Abstract
Monginis was started in 1970 at Chembur, Mumbai, India, with just one store. The franchise model that it pioneered in the industry embraced some real-time practices of human development that were carefully captured through the recruitment strategy, job engagement, training, positive work environment, along with strategic practice of embracing local taste in product that has summoned success. How will Monginis reach out to every Indian? While the franchise model has led to expansion and growth, the company does not wish to sit idly on past laurels, but how should it move ahead? This is an updated case study that touches upon two additional dimensions: 1) getting children to bake a cake program and 2) training intervention and buddy support to the franchisee team.
TopBackground
Monginis traces its roots back to its humble beginning to a time when it was a favorite with the Europeans in Mumbai. Little excuse was needed for Englishman to pick up a Monginis cake whenever there was an occasion in his family. A birthday, and an anniversary, a wedding or even tea-time would not be complete without Monginis. Today, it is the nationwide headquarters to which all manufacturing and cake shop franchisees report.
Early in the 20th century, two Italian brothers of the Monginis family ran a catering service in Mumbai's Fort precinct, one of which was popular with the city's European residents at the time. In 1958, Monginis Catering was bought up by the Khorakiwala family, and became Monginis Foods Limited. In 1971, the company adopted the franchise model of business, with a stated emphasis on localized production for local tastes. It also models itself on the “food boutique” concept, focusing on quality, presentation and service. It has thereby expanded its brand and reaches across the country, hitting a total worth of about 950 million rupees by 2012.
Today, the 42,000-sq-ft HACCP certified headquarters of Monginis is the place from where all the yummy stuff emerges from. It is the nationwide headquarters, to which all manufacturing and cake shop franchisees report. It is the fountainhead of ideas that are good enough to eat. The Monginis headquarters is also a model bakery with state-of-the-art manufacturing facilities designed to produce a wide range of cakes, gateaux and pastries, tongue-tickling savouries and a variety of any-time snacks. Here quality assurance steps at each and every stage of the manufacturing process ensure world-class soft n fresh cakes, snacks and baker's ware. Monginis headquarters has a well equipped lab and has gained the HAACP certification since past 2 years for maintaining and assuring best of the Hygiene and quality standards of our products and for our customers.
Globally Monginis has its strong presence in Cairo, Egypt,and besides supplying to neighboring countries like Libya, Yemen, Sudan in the African continent. Monginis brand also caters to the prestigious UK market and will soon be expanding to other European countries.
Monginis, based in an emerging economy (India) and a part of a growing bakery market, always had a challenge to understand the local palette in order to become successful and to become a national brand. It was then in 1990 that Monginis decided to franchise even the production of the cakes. Hence the cake shop moved outside Mumbai for the first time, opening stores in Rajkot, Pune, Goa and Ahmedabad
Monginis now have tens of production facilities, some owned directly by it while several others are franchised. Today the franchisee manufacturers account for about one half of total production and the company monitors quality of the produced by deploying its own executives to be part of the franchise team. All Monginis products are made at these centralized bakeries and then sent to the various outlets, which greatly helps Monginis to optimize the retail space - the cake shops are only about 200 sq ft. Monginis charges the franchisee bakers a royalty of 4% on their total sales to franchisee outlets.
Key Terms in this Chapter
Franchising: Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchisor licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee. In return the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a Franchise Agreement.
Product Management: It is an organizational function within a company dealing with new product development, business justification, planning, verification, forecasting, pricing, product launch, and marketing of a product or products at all stages of the product lifecycle.
Bakery: A bakery is an establishment that produces and sells flour-based food baked in an oven such as bread, cookies, cakes, pastries, and pies. Some retail bakeries are also categorized as cafés, serving coffee and tea to customers who wish to consume the baked goods on the premises. Confectionery items are also made in most bakeries throughout the world.
Innovation: It is a new idea, creative thoughts, new imaginations in form of device or method. Innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs.