Case Studies

Project Title

A 3600 inclusive consulting approach helps a tobacco major traverse from ideation to a feasible business in food sector

Title Description

Sathguru helped a tobacco major traverse from ideation to a feasible business in food sector.

Challenge/Problem statement/Situation analysis

Our client, a mid-sized Indian family business group, and one of the largest manufacturers of tobacco products with a pan India presence was challenged with declining revenues due to market and regulatory hurdles. The need for diversification was obvious and the group was keen on venturing into the food business. However they were also aware of the various challenges within food sector that was predominantly mass market driven, highly cluttered and competitive. Further the sector also posed challenges with limitation of quality product development professionals, high marketing costs and uncertainty of viability of products especially for new entrants. The company sought assistance from Sathguru to assist them traverse from ideation to a feasible business in processed food sector.

Scope

The scope of Sathguru’s engagement included:

1. Identify key categories and products and formulate a product development pathway.
2. Evaluate manufacturing technologies and recommend vendors and also provide technical assistance in facility development
3. Develop marketing plan for launch, market placement and promotion of products
4. Handhold during the implementation phase and assist with development of various policies and SOPs for smooth operation of business, building in-house research and product development capabilities etc.
Approach

Sathguru’s approach was to

a) Identify the gaps between the consumer’s expectations and the value proposition offered by existing products and identify innovative technologies and products to create a niche business proposition for the client.
b) Devise a unique cost effective marketing strategy with an optimal mix of ATL and BTL initiatives.
c) Identify technologies that were broad based rather than specific given the nascent stage of client in the food sector to enable the client leverage the same technology for multiple products.
d) Stagger infrastructure development, product development capacity and market penetration.
Recommendations

Based on the client expectations, bandwidth and risk appetite Sathguru made the following recommendations

a) Adopt an innovative and differentiated product portfolio and operate in a niche segment that is not cluttered by competition along with mass market products to optimize risk.
b) Engaging external product development experts during the initial phase and eventually build in-house product development capabilities.
c) Adopt flexible versatile technology package capable of producing multiple product categories to minimize risk and dependence on a single product.
d) Phased product launch, promotion and market placement to minimize the risk and investment in market development.