Journal of the International Academy for Case Studies Volume 23, Number 3, 2017
3 1532-5822-23-3-115
iD fresh food share value based pricing strategy to capture the largely unorganized
Indian market. They believed in the philosophy that “if the products are worth, the price is
always right” even for price conscious consumers. The company launched idly dosa batter in
1 kg packets for Rs.70 and 2 Kg for Rs.140, 1 Kg Udupi style idli batter Rs.65, 1 Kg ragi idli
dosa batter Rs. 80.The SKU’s price of iD Fresh product mix are: Just heat Malabar parota–
350 gm–Rs.70, Whole wheat parota–350 gms–Rs.70, whole wheat chapathi–Rs.60, natural
curd–400 gms–Rs.30, Paneer 200gms Rs.90. The company has also introduced combo packs.
The price of the product was fixed on par with the competitors. The product meets the needs
of middle class therefore the demand for the product is inelastic.
When the master plan of making 50,000 Kg of batter/day happened, the cousins
divided the work among themselves. Each one of them took a task, which they were best at.
One took care of grinding while another who had his well-established network at Malyali
Kirana shops took the charge of delivery, which was done with his own scooter. Mustafa took
care of the entire operations. They started by making 10 packets of batter of 1 Kg each in a
day that was delivered by second hand TVS scooter in Bangalore, India.
Based on the customer feedback and demand, iD Fresh reached out to 20 stores in
Bangalore gradually. The main distribution problem was logistics issues due to the perishable
nature of the product. The other major problem which had surfaced was lack of facilities to
store the unsold items; resulting in wastage and loss due to excess inventory. Efforts were put
to strike a balance between availability and loss due to unsold inventory. The CEO’s IT
expertise came handy and app Bizom was developed with the help of Mobisys Technologies.
With the app; information could be captured on a real-time basis. This enabled iD Fresh to
work on Just in Time inventory model that helped to forecast the sales, returns and optimize
production. The software features geo-fencing that uses RFID technology or GPS. It was
developed to identify geographical boundaries thereby helping to connect with their staff and
customers. This technology helped to track their supplies and to ensure that their timely
availability and decision-making based on the updated sales data.
In order to scale up their manufacturing capabilities, they tied up with a German
manufacturer, which could churn out 50,000 kg of batter every day. This required an
investment of Rs. 10 million. For parattos, they developed their own machine with the help of
a fabricator.
Currently, iD Fresh enjoys a market share in Bangalore, Mangalore, Mysore,
Hyderabad, Pune, Sharjah with semi-automated manufacturing plants and ISO certification.
They are locally based in each city to replenish products on a daily basis. With a team of 500
workers, the company manages to serve 5,000 retail outlets through 86 delivery routes (Anon,
2017). The company focusses on establishing its own distribution channel (trucks &
salesman), maintaining close relationship with retailers and exercising strict control on
product quality and service level to enhance productivity and maintain orders on a daily
basis.
In an interview; CEO Mr.P.C. Musthafa says, “Batter is made, seal packed and loaded
into chiller vans as early as 5.00 A.M. Further, the batter is supplied to stores across
Bangalore and other cities. The firm has partnered with thousands of retail stores and the
supply to all the areas is completed before 2:00 PM”. In order to maintain the customer base,
they supply directly to some of the largest Indian retailer chains viz., Reliance Fresh, Food
Bazaar, Spencer’s, Nilgiris, Heritage, Total, Smart, Safal and others.
Its products have reached more than 5000 retail outlets across eight cities. The
company has also partnered with leading grocery delivery portals like Bigbasket and Grofers.
The CEO strongly feels that online sales are still only a fraction of the overall market. iD now
employs 650 people, touching more than 10,000 stores a day
to cater to customers at
residential complexes, corporate offices and software parks. In the B2B business, they have a