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MARKETING
STRATEGY
ASSIGNMENT
Indian Potato
Chips Market
Report by:
Poulami Karjee
PRN- 18050143062
Media Management
Page 2
Overview ofthe
Industry
Fast moving consumer goods (FMCG)
are the 4th largest sector in the Indian
economy. The FMCG sector has
grown from US$ 31.6 billion in 2011
to US$ 52.75 billion in 2017-18. The
sector is further expected to grow at a
Compound Annual Growth Rate
(CAGR) of 27.86 per cent to reach
US$ 103.7 billion by 2020. The sector
is projected to grow 11-12 per cent in
2019 (Indian FMCG Industry
Analysis, 2019).
Potato Chips Market
falls under FMCG
Industry
The potato chips industry of India
is growing at an impressive rate.
The market has become crowded
with few major players claiming
most of the market share. Rest of
the market has small and scattered
local brands taking only the
outskirts distribution networks.
Potato chips accounts for 85% of
the total snacks segment. In 2017
India’s potato chips market was
worth US$2.59 billion growing at
an annual rate of 18.7%. The
Global data analytics report says
that it will further grow to US
$5.5 billion in 2022. Currently the
revenue from the market amounts
to US $370 million in 2019. This
market clearly shows no sign of
decline in the India consumer’s
fondness for potato chips in the
near future. The major branded
players in the market include
Frito lays, ITC Bingo, Balaji
wafers, Haldiram and Parle.
Page 3
Analyzing the Potato
chips market segment
through Porter’s 5
model
Due to its current growth rate the
market is still considered as a
profitable venture for new entrants.
The top payers in the market are all
priced similarly, here a new player can
take a lower price range and take a hit
at the top brands. Also, it can do the
same by offering more grammage of
the product at a similar price. But all
the big brands in the segment also
enjoy economies of scale and well
established distribution networks;
hence the market entrant threat is
moderate.
Every day the segment witnesses cut
throat competition among the top
players who are busy making
strategies to entice new consumers,
increase market share and find new
markets. Brand loyalty are very high
for branded players, consumers are
very much inclined to their brands.
But cost switching is low as all the
players operates in the same price
range hence competitive rivalry is very
high.
The bargaining power of the supplier
is very high because demand is
constant and brands need the resources
for production at any cost. Thus,
shortage of any input material will
affect production and hence the
distribution and ultimately the market
share. Suppliers in this case can raise
the price of the raw materials very
high. The growth in India’s potato
chips market has been driven by rising
household incomes. Unlike chocolate
or sugar confectionery, where children
are the main consumers, the growth in
potato chips sales in India is uniform
across age (Competing In India’s
Complex Potato Chips Market, 2019).
The market is highly price sensitive if
Lays decides to increase their price the
customers may shift to Bingo, expect
the loyal ones. Hence, brands can be
substituted as they are priced similarly
and any production, supplier or
distribution problem can increase the
sale of the other brand.
Threat of substitutes is very
high in this segment as the
market has huge volume yet the
product is very low involved,
mostly depends on impulse
buying. Other types of snacks
also fall in the substitute items.
The market can be profitable for
products that can bring in
differentiation in their offering,
has a well established
distribution networks and good
relationship with suppliers and
customers. All these brands
offer many exciting flavors that
are made from fresh potato. The
potatoes are sliced and cooked
in edible vegetable oils and are
seasoned with delicious flavors.
https://www.sathguru.com/news/
2019/03/15/competing-in-indias-
complex-potato-chips-market/
Page04
Page 5
THE MARKET STRUCTURE
Lay's under Pepsico is the market
leader in this category with 40% of
the market share. Market leader is
one that dominants other companies
in their market.
It can be a brand, company,
organization which has the highest
number of sales of a particular
market. The firm can be also ascribed
to highest profitability margin. They
can dominate the market by customer
loyalty, wide spread distribution
networks and pricing. The term
market leader is quite relevant in this
era of heavy competition and
digitalization as over a period of time
market leader of different markets
keeps changing. The first movers of
the market are often the market
leaders.
The market challenger in this
industry is ITC’s Bingo with 16% of
the market share. It posses the
highest threat to Lay’s in comparison
to other brands.Market challenger
possesthemarketsharebelowthatof
the market leader. Market challenger
of various segments mostly apply
strategies like reducing price,
increasing product differentiation or
bettercustomerservicetochallenge
the market leader.
Companies that have lower market
shares are generally not in position
to start a price war with the market
leader. Market challenger faces a lot
of risk as the market leader can take
them due to their size and high
customer base and also the brands
below them can attack at their
market share.
Market nicher offers distinct product
and strongly targets only a particular
group of consumers. Pringles potato
chips are a market nicher with 2.2%
share of the market. Pringles target
the health conscious consumers in
the same segment. The product
contains reduced fats compared to
the other brands. Precisely, 140
calories, 7 total grams of fat (only 2
grams saturated), and 135
milligrams of sodium per 17 chips.
The packaging is also very different
from other brands. They have
differentiated in terms of quality,
pricing and packaging. Their
packaging is very unique; the
product is stored in pour nozzle type
container that contains 100 chips per
container.
Page 6
LAY'S- THEMARKET
LEADER
In the year 1932, Herman W. Lay
established a small business in
Nashville, Tennessee and started
selling potato chips which was owned
by Frito Lay and now acquired by
Pepsico. Lays has segmented the
market according to the various regions
and is available across India and has
been focusing the rural and semi-rural
areas of India. Potato chips on a overall
notice doesn’t fall for any particular
consumer but still Lays has segmented
itself to be more popular among the
teens and serve as a quick bite for the
adults to enjoy. It is not a premium
snack products but is generally heavily
consumed in parties, theatres and
hostels. The brand targets various taste
buds catering to large variety of flavor
choices. Lays is accessible all around
the market. It has positioned itself as a
snack that can be eaten at any time of
the day for people to enjoy. It is well-
known brand ambassadors and
supporters during various cricket
matches etc. Lay’s mostly focuses on
the tastes that it offers to the customers.
Some of the variety is French Salt and
Cracked Pepper, Chile Lemon, Spanish
Tomato, etc.
