RTE Foods in India

INTRODUCTION
In the years following Independence, India has made great progress in the agriculture & food sectors both in terms of growth in output as well as yields and processing. With the introduction of "Retort Technology" developed by Defense Food Research Laboratory, Ready to Cook (RTC) and Ready to Eat (RTE) food segment has emerged as one of the fastest growing sectors in the Indian economy. Due to the large consumer base, the market for this sector was worth about Rs 800 Million in 2010 and has an enormous potential for growth.
The total size of the processed foods market is Rs1500 crore, of which the Ready to Cook and Ready to Eat markets are Rs 1275 crore and Rs.225 crore respectively this year with an expected growth rate of 25 – 30% over the next 5 years. This shows the enormous potential for increasing the customer base and increasing the size of the pie. Under Ready to Cook portfolio of products, instant noodles leads the segment with sales of Rs1000 crore followed by soups with sales of Rs. 200 crore , pasta at Rs.50 crore and others at Rs.25 crore. The RTE market is expected to grow to Rs 2900 crore by 2015 according a study by Tata Strategic Management Group.
MTR, ITC, Bambino, Priya and Kohinoor Foods are the dominant players in the competitive RTE and RTC segments of the market. MTR leads the processed food manufacturers in India with a turnover of US$ 261 million. Its export market accounts for approximately 10% of MTR’s total sales.

CONCEPT OF RTE
Ready to eat foods can be defined as food that is in a form that is edible without cooking, washing, or any sort of additional preparation by the consumer. It belongs to a category of convenience food where the product is prepared well in advance before packing and can be eaten as sold. These foods meet the specific needs of nutritional adequacy, convenience, storage, and shelf stability.

KEY DRIVERS FOR RTE MARKET IN INDIA
Following are the various factors that are favorable to the adoption of RTC and RTE foods in India:
Changing demographics: The rising proportion of the Indian youth has influenced the greater purchase and consumption of packaged foods such as ready-made meals, packaged soups etc. Larger number of globe-trotting Indians who are ready to experiment with different types of food have also contributed to an increase in the number.
Increase in income: Dual income family structure and rising disposable incomes have increased the affordability of buying packaged food. Reduced available time to cook has also spurred the demand for packaged foods.
Urbanization: Urbanization has led to an increase in the number nuclear families and has led to more and more women going to work, leaving little time for cooking food. RTE and RTC products give them an easy way out.
Growth in organized retail: Easy accessibility and availability of packaged foods is another factor that drives the growth in this market. Growth in organized retail has made the food items more accessible to customers. The penetration of this retail market is expected to increase by 16% in 2016
Improvement in packaging: Technology developments have led to advancements in the variety of packaging options available. Packaging items have become more sterile, durable and environmentally friendly. This has in turn led to a rise in shelf life and also satisfies various needs of the customers.

MAJOR PLAYERS
MTR
Kohinoor Foods
ITC
Haldiram
Tasty Bites
Priya

Current Marketing strategies and what went wrong:
Current marketing strategies adopted by major RTE firms are by projecting themselves as:
1. 100% natural- Claims to use no preservatives and using only finest and authentic ingredients.
This clearly did not work well with middle-class consumers as they still think this food is full of preservatives and genetically modified ingredients otherwise how would they have such long shelf lives. They have no idea about the RETORT packaging technology and need to be educated on the same.
2. Unparalleled tastes and flavor- Claims “Home cooked” taste.
Consumers do not perceive the RTE foods as an alternative for home cooking, thus comparing it to home cooked food is an entirely wrong approach. Instead it is perceived as an alternative to eating out, thus it should be projected as better and healthier than restaurant food.
3. Uncompromised Quality- Claims to use Best Quality standards
Focusing on quality as a central message did not work for non-cognitive users.
4. Technology- Claims to use the best technology to preserve food
As already discussed in the first point, cognitive consumers with negative attitudes have to be made aware about this technology and how it works.
5. Vegetarianism – 100% vegetarian
This works against the variety seeking behavior of the consumers. People need more multi-cuisine and non-vegetarian options.

