Monginis: A Success Story of “Multi-Dimensional Strategy”
Dr Mahesh Chandra Joshi[1]
Dr Kalpana Singh[2]
Mr. Anup Kumar Srivastava [3]
Abstract
This chapter is Business Case Study discusses about Omni Channel Marketing. The purpose of the case study is to make familiar with ‘Bakery Business in India’ and various ‘Commercial Aspects’ of major player “Monginis”.
This is Qualitative Case Study Research as an Empirical Work based on various primary and secondary data. Multiple data collection methods were adopted to collect the data.
This case study includes what were various decisions taken and strategies adopted by “Monginis” in the area of Branding and Distribution to survive and grow. Practicing as well as budding managers can learn that how a firm can establish itself in Food Sector specifically and remain competitive.
“Monginis” was established by Hussein Khorakiwala in early 1956 as a small shop at Fort, Bombay ( now known as Mumbai) offering Cakes and Bakery products. Throughout the years since, the company's founders, suppliers, and other partners had worked together to develop a brand identity in the market that has helped the company expand into what it became.
The Indian bakery business was one of the largest in the country's food processing sector, and it provided enormous potential for development, innovation, and the creation of new jobs. It was estimated that the Indian Bakery Industry, which includes bread, biscuits, and cakes and pastries, generated $7.22 billion in revenue in 2018.
The Monginis worked on “Omni Channel Marketing” and adopted multiple frameworks to win the market. Firm took technology on the forefront and established IOT based Distribution System. Its seven decade old existence also helped to emerge as reputed brand since survival in food industry itself is an evidence of quality. The journey was still on for the Monginis.
Key Words: Omni Channel Marketing, Multiple fronts, Distribution System, Brand, Competitive advantage
Introduction
QusaiKhorakiwala, Director at Monginis Foods Pvt. Ltd. was seating in his office going through monthly sales reports and was happy to see the growth of Monginis over the years. With the sense of accomplishment, he could not stop himself to recall his journey of working hard for multiple business fronts simultaneously which is not only a business for him but a family dream and journey to offer quality products. He could recapture the journey of hard work and consistent efforts to convert the family business as successful brand. As happens everywhere, there were decision dilemmas in front of the firm. Once there was a meeting where the head of production was emphasising investment in production facilities while the marketing manager was insisting on an aggressive marketing campaign while he himself was concerned for the better and more efficient distribution system.
He took a very professional approach towards all dimensions of the business and worked on multiple business fronts simultaneously viz. Quality Management, Branding and IOT Based Distribution. This was not a success story for him but it was a high family dream with high commitments from the promoter Hussein Khorakiwala.
History of “Monginis”:
“Monginis” was established by Hussein Khorakiwala in early 1956 asa small shop at Fort, Bombay ( now known as Mumbai) offering Cakes and Bakery products. Throughout the years since, the company's founders, suppliers, and other partners had worked together to develop a brand identity in the market that had helped the company expand into what it became.
The firm set Core purpose to help people express their happiness in a memorable way. It had Our Core values as:
In order to make Monginis a part of everyone's festivities and memories, it had a mission to provide exquisite cakes, pastries, cupcakes, cookies, and more that were widely loved by family and friends.
Customers, franchisees, and distributors all believe that our consistent dedication to them was essential to our long-term success. Our customers, suppliers, team members, and franchise partners all on us to behave ourselves with the utmost integrity in our value chain.
Indian Bakery Industry:
In order to grow an economy, the food and beverage industry had a critical role to play. The industry's growth had been fuelled by a rise in disposable income, particularly in emerging nations, during the past several years. A wide range of factors such as population growth, disposable income, lifestyle changes, product innovation, government policies and many, all impact the various food and beverage businesses.
There had been an increase in the demand for biscuits and cookies in India, as well as a rise in the population in the country. Baked goods were an essential part of the manufacturing process in the food sector. Due to their great nutritional content and affordability, bakery items had become a popular choice for consumers in the region. Bakery items had become increasingly popular as people's eating habits change due to their hectic schedules and the growing demand for Western-style foods. The expansion of the Indian bakery sector was being bolstered by the increasing number of women in the workforce.
