Professional Documents
Culture Documents
INTRODUCTION................................................................................................... 2
OVERVIEW OF SNAKE INDUSTRY IN INDIA............................................................... 3
Consumer behavior .............................................................................................. 5
Indian consumer buying behavior analysis............................................................. 6
Market Universe................................................................................................... 7
MARKET PROFILE............................................................................................... 7
MARKETING ENVIORNMENT : Bingo........................................................................ 9
SWOT Analysis: Bingo...................................................................................... 10
MARKETING ENVIORNMENT : Pepsi Co...................................................................14
SWOT Analysis: Lay’s/Kurkure........................................................................... 14
Market Segmentation.......................................................................................... 17
Segmentation and Marketing strategies...............................................................19
MARKETING POSITIONING FOR Pepsi Co products...................................................21
Brand Management: Lay’s................................................................................21
Brand Management: Kurkure............................................................................ 22
Competitor Analysis:........................................................................................23
MARKETING POSITIONING FOR Bingo (ITC)............................................................27
Brand Management for Bingo:............................................................................ 28
CONCLUSION..................................................................................................... 30
-1-
-2-
INTRODUCTION
I , as student of XLRI’s satellite course PGCBM-17, had prepared this
report as part of our term assignment for subject of Principles of
Marketing (POM).
This document explains the brand differentiation between PepsiCo’s
lay’s/kurkure and ITC’s Bingo.
Regds
Vadan Mehta
-2-
-3-
The industry has been growing around 10% for the last three years,
while the branded segment is growing around 25% per annum to stand
at Rs 5,000-Rs 5,500 crore, due to various reasons like Multiplex
culture, snacking at home while watching TV, pubs and bars (where
they are served free). AC Nielsen's retail audit shows that the large
sales volumes are due to a marked preference for ethnic foods,
regional bias towards indigenous snacks and good value-for-money
perception. Of course the branded segment is much smaller at Rs
2,200 crore, which is what makes it so attractive to food Companies
that are looking at bigger shares.
Growth rate of ready made snack (Potato chips/Namkeens) industry
MAJOR PLAYERS
-3-
-4-
-4-
-5-
CONSUMER BEHAVIOR
Picking involves a random choice, here the buyer picks a brand from
the available brands, and is indifferent to the brand he buys. Picking
occurs when the consumer has (a) low involvement in the purchase, (b)
there is little uncertainty with untried brands and (c) there are few
differences between the brands (Assael, 1987).
-5-
-6-
Extended
Variety
Picking/Im Problem
Seeking Habitual
pulse Solving
-6-
-7-
MARKET UNIVERSE
Market universe defines the targeted audience for the product. It is very
essential for marketer to target specified audience/consumers for the product
to keep the product away from picking buying behavior. For this product
should be positioned as brand differentiator to it’s competitors. Product
should bring some kind of functional/technical/others advantage to consumer
then it’s competitors.
In our example, following are the attributes that have impact on
consumer decision-making process, while buying snack product. ITC and
Pepsi Co have to study each of these attributes
MARKET PROFILE
-7-
-8-
CONSUMER PROFILE
The Indian consumers are noted for the high degree of value
orientation. Such orientation to value has labeled Indians as one of
the most discerning consumers in the world. Even, luxury brands have
to design a unique pricing strategy in order to get a foothold in the
Indian market.
Apart from psychology and economics, the role of history and tradition
in shaping the Indian consumer behavior is quite unique. Perhaps, only
in India, one sees traditional products along side modern products. For
example, hair oils and tooth powder existing with shampoos and
toothpaste
-8-
-9-
Introduction of ITC
Bingo is snack product from ITC (Imperial Tobacco Company of India
Limited ).
ITC is one of India's biggest and best-known private sector
companies. In fact it is one of the World's most high profile
consumer operations. Its businesses and brands are focused almost
entirely on the Indian markets, and despite being most well-known
for its tobacco brands such as Gold Flake, the business is now
diversifying into new FMCG (Fast Moving Consumer Goods) brands in
a number of market sectors - including cigarettes, hotels, paper,
agriculture, packaged foods and confectionary, branded apparel,
personal care, greetings cards, Information Technology, safety
matches, incense sticks and stationery.
