Business Case Studies,Marketing Strategies Case Study, Reliance JIO: Leadership Strategy in the Indian Telecom Sector

Code : MM0085 Year :2021 Industry :Food & Beverage			Region : Asia Teaching Note:Available Structured Assignment :Not Available
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CHITALE GROUP’S DIFFERENT BUSINESS VERTICALS: The Chitale Group made a conscious decision to diversify into different verticals to focus better on specific domains with different trajectories and nuances. However, on a ‘consumer facing front’, Chitale group continued to have two brands – Chitale Dairy for liquid milk distribution and Chitale Bandhu Mithaiwale (Chitale). The latter operated 25 stores and 12 xpress franchisee stores in the state of Maharashtra and distributed its products through a distribution channel of more than 500 distributors. The synergistic effect of the dairy business helped Chitale become a more well-rounded brand in terms of wider product offering vis-à-vis its competitors and also enabled its retailers, with limited shelf-space, to select the brands over its competitors. Chitale Dairy had a capacity to handle 0.8 million liters of milk daily and processed about 0.65 million liters of milk per day. Of this, 0.4-0.45 million liters were sold as liquid milk and the remaining was converted into value added products like shrikhand (sweet made with yogurt and powdered sugar and flavored with saffron and cardamom), paneer (Indian cottage cheese), khoa (milk thickened by heating), buttermilk (a fermented dairy drink), flavored milk, milk powder, and ghee (clarified butter)..

CHITALE BANDHU’S BUSINESS MODEL: Chitale’s production planning was complex as it was governed by the dates of the Hindu calendar of festivals which changed every year. To ensure easy access to its products and the timely in-store availability of its products during these year-round festive occasions, the company had a network of Chitale-branded retail outlets – both company-owned and franchisee. Chitale’s sales were generated by multiple sources: general trade or mom-and-pop stores, modern trade or supermarkets and company owned or franchisee operated stores. Chitale, which opened its first franchisee store in 1987, had 12 franchised outlets named Chitale Xpress in Pune and in other places in Maharashtra. While choosing a franchisee partner, Chitale was careful to ensure that their attitude and mindset matched with Chitale’s vision and mission..

PRODUCT INNOVATION: Chitale’s product portfolio had more than 60 different types of sweets and over 40 varieties of salty snacks (Refer to Exhibit II). According to the company, the star drivers in its portfolio were Bakarwadi, Shrikhand, Gulab Jamun (fried dough balls in sugar syrup), Mango Burfi (sweet made with mango puree, cardamom, and pistachio), Kaju Katli (cashew fudge candy), Soan Papdi (cube-shaped flaky sweet), Ghee (clarified butter), and Dahi (Curd)..

PROCESS AUTOMATION AND QUALITY MANAGEMENT: According to the company, the main factor contributing to the consumer’s preference for Chitale products was the assurance of consistent quality that the products carried. Even during the COVID-19 pandemic, the brand saw a surge in demand as it communicated and highlighted in every purchase the firm’s emphasis on quality...

BRAND COMMUNICATION: Chitale had not changed its original logo (Refer to Exhibit III) for many years as it enjoyed high brand recall and trustworthiness among its customers. The logo was trademarked in 2012 and consisted of the stylized writing of “Chitale Bandhu Mithaiwale” in devanagari script with the stylized drawing of a five-pointed star on a rectangular shaped label. The English translation of the word “Bandhu” was brother while “Mithaiwale” referred to the sweet and confectionery manufacturers and/or trader. The emotion-evoking word “Bandhu” in the brand name helped the brand create an emotional bond with its target segments by projecting a ‘one-step-away-from-the-home’ feeling. The brand deliberately avoided projecting itself as a corporate entity..

SUPPLY CHAIN AND DISTRIBUTION: Milk, a critical component for Chitale’s sweets business, was produced by Chitale Dairy. For this, Chitale Dairy has developed a network of 50,000 milk farmers with 200,000 cows and buffaloes. The produced milk was used for retailing and also as the main raw material for Chitale’s sweets and dairy products. The milk procurement through backward integration of the supply chain gave the company better control over the manufacturing process and timely product supply to super stockists. In 2010, the company implemented cloud computing technology to track the milk production. Cloud computing tracked the livestock’s activities, dietary cycles, gynecological cycle, and health cycle and gave farmers health updates and dietary recommendations for their animals. All these initiatives ensured the animals remained healthy and gave a good output. The company decided to control the quality of milk using technology to ensure the quality of the value-added products downstream in the point-of sales..

ROAD AHEAD FOR CHITALE BANDHU: In December 2020, Chitale was present in 300,000 stores across five Indian states. But, the brand had even bigger plans for the future. It aimed to open 2 million stores across 12 states over the next 5 years to fulfil its national ambitions. In order to achieve its national presence, the company focused on the basic strategy of reach and range..

EXHIBITS:
Exhibit I: Chitale Bandhu’s Competitors
Exhibit II: Product Range of Chitale Bandhu
Exhibit III: Logo of Chitale Bandhu