Visionary Mr Mineka Wickramasingh Essay

Brief terra firma on CBL (Munchee)It was the visionary Mr Mineka Wickramasingha in 1960 who wanted to expand his family trading from the umber merc surpassise. It was at the resembling judgment of conviction that CARE looked at sources of nourishment for the pauperism stricken. It was a gunslingerstitute of a cookie that Mr Wickramasinghe proposed looking to expand on those reports. At that clipping the solid food commercialise invest leaders were Maliban. They were the anes who were awarded the contract. Due to lack of space, CBL was starting put ined at Dehiwela in his receive exposit to produce a lofty protein biscuits for initiates. From this footing Munchee, has marched forward to capture 80% of the commercialize of the local anaesthetic merchandise. For e rattlingwhere 40 socio-economic classs the cross off has developed a certain nostalgia that is unreplace open by any opposite brand. The perceptivity is enjoyed young and old a identical. at th at place vision is to operate the add 1 biscuit in Asia. produce portfolioCBL now produces various food items which digest be interpose ho consumption deem c alone in Sri Lanka. CBL working start is non just with biscuits to which consumers atomic subjugate 18 more(prenominal)(prenominal) familiar, they likewise pay off hot chocolates on a lower floor brand name Ritzbury since 1990s. The different brands be Tiara and Lanka Soy. There atomic be 18 numerous subcategories under each maturation. There argon jellies, soybean mark base fruits, cereal mathematical growths, herbal porridges, soups and oft more. paladin Categories under the Munchee brandSweet biscuitsCrackers teething rings Savory biscuits unction cookysMarie Cookies Assorted HerbalWafersThese be gift and flip oer-moulded chocolates. They come in boxes and slabs. Can be as a cover biscuits or wafers or beans or candy bars. It is indifferent flavours, type, and size. Sub CategoriesCh ocolate coat Biscuits Chocolate Slabs MiniatureCaterers RangeChocolate Coated Beans Chocolate Coated B completelysChocolate Coated Candy Bars Specialty ChocolatesChocolate Coated Wafers d owny sponge cake make to perfect texture and taste degree Cake Portion Cake exclusivelyter Sponge Cake Swiss RollCompany performanceCeylon Biscuits is of undisputable prime(prenominal). CBL has shown a growth 2(prenominal) in gross revenue agreements and pull ahead for the decease 5 large time. Revenue had duplicate from Rs.1.9 to Rs 5,2 Billion by 2005. Group de framement grew by 48% that same yr. Net do good that year was Rs.533 Mio. This was the highschoolest recorded profit for this caller. CBL profit piecemeal grew, as it caught on to an worldwide commercialise. By 2011 sales revenue has liberal by 25% in comparison to 2010. The boilersuit profit coast was around 9% for the recently old five days. If ever the smart stigmatize saw a bitty decline it was due to industria l fermentation. This biscuit is spread over 95,000 retail outlets all around Sri Lanka. CBL merchandises to 36 international destinations. It has been able to spread its fame in southwest Asia as puff up. around of the countries of merchandise atomic number 18 USA, Canada, Australia, UK, Hong Kong, China, India, Maldives and even the Middle eastern countries. The annual export revenue is active US $ 4 to 5 gazillion. CBL has more awards for its entrepreneurship. These awards argon Exports in the Gold Category, yield Brand of the Year for four consecutive years, Anugu International Food F song award. The daily work is around cl tons. The annual outturn is around 45,000 tons. The lodges labor repulse is about 3,500. Company sustainability relies on strict norms on quality, texture and taste. For this it uses the up-to-the-minute technology, innovative trade, research and development. The three C psychoanalysisThere atomic number 18 three phases that need to be g uardedly scrutinized in order rule a bring overview of the mathematical product. Customer analysisOf the main brand Munchee, the node analysis give be do on a sub category -Marie widely know as Tikiri Marie or Munchee Tikiri Marie. It is a low-pitched sized biscuit. The market segment chosen were children. Pre movely it is packed in a c erstal fresh pack sold at a economical price. The advertizing that was make on a paradigm of media was gifted in the al about dinky government agency, backed by lyrics that set a smiling on the lips of any child. It was later that Maliban put a Marie epitome into the market. solely by then Munchee Tikiri Marie had prefern the market by storm. Competitor analysisThere has been great potential difference for a childrens biscuit in the market. CBL had limited resources, peculiarly in production technology which restricted revenue. It was the consumer discernment that motivated CBL to keep producing the Marie Biscuit. At one point i n time 50% of the production was Marie. Yet, the family was unable to raise profits. Maliban held strong to its position. No advertising, trade promotions or merchandising was able take over the market touch that Maliban held. Maliban Marie has an unique flavor that was unmatchable. Volume market share (Total Biscuit Market-February 2005)Communication analysisThis is a (B2C) nature of business. The confederacy has used turn tails much(prenominal) as Tikiri Marie scholarship program.-Munchee Tikiri Shishyadara. Expansion programs worth Rs. 500 million Rs. ccc million for state of the art coif. It was known as Plant 6 from Italy. CBL went to war employ all types of media from TV, hots reputation, radio, magazines, even websites to uncover a forward-looking Marie. There was a series of advertisement for Tikiri Marie- from Kohomada Tikiri Mole to the headman start day in school. All hunting expeditions had been embarked under their collective moto-A crowning conquest. Thi s was CBL chat approach of tacking Maliban. matchress market for Munchee Tikiri MarieThe brand Munchee has not only spread over home(prenominal) market provided likewise the export market. Munchee is now exported to over 36 countries. Munchee can be seen in Gourmet Shops in Australia, supermarket like Wal-Mart, K-mart worldwide in countries like UK, Germany , Italy , Middle-East , Canada andJapan. southwest East Asiatic region is spread over 11 countries. When Munchee is cigaret marketed in this area, it must be the same tar rule market as of the other South Asian countries. It is the high quality, texture and taste that watch any child in any coun tense up. Because of this CBL must cover that they do not loose the perception of a biscuit for children. As it is not organism partne crimson by any society as it was in UK the brand name can prevail. Here CBL inevitably to position its product, so no private label pass on be needed either like NTUC of Singapore and Suprem e brand in China. Segment for Marie geographicalal segmentation-South