These strategies have failed because of the consumer negative perception of RTE foods.
Undoubtedly, RTE food has a huge future potential but the problem is with that consumers have a negative attitude towards these products. They perceive that food is full of preservatives without any natural ingredients. Mothers in India always want to serve their children with fresh home cooked food. They perceive RTE food as stale and low on nutritional value which is bad for health. RTE food selling and reach to Indian housewives is a big challenge as this segment of customers doesn’t have timing constraints and can spend considerable time in quality spending.

Segmentation, Targeting and Positioning:

Target Consumer groups and Marketing strategies-

The common need for any kind of consumer will be how easily and fast can the food be prepared, its taste and quality. To attract the common set of customers, attractive packaging should be there. As per a customer as well as a retailer’s perspective, the product should have a longer life.

According to Attitude-

Old and traditional consumers: These consumers are the ones who are reluctant to adaptation of new products and varieties. They want less spicy and easily digestible food, preferring more natural products that are good for health. The food should include more digestible substance like aata, packaging highlighting nutrients. Promotional stalls near community places, temples will also serve the purpose of promoting RTE foods.

Price sensitive consumers: These consumers demand value for money with high bargaining ability. These can be just basic products without much variety. Considerable margin should also been kept when marketing and selling these products.

Young and quick customers: This segment comprises of young generation that is more quality conscious. This segment tries new products and is increasingly becoming more health conscious. Marketing strategies for such segment can include introducing new variety and flavours. Trial stalls in malls can be put up to promote the product in this segment.
Pricing is not the only deciding factor. Value for money is the new mantra. Customer looks for delight and value in products. A customer wants to maximize his time utility in his busy lifestyle.

According to Age groups/Profession:

Students/Consumers away from home: This segment of customers seeks variety the most. Since they stay away from home, a regional and home touch to their food can make difference. Variants and flavours can be incorporated to attract this segment. Regional looking packaging and celebrities like sports stars that are generally role models for students can be put on packages.

Housewives: This is the segment that generally avoids RTE food because housewives prefer home-cooked food and they don’t have timing constraints. This is the segment most hard to convince. Effective marketing strategies like Value for Money can come useful in this scenario.

Working class: This segment has the highest potential customer base. Due to timing constraints, this class is most inclined to RTE food. Better taste and quality can be the only factors that can be added to this segment.

What we propose

The RTE industry has been showing all the signals of an exponential growth market, such as - Decreasing time for traditional cooking, increasing disposable income of our target group and rise in customers looking for variety. Other products have also benefited from this industry change such as increase in sale of microwave ovens and other kitchen products which save time. Yet, the RTE industry has not seen this kind of growth in its sales.
This may be due to several factors such as doubts in nutrition, a general perception that RTE foods are not “fresh”, and they do not offer value for the money paid. This perception is hurting the entire industry and it cannot be shaken away easily from the minds of the consumers. In India, celebrities are a popular medium for influencing people’s minds since they bring in a fair amount of credibility and influencing power. Hence, RTE brands should look for celebrities to endorse their products, relevant to the message they are trying to portray (Ex- Popular chefs, Sportsmen, Newly married Bollywood celebrities etc.)

1. Create characters, logos and slogans to create “intangible” signals which stay in the mind of the customer and helps in brand recall and recognition. For example – “Kurkure” variety of flavors having a different character representing each flavor, RTE aimed at kids could contain mascots or cartoon figures to attract attention like the tiger in Parle-G biscuits

2. Increase customer engagement – through clever marketing events such as “Write back to us with your story “event by Maggi, cooking competitions with the brand as sponsors, distribution of sachets as prizes in college sponsorships etc.

3. India is a country of multiple states and varied tastes and cuisines, and each state has its own distinct food preparation, flavor and positive feeling. We could bring out this love for their respective states in people by associating each RTE food with the place where the dish is famous

4. Creative packaging – Packaging forms a very important component of marketing a product and RTE foods could be packaged more creatively keeping in mind consumer tastes, preferences and usage behavior. For example – Bhel puri is packaged in a round box, instead it could be packages in a paper cone keeping in mind customer buying preferences (Bhel puri is otherwise generally sold in the beach or fairs by road side chat shops)

5. Increase customer Awareness, Intention, Desire and action (AIDA framework) through clever coding signals and messages encoded onto the advertisements.