It takes advantage of PepsiCo’s
strong presence in over 100
countries. It also takes advantage of
Pepsico’s distribution network
which is very well established in the
Indian market. Considering Pepsico
being one of the biggest brands in
the world a lot of investment go for
its advertising and branding.
PepsiCo owns the No. 1 position in
the salty snack business and one of
the important brands is Lays. The
consumption of carbonated drink
has been all-time low and PepsiCo
has relied on the growth of Lays.
Thus, if we consider the BCG
matrix Lay’s will come under the
Starcategorybecauseitgiveshigh
amountofsalesandrevenuetothe
company. It also requires high
investments for advertising and
growth and isthe top performer in
Pepsico’s portfolio (Bhasin, 2019).
Page 7
Lay’s does intensive distribution and
triestostocktheirproductsinasmany
outlets as possible. The products are
seen anywhere from grocery,
supermarket,superstore,gasstations
and even in the vending machines in
airports, malls, and office canteens. Its
parent company holds a very strong
relationship with the retailers of the
market that Lay’s takes advantage of.
Italsohasrecentlyreducedthesodium
content by 5% to 25% in its products
and it aims to reduce to 75% by 2025.
Initiatives like these will help Lay’s
stay ahead of the competition. Lay’s
generally does mass marketing but it
stillsegmentsthemarketaccordingly
likeitsells 5rupees packet morein the
rural areas and north India has spicier
varietyoftheproductthansouthIndia.
InIndiaactorsRanbirKapoorandSaif
Ali Khan along with cricketer
Mahendra Singh Dhoni endorses
Lay’s.
BINGO- THEMARKET
CHALLENGER
It is one of the major food brands in
Indiaandmarketsitsproductsunderthe
flagship company of its parent company
ofITC. The brand has positioned itself
as chips with an Indian twist. It has 16
different flavors developed through
R&D. The chips segment includes
variants like masala, salted, tomato all
inspired by the snacking habits of the
Indian consumers. Bingo launched
direct frontal attack by placing similar
pricedpotato chips.Italmostcoversall
the flavors of the market leader and the
same marketing mix. ITC’s e chaupal
initiative played a very big role in
setting Bingo’s supplier contacts. This
facilitated timely supply of raw
materials too. ITC also has a well
spread network in the Indian market that
played as an advantage to Bingo. They
didacrucialalliancewithFuturegroup
which lead to all future group retail
outlets like Big Bazar, Food Bazar
stocking only ITC’s Bingo. For
promotions while Lay’s has celebrity
endorsements Bingochosehumor and
irrelevant themes to grabattention and
interest and standout from the
competitors. Also to add another
competitive edge Bingo has added more
weight to its product package (Bhasin,
Marketing Mix Of Bingo – Bingo
Marketing Mix, 2019).
Bingo executes
frontal attack
Page 8
BALAJIWAFERSAND
PARLE WAFERS-
THE MARKET
FOLLOWERS
Balaji is based in Rajkot, Gujarat,
India, manufactures and distributes
potato chips and other grain based
snacks in flavors. It has 8 variants in
its potato chips products all of them
mostly an impression of the market
leader. Out of all Lay’s plain salted
category is the main competitor of
Balaji. The brand targets both family
and children but mainly focuses on the
school going teens just like Lay’s
(Jariwala, 2017). Balaji wafers is an
Imitator it copies the same things from
the leader but maintain some
differentiation in packaging,
advertising, pricing. The pricing of the
product is same as the leader but it
differs in the package weight and has a
higher sodium amount in thechips.
Also, for distribution they have chosen
mostly the outskirt highway shops as
their primary target.
Parle Wafers have also launched
precisely the same four flavors as
Lays and with the
same color coding: Classic Salted
(Yellow Pack), Cream and Onion
(Light Green Pack), Tangy Tomato
(Red Colored) and Masala Magic
(Blue colored Pack). Also, there is
not much difference between the
tastes of the two brands. The name
of the brand is also very generic.
Youngsters mainly refer to potato
wafers as chips and so does the
main target audience but in semi
urbanand ruralmarkets peoplestill
refer to them as wafers. Parle is
tryingtocapturethesemiurbanand
rural market by bringing a similar
lookingproductaslaysbutnaming
it as wafers. Parle’s wafers are spell
alike, look alike and taste alike of
the Lay’s products (Parle Wafers -
Taking on Lays !). Bingo is a
successful brand today and
competes well with Lays because
they didn’t copy anyone. They were
originalanduniqueintheirflavors,
design and ads but Parle doesn’t
seem to be any of that. Hence, we
see Parle’s playing the role of a
Cloner in the market.
Balaji wafers is a Imitator
while Parle's is a Cloner
Page 9
PRINGLES- THE
MARKETNICHER
The brand Pringle’s was initially
founded in 1967 and marketed by
Procter and Gamble in the US but was
later sold to Kellogg's in 2012. Pringles
potato chips brand is available in several
flavors to customers among different
countries. Pringles the market nicher
offers snack chips, wheat and potato
based, they contain less fat than other
chips brand. They are mostly targeted at
health conscious consumers. It is even
packaged differently in a cylindrical can
plus they have longer shelf life than
other chip brands and is convenient to
use in terms of handling of the product
by the consumer as it has a light and neat
packaging. The product packaging has
been done based on the flavor of the
chips which appeals to the
consumers. Pringles follows a premium
pricing in its marketing mix as the costs
of producing the chips are low but high
price levels are maintained to encourage
favorable perceptions among the
consumers in terms of quality of the
product and they appeal to the higher end
of the market (Pringles Marketing Mix
(4Ps) Strategy). Pringle’s in India are
mostly stored in grocery stores,
supermarkets, convenience stores,
shopping centers, departmental stores
etc.
REFERENCES
Bhasin,H.(2019).MarketingMixOfBingo– BingoMarketingMix.
Marketing91.
Bhasin,H.(2019).MarketingStrategyofLays– LaysMarketingStrategy.
Marketing91.
(2019). Competing In India’s Complex Potato Chips Market. Sathguru Catalysing
Success.
(2019). Indian FMCG Industry Analysis. Indian Brand Equity Foundation.
