it was sold to Orkla, a Norwegian company for $ 80 Million in March 2007.

MTR ready to Eat Products

It produces packaged foods in different ranges— spices, instant mixes, ready-to-eat foods, vermicelli, ready-to-cook gravies, the range of frozen products, papads, pickles, chips, snacks, and ice creams. It bought the packaging technology from the Defence Food Research Laboratory in Mysore and there are no preservatives added to the food while packaging. MTR is also the first Indian processed foods company to be certified with the Hazard Analysis Critical Control Point (HACCP) certification which is a rigorous standard of food safety and hygiene. It has also been sponsoring magic shows and theatre performances a means of giving live demonstrations of their products and to hand out free samples to the audience. MTR Foods is also the first company in the world to have created a frozen dosa, which can be heated and eaten right away. MTR Food products are exported to the countries in the Persian Gulf, the United States, and the United Kingdom. It is believed that MTR is the one who brought the first ice cream vending machine to India.

Ready to Eat MTR Foods

MARKETING MIX OF MTR FOODS:

MTR foods a Product Dominant Company MTR Foods is a food product company offering a diversified range of packaged food products. It uses authentic recipes, high-quality oil, and best ingredients to retain and ensure homemade aroma, taste, and flavor. Products are prepared in the strict hygienic atmosphere so that packs retain crispiness and freshness. It includes items for breakfast, meals, and in-between meals like-Frozen Foods. The above company backdrop shows MTR as a company that continuously innovates and produces product with match of consumer needs wants and demands. Product efforts are Quality as strength to attract and retain customers. The framework of “Customer Vs Product” matching of this company can be understood as marketing marvel Company. To enable has Product Company MTR focused on “Product & Quality certifications” by different Food Quality Regulators FSSAI.

MTR food Products

This company has concentrated on single product line. Products based on different features, benefits, quality, variety items, and assortments. In this process of product assortment of the company, it is able to create value to the customer. This is done with a strong quality assurance system and certification. Product mix of the company is able to generate sufficient revenues for the business of the product. Product Profile Place in the Marketing Mix of MTR Foods Place in marketing mix means distribution or channel for selling the products. Here for MTR foods they used its own MTR tiffin centers to sell the products then started selling through other retail shops. MTR is spread it business in different parts of the worlds starting from Bengaluru as its headquarters in Karnataka. Its products are exported to several countries in world market like Singapore, Malaysia, Mauritius, Japan, Middle-East, New Zealand, Australia, Germany, United Kingdom, Canada, and the United States. 

MTR foods franchise

TR has also opened its fast-food restaurants on franchisee concept called MTR Super Shops and these are located in most cities and towns of India. It has seven facilities to conduct manufacturing process. It has a strong and extensive distribution network that includes services of distributors and retailers. Its products are easily available to consumers through its own stores and in supermarkets, hypermarkets, discount stores, convenience stores, and grocery stores. MTR Foods has launched its e-commerce platform from Bangalore as a venture to move with changing times. Online selling is e-commerce platform for company and it comes under place in marketing mix elements.

Promotion in the Marketing Mix of MTR Foods Promotion is the tool in marketing to make customer aware inform and create a positive ATTITUDE towards company and products. The tools of promotion that includes advertising, personal-selling sales promotions and publicity are given in MTR Foods is pursuing an aggressive and intensive marketing strategy at regional, national and international levels. It has organized sampling activities at popular places and launched several ad campaigns via television, magazines, newspapers, and social media platforms to garner maximum coverage. It has collaborated with Jiggs Kalra, celebrity chef, to increase its brand visibility. MTR Foods in the year 2002 was awarded ISO 9002 certification as it successfully met the food hygiene and safety standards in the international arena. It was the first company in India to receive an award for Technology Absorption by Price in the Marketing Mix Of MTR Foods Price is the last one marketer discusses but its critical one when compared all other marketing mix elements. As all other elements are cost-inculcating factors but price is the revenue generators. Price with together product creates value for customer. MTR follows the differential pricing for each benefits, features it adds. (Refer Annexure II for various Price methods).