6. Taste is important – When it comes to food, Indian customers are very taste sensitive. Even though the marketing campaign may focus on natural foods, ease of preparation and convenience, it has been seen that Indian youth do not compromise on the taste irrespective of the other factors. Hence, companies or brands must focus on this very important aspect

7. The current players should look at expanding their reach to cities with population of over 1 million

8. Should exploit variety seeking behavior of consumers and come out with non-vegetarian dishes as well. Should branch out in cuisines other than Indian.

9. Remove social stigma associated with buying RTE food products

10. RTE foods should be reformulated to contain low fat and low cholesterol and should be promoted as such as well. For this they can use ingredient branding strategies. For example: Sundrop has a RTE brand called yummy meals, to project it as healthy they can say that is made with the goodness of Sundrop cooking oil which is good for heart.

11. Indians are price sensitive. RTE companies have always targeted Indians living abroad, hence their prices and margins have always been high. Companies need to send out clear messages on price and how they are offering value for money products.

Implementing Marketing Strategies using Classical Conditioning
It is argued that the method of classical conditioning can be used to woo consumers to make RTE foods an integral part of their lifestyle. In the USA, the RTE food industry is booming, and caters to every section of society, not just to the elite. In India, inspite of the advent of pressure cooker based RTEs to facilitate preparation in households where there is no microwave, an ingrained bias against RTE foods exists.
Classical conditioning is a well acclaimed psychological experiment in which a conditioned stimulus is coupled with an unconditioned stimulus (as the sight of food) until the conditioned stimulus alone is sufficient to elicit the response. This slow and steady process will make the consumer open to novel ideas, and techniques, as in the case of RTE foods. The RTE foods, and their advertisements have to be positioned and advertised judiciously. The pricing strategy should also be slightly tweaked so that the end users are equipped enough to afford the products. An example in this case can be that of readymade chapattis that are available in most retails shops around the country. The chapattis are touted (by word of mouth) to be preservative based, and have a reputation of being ‘nothing-like’ home made chapattis. Needless to say, most people do not even experiment with the eatable.
However, if advertising was done, with a renowned, tasty brand of wheat flour, eg: the agreeable ‘Ashirvad’, and claims were made that the chapatti is just like home-made Ashirvad(by ITC) chapattis, a chord of credibility could be struck. In this case, ‘Ashirvad’ is the unconditioned stimulus, and the quality, taste and reliability associated with Ashirvad’ is the unconditioned response. The imparted know-how that the chapattis are made with the goodness of Ashirvad is the conditional stimulus. This could typically grow into a case of ingredient building. However, as ITC itself is in the RTE industry, it could exploit the goodness of its own atta, to condition consumer mindset. Though this is not a permanent solution for a disgruntled consumer, perennial conditioning along these lines will ensure the company a dedicated consumer.
Implementing Marketing Strategies using Elaborating Likelihood Model
It would be ideal to tackle the upsurge of RTE into the Indian market by means of the Elaboration Likelihood Model (to persuade consumers), as given in the figure below.

The central route, through the leftmost vertical would be the most ideal way to approach this problem, as the results of it will ensure that RTE foods will become an ingrained part of the Indian food map, for future generations. This can be done by educating people by advertisements based on the time-saving concept, while issuing proof that no preservatives have been used. The central route is usually approached by means of high-involvement techniques. Eg; ad advertisement that shows how exactly to use an RTE product, with fine results for proof. Involvement, though subjective, is usually heightened by tackling
Emotional aspects
Through teaser Ads
By using the fear appeal.
With the urban population in mind, focus could be brought to young families where both the husband and the wife are working. The young Indian husband could be reassured with the idea of cooking food as tasty as his wife makes, within a shorter span of time. Repetition and visual aids –mouth-watering food in posters and advertisements, which would cause an onlooker to salivate, would help. The highly affective technique of family involvement cold be portrayed in the AD.
However, most often, in the case of RTE foods, in its current Indian context, the cognitive aspect is not enough to cater to their purchase. The visual aids discussed before, or celebrities in advertisement’s may help redirect from the peripheral to the central route. These aids can include advertisements featuring fully blown chapattis, and other indicators of fresh, homely food, besides the gastronomic graphics.
Examples of celebrities working as peripheral cues:
Popular celebrities like Sachin Tendulkar, can be used to convey the message. They can speak of the RTE food remind them of their grandma’s food wherever they go, and a feature of Sachin’s grandmother using RTE items in her cooking may assist in injecting appeal.
Further, a reputed celebrity, with a penchant for integrity, could be brought in for the advertisement to enforce credibility. The person involved could be a middle aged classy woman, or a well renowned cook herself/himself.
Besides this, positive cues that give the impression that the product is not artificial, like the presence of orange pulp in ‘Minute-maid’s ‘Pulpy Orange’ might psychologically assist the consumer to experiment with RTE foods. Eg. Coconut shreds can be introduced into fine coconut milk. Though this may make the mix coarse, there is a high possibility for the perceived credibility associated with the product to increase.