Jariwala, M. B. (2017). His success story that reads like a film script began at a
cinema hall. The Weekend Leeder.
Parle Wafers - Taking on Lays ! mbaskool.com.
Pringles Marketing Mix (4Ps) Strategy. mbaskool.com.
Page 10
PLAGIARISM SCAN REPORT
Words 615 Date August 03,2019
Characters 3651 Exclude Url
9%
Plagiarism
91%
Unique
3
Plagiarized
Sentences
30
Unique Sentences
Content Checked For Plagiarism
Fast moving consumer goods (FMCG) are the 4th largest sector in the Indian economy. The FMCG sector has grown from US$
31.6 billion in 2011 to US$ 52.75 billion in 2017-18. The sector is further expected to grow at a Compound Annual Growth Rate
(CAGR) of 27.86 per cent to reach US$ 103.7 billion by 2020. The sector is projected to grow 11-12 per cent in 2019 (Indian
FMCG Industry Analysis, 2019). The potato chips industry of India is growing at an impressive rate. The market has become
crowded with few major players claiming most of the market share. Rest of the market has small and scattered local brands
taking only the outskirts distribution networks. Potato chips accounts for 85% of the total snacks segment. In 2017 India’s
potato chips market was worth US$2.59 billion growing at an annual rate of 18.7%. The Global data analytics report says that it
will further grow to US $5.5 billion in 2022. Currently the revenue from the market amounts to US $370 million in 2019. This
market clearly shows no sign of decline in the India consumer’s fondness for potato chips in the near future. The major
branded players in the market include Frito lays, ITC Bingo, Balaji wafers, Haldiram and Parle. Analyzing the Potato chips
market segment through Porter’s 5 model Due to its current growth rate the market is still considered as a profitable venture
for new entrants. The top payers in the market are all priced similarly, here a new player can take a lower price range and take
a hit at the top brands. Also, it can do the same by offering more grammage of the product at a similar price. But all the big
brands in the segment also enjoy economies of scale and well established distribution networks; hence the market entrant
threat is moderate. Every day the segment witnesses cut throat competition among the top players who are busy making
strategies to entice new consumers, increase market share and find new markets. Brand loyalty are very high for branded
players, consumers are very much inclined to their brands. But cost switching is low as all the players operates in the same
price range hence competitive rivalry is very high. The bargaining power of the supplier is very high because demand is
constant and brands need the resources for production at any cost. Thus, shortage of any input material will affect
production and hence the distribution and ultimately the market share. Suppliers in this case can raise the price of the raw
materials very high. The growth in India’s potato chips market has been driven by rising household incomes. Unlike chocolate
or sugar confectionery, where children are the main consumers, the growth in potato chips sales in India is uniform across
age (Competing In India’s Complex Potato Chips Market, 2019). The market is highly price sensitive if Lays decides to increase
their price the customers may shift to Bingo, expect the loyal ones. Hence, brands can be substituted as they are priced
similarly and any production, supplier or distribution problem can increase the sale of the other brand. Threat of substitutes
is very high in this segment as the market has huge volume yet the product is very low involved, mostly depends on impulse
buying. Other types of snacks also fall in the substitute items. The market can be profitable for products that can bring in
differentiation in their offering, has a well established distribution networks and good relationship with suppliers and
customers. All these brands offer many exciting flavors that are made from fresh potato. The potatoes are sliced and cooked
in edible vegetable oils and are seasoned with delicious flavors.
Sources Similarity
Indian FMCG Industry AnalysisCompare text
fast moving consumer goods (fmcg) are the 4thlargest sector inthe indianeconomy. there are three mainsegments inthe sector –
foodandbeverages which.growing awareness, easier access, andchanging lifestyles are the key growthdrivers for the consumer
market. the focus onagriculture...
https://www.ibef.org/industry/Fmcg-presentation
10%
10 Things to Keep in Mind to Survive the Dynamic FMCG MarketCompare text
according tothe ibef report in2018, the fmcg sector has grownfromus$ 31.6 billionin2011 tous$ 52.75 billionin2017-18. the
sector is further expectedtogrowat a compoundannual growthrate (cagr) of 27.86 per cent toreachus$ 103.7 billionby 2020. the
sector witnessedthe growth...
https://www.entrepreneur.com/article/322318
20%
PLAGIARISM SCAN REPORT
Words 882 Date August 03,2019
Characters 5268 Exclude Url
2%
Plagiarism
98%
Unique
1
Plagiarized
Sentences
47
Unique Sentences
Content Checked For Plagiarism
The Market Structure Lays under Pepsico is the market leader in this category with 40% of the market share. Market leader is
one that dominants other companies in their market. It can be a brand, company, organization which has the highest number
of sales of a particular market. The firm can be also ascribed to highest profitability margin. They can dominate the market by
customer loyalty, wide spread distribution networks and pricing. The term market leader is quite relevant in this era of heavy
competition and digitalization as over a period of time market leader of different markets keeps changing. The first movers of
the market are often the market leaders. The market challenger in this industry is ITC’s Bingo with 16% of the market share. It
posses the highest threat to Lay’s in comparison to other brands. Market challenger posses the market share below that of
the market leader. Market challenger of various segments mostly apply strategies like reducing price, increasing product
differentiation or better customer service to challenge the market leader. Companies that have lower market shares are
generally not in position to start a price war with the market leader. Market challenger faces a lot of risk as the market leader
can take them due to their size and high customer base and also the brands below them can attack at their market share.
Then comes one of the most inspired success story of Balaji wafers that holds 15% or little less and Parl’es wafers. They come
under market follower in this segment. They mostly follow the market leader of the category. It doesn’t take the risk of
challenging the market leader. A market follower may also be the brand that comes second in the market share holding who
doesn’t want to break the staus quo, but it is not the case here. Market nicher offers distinct product and strongly targets only
a particular group of consumers. Pringles potato chips are a market nicher with 2.2% share of the market. Pringles target the
health conscious consumers in the same segment. The product contains reduced fats compared to the other brands.
