Nilgiris Since 1905

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Nilgiris: At the heart of Great taste. Since 1905.

Muthuswamy Mudaliar, a mail runner in the British Colonial Rule is flooded with requests to carry products on his dairy trips into the hills of Ooty and Coonoor from Metupalayam in TamilNadu. He buys the butter business from an Englishman in Vannarpet and starts what he calls the “Nilgiris Dairy Farm Ltd”. The Nilgiris Dairy Farm Ltd shifts Operations to Ooty Club Road, still catering to the hills and specializing in dairy, dairy products, bakery and chocolates. With Ooty being a popular retreat for the British Administration in the region, business thrives. Nilgiris diversifies by opening the first outlet outside Ooty at Brigade Road in Bangalore in the year 1936 where they were able to capture the market for butter among the households. They opened a unit for producing Dairy Products in Erode for enhancing its production capacity to meet the growing markets. Later in the year 1971 Nilgiris became a Private limited Company and switches to self-service super market format. The foray of Nilgiris super market chain in Chennai happened in the year 1982 when it opened a bunch of outlets in Chennai, Erode and Coimbatore announcing its entry as a major player among the Supermarkets in the South.

The franchise Model adopted by Nilgiris is a huge success and enables it bring about a better customer focus and establish itself a reliable brand to the customer. The above mentioned facts are meant to a give a picture of how an entrepreneur is created by people themselves and the success of a business model is purely based on the customer centricity and the desire to provide a unique shopping experience rather than just satisfying the needs of the customer.

The focus now shifts to the outlet of Nilgiris at Nanganallur. Nanganallur is place in Chennai which is located in the suburbs of Chennai but is slowly growing into one of the most happening spiritual hub of Chennai after Mylapore. The rapid growth of flat culture and the fact that Nanganallur becoming easily accessible makes it all the more attractive for the IT People and the upper middle class who were earlier restricted to Adyar and Mylapore for purchasing houses.  Not to forget the old age population who live on heft pensions and returns coming out of smart investments done during their working tenure. This is the kind of demographic profile of the region.

Considering this demographic profile we have super markets vying with each other to establish their customer base. Nilgiris has achieved stupendous success in achieving the top position among the upper middle class population.

The reason for this being the fact that working on a franchise model enables Nilgiris to focus better on the customer needs as a particular franchise has to concentrate on the few areas which he owns and his performance is monitored regularly by the company and will be taken into consideration as Nilgiris tries to expand into new regions in and around Chennai. Chennai being an emerging market with a lot of scope for expansion; it becomes imperative for the franchise to be performing in its best business interest.

In Nanganallur, Nilgiris is being located in a strategic location close to a temple which attracts people on a daily basis. As far as analyzing Consumer preferences is concerned it is at its best to illustrate this let me narrate an example – Aavin Butter despite being high priced is preferred by people for making sweets and savouries by localities during festivals . During the last Diwali season there was a serious shortage of supply of Butter, it was during this time Nilgiris captured the market by increasing the availability of its butter and attracted consumers to purchase them by having it in different quantities.

The ambience is also pretty good making it comfortable for the consumer to think and purchase more rather than restricting them to the list. This becomes all the more important among the upper middle class population who purchase using Credit/Debit Cards. This provides an opportunity to purchase based on their current as well as the future needs.

Product positioning is pretty good and is constantly changed based on consumer preferences. The list of products which they market under their own Brand name is finely blended with the other existing brands in the product. Inventory maintenance is spot on and they ensure that the customer needs are met in the first visit. They also ensure that the recently launched products are also on the aisles so as to satisfy the initial surge based on the ad campaigns.

One more thing to prove their customer focus is the fact that we have a lot of roadside vegetable vendors and fruit vendors so people seldom buy fruits and vegetables from supermarket in our locality, taking cognizance of this fact they have devoted minimum shelf space for it and replaced it with packed food products like Paneer and Ice Creams.

The competitor focus which had come into the fore when they utilized their rented commercial space to the fullest extent after seeing the chat shop opened outside their outlet they opened shops making adai and appam which was purely to cater to the needs of the traditional south Indian old age population who were unable or not allowed to make those dishes in their home due to diet restrictions. This has been a pretty successful venture both for Nilgiris and the petty shop owners.

Nilgiris being an early entrant has capitalized on this advantage and has made the best out of the opportunity presented to them.

S..Santhosh Kumar

FT13472