The Spice Industry

8/13/2019 The Spice Industry

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INTRODUCTION TO THE SPICE INDUSTRY

The story of Indian Spices dates back to 7000 years

into the past. It is a chequered history of lands,

discovered or destroyed, kingdoms built or brought

down, wars won or lost, treaties signed or flouted,

favors sought or offered.

India has been the home of many important spices

like pepper, ginger, turmeric, chilies and cardamom

since ancient times. hen added in preparation of

vegetables, pickles, chutney and sauces, the species

enhances the appetite and palatability of the food

products. Spices are called the nature!s special gift to

the humankind. The species e"tracts #oils and

oleoresins$ are also very useful as medicinal

ingredients in %harmaceutical industry.


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In ancient times, spices were used as preservatives,

perfumes and medicines. Today, spices are an

indispensable part of every household. They play a

significant role in our cooking. &vailable in different

forms, spices are used to flavor food and to make

foods tastier. &bove all, spices play a significant role

in the economies of many countries. India is one such

country where different types of spices are available.

'rom ancient times India has been a ma(or trade

center in spice map of the world. This was a point

etched in the history when )asco d *ama landed in

+alicut on the est +oast of India in the year -/,

and set of the transaction of spices between India and

the estern countries. ature has always been

bounteous over India terrain, and its rich spice

tradition. The 1nited States is the largest importer of

spice in the world followed by est *ermany. India

leads e"port league of spices.


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India has been the world!s largest producer 2

e"porter of spices, meeting one third of the global

demand Spices of India retain their natural aroma 2

flavor for a long time, so one can have them fresh

even though they are thousands of miles away from

India. The e"port market of this commodity has been

taking giant leaps.

ithin the past one decade the international trade in

spices has grown by leaps and bounds. &n estimated

300,000 tones of spices and herbs valued at 300

million 1S dollars are now imported globally every

year. &n impressive -45 of this supply comes from

India. India6s e"ports of spice e"tracts have shown

spectacular growth attaining over 30 percent of the

global market within a short span.

ver the past decade, the Indian Spices industry has

made quality the cutting edge of its global game plan.


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INTRODUCTION TO COMPANY

:amdev ;asala is a very old and reputed name in the

market of spices in *u(arat. Shri :ambhai %atel,

pioneer of the company started a floor mill at

Saraspur in 4< where chilly, turmeric and

coriander were branded. =ater in 79 at small scale

they started selling their own grinded spices in loose

packing as per the demand of the consumers.

*radually their business grew and on 4th >anuary

/ ?:amdev 'ood %roducts =td.@ was incorporated

and loose packet were sold under the ?:amdev

;asala@ brand. 'or marketing retail counters setup at

;adhupura, Aapunagar, Saraspur, ;anek +howk,

aroda, Bhokhara, Balol and ;ehsana. In company launched different types of Instant ;i".


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:amdev is mainly a food product company, engaged

in grinding, packing and marketing the spices, instant

mi" and asafetida. :amdev changed the trend of

buying to &gmark quality products. It!s the first

company in India to get Trade ;ark for food

products in spices.

In / company divided into three companies i.e.

:amdev 'ood %roducts =td.

:amdev ;asala.

:amdev C"ports.


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In which :amdev ;asala and :amdev C"ports is

being handled by ;r. &rvind %atel and :amdev 'ood

%roducts =td. Ay ;r. Dasmukh %atel and ;r. %ravin

%atel.

In year ;r. &rvind %atel started poly pouch

spices and instant mi" under the brand SWAD

which has covered almost all the parts of *u(arat.

Hierarchy Of Company

Mr. Chirag Patel Mr. Rakesh Patel

Mr. Arvind Patel

Factory

Handling

E!ort

Division

Finance

rod"ction #"ality

Marketing

P"rchase $egalFactory

Handling


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Marketing Hierarchy

Sales personnel serve as the company!s personal

link to the customers. The sales representative is

the company to many of its customer. It is the sales

representative who brings back much needed

information to about the customers. The company

has 7 sales supervisors and 9/ sales representatives

for selling and marketing tasks. The company!s

marketing hierarchy is as follow,

Sales Eec"tive

Sales S"!ervisors

Sales Re!resentatives

Marketing Manager


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Distribution Channel

The company has two types of the distributionchannel that is,

Eero =evel, where the company does selling

directly to the final customers. The company has

established its own retail stores in many cities for

direct selling to the final customers of its

products.

Two level channel, where there are twointermediaries between the company and the

final customers. The company follows this

distribution channel to i.e.