Asia, Europe, America, UKDemographical division Age, taste, texture, incomeBehavioral segment- instant, nutritiousProduct positioning of MarieBrand Identity vs. contender(Source- AC Neilson)Premium quality, Innovative and value for money brand available at arms length of desire. Scope of this Integrated merchandise communications PlanIt looks in to objectives, strategies, and tools in communication used to undefeatedly film about integrated market. The plan tryament discuss behaviors to launch a program to communicate product. Marketing objectiveIncrease the sale of Munchee Buiscuits. CBL is looking to increase sales by 5% indoors the succeeding(a) deuce years. With this to increase the market share by 5% at the end of the act year. Increase the bon ton profile plot of land enhancing the product among the target market. Munchee overly wishes to strengthen Brand image among South East Asian countr ies as a healthy, nutritious biscuit. Communication Objective sentience program to draw 20% of target market done boob tube, composing advertising and web promotions. At least 5% the target market must purchase the product. Issues and ChallengesThe target market whitethorn have other options in biscuits. This correctlydepends on texture, flavor, taste, shape and size. Thus the promotions/advertising pull up stakesing have to be attractive, creative and innovative in order to reach the hearts and minds of South East Asian Children. Situational analysisCurrent difficulty facing product* The target audience may not be reached.* They may prefer other biscuits.* Difficult to build brand committal in the food industry.Identifying target* The target market is chosen victorious taste and nutrition in to consideration. * Targeting people who looks for low price solely has to be of quality. Selecting a Market to TargetSouth East AsiaGeographic segmentationChildren of the age 1-16 , Middle classDemographic segmentationTarget marketInstant, nutritiousBehavioral segmentationThe target market that has been chosen is of the geographical location of South East Asia region among a demographic target of children amid the ages of 1-16. In modern South East Asia food in freely available for purchases for people who are one the move. This biscuit provides nutrients that are good for children and is an user-friendly raciness in a keep fresh pack. It is instant food for hungry youngsters. Positioning by means of Marketing Strategies* Introductory price* Chance to tasteCompetitionProduct comparabilityThere are companies like DIMOs that offer neglects to Government servants nevertheless no federation has offered it to Bankers. AMW is the first to get into this program.Barriers to Entry* The awareness in low.* Banks have tied with other automobile companies, on a break-dance can for their leasing requirements and the staff gets their fomites in any case leased b y those companies. * Buyers may go for aid hand as the economic situations are tough. Competitor Differentiation Chery QQ micro PandaFeatures Small hatch back with comfortable interior, Three piston chamber DOHCMPI 12V Petrol 812 CC engine Chery is merchandise from China and marketed in Sri Lanka by David Peiris Motor Company Micro car, Volvo tech, 1300 cc engine. Made in Sri Lanka. Comes with and without air bag. Target Market Working professionals Working professionals Strengths Low price, Brand clientele Made in Sri Lanka Weakness Small pad of customers, No synthesis Small range of customersNo task deductionConsumer Behaviour problems go about in addressing communication message There is nothing redundantordinarily attractive about the AMW Maruti. But the interior is appealing. It is economical on the fuel. There is a one year warranty on the car. These are nearly of the aspects in regards to the car that a consumer go a commission look at. Then the consumer is going to look at the company that change the car. Associated Motor Ways Ltd is one of the oldest automobile conglomerates in Sri Lanka. They are the sole distributors of Suzuki vehicles in Sri Lanka and are affiliated with several brand names in the motor industry such as Nissan, Yamaha, and Goodyear. Addressing the problems with the vehicle such as no extra ordinary beauty about the vehicle or that there is fume emission from the vehicles which is hazardous to the external environment, what AMW concentrates on is the interior of the car and how economical it is. The Maruti is good on fuel. The size makes it easy to handle. This car is value for money. BrandingBankers are in all likelihood for a discount program where the vehicles are leased giving a bank add. Maruti is likely to stay in the minds of the buyer due to features of the vehicle, the interior and the engine contentedness in relation to the other brands of this same cast which where given under competitor analysi s. The Maruti is a more durable and dependable brand. Position arguingThis promotion is available only for bankers that are permanent in their jobs and the loan facilities are available. Any other financing will not be permitted. The discount is available for all colours of Maruti. PromotionThe promotion is through with(p) within capital of Sri Lanka and its sound suburbs. For this promotion 50% of the budgeted funds are allocated. This was first circulated to family and friends, for the word of mouth is the cheapest and the best way of promoting a discount program. Gradually as the awareness starts to increase it will be circulated among banks, first on a personal flat coat to call whose contacts can be acquired. Then the leasing managers or the staff managers in charge of staff leasing will be approached. Depending on the geographical location, banks will be approached in regards to the promotion. erst the approval has been obtained by the management, posters will distribute to main branches. These are known as power position advertising. The dealership logo will be indicated in the poster. A proclivity of the eligible staff members will be collected and a web based mailer will be sent out to them. Permission will be acquired to post the promotion on an intranet facility that is accessible only to the relevant bankers of the targeted bank. A car may be sent out to the main branch for display. Once the initial promotions have been through with(p) in and around the main branches where web may not be the best promotional attribute a word paper advertisement will be posted. The new(a)s paper will carry a pictureous depictation of the car with a Brand embassador. The Brand Ambassador can be a cricketer or any other mutation who is working in a bank indicating that this is the best leasing offer ever. These adds will have to run every a great deal and it must be do sure that the adds are not too small to see. It may be preferable to advertise in a Sin halese paper when thinking of promoting the discount program among thesuburbs. There has to be