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DECA IBP: WHOLE FOODS INDIA

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Zahra Desai

on 6 April 2014

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Transcript of DECA IBP: WHOLE FOODS INDIA

Three-Year Plan Projection
Whole Foods India
By: Zahra Hajee and Harshi Desai
Why India?
India Economic Analysis
Market Segment Analysis
Planned Operation
Whole Foods Market
Products and Services
Transportation
Pricing
Promotion Plan
Advertising Through Media
Planned Financing
Warehouse in Bhiwandi
41,000 sq ft
Located in the suburbs
Easy means of transport
Whole Foods stores in three major cities:
Mumbai
Delhi
Bangalore
What is Whole Foods?
"America's Healthiest Supermarket"
Forerunner in the organic foods industry
Based in North America and the U.K.
Rapid growth and sustainable business model
Mumbai, Bangalore, and Delhi
located near major rivers or in coastal areas
highly populated cities
potential suppliers: farmers
Competitive Advantages
India's emerging middle class
India's agricultural sector
Recent FDI Policies
Demographics
Whole Foods will operate through wholly-owned subsidiaries
Subsidiaries treated as franchises
Advantages:

Balance of profit
Exempted from U.S. income taxes
Liabilities
India's Projected Population Growth Graph
Whole Foods' Target Market Growth
Tax Considerations
Included within profit margin
Sales Tax: 4%
Value Added Tax (VAT): 12.5%
Currency Exchange
Proposed Pricing
Currency:
Rupee
which is partitioned into 100 paise
Current exchange rate:
$1 USD = INR 61.75
INR cheaper than USD
prices of raw materials relatively cheaper in India
offset partially by the lower sales price per unit
10-20% premium
Long term contracts
consistent quality
no supply disruptions
5-10% promotional discounts
loyalty discounts
market surveys
3-6% profit margin
THANK
YOU!
Mumbai Road Map
Bangalore Road Map
Delhi Road Map
Documents Required for Transportation
4 copies of a tax invoice
Packing list
Bill of exchange
Taxes:
A payment of the local sales tax (LST) and a value added tax (VAT), paid in accordance with our tax identification number (TIN).
Not only word-of-mouth advocacy (main campaign North America) but a true marketing campaign
2 million INR for Year 1
Expenses drop to 1.5 million by Year 2 due to brand loyalty
Traditional Advertising
Advertise through "Times of India", "Maharashtra Times" and "Navbharat Times"
55500 INR ($898.79 USD)
Social media promotional programs, such as discounts and coupons, will further attract audiences
Advertising on TV will be concentrated in all major television channels
main form of marketing
30 second advertisement per week in every theater in Mumbai
INR 664,500 ($10,761.13 USD)
India's Legal Analysis
India's Economic Evaluation
India's Foreign Investment and Trade
India's Consumer Market
India's Retail Industry
3rd largest by PPP
10th largest by nominal GDP
Emerged from global financial crisis as one of the world’s fastest growing economies.
Recently open to Foreign Direct Investment (FDI)
51% FDI in multi-brand retail
Average income per household will triple over the next decade
5th largest consumer economy in the world by 2025
Currently primarily unorganized retail
Organized retail growing rapidly: 20% share by 2020
Diminished middlemen system
Known for high-quality organic produce
Maintains guidelines established by USDA National Organic Standards
Recognizes NPOP
Turns the tedious chore of grocery shopping into a pleasant experience.
Local farmer's market aesthetics
Specialized staffing in every department
Bangalore
Potential Location
FDI Policies
Certain FDI policies provide an advantage to mass grocery sectors such as Whole Foods:
Minimum FDI of USD 100 million with at least 1/2 the amount invested in back-end infrastructure, including cold chains, refrigeration, transportation, storage, packaging etc.
Source a minimum 30% from the Indian small and micro industry
Minimum investment of INR 250-220 cr in backend infrastructure in the first three years.
30% sales from private label brands or unbranded products sourced from small industries.
Suppliers
Produce directly transported from local suppliers (within 100-mile radius)
Eliminated Middlemen
reduced transport
direct relationships
#Whole Foods
Will place 60x20 ft billboards throughout Mumbai’s suburban neighborhoods
800,000 to 1,000,000 INR ( $12,955.47 to $16,194.33 USD)
INR 28,407 ($460.03 USD)
Full transcript