Examples of its successful new FMCG products include:
About Bingo
The Bingo brand of chips was launched by ITC on 14th March 2007
with an aim to capture at least 25 percent market share of the Rs 2000
crore branded snack market within five yrs. The launch is symbolic of
-9-
- 10 -
STRENGTH
Distribution
ITC leveraged it traditional businesses to develop new brands for
new segments. For example, ITC used its experience of
transporting and distributing tobacco products to remote and distant
parts of India to the advantage of its FMCG product as BINGO.
Experience
ITC has launched other FMCG products (Ashirwad Ata, Minto,
Kitchens of India ) and thus it has good experience of food market in
India, which can be strength for BINGO.
Skilled Resources
ITC has availability of master chefs from its hotel chains to develop
new food concepts and tastes for FMCG market. ITC has utilized these
skilled resources, to launch BINGO with various tastes.
Capital
ITC is a diversified company trading in a number of business sectors
including cigarettes, hotels, paper, agriculture, packaged foods and
confectionary, branded apparel, personal care, greetings cards,
Information Technology, safety matches, incense sticks and
stationery. Thus ITC had enough cash flow to launch and sustain, new
brand BINGO.
WEAKNESS
Cash Flow
ITC’s original business was traded in tobacco. ITC stands for Imperial
Tobacco Company of India Limited. It is interesting that a business
that is now so involved in branding continues to use its original name,
despite the negative connection of tobacco with poor health and
premature death.
- 10 -
- 11 -
Organization Attention
ITC is big company with many division and product diversifications.
Thus it is hard for any ITC product to hold the organization attention
and commitment for long time.
International Standards
Being a domestic player, ITC’s Bingo is behind in understanding and
adapting international standards of food processing and marketing.
Price
While competing with local snack alternatives, Bingo price is high.
Brand Loyalty
Typically Indian consumer is having law brand loyalty for ready made
food products.
OPPORTUNITIES
Growing Industry
The Indian FMCG sector is the fourth largest sector in the economy
with a total market size. Quoting the study by McKinsey & Co, a report
by the US Department of Agriculture stated "The market size for the
food consumption category in India is expected to grow from US$ 155
billion in 2005 to US$ 344 billion in 2025 at a compound annual growth
rate of 4.1 per cent."
- 11 -
- 12 -
Untapped Market
Growing middle class and new life style in India, has created
opportunity for many FMCG products for untapped market.
Emerging India
Internet and TV media has increased the awareness of different world
culture and their food habits. Indian consumer is started looking for
new tastes and willing to pay bit extra price for that. Expanding Mall
culture, multiplexes and other avenues create new marketing
opportunities for snack industry.
Globalization
Increased global trade has opened door for domestic market to
international players and in same fashion triggered new opportunities
for domestic players as ITC for international consumer.
Brand awareness
Due to innovative marking strategies and available platforms for
advertisement (TV channels, news media, Commercial radio
channels), Indian consumer is slowly changing, his buying behavior
from seeking to problem solving. Brand awareness in FMCG
marketing is increasing.
THREAT
Competition with Multinational brands
The obvious threat is from competition, both domestic and international.
Western companies will see India as an exciting opportunity for themselves
to find new market segments for their own offerings. ITC's opportunities are
likely to be opportunities for other companies as well. Marketing team of ITC
has stiff task to establish BINGO in highly competitive snack market, which
is dominated by multinational companies as, FritoLays. Due to high
investment and international experience of snack industry, Fritolays has
higher consumer visibility, brand value and market penetration.
Regional players
Regional players as Balaji Wafers, poses threat to Bingo’s market share due to their lower
prices. Regional brands have better knowledge of local taste and consumer behavior.
- 12 -
- 13 -
Agriculture Dependency
As other FMCG products, BINGO is also dependant on agriculture raw
materials as potato, rice grains, chili etc. Irregular nature of monsoon has
always make agriculture market on mercy of rain god. A bad monsoon can
bring monstrous price hike in agriculture products which may have adverse
impact on FMCG market.
Internal Competition
ITC is a diversified company trading in a number of business sectors
including cigarettes, hotels, paper, agriculture etc. Thus if a particular
product of ITC, fails in achieving the required market share or change in
company’s business strategies, may end the life of the product. There is
possibility that BINGO is facing threat from other ITC products.
Government Taxation
Heavy tax on FMCG products will bring price hike and hurt the sales of the
product.