C"sto%ers

Man"&act"rers


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MARKETING MIX

Prod"ct

The first step in company!s pursuit for qualitative

e"cellence is in the procurement stage where in

company focus on getting only the best of produce,

C"sto%ers

Retailers

Man"&act"rers

Distri'"tors


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free from e"traneous plant and animal matter. This

material is then kept in a godown, away from the

processing unit. Tests are conducted on the material

before sending it for re8cleaning and processing.

;aterial that does not conform to the prescribed

norms is not used and the same is disposed. The

material is cleaned using both mechaniFed and

handheld sieves of different grades for varying

product siFes and requirement. Gue care is taken to

retain the natural flavour and aroma in the various

steps of production.

& host of machines like automatic sieves, grinding

machines, automatic packing machines, etc are used

in con(unction with age8old methods of processing to

heighten the e"isting aroma and flavour besides

lending taste to foodstuffs.The unit boasts of a well8equipped laboratory for

maintaining strict quality control. It conducts regular

tests to ascertain the presence of pests,


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microorganisms, pesticide residues in spices and

other food products. ;easures to control incidence of

rodent pests are carried out regularly both inside 2

outside the unit. %re8fumigation 2 post fumigation

tests are done on samples, nutrition facts are

determined and a host of other tests are conducted to

maintain strict quality control.

;anufacturing process for these products is batch

type. Aatches can be identified both on the basis of

time span and quality of production on time basis a

single batch for chili powder produces 3,000 to

90,000 kg whereas, in a single batch, 7,000 to /,000

kg, turmeric powder is produced. Aatches for

coriander powder produces


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&ccording to government requirements the e"piry

date is to be after ten to twelve months of production.

Dence, e"piry dates for spices8powders are after eight

months of production and in case of &safetida and

*aram ;asala, it is after twelve months of

production.

Packaging

&ll the products are neatly packed in attractively

designed packing, be it spices or instant mi"es.

+ompany specialiFes in private labeling. &ll the

packing, labeling, bar coding, printing of ingredients,

etc., are done by company, here, on behalf of the

buyers in accordance with their specifications. &

strict check is maintained in all the departments so

that only the best product reaches to buyers, reducing

unnecessary hassles faced by them with regard to


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product quality. +ompany has been supplying quality

products in this form since 9 and has earned the

appreciation of esteemed clientele over the years.

Place

The traditional Indian women believed that loose

masala prepared by grinding and crushing can only

give the desired taste and purity. Aut with the

increase in the number of nuclear families in Indian

society and also due to increase in the number of

workingwoman, the company strategy was built to

focus its products as of better quality than loose

products because loose products may be adulterated

than branded one. They also claim that poly packs

will keep the product fresh and tasty. The Instant

mi"es are targeted mainly on the workingwomen

segment that finds little time for cooking.


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Pro%otion

Initially, only posters and hoarding were used as

materials for advertisement. %resently the products

are also been advertised through newspapers and

magaFines. early 3 5 of the turnover!s proportion is

spent on advertising.

The promotion schemes include free sample

distribution to attract the customers. The company

had also launched promotion schemes for both

consumers and retailers who will be receiving

specified gifts. Cvery year, the company introduces

such promotional schemes to promote the products.


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MARKETING FLOW

Product Flow

+ompany Gistributors :etailers+ustomers

+ompany +ustomers

Title Flow

+ompany Gistributors :etailers+ustomers

Payment Flow

+ompany Aanks Gistributors :etailers

+ustomers


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Information Flow

+ompany Sales :ep.H Gistributors :etailers

+ustomers

Promotional Flow

+ompany

&d &gency

Gistributors

:etailers

+ustomers

SALES & DISTRIBUTION MANAGEMENT OFRAMDEV MASALA

Obecti!es

The followings are the ob(ectives of the pro(ect


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To study about the effectiveness of the

distribution channel of :amdev ;asala.

The appointment and distribution policies for the

distributors.

To study about the logistics management at

:amdev ;asala.

To study about

:ecruitment and selection of the sales

force,

;arketing flow, 2

;arket Segmentation 2 Gemand

'orecasting.

Information "e#uired

About dit!ibuto!

To collect information about the present

distribution channel of :amdev ;asala.


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The terms and conditions of appointment of

distributors and the distribution policies.

To collect information about logistics

management at :amdev ;asala.


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S"#$ %o!$

To understand the recruitment and selection

procedures.

Information about market segmentation and

demand forecasting.

'unctions of the sales force.

"esearch Design

& descriptive research was done to understand the

sales and distribution management at :amdev

;asala.

Data Collection Method

In8depth interview method was selected to conduct

the research at :amdev ;asala.


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Distribution Channel

The company has two types of the distribution

channel that is,

Eero =evel, where the company does selling

directly to the final customers. The company has

established its own retail stores in many cities for

direct selling to the final customers of its

products.

Two level channel, where there are two

intermediaries between the company and the

final customers. The company follows this

distribution channel to i.e.

C"sto%ers

Man"&act"rers


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$ppointment Of Distributors

Gistributors are the main role players in this channel

because better distribution is a boon for the company.

'or this reason the members of this channel areselected carefully.

C"sto%ers

Retailers

Man"&act"rers

Distri'"tors


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The company has framed a definite policy for the

appointment of distributors

The distributor is not appointed purely on the

basis of geographical regions, i.e. a local

businessman of a particular area is selected for

that particular town or city.

henever the company wishes to appoint a

distributor, it advertises in newspapers and

invites businessmen of that particular area to

make an application. In case of vacancy of

distributorship, other businessmen of that

particular area may send their applications to the

company.

&fter receiving the application the company

scrutiniFes them and if the qualification met the

requirement then the meting with the company

official is arranged with the applicant.


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&t the meeting he is informed, e"plained and

guided about the company strategies about

selling and distribution. &t that time the interest

of the distributor is checked.

Gistributor is selected only if he assents to work

according to the guidelines of the company.

The company!s supervisors perform a personal

check on his shop, godown selling and

distribution arrangement, and e"perience of

distribution, personnel, financial condition,

goodwill and business with other agencies.

&fter giving due considerations to all above

points the company!s senior officials meet and

select the distributor.


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&fter taking the final decision regarding the

appointment, the selected distributor is asked to

meet in person. & written assurance with the

firm!s stamp is taken on an agreement paper. The

company official specifically discusses the below

mentioned points with the distributor.

. ho will be responsible for distributionof the productsJ

9. n which days the distribution will be

doneJ


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Initially, after appointment the company deals on

advance basis for the first ten dealings with the

distributor.

%uidelines to Distributors

The following points are to be specifically noted and

practiced while doing distribution and selling of

:amdev products.

The distributor should make a list of all the

outlets selling the product and remit it to the

company.

Cach distributor must sell the products in person

in the market on fi"ed days once in a week.


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De must do the work of selling and distribution

according to the company!s policy.

De must get the permissionHmake aware, of the

company if he wants to start any other business.

&ll the distributors must prepare stock statement

for each and every product specifically stating

opening stock, ordered stock, total stock, sales

and closing stock.

The distributor must keep the stock of seven

days. +onsidering the average sales of the week

he must fill up the company!s order form stating

closing stock on a fi"ed day of the week. The

company issues hundred order forms to the

distributors.

Cvery retailer should be given stock afterconsidering his average sales. o one is allowed

to keep the stock of more than two weeks.


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Cvery distributor must adhere to the payment

policy framed by the company.

nce in a week the sales representative goes and

checks the distributorship according to the

convenience of the company. The ob(ective

behind the visit is see that the policies are being

practiced properly and to see whether the %%

material is being properly used. De also checks

the sales promotion schemes and the record

keeping.

Guring his call the sales representative should

check the stock and see that the old stock is sold

first. De must find out avenge sales and supply

accordingly. This measure will prevent over

piling of stock and the consumers will get fresh

products.


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Cach distributor must fill up the retail card and

maintain a card for each retailer to whom he

supplies. In the card he must write the particulars

of purchase made by the respective retailer of the

products. 'rom such cards information of retail

purchase and sales can be estimated.

The distributors are also allowed to do retailing

provided they sell the product on the printed

price.


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Policy "egarding Deposits

The amount of deposit is finaliFed after

considering the potential sales of that particular

region. The ma"imum amount of the deposit in

case of good urban center is :s. 93,000.

The amount of deposit stays with the company

till the party remains the distributor of the

company. Interest at the rate of 95 is paid to

the distributor at the end of every financial year.

The amount of the interest is sent to the

distributor at the end of every financial year.

hen the distributor wants to stop working for

the company, his deposit is returned on the same

day with the interest till that day. There is no

penalty of ceasing to be the distributor even


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though it harms the business till the new

distributor is appointed

Margins to Channel Members

%roducts Gistributors :etailers

;asala 2 &safetida 0


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&chemes

'or distributors schemes are as follows

. In case if sales are 935 more than last year

sales then 0.35 more commission is given.

9.&nd if sales are 305 more than last year

sales then .35 more commission is given.

'or retailers, #free pouches are given to them as

follows$

8 for 0 at introduction stage.

8 for 90 at later stage.

8 n %.s. 000 sales free :amdev bag is

given.

8 &lso regular incentive schemes #seasonal$ are

given to retailers for additional margin

'or customers


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. 'ree samples, lucky draw coupons, gifts and

other schemes have been introduced for the

customers.


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Policy "egarding &upply ' its Payment

The payment should be made within 7 days of

the date of supply through GG If the distributor

does not make payment in time then the

company may ask him to pay advance draft with

the order in the future. 1sually for a new

distributor the first 0 dealings are done on

advance basis.

The commission on GG and the postal e"penses

are to be borne by the distributor.

& credit period of 7 days is given for each supply

and the new supply will be made only after the

payment of the prior is made.

If the payment is made after 7 days, the company

issues a debit note having interest charged at the

rate of 9-5 per annum.


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If a distributor is unable to maintain appropriate

stock of the necessary product then his area

operation will be reduced and other

arrangements for distribution will be made.

In case of late payment, check bouncing, ready

retailing, stock out etc. the company generally

gives a warning to the distributor and it takes

action if repeated.


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Policy "egarding (oading )ehicle

The distributor should take the company!s

permission before distribution with the loading

vehicle owned by the company.

It should be painted according to the company!s

specification and should be in a good condition

for efficient supply.

If the distributor takes into consideration the

above8mentioned points then the monthly

allowance for the loading vehicle is negotiated.

"eplacement Policy

%roducts of :amdev ;asala remain fresh in the pack

for a long period so problem of replacementgenerally does not arise. Then also in case if

replacement is to be made then following points must

be consideredK


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If the pack is torn #possibility of it is minimal$

then the distributor can replace the pack after

checking it.

C"piry date is printed on every packet. So every

distributor before supplying a new stock must

check old stock at retail out let and see that it is

sold first. This would reduce the chances of bad

products reaching the consumers. If such old

products are found with some retailers then the

distributor should replace it. Then after

negotiating the genuineness of the case the

company will decide that the replacement should

be given to the distributors or not.

+ompany!s policy for retailers and consumers is

to replace packet for packet.

%ouches damaged by rats at retail out lets or the

distributors will not be replaced because it is not

the fault of the company.


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Cach month the replacement should be done at

the end of the month If the goods are not sold

then the company is ready to take the unsold

goods back but only before e"piry date.

There is no replacement to be done after e"piry

date. &nd the company is very strict on this

issue. So the distributor himself is responsible on

this front.

Policy "egarding Complaints

The company keeps stringent quality control so

complaints are not likely to come. Aut if some

complaint does arise then the distributor should

follow the following instructions.

Take the name and address of the complainer.

Take the name and address of the retail outlet

from where the customer had purchased the

product.


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Take the details regarding the product category,

its manufacturing date, batch no., etc.

The distributor should store such packets

separately and show them to the company sales

representative when he visits them. Such packets

are replaced according to the company!s policy.


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The company checks the defective product and

replaces it and thus satisfies the customer, further

this is informed to the concerned distributors and

the retailers. The same is the case if the product

is an instant mi".

Thus the company is quite co8operative, it

reduces the complaints through customer

satisfaction and guidance to its customers and

the distributors.

Price Change Mechanism

The price of the product fluctuates on the basis of

prices of the raw materials in the market. If the price

of the raw material increases the price of the product

increases simultaneously and vice versa

hen the price is increased, no prior information is

given to the distributor, but the products will be


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supplied to the distributor at the prevailing price. The

distributor is supposed to follow the following steps

in case of price increaseK

The distributor and the retailer must sell their

stock at the price that they have got or at the

printed price of the product.

The distributor should inform the retailer that he

would supply the stock at the price at which the

company gives him.

hen prices are to be reduced,

The distributor will be informed seven days in

advance so that he can sell off his stocks.

De must ask the retailers to sell off their stock as

soon as possible to avoid possible losses.

De must see that the old stock is sold first and do

not make a fresh supply till then, this will avoid

the packets with two different prices.


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The company will not give price reduction on

old stock.

"eimbursement of *+penses

It will be refunded on presentation of the real bill

with the receipt.

The distributor must send such a receipt to the

company within 3 days of ta" payment along

with the following particulars

Aill no.

&mount of bill.

Ta" :ate.

&mount paid as ta".

The company will refund this amount every

The Spice Industry

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