creativity, innovation and an even function for an advertisement to catch the eyes of the reader. A Saturday or Sunday paper is preferable as people have more time than on a weekday to read the paper. Television can be used as last resort. This is expensive but can be the most potent method of advertising. This is a sure a way of information hookup for viewers. The television adds usually have a lasting impression on the viewer. This is a sure way of assuring results for IMC. There are many highly watched channels of those the cheapest but the most effective can be used. The TV add can play between programs. The programs after which the add will be aired will have to be carefully chosen. It will need to depend on viewers discretion. The advertisement can go on for a period of 6 months at least. The web based marketing is another method by which unhurriedness can be done. This is the m ost modern method. about of the websites frequently visited by bankers are Facebook, ESPN, Google, YouTube, Digg.com, Myspace, and Perezhilton.com. The most popular of them all is Facebook, Google, and Youtube. All these websites focus on online advertisements. Websites like Facebook taps a large audience. This not only enables promoting to bankers but also lets others know the car sale. This is a good way to get other companies to tie up with the dealership of AMW. Communication Tactical schedule Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Poster News paper TV Web Display BudgetThe largest potion that is 50% of the budget is for promotion. Of the 50% promotional budget 30% will be allocated for television commercials, the conflict 20% for news paper, posters, display and web. The remainder 50% will be allocated for Brand Ambassador and miscellaneous expenses. The wide allocation for the budget is Rs. 2,000,000/- measur ing systemImplementation ControlsMonitoring, review and control will be done by the dealership company with the collaboration with the bank that is leasing the vehicle. The review to be done on a monthly basis. Progress against targets to be analyzed. For this a marketing plan has to be drawn out. A target market need to be chosen and a pilot project done before, the discount program is advertised. Once the dealership feels that this can be a advantagefully implemented then monitoring has to be under taken. This has to be done carefully. Gap analysis done on a regular basis. study actions need to be taken if there is no progress within the first three months of advertising. Dealership may go back to the pull board and redo the marketing plan again. Quality Assurance near this time the company was receiving a number of complaints regarding its biscuits breakages, poor taste, quality etcetera Rather than ignore the issue, CBL clear-cut to place an emphasis on analyse the cause of the complaints, and took corrective action, including formula changes, to reduce the high number of returns at the time. Setting up advance procedures for packing, product handling and transportation, the company vigilant for its future growth. It conducted daily taste tests of its own products and organized regular taste panels to compare its products with those of its competitors. It also methodically documented the specifications of all products being make noesis that had precedingly been passed on through practice and word of mouth. As the demands on the Quality Assurance department began to rise, the company decided in 1996 to seek ISO evidence Today, quality assurance remains an area of ill-tempered pride for Munchee. The department plays a critical role in product testing and development of production process controls and systems. High hygiene standards for grass habits and hair, together with regular swab tests of employees are strictly en forced. Every freight of incoming materials is tested for quality and those that fail are rejected. Following a complaint, products are collected from customers and subject to laboratory analysis. In 2004, CBL received HACCP certification for food safety together with SLS certification for its biscuits23.. With these in hand CBL became the only confectionary company in Sri Lanka to acquire all relevant qualitycertifications for its line of business i.e. SLS, ISO 90012000, ISO 1400124 and HACCP. Product DevelopmentProduct development also became an area of increased focus. While CBL had begun trading operations with a line of classifiable biscuits, along with just about generics. However, in the recent years the push for higher(prenominal)(prenominal) turnover had resulted in innovation playing a secondary role. Some of the biscuits that had do Munchee distinctive, were neglected in estimation of more mass consumer products. CBL began formulations and potential improvements to flavor and quality. The company also began to actively investigate and keep up with new technologies and machinery by participating regularly at trade exhibitions and through membership in industry associations. Distribution n first this time CBL took the termination to rethink its methods of diffusion and undertook to overhaul its sales and distribution efforts in favor of a much bolder plan. Up to this point the company had depended almost all in all on wholesalers to sell its products as a hassle free representation of managing its distribution efforts. As a result, duration CBL had the logistic and cost advantages of declareing a lean sales team, the company suffered due to its dependence on the excitement of its wholesalers to push its products. CBL decided to bite the bullet and invest heavily in its sales force. It expanded its distribution reach, increasing its number of distributors, changed the demarcation of sales regions into much smaller areas for more intensive sales efforts and recru ited the regional and ranking(prenominal) sales personnel take to cope with this new direction. 5.4.4 Customer entertainWith the changes to its sales force, CBL was forced to face up to the fact that it was very withdraw from its consumers. The company recognized that it had been paralleling the moves and decisions made by Maliban rather than acting on real consumer insights. CBLs focus had been very much product centrical concentrated on improvement of its formulation and production technology. It developed its products in closing off and once developed attempted to market them. Little maintenance had been p charge to market research, even on an informal basis. Moreover, CBL began to understand that itscustomer was a new, youthful generation whose tastes and style were very different from the consumer of the previous ten years. first in 1996, the Board itself acknowledged this changed attitude by beginning to go to the field on a regular basis to a top go across attempt t o gauge market perceptions and trends. The new developed sales force provided feedback from consumers and distributors and the company took the further maltreat of scene up a wear subsidiary to plan its marketing activities and to become more responsive to market needs an gaps. The prop company became in general responsible for improving product quality and procedures. 