The document provides an overview of the Indian wafer snacks market. It discusses the market size of approximately Rs. 4,500-5,000 crores annually and growth rate of 30%. Major players include Frito-Lay, Bingo, Haldiram, and Balaji. Frito-Lay commands 45% market share. The document then analyzes the industry attractiveness using Porter's 5 forces model, finding the threat of new entrants and competitive rivalry to be moderate and high respectively. Finally, it summarizes the marketing strategies of leaders Frito-Lay and Bingo, and challenger Smart Chips.

1. Wafer Warfare A project aimed at understanding the Indian Wafer Snacks Market with special emphasis on Market Size, Market Structure, Competitors and their Strategies. Submitted To:- Prof. Dr. Amit Rangnekar By:- Rahul Vaswani Chetana’s R.K Institute of Management & Research Roll No:116 (M3, MMS Marketing)

3. The market is growing at 30 percent annually

4. The branded players account for 2,000 croresof the market size

5. Major branded players include Frito-Lay, Bingo, Haldiram, Balaji, Parle

6. Potato Chips and Potato based items account for 85 percent of the total snacks segment.

7. As per Nielsen’s Retail Audit, Frito-Lay commands 45% market share, followed by Haldiram at 27% and Bingo at 16%

9. Analyzing Segment Attractiveness (Porter’s 5 forces)

11. As branded players are priced similarly, new players might penetrate by adopting a lower price or by offering more grammage at the same price (Balaji-strategy)

12. New players with a distinct USP and marketing strategy may find it easier to enter the market (Bingo Strategy)

13. Unorganized players still account for half of the total wafer segment, thereby discouraging market entry

14. Veteran players such as Fritolay, Haldiram etc enjoy economies of scale, well-established distribution and good distributor relations.Hence, the threat of new entrants is moderate.

16. Low Quality differences among branded players.

17. Quality difference between branded and unbranded offerings is offset by low price offered by unbranded players

18. Cost of switching is low as all players have a similar pricing strategy

19. Brand Loyalty is high for branded playersHence, the threat of competitive rivalry is high.

21. Higher cost of input commodities leads to lower margins, making the market unattractive for distributors and retailers (in an already low-margin, high-volume market)

22. Shortage of any input material may also affect production and thereby impact distribution.

23. Veteran players like Fritolay and ITC already have a well-established network of suppliers. ITC’s e-choupal venture permits a steady supply of raw materials at the lowest price. Hence, the bargaining power of suppliers is high.

25. Competitor differentiation is in terms of variants and communication.

26. Ability to substitute is high as brands are priced similarly and distribution problems for one brand promote sales for the other.

27. Price Sensitivity is high. An increase in the price of Lays may promote a switch to Bingo for most buyers (except for loyalists)Hence, bargaining power of consumers is high.

29. All snacks are considered to be substitutes of each otherBiscuits, Wafers and local snacks like Chakli, banana chips, farsan etc are all substitutes of one another Hence, the threat of substitutes is high.

31. Do not have a well-established distribution network

32. Do not have good supplier and dealer relationships However, if one can “Pull” a bingo or carve out a “Smart” Niche ala Smart Chips, the entry to this market may be profitable.

33. UnderstandingTheMarketStructure

34. MARKET STRUCTURE

35. Stages in the Lifecycle of the Category

37. Product Testing – identifying a sample target group to evaluate the potential of the product

38. Research & Development – aimed at constantly improving/differentiating the product

39. Eg, before Launch, Bingo developed a cross-sectional team of 8 individuals who travelled across 14 cities to identify the snacking habits of the Indian Consumer. The team found out that local-tasty snacks like khakra, vadapav , samosas, etc were the popular choices among the Indian audience. Based on this information, the company decided to develop flavors with an Indian taste.

41. The price is set keeping in mind the competitor’s offering, the price-sensitivity, market size, cost of switching, extent of brand loyalty among other factors. However, it is advisable to follow the leader in this regard unless there is a significant USP. If the product is me-too, a lower price is advisable

42. Promotional Spends, if launched nationally, must be high enough to gain maximum visibility in the early stages. Efforts must be made to keep the communication simple and unique. The launch campaign must be such that it doesn’t get lost in the clutter.