Bakery items were being fortified to satisfy the health-conscious consumer's desire as the need for innovative and nutritious food alternatives grows. The number of bakery items marketed as "healthy" was on the rise, and this trend was expected to continue. The rise of the bakery business in the region was being fuelled by the increasing use of bakery chains.
Next to China, India had the potential to become the world's greatest food-producing country. As a result, the bakery business in India faces several trends and problems. A large portion of India's processed food business was accounted for by the country's Bakery Industry. Bread and bwascuitswere the most popular baked goods in the country, accounting for more than 82 per cent of all the country's bakery products. Having an adequate supply of core ingredients required by the sector gives the Indian Bakery Industry a competitive advantage in production. India was the world's third-largest producer of biscuits (after the United States and China).
The Indian bakery business was one of the largest in the country's food processing sector, and it provided enormous potential for development, innovation, and the creation of new jobs. It was estimated that the Indian Bakery Industry, which includes bread, biscuits, and cakes and pastries, generated $7.22 billion in revenue in 2018. When it comes to biscuit production, India was the second-largest country after the United States and China, and its entrepreneurial spirit makes it a great place to start a business in the bread industry.
The Indian bakery industry was being shaped by shifting customer tastes and lifestyles. Bakery items were no longer only a special occasion treat, but were instead consumed on a daily basis as part of a global movement toward healthier products and alternatives. Customers were looking for baked goods that were guilt-free, low in calories, sugars, and gluten-free or prepared with alternative ingredients like multigrain and whole-wheat because of their high consumption rates. New flavours and experiences were especially important to millennials, who were continuously on the lookout for healthier alternatives.
Bakeries were a popular choice for Indians due to their busy lifestyles and the high demand for fast-moving consumer goods (FMCG) like bread and biscuits. As long as there was a market for baked goods in India, there will be difficulties for India's Bakery Industry. More than 2,000 organised or semi-organized bakeries and more than 1,000,000 uncontrolled bakeries make up the industry. The lack of technology and experienced people was a big problem in the sector, as was operational efficiency. Additionally, organised bakeries in India use social media marketing and social media interaction to deliver targeted and cost-effective advertising. Local bakery-cafes were relying on word-of-mouth referrals instead of social media marketing and social media interaction since they lack the resources of international chains. Enormous Indian chains like Barista and Mad Over Donuts, on the other hand, focus on manufacturing large volumes but with strong branding and related trust in order to compete. The bread business in India was seeing a growth in entrepreneurial initiatives, despite the fact that many other companies were losing money due to a lack of suitable machinery and other resources. Traditionally, baking at home had been a popular pastime, but modern technology had allowed people to make money from their efforts.
Approximately USD 7.60 billion would be generated by India's Bakery Industry by 2020, according to Expert Market Research. A CAGR of 8.5 percent was expected between 2021 and 2026 to bring the market to a total value of USD 12.39 billion by 2026. India's burgeoning biscuit and cookie business helps sustain the country's burgeoning bakery sector.
India's biscuit and cookie business account for about two-thirds of the country's bakery sales. Cookies and biscuits had far higher market penetration in urban and rural regions than other baked FMCG items, thanks to their low cost and cholesterol-free composition. By 2020, India will be the world's leading biscuit consumer, with a market value of almost USD 4.65 billion. The abundance of primary ingredients in the area gives the manufacturing sector a leg up, as does the region's comparative advantage.
India's East and North had the country's largest per capita consumption of biscuits and cookies, respectively. The largest per capita biscuit consumption was seen in Maharashtra and West Bengal, the two states with the most industrialized economies. A total of 61 percent of the biscuit and cookie market is held by Britannia and Parle Products, which together account for the top four manufacturers in the industry.