5.4.5 Image BuildingCBL also recognized that in order to grow it had to become a better known name as a company. donationly as a result of its multiple brand names, CBL itself was relatively unknown as a collective entity. Embarking on a contend to raise the profile of the company, CBL act the services of a consultant, and set out to gain greater corporate recognition for itself among both consumers and the business community. The publics lack of knowledge of the breadth of the companys activities was hindering its activities as a holding company, particularly for purposes such as tapping the cracking marke t. With the help of its consultant, CBL set about establishing a public image for itself. This was done primarily through the write media. Every week or so, an article regarding the company and its various corporate activities and Latest initiatives, including its export plans and CSR, appeared in the newspapers. Competitiveness BehaviourThe Biscuit WarsAround 1995, CBL had hit a wall in terms of increasing its turnover. hold by its existing production technology and consumer tastes, t its highest growth luck lay in the Marie biscuit market. While CBLs Marie25 biscuits now made up 50% of total production, the company was unable to meaningfully increase its sales and market share of the Marie category. It had attempted a variety of marketing activities including extensive advertising, merchandising and trade promotions, but was still not able to take sufficient market share away from Maliban. The Munchee Marie biscuit was at this time essentially a knockoff of Malibans Marie and us ed verysimilar packaging. However, contempt much effort and testing, eBL was not able to scarcely reproduce the Maliban Marie flavor. Although market share was a (then) respectable 10% and disdain fervent urgings from its own sales team to the contrary to be more like Maliban, CBL decided that the time had come to change tactics and be different in order to try to break through the turnover barrier. The Tikiri Marie CampaignMunchee hit on the winning concept of launching its own Marie as Tikiri Marie a petit sized Marie biscuit using an aggressive campaign entitled Tikiri Mole, to bring the little biscuit to the attention of consumers. The campaign targeted children with the use of attractive advertising and proved a real twist point in Munchees growth and image. The biscuit was so supremacyful that the smaller sized Tikiri Marie became the number one Marie biscuit in the Sri Lankan market, with a phenomenal 50 per cent of Marie market share and finally forced the giant Mali ban to acknowledge Munchee as a significant market fraud by playing copy cat and resizing its own Marie. 7 Part of Munchees success with Tikiri Marie stemmed from Malibans complacency and its failure to reply to this attack on the Marie category. The Tikiri Marie campaign brought into effect other changes at CBL such as the introduction of Munchees keep fresh pack, which ensured better product freshness. Following its success with Tikiri Marie CBL expanded the use of the fresh pack to the entire Munchee biscuit range. The company also commenced a Tikiri Marie scholarship program for school children in 1997 entitled Munchee Tikiri Shishyadara which it continues to this day. Now in its eighth year, the program provides one hundred twenty deserving children with scholarships of Rs. 1000 per month for one year with fresh applicants being selected annually. By 1998, the cumulative effect of the changes made through the 1990s, resulted in CBL achieving a 30% market share of the biscuit market (up from 20% at the start of the 1990s) and topping the Rs. 1 billion turnover mark. This was a study milestone for CBL, both internally and externally. The company was becoming better known, both to consumers for its brands and quality products and to the industry for its investments in good technology. CBL reinforced this reputation by committing to a Rs. 500 million expansion program Rs. 300 million of which was spent on a large state of the art plant from Italy. Plant 6 as it was known, was CBLslargest skill plant thus far with five lines that could handle both hard and fermented dough. This action by CBL sent a strong message, to its staff and associates, about CBLs optimism and potency in the companys future growth commercialization of this new plant, CBL planned to introduce a new range of biscuits to tackle Maliban head-on. 6.1.2 The gamboge snort BattleCBLs next strategic attack on Maliban came in 2001 with its rotter Puff. The Munchee Lemon Puff had a solid 3 0% market share but as was the case with Marie, failed at increment sales further as a me too product. CBL decided to re-Launch Lemon Puff, by promoting it as a machinate biscuit with a higher quantity of lemon picking. The campaign was heralded by an intensive television campaign directed at capturing the attention of a new market. What the company did not reveal in its advertising was that the cracker itself had been vastly improved, through a new formula and upgraded technology. It was in fact a noticeably better boilers suit sandwich biscuit than Malibans Lemon Puff rather than just being a look alike with more toss. Going against the advice of its advertising company, Munchee replaced the traditional yellow packaging, synonymous with the Lemon Puff category, with a white negligee. The superior moisture and odour barriers of the new metalized wrapper combined with the new lozengeow pack technology, which used only two seals to achieve increased air-tightness, better prese rved the crispness and freshness of the sandwich biscuit. This had been a problem that had plagued both companies tuffets for decades. Consumers who tasted the Munchee Lemon Puff for its extra cream (not enough cream was a complaint associated with both Lemon Puffs for years) were cheerily surprised and rapidly confuseed loyalty to the Munchee Lemon Puffs. Thus Munchee demonstrated that it was in touch with tastes of its consumers and used their feedback to improve its biscuits. The impact of the product changes were felt immediately. Munchees market share in puffs went up from 30% to over 50% within a mere four months future(a) this relaunch, and grew the entire puff category from 12 to 16%. As a result, Malibans share of Lemon Puff which had been a staggering 70% plummeted to 29%. By now Munchee had 45% of the local biscuit market and was vying with Maliban for market leadership. CBLs next big challenge was clear take on Maliban in the cream cracker market. disrespect Munche es success at evolution its sales,Maliban still had nearly 75% of the lucrative cracker market eyepatch Munchee was at a meager 23%. The Maliban cream cracker was well accepted and entrenched in the market. CBL had to fetch a way of severance through with an innovative cream cracker to take on this market. 