44. The company may introduce newer variants through continuous R&D

45. The firm may undertake sales promotion such as extra grammage, freebies, etc.

46. Example: The sales of Lays multiplied through the introduction of “Tazo”

50. Marketing Strategy of Frito-Lay Product Strategy:- Frito-Lay's product strategy aims at differentiating among its own brands in terms of product taste, design, packaging and target audience.

52. Lays and Kurkure, the two popular choices, come in different SKU’s priced at Rs.5, Rs, 10 and Rs. 20, similar to Bingo and Haldiram.

54. For Lays, the company signed on ambassadors Saif Ali Khan & MS Dhoni. Indianized versions of Lays were also launched after Bingo’s success with Indian flavours. These included Chat Street,

55. “Chala Change Ka Chakkar” – the largest ever brand promotional strategy undertaken by Fritolay aimed at bringing all its flagship brands under one roof. This massive umbrella campaign would allow chosen customers to live the life of a Bollywood Indian celebrity for a day.

56. “Chai Time Achievers” – a Kurkure centric campaign was aimed at the housewives in India. The Idea was to promote heavy audience interaction by sending recipes for new flavours. The winning family would then have the opportunity to have their photographs on one million Kurkure packs

57. Aside from JuhiChawla, the company also signed on KareenaKapoor for the “Desi Beats” version of Kurkure.

61. The initial offerings were a mix of potato chips and finger snacks.

62. The Potato chips segment includes variants like masala, salted, tomato inspired by the snacking habits of the Indian consumer

63. The offerings under Finger Snacks include the pakoda inspired ‘Live Wires’ and Khakra inspired ‘Mad Angles’

65. ITC already enjoyed cost advantage over competitors through its e-choupal initiative. This also facilitated timely supply of raw materials.

67. The advertising strategy revolved around slapstick humor and irrelevant themes to hold eyeballs, garner attention and interest, and stand out from the clutter.

68. ITC booked 10 to 15 spots per channel per day, 20 spots on radio stations supported by 1000’s of hoardings advertising the product. According to industry estimates, the total advertising spend in the initial 6 months were roughly 100 crores.

69. While its competitor Fritolay focuses on celebrity endorsements, Bingo chose a different route. It didn’t have an ambassador!

70. As the product is aimed at the youth, digital media was heavily used. For instance, the Bingo National Gaming Championship across 4 cities with more than 25,000 participants

72. Further, the company distributed 4 lakh racks across all retailers to display the brand at all Points-of-sale.

73. Within 6 months, Bingo was available across 2,50,000 retailers across the country.

74. A crucial alliance with Future group which lead to all future group retail outlets like Big Bazaar, Food Bazaar stocking only ITC”s Bingo

76. Marketing Strategy of Parle’s Smart Chips Among its competitors, Parle has had a tough time gaining a considerable market share for its snack offerings. Must Bites & Must Sticks together account for 5-7 percent of the total organized wafer chips segment Product strategy Parle Monaco recently entered the chips segment with its healthy variant called “Smart Chips”. Realizing the recent market trend of being more ‘health conscious’, Parle, through Smart Chips has carved out its own niche. Highlighting it’s USP of being baked rather than friend. Smart Chips comes in 4 different flavors: Simply SaltedTangy TomatoCrazy ChatMacho Masala

80. Learning’s from the competitors.

81. REFERENCES TEXTUAL REFERENCES Marketing Strategy – Walker, Mullins, Boyd Marketing Strategy & Plans – Michael Vaz Class Handouts – Prof. Dr. Amit Rangnekar WEB-BASED REFERENCES http://www.imagesretail.com/support_jan_suplychain.htm http://www.televisionpoint.com/news2009/newsfullstory.php?id=1244814371 Official Websites of Fritolay, Parle, Balaji, Bingo among other brands http://www.afaqs.com/perl/news/story.html?sid=20324 http://www.moneycontrol.com/news/business/frito-lay-loses-snack-mkt-share-to-itcs-bingo_300325.html http://www.bizdewz.com/parle-monaco-smart-chips-vs-lays-or-aliva/ http://www.afaqs.com/perl/news/story.html?sid=25651 http://economictimes.indiatimes.com/news/news-by-industry/cons-products/food/Balaji-Wafers-a-name-to-reckon-with-in-Gujarat-snacks-market/articleshow/5367599.cms

82. THANK YOU