Precisely, 140 calories, 7 total grams of fat (only 2 grams saturated), and 135 milligrams of sodium per 17 chips. The packaging
is also very different from other brands. They have differentiated in terms of quality, pricing and packaging. Their packaging is
very unique; the product is stored in pour nozzle type container that contains 100 chips per container. Lay’s- The market
leader In the year 1932, Herman W. Lay established a small business in Nashville, Tennessee and started selling potato chips
which was owned by Frito Lay and now acquired by Pepsico. Lays has segmented the market according to the various regions
and is available across India and has been focusing the rural and semi-rural areas of India. Potato chips on a overall notice
doesn’t fall for any particular consumer but still Lays has segmented itself to be more popular among the teens and serve as a
quick bite for the adults to enjoy. It is not a premium snack products but is generally heavily consumed in parties, theatres
and hostels. The brand targets various taste buds catering to large variety of flavor choices. Lays is accessible all around the
market. It has positioned itself as a snack that can be eaten at any time of the day for people to enjoy. It is well-known brand
ambassadors and supporters during various cricket matches etc. Lay’s mostly focuses on the tastes that it offers to the
customers. Some of the variety is French Salt and Cracked Pepper, Chile Lemon, Spanish Tomato, etc. It takes advantage of
PepsiCo’s strong presence in over 100 countries. It also takes advantage of Pepsico’s distribution network which is very well
established in the Indian market. Considering Pepsico being one of the biggest brands in the world a lot of investment go for
its advertising and branding. PepsiCo owns the No. 1 position in the salty snack business and one of the important brands is
Lays. The consumption of carbonated drink has been all-time low and PepsiCo has relied on the growth of Lays. Thus, if we
consider the BCG matrix Lay’s will come under the Star category because it gives high amount of sales and revenue to the
company. It also requires high investments for advertising and growth and is the top performer in Pepsico’s portfolio (Bhasin,
2019). Lay’s does intensive distribution and tries to stock their products in as many outlets as possible. The products are seen
anywhere from grocery, supermarket, superstore, gas stations and even in the vending machines in airports, malls, and office
canteens. Its parent company holds a very strong relationship with the retailers of the market that Lay’s takes advantage of. It
also has recently reduced the sodium content by 5% to 25% in its products and it aims to reduce to 75% by 2025. Initiatives
like these will help Lay’s stay ahead of the competition. Lay’s generally does mass marketing but it still segments the market
accordingly like it sells 5 rupees packet more in the rural areas and north India has spicier variety of the product than south
India. In India actors Ranbir Kapoor and Saif Ali Khan along with cricketer Mahendra Singh Dhoni endorses Lay’s.
Sources Similarity
Marketing Strategy of Lays - Lays Marketing StrategyCompare text
pepsicoowns the no. 1 positioninthe salty snackbusiness andone of the important brands is lays.lays is nowfocusing more onthe
millennial customers driving its traffic totheir facebookpage andbecoming a relevant topic of conversationonsocial media.
https://www.marketing91.com/marketing-strategy-of-lays/
3%
PLAGIARISM SCAN REPORT
Words 732 Date August 03,2019
Characters 4361 Exclude Url
6%
Plagiarism
94%
Unique
2
Plagiarized
Sentences
33
Unique Sentences
Content Checked For Plagiarism
Bingo- The market challenger It is one of the major food brands in India and markets its products under the flagship company
of its parent company of ITC. The brand has positioned itself as chips with an Indian twist. It has 16 different flavors developed
through R&D. The chips segment includes variants like masala, salted, tomato all inspired by the snacking habits of the Indian
consumers. Bingo launched direct frontal attack by placing similar priced potato chips. It almost covers all the flavors of the
market leader and the same marketing mix. ITC’s e chaupal initiative played a very big role in setting Bingo’s supplier contacts.
This facilitated timely supply of raw materials too. ITC also has a well spread network in the Indian market that played as an
advantage to Bingo. They did a crucial alliance with Future group which lead to all future group retail outlets like Big Bazar,
Food Bazar stocking only ITC’s Bingo. For promotions while Lay’s has celebrity endorsements Bingo chose humor and
irrelevant themes to grab attention and interest and standout from the competitors. Also to add another competitive edge
Bingo has added more weight to its product package (Bhasin, Marketing Mix Of Bingo – Bingo Marketing Mix, 2019). Balaji
Wafers and Parle wafers- The market followers Balaji is based in Rajkot, Gujarat, India, manufactures and distributes potato
chips and other grain based snacks in flavors. It has 8 variants in its potato chips products all of them mostly an impression of
the market leader. Out of all Lay’s plain salted category is the main competitor of Balaji. The brand targets both family and
children but mainly focuses on the school going teens just like Lay’s (Jariwala, 2017). Balaji wafers is an Imitator it copies the
same things from the leader but maintain some differentiation in packaging, advertising, pricing etc as the pricing of the
product is same as the leader but it differs in the package weight and has a higher sodium amount in the chips. Also, for
distribution they have chosen mostly the outskirt highway shops as their primary target. Parle Wafers have also launched
precisely the same four flavors as Lays and with the same color coding: Classic Salted (Yellow Pack), Cream and Onion (Light
Green Pack), Tangy Tomato (Red Colored) and Masala Magic (Blue colored Pack). Also, there is not much difference between
the tastes of the two brands. The name of the brand is also very generic. Youngsters mainly refer to potato wafers as chips
and so does the main target audience but in semi urban and rural markets people still refer to them as wafers. Parle is trying
to capture the semi urban and rural market by bringing a similar looking product as lays but naming it as wafers. Parle’s
wafers are spell alike, look alike and taste alike of the Lay’s products (Parle Wafers - Taking on Lays !). Bingo is a successful
brand today and competes well with Lays because they didn’t copy anyone. They were original and unique in their flavors,
design and ads but Parle doesn’t seem to be any of that. Hence, we see Parle’s playing the role of a Cloner in the market.