Lifestyle Change-Rising Cake Consumption:
Indians are gradually shifting from tradition of sweet consumption to preference for cake and confectionary products. After Covid -19, there is a significant change in consumer behaviour as an increasing desire for healthier food options. Obesity and other related health disorders were on the rise, and restrictions regarding product labelling had compelled cake producers to explore healthier alternatives. So cakes high in fibre, low in calories and fat and devoid of sugar and gluten had become increasingly popular. The market was projected to be driven by such advancements.
Demand for cakes, cupcakes, and high-end confectionery experiences was likely to fuel the cake industry in India. Birthdays, anniversaries, graduations, promotions, Valentine's Day, weddings, holidays, and festivals all call for cakes. Photography studios, caterers, and other wedding-related businesses rely on us year-round. Key locations include bakeries (retail/wholesale), convenience shops (college/university), hotels/casinos/cafes (corporate dining/feeding events), and businesses (corporate dining/dining). The popularity of cupcakes was projected to rise in the near future. It's also becoming more fashionable to make your own cake or create a personalized cake. The United States and Europe were projected to be the most important markets for the product. It's not just Europe and North America that were becoming important markets
Marketing Strategies of “Monginis”:
Quasai understood that the industry had become very competitive and working on multiple fronts will help the firm to grow and gain a competitive advantage. The topcompetitors in Monginis competitive set were Cake studio, Mad Over Donuts, Gifts2India Online, India gifts services, Ferns and Petals, Book a Flower and Giftxoxo. Grupo Bimbo was world number one in the bakery industry with quick adaptation to IoT supply chain, covering length and breadth of the category range and covering major geographies in Mexico, USA, UK and Asian countries. Its turnover was USD 15 billion in the year 2021.
Competitors Analysis & Competitive Advantage:
As said by Michael E Porter (1985), Competition was at the core of the success or failure of firms.
He further added “Competition determines the appropriateness of a firm's activities that can contributeto its performance, such as innovations, a cohesive culture, or goodimplementation. Competitive strategy was the search for a favourablecompetitive position in an industry, the fundamental arena in whichcompetition occurs. The competitive strategy aims to establish a profitableand sustainable position against the forces that determine industry
competition.”
Competitive Advantage was basically an advantage associated with your offer unique for your customers. As Competitive Advantages were basically related to Lower Price and Differentiation, Monginis picked the advantage in terms of “differentiation” to highlight Quality, Distribution and Branding
Gradually competition was on the rise and was facing competition from local as well as regional players. Grupo Bimbo was selling bakery brand Harvest Gold in India, which was acquired in 2017 as part of its India entry. With revenue of Rs. 400 crore, Modern bread held about 35-40% market share in the Indian bread market. Starting in 1994, Ferns N Petals (FNP) claimed India's largest flower and gifts retailer and one of the largest flower retailers in the world with a network of 320 plus outlets across 120 cities.
The table 1 exhibits market analysis highlighting three major players and their product was basket.
Table 1: Market Analysis
|
Competition landscape |
|||
|
Products |
Monginis |
Grupo Bimbo |
FernsNPetals |
|
Fresh cakes |
Celebration |
Not Available |
Bday |
|
Core |
Veg cakes |
|
Etc |
|
|
E-motion 3D |
|
|
|
Photo cakes |
|
||
|
Pastries |
|
||
|
|
All flavours |
|
Designer cakes |
|
|
Designer |
|
Photo cakes |
|
Mongi-land |
|
Cartoon cakes |
|
|
|
Pre mix |
|
|
|
Packaged |
Muffins |
Cup cakes |
|
|
Quick pick |
Sliced cake |
Chocolate |
Chocolates |
|
|
Bar cake |
Dry pasta |
|
|
|
Swiss roll |
Yogurt cake |
|
|
|
Tiffin cake |
Chocolate cake |
|
|
|
Chocolates |
Puff pastry |
|
|
|
|
Sponge cake |
|
|
|
|
Muffin |
|
|
Snacks |
Snack packets |
Chips |
|
|
Quick bite |
Cookies |
Takis |
|
|
|
Puffs |
Big mix |
|
|
|
Bread |
Runners |
|
|
|
Khari |
Hot nuts |
|
|
|
Toast |
Golden nuts |
|
|
|
Wafers |
Bread |
|
|
|
Breadsticks |
Salty pastries |
|
|
|
Cheese straws |
Roasted bread |
|
|
|
Crispy twist |
Tortillas |
|
|
|
Potato shells |
Croissant |
|
|
|
|
Nachos |
|
|
fresh snacks |
Burger |
Mini muffins with 5 cereals |
|
|
/ healthy |
Wraps |
|
|
|
|
Sandwich |
Sandwich |
|
|
|
Cutlet |
Wraps |
|
|
|
Puff |
Pizza |
|
|
|
Samosa |
Burger |
|
|
|
Pizza |
Donuts |
|
The firm conducted an in-depth analysis of consumer behaviour to design appropriate marketing strategies. Variables influencing decision processes were identified as Individual differences, Social Influences and Online environments.