- 13 -
- 14 -
STRENGTH
Distribution
Pepsi Co has launched Lays potato chips and Kurkure in 1998. By that
time, Pepsi Co has already acquired Uncle chips, indigenous brand of
India and have strong distribution network of Uncle chips, ready for its
new brands.
Experience
- 14 -
- 15 -
Brand Promotion
Pepsico’s Lay’s brand was endorsed by bollywood stat Saif Ali Khan
and thus had high visibility in market. Kurkure is endorsed by another
bollywood star Juhi Chawla to get the visibility and position as Family
Product.
WEEKNESS
White Space
Term White space is referred to area where parent organization has
never ventured before. Indian food market was white space product for
Pepsi Co.
Market Appeal
With Kurkure is promoted as law fat snack. It is uncertainty about Law
fat appeal’s credibility to traditional Indian consumer, for whom
Kurkure is made.
Price
Pepsico’s products are expensive the regional snack products due to
it’s high production and markeing costs.
Brand Loyalty
Typically Indian consumer is having law brand loyalty for ready made
food products.
OPPORTUNITIES
Globalization
Due to market globalization, Pepsico is operating in 55 countries.
Product such as Kurkure can be launched in other potential countries
as Shri lanka, Pakistan, Morrocco, Chili.
- 15 -
- 16 -
Emerging India
Internet and TV media has increased the awareness of different world
culture and their food habits. Indian consumer is started looking for
new tastes and willing to pay bit extra price for that. Expanding Mall
culture, multiplexes and other avenues create new marketing
opportunities for snack industry.
Brand awareness
Due to innovative marking strategies and available platforms for
advertisement (TV channels, news media, Commercial radio
channels), Indian consumer is slowly changing, his buying behavior
from seeking to problem solving. Brand awareness in FMCG
marketing is increasing.
THREAT
Multinational Product
Being a MNC product, Kurkure has impact of relationship between host
and parent country. Bad relationship may have adverse impact on
Kurkure’s brand.
Government legislation
Any harsh government legislation/tax/policy change can disturb the
Pepsico’s products’ business case and profit.
- 16 -
- 17 -
Market Segmentation
1. The Socialites
Socialites belong to the upper class. They prefer to shop in specialty
stores, go to clubs on weekends, and spend a good amount on luxury
goods. They are always looking for something different. They are the
darlings of exclusive establishments. They go for high value, exclusive
products. Socialites are also very brand conscious and would go only
for the best known in the market.
2. The Conservatives
The Conservatives belong to the middle class. The conservative
segment is the reflection of the true Indian culture. They are traditional
in their outlook, cautious in their approach towards purchases, spend
more time with family than in partying and focus more on savings than
spending. Slow in decision making, they seek a lot of information
before making any purchase. They look for durability and functionality
but at the same time are also image conscious.
They prefer high value consumer products, but often have to settle for
the more affordable one. These habits in turn affect their purchasing
habits where they are trying to go for the middle and upper middle
level priced products.
4. India’s Rich
• The Rich
- 17 -
- 18 -
5. Rural Consumer
About three quarters of the Indian population are in the rural areas and
with the growing middle class, specially in the Indian cities, the spill
over effect of the growing urban middle class is also felt in the rural
areas.
- 18 -
- 19 -
- 19 -
- 20 -
- 20 -
- 21 -
To gain the market share in Snack industry and position Frito lays’ food
products with brand differentiation, Pepsi Co has chosen Bollywood stars as
Saif Ali Khan and Juhi Chawla to endorse their products Lay’s potato Chips
and Kurkure, respectively.
An opera singer is at the height ...a bored Saif munching his Lays His equally bored girlfriend
of her performance. But amongst comments, "Is aunty ne to saara replies that he could sing better,
an appreciative audience... mazaa kharab kar diya." and as he sees her eat the chips,
- 21 -
- 22 -
He walks up to the opera lady She can't help taking one more, Soon the stage comes alive as
during her break, offers Lays and but when he pulls back she she and Saif break into a Hindi
challenges her, "I bet you can't accepts defeat and asks, "What's film song and dance, the
- 22 -
- 23 -
Offering Kurkure to her guest Taking some, the unimpressed But in the next instant she says,
Juhi informs her, "Naya Kurkure." guest replies, "Sab kuch naya hi "Aur bhi mast banayala hai
Her shocking style of speaking MVO: "Aila, naya Kurkure Red "...Masti bole to..." the old
creates a stunned response in Chilli Chatka, Masala Munch ab lady starts and Juhi completes,
atke..."