Pringles- The market nicher The brand Pringle’s was initially founded in 1967 and marketed by Procter and Gamble in the US
but was later sold to Kellogg's in 2012. Pringles potato chips brand is available in several flavors to customers among different
countries. Pringles the market nicher offers snack chips, wheat and potato based, they contain less fat than other chips
brand. They are mostly targeted at health conscious consumers. It is even packaged differently in a cylindrical can plus they
have longer shelf life than other chip brands and is convenient to use in terms of handling of the product by the consumer as
it has a light and neat packaging. The product packaging has been done based on the flavor of the chips which appeals to the
consumers. Pringles follows a premium pricing in its marketing mix as the costs of producing the chips are low but high price
levels are maintained to encourage favorable perceptions among the consumers in terms of quality of the product and they
appeal to the higher end of the market (Pringles Marketing Mix (4Ps) Strategy). Pringle’s in India are mostly stored in grocery
stores, supermarkets, convenience stores, shopping centers, departmental stores etc.
Sources Similarity
Balaji Wafers - WikipediaCompare text
Balaji Wafers andNamkeengroup, basedinRajkot, Gujarat, India, manufactures anddistributes potatochips andother grain-based
baggedsnacks invarious flavours.
https://en.wikipedia.org/wiki/Balaji_Wafers
5%
Parle Wafers - Taking on Lays ! | MBA Skool-Study.Learn.Share.Compare text
bingois a successful brandtoday andcompetes well withlays because they didn’t copy anyone. they were original andunique
(sometimes vague) intheir flavorsthey have launcheda product whichlooks like a copy of lays indesignandtaste. we agree that
quality is not compromised.
4%
quality is not compromised.
https://www.mbaskool.com/business-articles/marketing/156-parle-wafers-vs-lays.html
4%

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Marketing Strategy in the Indian Potato chips market

  • 1. MARKETING STRATEGY ASSIGNMENT Indian Potato Chips Market Report by: Poulami Karjee PRN- 18050143062 Media Management
  • 2. Page 2 Overview ofthe Industry Fast moving consumer goods (FMCG) are the 4th largest sector in the Indian economy. The FMCG sector has grown from US$ 31.6 billion in 2011 to US$ 52.75 billion in 2017-18. The sector is further expected to grow at a Compound Annual Growth Rate (CAGR) of 27.86 per cent to reach US$ 103.7 billion by 2020. The sector is projected to grow 11-12 per cent in 2019 (Indian FMCG Industry Analysis, 2019). Potato Chips Market falls under FMCG Industry The potato chips industry of India is growing at an impressive rate. The market has become crowded with few major players claiming most of the market share. Rest of the market has small and scattered local brands taking only the outskirts distribution networks. Potato chips accounts for 85% of the total snacks segment. In 2017 India’s potato chips market was worth US$2.59 billion growing at an annual rate of 18.7%. The Global data analytics report says that it will further grow to US $5.5 billion in 2022. Currently the revenue from the market amounts to US $370 million in 2019. This market clearly shows no sign of decline in the India consumer’s fondness for potato chips in the near future. The major branded players in the market include Frito lays, ITC Bingo, Balaji wafers, Haldiram and Parle.
  • 3. Page 3 Analyzing the Potato chips market segment through Porter’s 5 model Due to its current growth rate the market is still considered as a profitable venture for new entrants. The top payers in the market are all priced similarly, here a new player can take a lower price range and take a hit at the top brands. Also, it can do the same by offering more grammage of the product at a similar price. But all the big brands in the segment also enjoy economies of scale and well established distribution networks; hence the market entrant threat is moderate. Every day the segment witnesses cut throat competition among the top players who are busy making strategies to entice new consumers, increase market share and find new markets. Brand loyalty are very high for branded players, consumers are very much inclined to their brands. But cost switching is low as all the players operates in the same price range hence competitive rivalry is very high.
  • 4. The bargaining power of the supplier is very high because demand is constant and brands need the resources for production at any cost. Thus, shortage of any input material will affect production and hence the distribution and ultimately the market share. Suppliers in this case can raise the price of the raw materials very high. The growth in India’s potato chips market has been driven by rising household incomes. Unlike chocolate or sugar confectionery, where children are the main consumers, the growth in potato chips sales in India is uniform across age (Competing In India’s Complex Potato Chips Market, 2019). The market is highly price sensitive if Lays decides to increase their price the customers may shift to Bingo, expect the loyal ones. Hence, brands can be substituted as they are priced similarly and any production, supplier or distribution problem can increase the sale of the other brand. Threat of substitutes is very high in this segment as the market has huge volume yet the product is very low involved, mostly depends on impulse buying. Other types of snacks also fall in the substitute items. The market can be profitable for products that can bring in differentiation in their offering, has a well established distribution networks and good relationship with suppliers and customers. All these brands offer many exciting flavors that are made from fresh potato. The potatoes are sliced and cooked in edible vegetable oils and are seasoned with delicious flavors. https://www.sathguru.com/news/ 2019/03/15/competing-in-indias- complex-potato-chips-market/ Page04
  • 5. Page 5 THE MARKET STRUCTURE Lay's under Pepsico is the market leader in this category with 40% of the market share. Market leader is one that dominants other companies in their market. It can be a brand, company, organization which has the highest number of sales of a particular market. The firm can be also ascribed to highest profitability margin. They can dominate the market by customer loyalty, wide spread distribution networks and pricing. The term market leader is quite relevant in this era of heavy competition and digitalization as over a period of time market leader of different markets keeps changing. The first movers of the market are often the market leaders. The market challenger in this industry is ITC’s Bingo with 16% of the market share. It posses the highest threat to Lay’s in comparison to other brands.Market challenger possesthemarketsharebelowthatof the market leader. Market challenger of various segments mostly apply strategies like reducing price, increasing product differentiation or bettercustomerservicetochallenge the market leader. Companies that have lower market shares are generally not in position to start a price war with the market leader. Market challenger faces a lot of risk as the market leader can take them due to their size and high customer base and also the brands below them can attack at their market share. Market nicher offers distinct product and strongly targets only a particular group of consumers. Pringles potato chips are a market nicher with 2.2% share of the market. Pringles target the health conscious consumers in the same segment. The product contains reduced fats compared to the other brands. Precisely, 140 calories, 7 total grams of fat (only 2 grams saturated), and 135 milligrams of sodium per 17 chips. The packaging is also very different from other brands. They have differentiated in terms of quality, pricing and packaging. Their packaging is very unique; the product is stored in pour nozzle type container that contains 100 chips per container.