MTR Revenue

MTR Foods is estimated as rupees 700-crore company with a growth rate at 18 % CAGR. Its exports account for nearly 20 % and sales in Southern states to 60 % of its total revenues. MTR Foods has adopted a market penetration pricing policy and has implemented reasonable rates for its products. Pocket-friendly and affordable rates will help the company in reaching further markets. MTR Foods has launched its web portal as a much-needed initiative to garner larger profits as it will be able to cut down on its distribution costs. It has also implemented promotional policies and offers incentives like 20 % extra product with the original. The fifth P of marketing mix is packaging is dominant by this MTR company as its product-based firm and food-based industry.

MTR FUTURE AHEAD

Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by the food processing industry offers several benefits. It would enable adherence to stringent quality and hygiene norms and thereby protect consumer health, prepare the industry to face global competition, enhance product acceptance by overseas buyers and keep the industry technologically abreast of international best practices. As Peter Drucker, The Father of Management says that The main aim of marketing is to make selling redundant. MTR is able to provide products matching overshooting the expectations needs wants and demands of customers as per framework and able to create the Customer delight and customer loyalty Through its philosophy of Quality as USP. We hope MTR sustains its marketing marvel even in the new regime of globalization in a digital world.

ANNEXURE– 1 –  Industry trends & Investments. US-based food company Cargill Inc aims to double its branded consumer business in India by 2020, by doubling its retail reach to about 800,000 outlets and increase market share to become the national leader in the sunflower oil category which will help the company be among the top three leading brands in India.

Mad Over Donuts (MoD), outlined plans of expanding its operations in India by opening nine new MOD stores by March 2017.

Danone SA plans to focus on nutrition business in India, its fastest growing market in South Asia, by launching 10 new products in 2017 and aiming to double its revenue in India by 2020.

Uber Technologies Inc plans to launch UberEATS, its food delivery service to India, with investments made across multiple cities and regions US $ 20 million.

Di Bella, the Australia-based coffee chain, plans to invest Rs 67 crore (the US $ 10 million) for setting up around 20 new outlets in Mumbai, besides entering Delhi and Bangalore by 2017.

KKR & Co LP, the US-based private equity firm, plans to invest about Rs 520 crore (the US $ 77.38 million) in dairy company Kwality Ltd, which will be used to strengthen its milk procurement infrastructure and increase processing capacity.

Henry Ford Health Systems (HFHS), a US-based health and wellness group, plans to enter India by signing a franchise partnership with Chandigarh-based hospitality and food services firm KWalls Hospitality, and set up “Culinary Wellness” branded stores across the country.

Mondelez International, the US-based confectionery, food, and beverage major, inaugurated its new manufacturing plant in Andhra Pradesh set up for Rs 1,265 crore (the US $190 million), with an annual production capacity of 250,000 tonnes.

PureCircle, a Malaysia-based natural sweetener producer, plans to invest around Rs 1,300 crore (the US $ 200 million) in India to set up a manufacturing plant and make the country its regional production and export hub in the next five years.

Swiggy, a food delivery start-up owned by Bundl Technologies Private Limited, has raised Rs 230.34 crore (the US $ 33.80 million) in a Series C funding round, with its existing investors SAIF Partners, Accel Partners, Norwest Venture Partners, and Apoletto Asia Ltd contributing 79 % of the new funds raised.

Gujarat Cooperative Milk Marketing Federation (GCMMF), popularly known as Amul, plans to invest Rs 5,000 crore (the US $ 733.6 million) to establish ten new processing plants as well as expand the current capacity to touch 32 million litres per day (MLPD) capacity by 2020.

Private Equity (PE) firm India Value Fund Advisors (IVFA) plans to invest around US $ 100– 150 million in the food business in India over the next two years. Zomato, a restaurant search and discovery platform, has raised US $ 60 million from Singapore government-owned investment company Temasek, along with existing investor Vy Capital, in order to explore new business verticals.

ITC Limited plans to invest Rs 800 crore (the US $ 117.4 million) to set up a world-class food processing facility in Medak, a district located in Telangana. The company has also formulated plans to enter the dairy market. * Source: https:// www.ibef.org/ industry/ Indian-food-industry.aspx

2 Comments

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