6.1.3 The Cream Cracker AssaultThe following year, in 2002, CBL re-Iaunched its cracker as a topnotch Cream Cracker, enriched with vitamins in a bold campaign, with live send of two music shows held simultaneously in Colombo and Anuradhapura before spacious crowds As they had done with the Lemon Puff, CBL used a new metalized pillow-pack with a contemporary look to break away from the traditional solid red Maliban packaging synonymous s with cream cracker and re-formulated the cracker to feature a crisper and tastier product. The Munchee system of delivering a superior quality product that convinced consumers to switch brands proved a success and the results were phenome nal. Cracker sales grew, expanding its own market not merely taking over competitor share. ingathering in sales nearly tripled and Munchees market share in cream cracker immediately doubled to 40%, reaching 50% the foHowing year. Today, of the total cream cracker category, which makes up 20% of the total domestic help biscuit market, Munchee owns a 60% share. Super Cream Cracker accounts for 30% of the companys turnover, with a profit margin of over 25%. Munchee continues to fight aggressively for market share. Its most recent marketing campaign entitled Podi Badaginne targets the large 500 gm pack market, previously serviced by loose crackers. The focus is to use the cracker as a deputise for a full meal for chummary factory workers who are already provided with two meals from their work place. The company has again demonstrated its knowledge of customer needs and changing trends and lifestyles in Sri Lanka as the record 128% growth of this heavy use pack from 2004 to 2005 shows . Business ExpansionBeginning from the 1990s, CBL began looking at other areas in the food and confectionary industry to expand its businesses activities. 6.2.1 Ritzbury unitary of the first areas CBL explored was one naturally complementary to its existing line of business chocolate. At one time, the company had produced chocolate for Nestle and had just about exposure to Nestles chocolate operations.Launched in 1991, Ritzbury chocolates began with chocolate coat (enrobed) biscuits. The company went through much teething pain in developing the right quality chocolate for its use. It struggled to develop a workable formulation one that tasted good small-arm withstanding the melting and rancidity caused by the tropical Sri Lankan weather. Ritzbury gradually developed its market by first growing its range of coat biscuits, then expanding to chocolate candies and hand made chocolates, and only recently moving into the traditional slabs the largest market category. The companys stra tegy is to provide innovative eye-catching products to its consumers and thus pit from its contender. Ritzburys first entry was Chunky Choc (chocolate covered biscuits sandwich with butterscotch cream filling), followed by Chit Chat (chocolate cover wafer with hazelnut cream) and Chocolate Fingers (chocolate coated finger biscuit). Another innovation for Sri Lanka was Pebbles (brightly colored, sugar coated chocolate candies). The Ritzbury range includes Nik Nak, (chocolate coated vanilla cream wafer), Go silly (colored chocolate coated peanuts), Choosy (liquid chocolate stick) and Choco-La individual nuggets. Although it started out originally as a poor number four, Ritzbury recently beat Kandos (Ceylon Chocolates) to the number two intellect of touch in the chocolate market. However, at 21 % vs. 42% Ritzbury has only half the market share of market leader Edna and a long way to go to become number one. Further, Edna has itself shown to be very aggressive and warm in bringi ng out innovative products to the chocolate market. Ritzbury for its part, offers over 60 differentiated items, at the full range of price points and with a dedicate sales force certainly provides its consumers affordability and access. Despite being a small local brand, it offers consumers a complete range of chocolates and chocolate coated products and for other products frequently provides comparable alternatives to more expensive imported products. Examples are Pebbles as an alternative to Smarties, Chit Chat to Kit Kat and Go Nuts to M&Ms. Yet, apart from the hand molded specialty chocolates and coated biscuits products, the company has yet to fully convince local consumers that the quality of its slab range is on par with that of imports or Kandos. By 1997, following its first biscuit war and having magnanimous its market share in the biscuit market to a respectable 30%, CBL began to focus on sales of Ritzbury. One hindrance to improving growth CBL realized was the then s ingle kitchen stove of distribution it used for both biscuits and chocolates. In practical terms what this implied was that once a retailer had gone through purchases of the more established Munchee list of biscuits they would have little money left for Ritzbury chocolates. Ritzbury sales were materially change and it became evident that an alternative would have to be sought out. One excerpt was to increase the breadth of the CBL range in order to afford to maintain a second line of distribution. 6.2.2 Pancho SnacksWith this in mind, CBL decided to enter the snack food market in 1998 under Ritzbury. Named Pancho, this snack range was made up primarily of extruded snacks. However, patronage the companys sustained efforts with Pancho and the separate sales force, the impulse buy snack market proved a disappointing arena for CBL. Despite the introduction of two products under a new line named Catch Me together with a re-Launch of Pancho in 2000, the company found that it could only succeed in this market with a near continuous stream of promotions. Although CBL persevered in snack foods for nearly five years, it was eventually forced to close up this operation and admit failure. With the receive of an expansion of its range still in mind, CBL next entered a alone unknown food market. In 2000 due to its own fiscal difficulties, Yanik Incorporated, an investment bank, was selling its 79% stake in Soy Foods (Lanka) Limited, a public listed company manufacturing textured vegetable protein (TVP) nuggets. Soy Foods was a loss making number four instrumentalist in the market but had pioneered a number of soy products under the brand Lanka Soy. CBL seized this opportunity to expand its range, encouraged by its present Managing Director who had experience in the soya area. CBL purchased the stake in Soy Foods at Rs.9/share and took over operations in kinsfolk 2000 by 2002 the company had been successfully off-key around and had become a viable entity. This was t he success story that CBL had been searching for. The Soy Foods line allowed CBL to maintain a dual distribution network, one for its biscuits and another for chocolates and soy. The effects of this isolation of chocolate sales from biscuits were immediate and notable. By 2002 Ritzbury had made impressive inroads into its competition and grown market share to over 15%. 