  • 6. Page 6 LAY'S- THEMARKET LEADER In the year 1932, Herman W. Lay established a small business in Nashville, Tennessee and started selling potato chips which was owned by Frito Lay and now acquired by Pepsico. Lays has segmented the market according to the various regions and is available across India and has been focusing the rural and semi-rural areas of India. Potato chips on a overall notice doesn’t fall for any particular consumer but still Lays has segmented itself to be more popular among the teens and serve as a quick bite for the adults to enjoy. It is not a premium snack products but is generally heavily consumed in parties, theatres and hostels. The brand targets various taste buds catering to large variety of flavor choices. Lays is accessible all around the market. It has positioned itself as a snack that can be eaten at any time of the day for people to enjoy. It is well- known brand ambassadors and supporters during various cricket matches etc. Lay’s mostly focuses on the tastes that it offers to the customers. Some of the variety is French Salt and Cracked Pepper, Chile Lemon, Spanish Tomato, etc. It takes advantage of PepsiCo’s strong presence in over 100 countries. It also takes advantage of Pepsico’s distribution network which is very well established in the Indian market. Considering Pepsico being one of the biggest brands in the world a lot of investment go for its advertising and branding. PepsiCo owns the No. 1 position in the salty snack business and one of the important brands is Lays. The consumption of carbonated drink has been all-time low and PepsiCo has relied on the growth of Lays. Thus, if we consider the BCG matrix Lay’s will come under the Starcategorybecauseitgiveshigh amountofsalesandrevenuetothe company. It also requires high investments for advertising and growth and isthe top performer in Pepsico’s portfolio (Bhasin, 2019).
  • 7. Page 7 Lay’s does intensive distribution and triestostocktheirproductsinasmany outlets as possible. The products are seen anywhere from grocery, supermarket,superstore,gasstations and even in the vending machines in airports, malls, and office canteens. Its parent company holds a very strong relationship with the retailers of the market that Lay’s takes advantage of. Italsohasrecentlyreducedthesodium content by 5% to 25% in its products and it aims to reduce to 75% by 2025. Initiatives like these will help Lay’s stay ahead of the competition. Lay’s generally does mass marketing but it stillsegmentsthemarketaccordingly likeitsells 5rupees packet morein the rural areas and north India has spicier varietyoftheproductthansouthIndia. InIndiaactorsRanbirKapoorandSaif Ali Khan along with cricketer Mahendra Singh Dhoni endorses Lay’s. BINGO- THEMARKET CHALLENGER It is one of the major food brands in Indiaandmarketsitsproductsunderthe flagship company of its parent company ofITC. The brand has positioned itself as chips with an Indian twist. It has 16 different flavors developed through R&D. The chips segment includes variants like masala, salted, tomato all inspired by the snacking habits of the Indian consumers. Bingo launched direct frontal attack by placing similar pricedpotato chips.Italmostcoversall the flavors of the market leader and the same marketing mix. ITC’s e chaupal initiative played a very big role in setting Bingo’s supplier contacts. This facilitated timely supply of raw materials too. ITC also has a well spread network in the Indian market that played as an advantage to Bingo. They didacrucialalliancewithFuturegroup which lead to all future group retail outlets like Big Bazar, Food Bazar stocking only ITC’s Bingo. For promotions while Lay’s has celebrity endorsements Bingochosehumor and irrelevant themes to grabattention and interest and standout from the competitors. Also to add another competitive edge Bingo has added more weight to its product package (Bhasin, Marketing Mix Of Bingo – Bingo Marketing Mix, 2019). Bingo executes frontal attack
  • 8. Page 8 BALAJIWAFERSAND PARLE WAFERS- THE MARKET FOLLOWERS Balaji is based in Rajkot, Gujarat, India, manufactures and distributes potato chips and other grain based snacks in flavors. It has 8 variants in its potato chips products all of them mostly an impression of the market leader. Out of all Lay’s plain salted category is the main competitor of Balaji. The brand targets both family and children but mainly focuses on the school going teens just like Lay’s (Jariwala, 2017). Balaji wafers is an Imitator it copies the same things from the leader but maintain some differentiation in packaging, advertising, pricing. The pricing of the product is same as the leader but it differs in the package weight and has a higher sodium amount in thechips. Also, for distribution they have chosen mostly the outskirt highway shops as their primary target. Parle Wafers have also launched precisely the same four flavors as Lays and with the same color coding: Classic Salted (Yellow Pack), Cream and Onion (Light Green Pack), Tangy Tomato (Red Colored) and Masala Magic (Blue colored Pack). Also, there is not much difference between the tastes of the two brands. The name of the brand is also very generic. Youngsters mainly refer to potato wafers as chips and so does the main target audience but in semi urbanand ruralmarkets peoplestill refer to them as wafers. Parle is tryingtocapturethesemiurbanand rural market by bringing a similar lookingproductaslaysbutnaming it as wafers. Parle’s wafers are spell alike, look alike and taste alike of the Lay’s products (Parle Wafers - Taking on Lays !). Bingo is a successful brand today and competes well with Lays because they didn’t copy anyone. They were originalanduniqueintheirflavors, design and ads but Parle doesn’t seem to be any of that. Hence, we see Parle’s playing the role of a Cloner in the market. Balaji wafers is a Imitator while Parle's is a Cloner
  • 9. Page 9 PRINGLES- THE MARKETNICHER The brand Pringle’s was initially founded in 1967 and marketed by Procter and Gamble in the US but was later sold to Kellogg's in 2012. Pringles potato chips brand is available in several flavors to customers among different countries. Pringles the market nicher offers snack chips, wheat and potato based, they contain less fat than other chips brand. They are mostly targeted at health conscious consumers. It is even packaged differently in a cylindrical can plus they have longer shelf life than other chip brands and is convenient to use in terms of handling of the product by the consumer as it has a light and neat packaging. The product packaging has been done based on the flavor of the chips which appeals to the consumers. Pringles follows a premium pricing in its marketing mix as the costs of producing the chips are low but high price levels are maintained to encourage favorable perceptions among the consumers in terms of quality of the product and they appeal to the higher end of the market (Pringles Marketing Mix (4Ps) Strategy). Pringle’s in India are mostly stored in grocery stores, supermarkets, convenience stores, shopping centers, departmental stores etc.
