A SPICE ROUTE INTO A NEXT-DOOR NEIGHBOUR

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A SPICE ROUTE INTO A NEXT-DOOR NEIGHBOUR

Post  Anand on Sat Aug 16, 2008 3:33 pm

The much-talked-about, relaxed FDI norms in India have not only attracted high-end western brands, but are also pulling in established labels from neighbouring countries. Probably the first Pakistani entrant in the foods segment, with its speciality recipe masalas, is National Foods Limited (NFL). Zahid Majeed, corporate marketing director, discusses with Ranjan Kaplish the company's India foray strategies and plans ahead.

What attracted National Foods Ltd to India?

As the trade is relaxed and restrictions are curtailed, we have been coming to India from last 2-3 years through consumer exhibitions wherein the responses were really overwhelming. Looking at the responses, we also conducted some surveys. In order to launch formally, we had to do our homework first.

As of now, we are already in the market through 300 A-class stores and meat shops, and are also available in various cities through the wholesale network. We are eyeing a strong distribution network.


What was the homework like? How did you study the Indian market before launch?

We associated with an established consultancy to conduct consumer research. It was a three-phase research. In the first phase, the focus group was based in Mumbai and Delhi. We tried to understand the perception about Pakistani food in general and how the consumer here differentiates between subcontinental and Pakistani food.

There were three things that came out as a result – the first being that Pakistani food is generally considered non-vegetarian. It is rich and aromatic, and the spice combination is different. Based on that, we went in for home trials at over 400 homes, where we cooked biryani and chicken with our masalas as well as some local varieties. Consumers agreed that there's a difference in the flavour and also the usage, and appreciated the product.

Advantage of this recipe masala is that there's no need to add pepper and salt as they are already there along with other whole ingredients that provide a flavoured kick.


What is NFL's positioning? How is it going to be positioned in the country?

NFL has been around since 1970, and now we are dealing with the second generation of Pakistanis, so we see ourselves as a contemporary company. In India, too, we tested the two different positioning routes – the heritage route and the contemporary route. It is the contemporary route that the consumer wanted, so we are sticking to that.


What is the brand name? Is it the same in all the countries you are present in?


The brand name is National and all products will come under the same brand. The same brand is there in Pakistan, Canada, Middle East – wherever the South Asian population is. It is being sold by the same name since 1970.

In Pakistan we are the only multi-category player. In India we'll be launching primarily the recipe masalas and also some dessert mixes. We've got good response for pickles, but we'll hold that for the time being because that retail space is premium and we have to build up that relationship with the trade also. As of now, the opening batsman for us will be the recipe masala.


How will you manage your India operations? Any Indian partners?

After the test phase, wherein we had seen positive results, what we needed was a partner for our India operations. When you enter a market that is so vast and challenging, you really need a very solid partner. It was imperative to find a reliable partner whose business revolved around speciality foods. Rai & Sons actually does that. The company has been in the business for 10-12 years now, and handled certain foreign brands with a good retail network.


When are you looking to break even? What is your expected retail presence?

We are looking at the business from a long-term perspective; we are not trying to make profits from day one. We understand that the business will grow and we have to be at it. To reach breakeven, we are looking at a year or two.

For retail presence, what our consulting partners suggested was to spread out to over 10,000 outlets. Within year two of our launch we'll start extending our range and spread across 15,000 outlets in the country.


What will be your strategy to tackle competition here?

We are not taking on the giants here, but looking at a niche market in the recipe masala segment – to put it alternately, niche and speciality foods from Pakistan.

‘Made in Pakistan' is the major novelty factor attached. There is a certain amount of positive curiosity about the product. What we want to claim is that these are Pakistani products from the same family that their Indian counterparts belong to, but this category is niche.

In Pakistan there's great demand for Indian cuisine and other products; it's a similar case here in India as well. The advantage we have in India is that we have more empathy towards Indians and Indian products as compared to an European or an American brand – we can understand the Indian consumer better.


Any plans to come up with a manufacturing facility in the country?

In order to do that, there's a critical mass that one has to achieve. Then we can definitely think of having at least a packaging unit in the country, or ally with an Indian manufacturer who can do the same for us. We are already in talks with players, but initially the focus will entirely be on distribution and building of a brand.


• Please throw some light on your brand building process/strategy.


We are looking at a lot of detailed activities like cooking shows and cooking classes, as well as tie-ups with FM radio and magazines.

One thing that the Indian consumer wanted was a vegetarian variant of the non-vegetarian recipes, so we customised some of our products. For instance, our biryani masala is especially for India. We have also introduced a recipe book explaining what Pakistani cuisines are and how these are cooked. We've done similar things in different markets. We believe in engaging the consumer, and exhibitions are one form of engagement whereby we meet our customer face-to-face.


What will be the mediums of advertising and the budget for these?

As we are launching only in eight cities in the introductory phase, we will be focusing only on local media, primarily print. Our target consumers will be women in the age group of 25-35 years. They are experimenters who enjoy cooking food and are the main cooking decision-makers. The medium of communication will be FM radio and magazines.

The budget we are targeting for the detailed activities will be 15-20 per cent of our sales, while for advertising it will be 20-25 per cent. We are negotiating with various media houses.

Anand

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Location : Kolkata
Registration date : 2008-08-15

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