6.2.3 Lanka SoyIn 2000 when CBL bought over management of Soy Foods (Lanka) Ltd. from Yanikit was a loss making company. Despite being the pioneer in the local soy market, Lanka Soy was at the time selling only 50% of the volumes of the market leader Raigam, with a 15% market share. The companys growth was stagnating in a rapidly growing market, and many smaller competitors were cashing on its market with lookalike products. The challenging strategy set out for a turnaround of the company was to aim to make it not merely profitable but the market leader. CBL decided that not only was it necessary to grow Lanka Soys ma rket share, through a fresh look and product, it was going to grow the total product market through a change in positioning. sentiment very innovatively, the company decided what was needed was to position soya not just as a vegetarian food, but as a more economical substitute for the protein content of a main meal. Touting advantages such as convenience, price and the lack of freezer requirements together with newly introduced catchy features such as participationing shapes and flavors, a whole range of new brand soy products were launched under the Lanka Soy umbrella. Given that at the time, scandalmongering flavored soya was the most popular soya product the company decided it would introduce interesting flavors to accompany new presentation efforts. In order to take the competition head on, it improved the taste of its traditional range, while also increasing its product range. It developed not one but a range of chicken flavors, under the brand Chikosoy, consisting of tandoo ri, masala, roast and chilli chicken flavors. For the traditional vegetarian market, it introduced the Vegesoy range a further four flavors of mushroom, hot and spicy, Chinese chop suey and Indian rasam. But its piece de resistance was a completely new entrant Malusoy. This range of not merely fish but also seafood flavors truly tapped into a very strong local preference for seafood. Malusoy comprised spratts, devilled prawns, cuttlefish and ambul thiyal flavors. Packaging for the four new sub brands was done using a range of appealing eye-catching colors, with a unique logo designed for each. Advertising again interestingly was carried out by the piece on a sub brand basis. For specimen, Malusoy used a two pillar poster conveying the advantages over can fish. The company also took the extra yard of providing a sauce sachet to provide a one step cooking process. Emphasis was placed to introduce the cooked product to consumers by way of cookery demonstrations and street promoti ons. In particular, Malusoy was aimed at areas with littlecoastal access. gross sales efforts were overhauled, re-demarcating a network to reach 35,000 outlets with designated representatives for supermarkets, catering and restaurant orbits. The results were strong. By early 2002 Lanka Soys market share had jumped to 25% hitting 30% and market leadership a year later. Malusoy to eBLs surprise turned out to be Lanka Soys front runner in sales. The strategy to offer consumers, as a household, their daily main bag at a price less than half the price of canned or fresh sea food was highly successful. Within 24 months Malusoy sales exceeded 500,000 packets a month, making up over 14% of the total soy market. Due to the sudden launch of many interesting products at the same time Lankasoy established itself as trend setter and frontrunner of the soya product market. 6.2.4 Tiara CakeseBLs next expansion was within the local confectionary business -the lucrative Rs. 4 billion plus local c ake market. eBLs main biscuit and chocolate operations had traditionally taken place at its home factory located along with its head place in Pannipitiya. However in 2002, the company invested Rs. 1.5 billion to set up eBL Foods International (eBL Foods), a Board of Investment (BOI) approved company in Rannala, about one time of day away. Awarded a 10 year measure holiday, eBL Foods has a mandate to manufacture bakery products and chocolates the former includes a new line of cakes under the brand name Tiara. The new venture commenced operations in September 2004 with a new line of portion cakes individually wrapped sponge layer cakes, marketed under the Tiara sub brand Okay, The product line also includes swiss rolls. CBL Foods boasts a state of the art plant think primarily for cakes and a Clean Room,,33 to guarantee freshness for a shelf life of up to eight months. Due to production constraints faced elsewhere however the 110,000 square foot modern facility also includes man ufacturing and packing for chocolates, wafers and biscuits the latter including both hard and soft dough. CBL expects that its group task slab will come down to 32.5% as a result of CBL Foods tax advantaged status and the shifting of these manufacturing of chocolates, wafers and biscuits, which previously came under Ceylon Biscuits tax slab. The company uses a formula to determine profit and is taxed at the preferential rate of 15% on its export. 6.2.5 Other SnacksIn 2004, CBL invested Rs. 50 million to acquire a 60% stake in Cecil Food (Pvt) Limited (Cecil Food) an organic manufacturing business of dehydrated fruit products, fruit juices, desiccated coconut and cashews primarily for the export market. Though the company had been in existence for 10 years and exported to 20 countries, it was facing financial difficulties. CBL brought to Cecil Foods the financial strength and management experience that it needed, while the founder retained a 25% stake. CBLs main interest in Cecil Food was its exposure to rural agriculture and its export and local market potential. The company presently exports to countries including the US, UK, Germany, Taiwan, Australia, New Zealand, Malta, UAE, Saudi Arabia, Qatar and Bahrain. Armed with CBLs financial backing the company has overcome its working capital needs. CBLs infusion of capital has enabled the purchase of new equipment and is now looking at expanding sales to tap the local market. Cecil Foods also has a 100% own subsidiary Cecil Fruit Canneries which concentrates on natural fruit juices for both the domestic and export markets. CBL intends to launch this range to the domestic market by introducing a line of fruit juices in novelty pouches. Export MarketsCBL has also set its sights on growing its revenues through tapping sales in overseas markets. Although CBL had been exporting biscuits from inception, around 1997, the company began to export regular container loads to the unit of measuremented States, Canada, Aus tralia and India, while also investigating at lucrative export markets such as