CASE ANALYSIS OF CARGILL INDIA PVT. LTD.

Cargill Incorporation is a diversified conglomerate with four major segments: food, agriculture, finance and industry. The company has presence in 65 countries and has employed 1, 40,000 people. The food business focuses on providing ingredients and ingredient-systems to food and beverage manufacturers, food service companies and retailers. The agriculture business bought, processed and distributed grains, oilseeds and other commodities to manufacturers of food and animal nutrition products. Cargill India Pvt. Ltd. began its operations in 1987 by trading in only food grains as agriculture was considered the main occupation of majority of Indian population. The main reason for starting up was unavailability of proper knowledge to farmers regarding agricultural activities and exploitation of farmers by the intermediaries. There was three level of channel of distribution present between the farmer and the end user. This decreases the amount of income of farmers whereas the food grains were sold at a high price to the customers. So, Cargill set up their own grain collection centers which were known as saathis, which directly deals with the farmers. They have successfully set up 85 saathis serving 2,50,000 by 2005 and are growing more every year. After their successful establishment, the company expanded in to processing and refining a wide range of indigenous and imported edible vegetable oils, fats and blends for the food industry internationally. It also offers the high quality food ingredients from its global portfolio to the food industry in India. The entire business structure was divided in to functional units. Summary of the case: This case basically deals with the change in the target market of the company in order to increase their customers from businesses to end-users. There is a discussion of the current customer base in India, the growth of the customer base, the opportunities available as well as the competitors present in the segment where Cargill is planning to enter. Also, the success of the second initiative taken in this direction is also a challenge as company has failed the first time. As mentioned in the case, India is the second most populous country with 1.08 billion people which is nearly 17% of the global population. As the largest producer of milk and the second

largest producer of fruits and vegetables in the world, it generated 12% of the global food output. The value chain of the foods consisted of four phases: farming, procurement,

processing and consumption. There were constraints available at each stage in India which has an impact on the volume, cost and quality of products available. Also, Indian economy is one of the fastest growing economy in the world with GDP recording between 6 to 8 percentage annually from 1992 to 2004. The retail industry was on boom and the food and grocery was estimated at $ 13 billion per annum. The competitors of Cargill as mentioned are the homegrown companies as well as multinationals. The Indian companies were Britannia Industries and ITC whereas the multinationals include Unilever, Pepsico, ConAgra Foods and General Mill. The strategy followed by these companies focuses on three main aspects: improving their cost advantage by rationalizing low-margin stock-keeping units, streamlining manufacturing and centralizing sourcing and restructuring business processes, developing breakthrough innovations such as moving beyond line extensions to expand the category, meeting specific customer needs and targeting niche segments. There was a regulation of government on the Indian food Industry as the edible oil segment faced short of demand of edible poils and they were importing in order to meet the deficit. They encouraged farmers by gioving them price incentives to produce oilseeds on some part of their farm. Private players were given license to import edible oils in 1994. Cargill saw an opportunity and planned to establish their own refinery plants in India through acquisition and greenfield. The challenges that will be faced by Cargill in Indian perspective are at-home consumption by majority of population, diversity of markets, Evolving retail, Younger demographic and value for money. There was a huge opportunity in front of the Cargill as India was the fifthlargest producer of oilseeds in the world. But at the same time it imports edible oil to meet the demand. The more challenge for Cargill was to build networks among the suppliers, retailers, wholesalers, setting up the manufacturing capacity and achieving economies of scale. The company also planned to move beyond edible oils in to the packaged foods but was not an easy task as there is a wide variation in the taste and preferences of people across various regions in India. Also, there is a great expense on the supply chain because many regions are scattered and the biggest expense is on marketing as the company needs to create awareness among the customers of India.

The above were the main points highlighted in the case. Cargill company should definitely pursue the B2C strategy as there is huge opportunity, larger amount of market available and expansion will be easy. The company is not new in the country but as it has businesses as its customers, so the actual consumers are not aware about the company and its offerings. So, the basic activity that Cargill must perform is to create awareness among the customers through advertisements, sponsorships in food programs and conducting a food competition. Purpose and Objectives of Strategic Marketing plan: To create awareness in the customers regarding the company and the offerings. To increase the customer base for the company. To have a market share in the segment that it is going to enter.

As per the analysis given, there is high scope of the business as there is still demand in the market which is unmeet by the present companies. Marketing and Branding Activities The various marketing activities that the company should do are: Advertisements Sponsorships Events and Personal Selling

The tools of marketing that can be used are radio advertisement, newspaper advertisement, pamphlet distribution regarding the various product mix and hoardings.