  • 10. REFERENCES Bhasin,H.(2019).MarketingMixOfBingo– BingoMarketingMix. Marketing91. Bhasin,H.(2019).MarketingStrategyofLays– LaysMarketingStrategy. Marketing91. (2019). Competing In India’s Complex Potato Chips Market. Sathguru Catalysing Success. (2019). Indian FMCG Industry Analysis. Indian Brand Equity Foundation. Jariwala, M. B. (2017). His success story that reads like a film script began at a cinema hall. The Weekend Leeder. Parle Wafers - Taking on Lays ! mbaskool.com. Pringles Marketing Mix (4Ps) Strategy. mbaskool.com. Page 10
  • 11. PLAGIARISM SCAN REPORT Words 615 Date August 03,2019 Characters 3651 Exclude Url 9% Plagiarism 91% Unique 3 Plagiarized Sentences 30 Unique Sentences Content Checked For Plagiarism Fast moving consumer goods (FMCG) are the 4th largest sector in the Indian economy. The FMCG sector has grown from US$ 31.6 billion in 2011 to US$ 52.75 billion in 2017-18. The sector is further expected to grow at a Compound Annual Growth Rate (CAGR) of 27.86 per cent to reach US$ 103.7 billion by 2020. The sector is projected to grow 11-12 per cent in 2019 (Indian FMCG Industry Analysis, 2019). The potato chips industry of India is growing at an impressive rate. The market has become crowded with few major players claiming most of the market share. Rest of the market has small and scattered local brands taking only the outskirts distribution networks. Potato chips accounts for 85% of the total snacks segment. In 2017 India’s potato chips market was worth US$2.59 billion growing at an annual rate of 18.7%. The Global data analytics report says that it will further grow to US $5.5 billion in 2022. Currently the revenue from the market amounts to US $370 million in 2019. This market clearly shows no sign of decline in the India consumer’s fondness for potato chips in the near future. The major branded players in the market include Frito lays, ITC Bingo, Balaji wafers, Haldiram and Parle. Analyzing the Potato chips market segment through Porter’s 5 model Due to its current growth rate the market is still considered as a profitable venture for new entrants. The top payers in the market are all priced similarly, here a new player can take a lower price range and take a hit at the top brands. Also, it can do the same by offering more grammage of the product at a similar price. But all the big brands in the segment also enjoy economies of scale and well established distribution networks; hence the market entrant threat is moderate. Every day the segment witnesses cut throat competition among the top players who are busy making strategies to entice new consumers, increase market share and find new markets. Brand loyalty are very high for branded players, consumers are very much inclined to their brands. But cost switching is low as all the players operates in the same price range hence competitive rivalry is very high. The bargaining power of the supplier is very high because demand is constant and brands need the resources for production at any cost. Thus, shortage of any input material will affect production and hence the distribution and ultimately the market share. Suppliers in this case can raise the price of the raw materials very high. The growth in India’s potato chips market has been driven by rising household incomes. Unlike chocolate or sugar confectionery, where children are the main consumers, the growth in potato chips sales in India is uniform across age (Competing In India’s Complex Potato Chips Market, 2019). The market is highly price sensitive if Lays decides to increase their price the customers may shift to Bingo, expect the loyal ones. Hence, brands can be substituted as they are priced similarly and any production, supplier or distribution problem can increase the sale of the other brand. Threat of substitutes is very high in this segment as the market has huge volume yet the product is very low involved, mostly depends on impulse buying. Other types of snacks also fall in the substitute items. The market can be profitable for products that can bring in differentiation in their offering, has a well established distribution networks and good relationship with suppliers and customers. All these brands offer many exciting flavors that are made from fresh potato. The potatoes are sliced and cooked in edible vegetable oils and are seasoned with delicious flavors. Sources Similarity Indian FMCG Industry AnalysisCompare text fast moving consumer goods (fmcg) are the 4thlargest sector inthe indianeconomy. there are three mainsegments inthe sector – foodandbeverages which.growing awareness, easier access, andchanging lifestyles are the key growthdrivers for the consumer market. the focus onagriculture... https://www.ibef.org/industry/Fmcg-presentation 10% 10 Things to Keep in Mind to Survive the Dynamic FMCG MarketCompare text according tothe ibef report in2018, the fmcg sector has grownfromus$ 31.6 billionin2011 tous$ 52.75 billionin2017-18. the sector is further expectedtogrowat a compoundannual growthrate (cagr) of 27.86 per cent toreachus$ 103.7 billionby 2020. the sector witnessedthe growth... https://www.entrepreneur.com/article/322318 20%
  • 12. PLAGIARISM SCAN REPORT Words 882 Date August 03,2019 Characters 5268 Exclude Url 2% Plagiarism 98% Unique 1 Plagiarized Sentences 47 Unique Sentences Content Checked For Plagiarism The Market Structure Lays under Pepsico is the market leader in this category with 40% of the market share. Market leader is one that dominants other companies in their market. It can be a brand, company, organization which has the highest number of sales of a particular market. The firm can be also ascribed to highest profitability margin. They can dominate the market by customer loyalty, wide spread distribution networks and pricing. The term market leader is quite relevant in this era of heavy competition and digitalization as over a period of time market leader of different markets keeps changing. The first movers of the market are often the market leaders. The market challenger in this industry is ITC’s Bingo with 16% of the market share. It posses the highest threat to Lay’s in comparison to other brands. Market challenger posses the market share below that of the market leader. Market challenger of various segments mostly apply strategies like reducing price, increasing product differentiation or better customer service to challenge the market leader. Companies that have lower market shares are generally not in position to start a price war with the market leader. Market challenger faces a lot of risk as the market leader can take them due to their size and high customer base and also the brands below them can attack at their market share. Then comes one of the most inspired success story of Balaji wafers that holds 15% or little less and Parl’es wafers. They come under market follower in this segment. They mostly follow the market leader of the category. It doesn’t take the risk of challenging the market leader. A market follower may also be the brand that comes second in the market share holding who doesn’t want to break the staus quo, but it is not the case here. Market nicher offers distinct product