This causes different online and offline search choices.
Influences both search processes as well as purchase decision outcomes.
The form understood that using technology to pivot to a hybrid of online and physical experience will be key to survival. Businesses that adopt technology to gain customer insight, and use this for marketing will only survive so they considered technology as a vital part of their marketing strategy. They also took professional consultancy to strengthen their operations and Monginis was advised to work on:
There was an unusual occurrence in the perishable food sector where the suppliers and the merchants build their own industrial parks or marketplaces. Known as industrial agglomeration, it's a common phenomenon.
The typical supply chain for perishable food had two features: First, each participant were responsible for their own logistics. To add to that, as the supply chain goes along, data was sent across several nodes. Integration of logistics and storage operations may significantly reduce costs and increase the value of perishable items by enhancing operational efficiency.
Firstly, supply hubs might provide a public logistics service that was responsible for the transportation, distribution, and storage of goods for their neighbouring businesses. It was the responsibility of the upstream supply hub to offer short-term storage, gather various resources and intermediary goods, as well as handle shipping and distribution.
Second, the service of real-time online tracking of logistics was also offered. A product's operating state may be tracked down in real-time using contemporary communication and sensor technology. As a result, the supply hubs were well-positioned to assist when needed or act on their own in the event of an emergency.
IOT Based Distribution
IoT is defined as a dynamic global network infrastructure where objects are connected, monitored and optimized through either wired, wireless or hybrid systems (Atzori et al 2010). In recent years, the advancement in IoT such as radio frequency identification, sensor technology, communication modules, microprocessors and actuators has offered much broader potential in the real life implementations (Qiu et al 2015). In the perishable food industry, an interesting phenomenon is that the suppliers and the retailers often gather together to form their industrial parks or markets. The following figure indicates use of IOT in distribution management.
Figure 1: Virtual food supply chain management from Internet of Things
Source :(Journal of Food Engineering 2016)
The Ansoff Matrix, a strategic planning tool that provides a framework to help decision makers in selecting appropriate course out of Market Penetration, Product Development, Market Development and Diversification. The form applied this matrix on their business model and developed “Multi Dimensional Strategy” as their internal path to explore the market. The Monginis worked on Muti Dimensional Strategy and adopted the following Framework to win the market.
Figure 2: Multi Dimensional Strategy of Monginis
The firm had effectively utilized its “Legacy” to be positioned as one of the most trusted brands. It worked simultaneously on “Omni Channel Distribution” and superior “Production Facility” to ensure quality and economy of scale.
Monginis realised that “Omni Channel Marketing” is must to survive and grow in the fast growing but highly competitive fast food market of India. Omnichannel marketing is the integration and cooperation of the various channels organizations use to interact with consumers, with the goal of creating a consistent brand experience. This includes physical (e.g. stores) and digital channels (e.g. websites).
Result & Outcome
It took Monginis a long time to build up its 12,000 square foot ISO-certified headquarters with cutting-edge production equipment to make a wide selection of cakes, pastries, mouthwatering savoury treats and an assortment of snacks.