the Middle East. India became a particular focus, with the company beginning its own marketing effort there. By 2000 CBL was also exporting to the US, Canada, Australia, UK, Sweden, the Middle East, Hong Kong, Mauritius, Fiji Islands and the Maldives. Although the export sector took a long time to stabilize, export orders now go out to 36 countries, exceeding Rs. 110 million in value (USD$ 1 million) in 2004/5. Exports to the UK, Middle East and Canada are mainly to the so called ethnic markets catering to the Sri Lankan diaspora, but in other countries demand is slowly establishing into in the established biscuit market through chain distributors. While most exports are under private labels that it, outsourcing for extraneous biscuit companies CBL has managed in or so instances to establish its own brand. This is particularly the case inAustralia where the company has taken the additional step, as it did in India, of setting up its own marketing effort by establishing a company representative as market manager. Australia is now the main export market for CBL, having overtaken the United States. CBL also enjoyed some recent success making inroads into western Africa. 6.3.1 Entry into IndiaThere are four accepted methods for a company to enter a foreign market exports, licensing, joint ventures and direct investment, which often represent an evolution in the degree of interest the company develops once it is present in the market. Beginning with straightforward exports from the mid 1990s and early exports of containers to India in 1999 CBL took the next step in developing the Indian market by investing Indian Rupees 3.6 crores (36 million) to purchase Parrys Confectionary based in Pondicherry, about an time of day from Chennai. Setting up a 100% possess subsidiary Ritzbury India, CBL began manufacturing operations for the first time outside Sri Lanka. The acquirement provided C BL with a six line 350 ton a month manufacturing plant. The company entered the Indian market with the Munchee and Ritzbury brands, for distribution in Tamil Nadu and Kerala. While the chocolates were manufactured in Sri Lanka, most of the Munchee range was baked in India. CBL produced nine varieties of biscuits including Marie, Glucose biscuits and several creams at the Pondicherry plant. This manufacturing base in India proved to be both a blessing and a harm to CBL. On the one hand, it became a strong negotiating tool for CBL at a time of labour unrest. CBL was able to take a tough stance, with child(p) closure and the moving of its entire manufacturing operations to its base in India. However, on the other hand, distribution arrangements provided by Parrys proved to be less than satisfactory. The company began a losing battle in trying to distribute its products. Revenues were far infra expectations and Ritzbury India further faced a number of detrimental tariffs in South Ind ia. Despite a Free Trade Agreement with India, and a decrease of vocation to 3%, the state sales tax in Tamil Nadu was increased by 8% for imported goods effectively nullifying any duty concessions. Following a second acquisition in India, CBL decided to completely dispose of its Chennai operations at a loss, dissolving Ritzbury India. In 2003 CBL hear about the sale through court auction of Bakemans, once the ternary largest biscuit manufacturer in India with a market sharehigh of 13% of the total Indian market. Outbidding its Indian competition in July 2004 CBL successfully acquired the assets of Bake mans at a cost ofRs .. 300 million. Along with the premises the company also gained six biscuit lines from the acquisition, two of which it chose to bring to Sri Lanka for knowledgeableness at CBL foods to allay its present faculty constraints. Based in Patiala in the state of Punjab, CBL set up CBL India with plans to commence commercial production in the near future, using one biscuit line. Having recruited Bakemans former CEO, who had been directly pertain in the companys rise to its one time number three position, CBL has ambitious plans for India and its manufacturing operations there in the future. Tentatively speaking of a Munchee-Bakemans brand name, CBL aspires to become number three in India within two years of operations and have the same type of success at retail that Dilmah has achieved in India CBLs challenge in India is to find a mass consumer line of biscuits similar to Marie and Cream Cracker in Sri Lanka. Glucose biscuits are an area that the company will have to examine, given their present popularity in India, but to compete with established players such as Parle-G and Britannia, CBL will need both a reliable distribution network and an attractive proposition for the Indian consumers to give it a try. The use of the Bakeman name, which would certainly aid the latter, is presently an issue. If CBL is able to use the Bakeman brand name in some form it will cut down market establishment time considerably. CBLs strength is that it has the innovation to develop a product to fit out this market and it has proved in Sri Lanka that it has the quality and taste to convince consumers to switch to its brand. What remains to be seen is whether it will have sufficient insight into the Indian market to correctly select what that winning product and distribution strategy should be. Other Indian VenturesIn 2004 CBL entered into an agreement with Ferrero of Italy to distribute and undertake manufacturing on Ferreros behalf. Ferrero is the world renowned producer of Nutella, Tic Tac and Ferrero Rocher and Mon Cherie brands of chocolate and another family owned business. Presently the agreement entails the manufacture of boxes for Tic Tac, Ferreros signature mini mint, intended to be extended to the manufacture or finishing of the mint pill also. CBL distributes Ferrero Rochers foil wrapped boxed chocolates,Nutella and Tic Tac fo r Ferrero in Sri Lanka and India. Manufacturing commenced in direful 2005, packing pills imported from Australia into the boxes. Distribution is intended for Sri Lanka, Africa, India and Pakistan. The linkup with Ferrero is another example of CBLs chairmans dynamic personality and relationship structure skills. Following initial contact in India, CBLs directors visited Ferreros head quarters in Alba, Italy, which Ferrero reciprocated with a visit to Sri Lanka. The company has expressed an interest in using Sri Lanka as a base for South Asian activities, moving its present activities from India, convinced of CBLsabilities as a business partner. CBL in turn hopes the association will expand its knowledge base through contact with the 60 year old Italian family business.Business Unit ContributionBiscuitsTurnover from Munchee biscuits, the biggest contributor to group turnover, grew 30% in the financial year 2004/5 and early results for 2005 show this trend continuing. Past years sale s have grown at a similar overall