The focus could be shifted to kids as well, as because of the influence they have on their parents spending (the nag-factor), and also because they are the buyers of tomorrow. RTE items can be depicted in a fun manner to cater to this segment. Suggestions include

Introduction of a mascot
(RTC product -pilsbury chakki fresh atta’s white fluffy man worked wonders)

Introduction of clubs among children like the Kellogg’s fan club in USA.

Depiction of food at their tasty best, featuring ecstatic children.

Popular celebrities using catchy taglines (Eg. Boost is the secret of my energy)

Implementing Marketing Strategies using Theory of Reasoned Action

The marketing Theory of Reasoned action (Fishbein), inspite of being heavily cognitive can also be used to popularize the breed of RTE products in the country. The theory is based o changing attitude towards behavior, which are shaped by beliefs regarding behavior, and by the evaluation of these beliefs.
The model also used the quotient of subjective norm (the opinion of the society) to add new beliefs and reference and to use e beliefs to motivate the consumers of the end product.

In case, of RTE foods the message conveyed had always been aimed at housewives, giving them various reasons such as impressing the mother-in-law etc. However, if we need to convince this segment that this product is more than just a quick fix, we need to influence the subjective norms surrounding the product. One good strategy would be to influence the elders and children of the family so that they can in turn persuade the decision makers to buy the product. Cognitive based ADs like one where the housewife needs over ten hands to manage her household chores, have a huge impact on the audience. Kitty parties, bachelors, and children groups are strong influencers and influencees. Live kitchens that give users the opportunity to try out RTE based food items would be a strategic moves.
Surveys are used to calculate data obtained by this model.

CONCLUSION

To summarize, several marketing strategies or avenues can be used by companies trying to make an impact in the RTE industry. It would be productive for all companies if they collaborate and try to increase the entire industry size or “market pie” so that all companies could benefit from the increased sales. Variety is an imperative, taking into account the rise in the demand for Indian and international cuisines. Clearly, the future is very promising for those players who understand and work up to the dynamics of the market.

REFERENCES

1. http://en.wikipedia.org/wiki/Theory_of_reasoned_action
2. Ready –to-eat brands, not yet a palatable concept, by Ambi Parameswaran
3. http://www.fnbnews.com/article/detnews.asp?articleid=31817&SectionId=15
4. http://www.slideshare.net/edentamayogallardo/the-elm-etg271112
5. http://en.wikipedia.org/wiki/Elaboration_likelihood_model
6. http://www.uow.edu.au/~sharonb/children.html
7. https://www.youtube.com/watch?v=OkEvwRgphEk
8. https://www.youtube.com/watch?v=35CEyuzfSN0
9. https://www.youtube.com/watch?v=MAhxVVoqWSU
10. https://www.youtube.com/watch?v=jCQmxJmO660&list=PLFCBCA8BE1B9A56DA&index=8
11. https://www.youtube.com/watch?v=zfhLE2fnzh8&index=10&list=PLFCBCA8BE1B9A56DA
12. .https://www.youtube.com/watch?v=E3bd-ehTxDc&list=PLFCBCA8BE1B9A56DA&index=14
13. http://www.academia.edu/5373625/RTE_and_RTC_Foods_-A_New_Era_in_the_Processed_Food_Industry_With_Special_Reference_to_MTR_INTRODUCTION_AND_CURRENT_INDIAN_MARKET_FOR_FOOD_PROCESSING_INDUSTRY