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Cargill India PVT - LTD: B2B Management

Cargill India is considering expanding into business-to-consumer (B2C) sales in India to gain better control over costs and revenues from commodity price volatility. This would be a strategic change as Cargill focuses on business-to-business (B2B) sales. The Indian food market has strong potential for growth. Entering B2C could allow Cargill to target retail consumers, gain new customer insights, and tap rising individual consumption. However, managing the transition to a new business model and attracting marketing talent presents challenges.

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102 views

Cargill India PVT - LTD: B2B Management

Cargill India is considering expanding into business-to-consumer (B2C) sales in India to gain better control over costs and revenues from commodity price volatility. This would be a strategic change as Cargill focuses on business-to-business (B2B) sales. The Indian food market has strong potential for growth. Entering B2C could allow Cargill to target retail consumers, gain new customer insights, and tap rising individual consumption. However, managing the transition to a new business model and attracting marketing talent presents challenges.

Uploaded by

SMRITI singh
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© © All Rights Reserved
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Download as PPTX, PDF, TXT or read online on Scribd
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CARGILL INDIA PVT.

LTD

B2B MANAGEMENT
By Group – E
Ritwik Acharya (120036)
Sulviya Afreen (120111)
Tanu Akash (120114)
Tanya Singh (120053)
Tiasha Bannerjee (120116)
Udita Sagar (120054)
Ujjwal Aaishwarya (120117)
Utsav Sinha (120055)
Vidya Sagar (120056)
Vikash Kumar Mihsra (120119)
Vishal Kumar Ambastha (120059)
Introduction
• Cargill Inc. is U.S. based conglomerate of food, agricultural, financial and
industrial products.
• In March 2005, Siraj A. Chaudhary(Head of the refined edible oil business
of Cargill India Pvt. Ltd.) was in the middle of developing his annual
marketing plan for India.
• In order to gain better control over cost and revenues, Chaudhary was
examining an opportunity to expand into the business to consumer space in
India.
• Planning to launch a portfolio of food products, beginning with edible oils
for the consumer market and the demand will be fulfilled by imports.
• Cargill India had already ventured into B2C marketing in 2000 and had
quickly moved out of it.
Dilemma

• Cargill have been targeting the institutional buyers as customers at Cargill


Inc. for decades as a part of B2B. B2C was not in the DNA so, How to
develop a B2C roadmap for Cargill India?
Food Industry in India
• The Indian retail market estimated at 364 billion in 2005 – 44% of the GDP.
• Food and grocery was the largest at 165 billion – 45% of the total retail
market
• The organised retail segment for food and grocery was estimated at 13 billion
per annum.
• Competitive industry as it comprised home-grown companies – Britannia and
ITC as well as multinational companies – Unilever, PepsiCo, ConAgra foods
and general mills in food space.
• Three fold strategy - Improving their cost advantages by rationalizing low
margin SKUs – Developing breakthrough through innovation – marketing
more effectively through targeted marketing and promotions.
Regulations and Opportunity
• There was regulations on Indian food industry by the government.
• Domestic production of edible was not adequate, failed to fulfill the market
demand.
• Imports were routed through state trading corporations.
• Govt. Initiated incentives to farmers for edible oil production to substitute
imports.
• In 1994, regulations lifted and traders got freeway to import edible oil freely.
• Cargill Inc. sensed opportunity and planned to establish refining capacities in
India through both greenfield and acquisition routes.
Issues Related to Cargill India Pvt.Ltd.
• Cargill Inc., a U.S.-based multinational company, is known for its skills in
business-to-business (B2B) marketing. 
• It processes food products and markets them in bulk to large institutional
buyers with whom it has a strong customer orientation.
• However, the head of the refined edible oils business at Cargill India its
subsidiary is facing a problem with the parent company's value proposition
around B2B.
• While developing the annual marketing plans for the next financial year, he
finds that the volatility of commodity price movements has made the task of
revenue forecasts at Cargill India difficult.
• This volatility is compounded by frequent changes introduced by the
federal government to official regulations governing the edible oil business
in India.
• In order to gain control over the two variables, he is examining the
prospect of moving into the business-to-consumer (B2C) space in India. 
• This is a new strategic direction not only for the Indian subsidiary but also
for Cargill Inc.
• Can he achieve buy-in not only from the parent company but also from his
own managers?
• Will he be able to attract marketing professionals who can promote his
new brands successfully to the Indian consumer?
Market Potential Analysis of Cargill India Pvt. Ltd.
• Market potential of Cargill India Pvt. Ltd. products various on factors such
as – In mature markets the profitability is often stable, but the market
potential is less as most of the players have already taken market share
based on the segment they are serving. New players must go for market
share strategies in marketing.
• Technological competence of the existing players and culture of innovation
and development in the industry.
• Estimate the current stage in product life cycle and its implications for
marketing decisions for the product.
Cargill India Pvt. Ltd. - Customer Value Analysis
• Capturing customer value is essential to marketing efforts as it results in
higher return in the form of both current & future sales, greater market share,
and higher profits.
• Product differentiation is often based on building on a value niche that a firm
believes that is very important to the customer. This niche contributes to
perceived value. If the perceived value is high, then customer stay loyal to
the product if not then she can switch to the competitor’s product.
• Graphically displaying value differences for deeper understanding and better
internal communication.
• Identifying and selecting actionable value creation options. This can help in
increasing the customer lifetime value. 
Advantages of Cargill expansion into the business to
consumer (B2C) model in India
• At home consumptions in India .
• More Individual consumption of edible oil in India.
• B2C would bring new customers at the retail end.
• Young demographic: 70 per cent less than 35 years of age.Young
population had a higher propensity to consume, India was a promising
market.
• Indian market has huge potential.
• The demand for brands comes also from the existing B2B customers.
But , if it enters B2C it can focus on the consumer and gain fresh
insight.
• Generate better revenue : India was the second most populous country ,
accounting for nearly 17 per cent of the global population.
• Edible oils/oilseeds demand projections : 10.9 in 2004 to 21.3 in 2015
(Exhibit 8)
• Forecast of packaged foods sales : Oils and fats (1,751.0 in 2005 to
2,187.0 in 2010)
• From Exhibit 9 : Cargill B2C model in India has potential .
• B2C model would enable the company to tap into the popular end of the
domestic edible oils market.
• It would improve the contribution of Cargill India to global revenues of
Cargill Inc.
• B2C model could be replicated in different geographies within the
Cargill organization, particularly in emerging markets.

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