pace, although specific products have shown even higher growth rates at times of changes and innovation. Profit margins on biscuits range from 20-25% with products such as Super Cream Cracker, Tiffin and Chocolate Puff being the most profitable. Biscuit sales are presently constrained primarily by production capability, with demand strong and the company intending to increase its production lines in 2005/6. To try to keep up with demand, CBL has brought down two lines already from its recent acquisition in India and plans to import a new 2 ton per hour machine from Italy, expected to be installed in early 2006. Group cognitive operationWhile CBLs overall growth has been strong over the past five years with revenues more than doubling from Rs. 1.9 to Rs. 5.2 billion over the period, profit increases have been even higher due to various tax benefits. In 2005 CBLs group turnover grew 48% to Rs. 5.2 billion and net profit after tax grew 63% to Rs. 533 million, the highest ever in the companys 36 year history. sales surpassed the previous year across all areas of biscuits, chocolates, Soya and exports. The tremendous bottom line growth clearly indicates the donation accrued from CBL Foods tax advantaged status. Incomparison the 2004 figures were 11% top line and 23% bottom line growth. On average, overall profit margin has been near 9% over the five year period. This is taking into account FlY 200112 which differs due to both the industrial unrest that CBL faced for two months of that financial year as well as the exhaustion of the tax benefits afforded by the 1988 Investment Tax Allowance.The companys latest earning per share figure (EPS) is an astonishing Rs. 53.12 and more impressively has grown from Rs. 36.75 in 2003. This EPS figure reflects the extraordinary growth that CBL has experienced over the last 10 years. EPS in the late 1990s was actually in the Rs. 3000 range on the companys original ordinary share capital of Rs. 390,000 (made up of 39,000 Rs. 10 shares). Path ForwardCeylon Biscuits faced with production capacity constraints for its biscuits, as demand has grown well beyond forecasts. It has adopted the following three pronged approach to increase capacity a) bringing down two biscuit lines from India from its Bakemans operation for immediate capacity expansion, b) importing a brand new large capacity plant from Italy and c) future capacity expansion of its Indian manufacturing operations. CBLs future growth will come from increasing exports of its established products and diversifying by leveraging its domestic logistics and distribution capabilities to market its other products. The company is also increasingly open to looking at new opportunities, an example being manufacturing for Italian chocolate maker Ferrero. The companys core competencies for the future will be investment in technology, financial strength, sales and marketing competency and focused management. backbone challenges will be dealing with its production restrictions and becoming able to compete on a global basis by 2007. CBLs greatest test will be when the Indo Lanka FTA final phase permits Indian biscuits to be imported duty free beginning 2007. CBL intends to examine becoming listed on the Colombo Stock Exchange over the next few years. Since the desire for listing does not seem to be driven by financial needs only, it is still unclear what CBL will gain from this step. The company wishes to formalize its procedures in order to firm up its financial transparency and professionalize its make-up structure andoperations to ensure future continuity and success. There is a sentiment that going public will enforce the discipline required to ensure this. CBL is well poised with a business model to ensure ongoing value creation. It has spent time building strong brands that have future earnings potential. The brands have proven their competencies in that they have been replicated across new markets w ith success. However there are some concerns that need to be explored.Managing export marketsExport marketing could be more aggressive the model adopted by Munchee for Australia of establishing a marketing office seems the proven roadway to establish and develop key markets. We see some amazing possibilities for synergies for CBL in inviting someone of the caliber of Merrill 1. Fernando Chairman Dilmah to its board, perhaps even offering Dilmah some equity in an export division or forming a separate export company, who could help with establishing relationships with some of Dilmahs retailers and distributors in Australia. One way or another, the use of a different model to fast pursue export market expansion is advisable. 5. Managing Indian market entryThis is the second greatest challenge facing the company. India is an amazingly dissimilar market to Sri Lanka despite certain cultural similarities. It is fragmented with over 15 million retail entities, the largest number in the world. The organized retail sector in India is only 3%. However, over 51 % of its population is under 25 years of age and the fastest growing sector is the retail high-end supermarkets -expected to grow over three fold in the next five years (from US$8 billion to US$25 billion). Beginning with three malls in 2003, India had 25 by 2005 and is building 200 more. The pace of change is phenomenal. It makes sense to enter this high-end retail Focus on core competencieslRefocus on Sales and MarketingCBLs passion for quality, capacity to build brands and technological and production innovativeness are great competencies to be retained. Skills like marketing and sales are always unstable. Such skills are in demand, pressures are great and often new challenges are looked for in different cycles of growth. No proper product management system or category managementis in place. It is all-important(a) to have some depth to the marketing department. And while CBLs success speaks volumes for the capabilities of its current Director of marketing there is a need for a diversity of approaches and opinions so that marketing efforts do not grow stale. Key mid level appointments need to be made. Customer intimacy Product leadership / Managing brand TOMIn spite of CBL making all the right moves, and succeeding in achieving higher scores than Maliban in most of the consumer research categories (see chart below), Munchee is still behind in brand Top-Of-Mind (TOM) recall. This is despite Munchee having strong market noise levels in share of voice and especially with the competition making so many mistakes. Part of the gap between Munchee and Maliban in top of mind recall can be explained by the long history of Maliban as a market leader, and that it was the dominant player for a very long time. Part of the gap between Munchee and Maliban in top of mind recall can be explained by the long history of Maliban as a market leader, and that it was the dominant player for a very long time.