Competitor Analysis:
Currently PepsiCo enjoys leader in organized snack industry with 45%.
ITC’s recently launched Bingo has decreased marker share of Pepsico
by 8 to 9&. Bingo is the closest competitor PepsiCo is having at brand,
product and market universal level. To counter the Bingo with it’s new
tastes and ingredients, forced Pepsi Co to indianized it’s brand,
Kurkure by lauching Desi Beats. Bollywood star Kareen Kapoor was
chosen to endorse the Desi Beats of Kurkure to position the brand
among Urban Youth, especially among teen girls.
- 23 -
- 24 -
In a bid to take on its archrival ITC Foods, Frito-Lay India has opted for
a swadeshi branding strategy by launching ‘Desi Beats’, as part of its
flagship snack brand Kurkure’s brand portfolio.
With this move, PepsiCo is now directly competing with ITC Bingo’s
Mad Angles. “In appearance, Pepsi’s new brand ‘Desi Beats’ is an
exact replica of Bingo’s Mad Angle. It’s a clever strategy of PepsiCo to
gain market share in the highly competitive sector,” said an industry
analyst in Mumbai. With a shift in brand strategy, the market
dynamics will soon change in the branded snack sector in India.
However, imitation is not the best form of appreciation for ITC Foods.
For, the company is getting ready to launch an aggressive advertising
campaign, which will emphasis the originality of Bingo’s Mad Angles in
its communications. “Very soon, ITC Foods will launch its media blitz
which will talk about the uniqueness of the product which has fared
very well in the Indian market place,” informed key industry sources.
Currently, Ogilvy & Mather (Bangalore) is giving finishing touches to
ITC Foods brand new ad campaign.
Across the road, Frito-Lay India is fine-tuning its marketing strategy to
promote its new launch ‘Desi Beats’ across the country. To support its
high-voltage television campaign, Frito-Lay will be launching a host of
promotional activities which include radio advertising, outdoor
promotion and on-ground activities.
On the core advertising strategy for ‘Desi Beats’, Rohit Ohri, senior
vice president & managing partner JWT India said: “In our
communications, we have positioned the brand as ‘no fun with out
desipan’. To support the launch, we are rolling out a multi media ad
campaign featuring cine star Kareena Kapur.”
According to a spokesperson from PepsiCo, ‘Desi Beats’ is a new age
snack from the house of Kurkure, made by leveraging Pepsico’s
Technological know how, using Indian ingredients. “The product was
launched keeping Indian tastes in mind. Targeted at the youth
segment, it is an all new snack with a stylish Indian twist,” he added.
Now, the vital question is: Who will emerge as the winner in this battle
for market share
- 24 -
- 25 -
We see the story of Next shot, the evil Enters the fairy
Cinderella, being narrated stepsisters get ready for the Godmother(Ila Arun) and
in a Haryanvi accent. ball and leave the poor hands her a pack of Kurkure
Cinderella at home. Desi Beats.
Cut to, the ball where Enters Cinderella in a Desi VO: Kurkure ka naya Desi
everyone including the Avatar and spices up the Beats, firangi style mein
stepsisters are engaged in a ball with her dance moves. desi tadka.
boring dance.
- 25 -
- 26 -
- 26 -
- 27 -
- 27 -
- 28 -
Due aggressive and well planned marketing statergy, Bingo has gained
the market share of appx. 16% in first two years. Market leader Pepsi
Co has been forced to launch product Desi beats to counter Bingo-
mania.
- 28 -
- 29 -
a brand. The fact that ITC has a well established distribution network
has also helped it increase consumer interaction points.
- 29 -
- 30 -
CONCLUSION
Feature Pepsi Co (Lays & Bingo
Kurkure)
Market Share 45% 16%
- 30 -
- 31 -
• Brand
awareness
Threat • Multinational • Competition with
Product Multinational
• Government brands
legislation • Stiff competition
• Stiff with regional
competition players
with regional • Agriculture
players Dependency
• Agriculture • Internal
Dependency Competition
• Prevalence of
• Prevalence of cultural taste
cultural taste brands
brands • Government
Taxation
- 31 -