There was a well-equipped lab at the corporate headquarters that ensured the highest levels of hygienic and sanitary conditions. Additionally, Monginis had production facilities in Pune, Nasik, Goa, Surat, Baroda; Rajkot; Ahmedabad; Indore; Hyderabad; Bhubaneshwar; Palanpur; and Delhi, which served 1000 retail franchisees in 40 cities throughout India.
'Celebrating Life' had been the tagline since 1956. It was well-known on social media and in internet travel directories. When 3D and Live Products were introduced, the company could combine its tried and tested taste with new cutting-edge designs and technology to provide clients the best of both worlds.
The successful implementation of Multi Dimensional Strategy helped the firm to remain top player in the market. The journey was still on for the Monginis.
Question: 1 What are the Key Success Factors of “Monginis”?
Question: 2 Write a note on Distribution Strategy of “Monginis”.
Question: 3 Suggest some ways to “ Monginis” to improve their overall operation.
Teaching Note
Case Overview and Pedagogy
This case is based on primary as well as secondary data collected from various sources. This is an academic case for the purpose of class room teaching and suitable for undergraduate as well as post graduate students.
This case discuss about bakery industry in India and includes general managerial aspects like brand building, operations, marketing, distribution , strategy etc.
To discuss and analyse the case, students must have primary knowledge oof marketing management and strategic marketing. Ideally the case will take one and half to two hours for discussion as well as answering the questions.
Teachers are requested to distribute the case and encourage participative discussion by asking relevant questions and simultaneously explain the case facts. At the end, students should answer the questions given in the case.
Learning Objectives
The case was developed to give students the opportunity to:
Key Issues
Research Methodology
The “Monginis” case was based on interviews with company officials with one of the author and on promotional material provided by his office. Competitive industry information came from public sources. The authors express their thanks for officialsgenerosity in making his time available and for providing valuable guidance during the development of the case.
****
Theoretical Linkages
Question: 1 What are the Key Success Factors of “Monginis”?
Question: 2 Write a note on Distribution Strategy of “Monginis”.
Question: 3 Suggest some ways to “ Monginis” to improve their overall operation.
Key success factors (Question 1)
Key success factors are discussed in Kotler, Bowen & Makens (2006), Carpenter & Sanders, Strategic Management: A Dynamic Perspective (2007). It is defined as the “key asset or requisite skill that all firms in an industry must possess in order to be a viable competitor.” Students should be able to brainstorm a list of characteristics that they associate with a bakery industry and “Monginis”. Their competitive strength can be indicated with the help of Ansoff matrix.Further students should highlight branding strategy of the firm. Students are expected to discuss on “Omni Channel Marketing” and its advantages.
Distribution Strategy(Question 2)
Distribution is related to “Place” in the marketing mix and plays very significant role. Michael H. Hugosinhis book Essentials of Supply Chain Management (2003) as well as Sunil Sahadev and Tapan K. Panda in their book Sales and Distribution Management(2005) have discussed various aspects of Distribution. In other text book related to Sales and Distribution can be consulted for various fundamental aspects.
Students will write on importance of distribution strategy highlighting key aspects of distribution strategy of the company. IOT based distribution generates competitive advantage to the firm.
Overall Suggestions (Question 3)
This is an open ended question where students can give logical suggestion on any business area like Branding, Distribution, Strategy, Operation etc.
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Weblinks
https://grupobimbo.com/en
https://www.fnp.com/info/about-us
https://economictimes.indiatimes.com/industry/cons-products/food/mexicos-grupo-bimbo-buys-iconic-bread-brand-modern-foods/articleshow/81186726.cms?from=mdr
https://www.albany.edu/~gs149266/Porter%20(1985)%20-%20chapter%201.pdf
https://www.marketingevolution.com/knowledge-center/topic/marketing-essentials/omnichannel#:~:text=Omnichannel%20marketing%20is%20the%20integration,digital%20channels%20(e.g.%20websites).
[1] Associate Professor, Directorate of Online Education, Manipal University, Jaipur
[2] Assistant Professor, School of Business Studies, Sharda University, Greater Noida, Uttar Pradesh
[3] Assistant Professor, School of Business Studies, Sharda University, Greater Noida, Uttar Pradesh
