4.
PESTEL Analysis
Political:
Less Tax on Juice: Government has kept less tax on beverages based on fruit pulp or
fruit juice in comparison to fizzy drinks like Coke, Pepsi, and Sprite etc. to promote
fruit juice. Fizzy drinks falls under 40% tax slab whereas fruit juice falls under 12%
tax slab.
Political Support: In an attempt to increase sourcing from Indian farmers PM
Narendra Modi has urged beverage companies to add 5% natural fruit juice in their
product. It resulted in Coke launching Fanta with 5% Indian-origin juice in selected
market.
Licence: If annual turnover is less than 12 lakhs then only registration is required, No
need for licence.
Economical:
Inflation: Since, 2014 inflation rates are stable at (6 +-1%), and went to as low as
1.54% in June 2017. This means the cost of production will be lower and directly
affects the growth of organisation. This will also leave consumer with high Personal
Disposable Incomes (PDI), resulting them to spend more on consumption.
Gross Domestic Product: If Gross Domestic Product (GDP) is rising, the economy is
in good shape, and the nation is moving forward. India has showed positive trends
with respect to its GDP thus it’s per capita income is increasing and thus amount
spend will be more.
Living Standard: With the rise in living standard the demand for more production of
goods, number of goods and the quality of goods will increase.
Social:
Age Distribution: The Median age of India’s population is predicted to be between
27.9 years (2018) and 34 years (2040). So most of the people are working class and
have less time for other activities. This promotes packaged, fast consuming and
nutritious product.
Population Growth: With India to become the most populous country in the world
by 2025 and people becoming more of health conscious, the above trends should
serve to be of higher interests to set up more food consuming product in the market.
Education Level: Education plays a major role as a buying factor. As there is an
increase in literacy rate in India. People will be more aware to select their product and
will be able to differentiate the product well.
Consumer Behaviour: Now a day there is a shifting trend of people becoming more
health conscious. This will bring in the trend shift in consumer buying behaviour from
fizzy drinks to fruit juice.
Technological:
Automation: With automation most of the work will be done by machines as before
it was done by labour and eventually it will reduce the amount of money spend on
labour. Dabur has state-of-the-art food processing plants that are completely
mechanized.
Research & Development: Research can be done on how to preserve the juice for
more days and how to decrease the preservatives. Real juices uses the advanced
technical process –Aseptic processing which doesn’t need any chemical preservative.
Tetra Pak with a double seal spill proof cap is used to pack the fruit juice which
retains the freshness and quality of the juice. This is packed like this to keep the juice
fresher for longer time without adding any preservatives.
Advancement in technology: Technology can be used to do digital marketing, health
awareness campaign and to increase the operational efficiency. Dabur runs “Real
moms, Real stories”, “Mom’s speak” digital campaign for digital marketing and
spreading health awareness using this.
Environmental:
Recycled Packing: The packaging done can be recycled, sustainable and
biodegradable, which is very eco-friendly. Thus they are not doing any harm to
environment.
Hygienic: Dabur has state-of-the-art food processing plants which eliminate outside
contact to maintain hygiene and retain the natural goodness of the foods.
Afforestation: If demand goes high, farmers will have to supply more fruits which
will encourage them to plant more trees.
Legal:
Companies’ law: Company meets all the company law requirement so as to grow,
develop and sustain in competitive market.
Employment law: This law provides equal opportunities to every citizen to work and
earn his livelihood. It provides equal opportunity to all the citizens.
Consumer protection: This law protects the right of consumers and he can file a case
against seller if he finds that he is cheated.
Industry-specific regulations: FSSAI (Food Safety and Standard Authority of India)
licence and GST registration is mandatory for the companies, who are in Food sector.