and strongly targets only a particular group of consumers. Pringles potato chips are a market nicher with 2.2% share of the market. Pringles target the health conscious consumers in the same segment. The product contains reduced fats compared to the other brands. Precisely, 140 calories, 7 total grams of fat (only 2 grams saturated), and 135 milligrams of sodium per 17 chips. The packaging is also very different from other brands. They have differentiated in terms of quality, pricing and packaging. Their packaging is very unique; the product is stored in pour nozzle type container that contains 100 chips per container. Lay’s- The market leader In the year 1932, Herman W. Lay established a small business in Nashville, Tennessee and started selling potato chips which was owned by Frito Lay and now acquired by Pepsico. Lays has segmented the market according to the various regions and is available across India and has been focusing the rural and semi-rural areas of India. Potato chips on a overall notice doesn’t fall for any particular consumer but still Lays has segmented itself to be more popular among the teens and serve as a quick bite for the adults to enjoy. It is not a premium snack products but is generally heavily consumed in parties, theatres and hostels. The brand targets various taste buds catering to large variety of flavor choices. Lays is accessible all around the market. It has positioned itself as a snack that can be eaten at any time of the day for people to enjoy. It is well-known brand ambassadors and supporters during various cricket matches etc. Lay’s mostly focuses on the tastes that it offers to the customers. Some of the variety is French Salt and Cracked Pepper, Chile Lemon, Spanish Tomato, etc. It takes advantage of PepsiCo’s strong presence in over 100 countries. It also takes advantage of Pepsico’s distribution network which is very well established in the Indian market. Considering Pepsico being one of the biggest brands in the world a lot of investment go for its advertising and branding. PepsiCo owns the No. 1 position in the salty snack business and one of the important brands is Lays. The consumption of carbonated drink has been all-time low and PepsiCo has relied on the growth of Lays. Thus, if we consider the BCG matrix Lay’s will come under the Star category because it gives high amount of sales and revenue to the company. It also requires high investments for advertising and growth and is the top performer in Pepsico’s portfolio (Bhasin, 2019). Lay’s does intensive distribution and tries to stock their products in as many outlets as possible. The products are seen anywhere from grocery, supermarket, superstore, gas stations and even in the vending machines in airports, malls, and office canteens. Its parent company holds a very strong relationship with the retailers of the market that Lay’s takes advantage of. It also has recently reduced the sodium content by 5% to 25% in its products and it aims to reduce to 75% by 2025. Initiatives like these will help Lay’s stay ahead of the competition. Lay’s generally does mass marketing but it still segments the market accordingly like it sells 5 rupees packet more in the rural areas and north India has spicier variety of the product than south India. In India actors Ranbir Kapoor and Saif Ali Khan along with cricketer Mahendra Singh Dhoni endorses Lay’s. Sources Similarity Marketing Strategy of Lays - Lays Marketing StrategyCompare text
  • 13. pepsicoowns the no. 1 positioninthe salty snackbusiness andone of the important brands is lays.lays is nowfocusing more onthe millennial customers driving its traffic totheir facebookpage andbecoming a relevant topic of conversationonsocial media. https://www.marketing91.com/marketing-strategy-of-lays/ 3%
  • 14. PLAGIARISM SCAN REPORT Words 732 Date August 03,2019 Characters 4361 Exclude Url 6% Plagiarism 94% Unique 2 Plagiarized Sentences 33 Unique Sentences Content Checked For Plagiarism Bingo- The market challenger It is one of the major food brands in India and markets its products under the flagship company of its parent company of ITC. The brand has positioned itself as chips with an Indian twist. It has 16 different flavors developed through R&D. The chips segment includes variants like masala, salted, tomato all inspired by the snacking habits of the Indian consumers. Bingo launched direct frontal attack by placing similar priced potato chips. It almost covers all the flavors of the market leader and the same marketing mix. ITC’s e chaupal initiative played a very big role in setting Bingo’s supplier contacts. This facilitated timely supply of raw materials too. ITC also has a well spread network in the Indian market that played as an advantage to Bingo. They did a crucial alliance with Future group which lead to all future group retail outlets like Big Bazar, Food Bazar stocking only ITC’s Bingo. For promotions while Lay’s has celebrity endorsements Bingo chose humor and irrelevant themes to grab attention and interest and standout from the competitors. Also to add another competitive edge Bingo has added more weight to its product package (Bhasin, Marketing Mix Of Bingo – Bingo Marketing Mix, 2019). Balaji Wafers and Parle wafers- The market followers Balaji is based in Rajkot, Gujarat, India, manufactures and distributes potato chips and other grain based snacks in flavors. It has 8 variants in its potato chips products all of them mostly an impression of the market leader. Out of all Lay’s plain salted category is the main competitor of Balaji. The brand targets both family and children but mainly focuses on the school going teens just like Lay’s (Jariwala, 2017). Balaji wafers is an Imitator it copies the same things from the leader but maintain some differentiation in packaging, advertising, pricing etc as the pricing of the product is same as the leader but it differs in the package weight and has a higher sodium amount in the chips. Also, for distribution they have chosen mostly the outskirt highway shops as their primary target. Parle Wafers have also launched precisely the same four flavors as Lays and with the same color coding: Classic Salted (Yellow Pack), Cream and Onion (Light Green Pack), Tangy Tomato (Red Colored) and Masala Magic (Blue colored Pack). Also, there is not much difference between the tastes of the two brands. The name of the brand is also very generic. Youngsters mainly refer to potato wafers as chips and so does the main target audience but in semi urban and rural markets people still refer to them as wafers. Parle is trying to capture the semi urban and rural market by bringing a similar looking product as lays but naming it as wafers. Parle’s wafers are spell alike, look alike and taste alike of the Lay’s products (Parle Wafers - Taking on Lays !). Bingo is a successful brand today and competes well with Lays because they didn’t copy anyone. They were original and unique in their flavors, design and ads but Parle doesn’t seem to be any of that. Hence, we see Parle’s playing the role of a Cloner in the market. Pringles- The market nicher The brand Pringle’s was initially founded in 1967 and marketed by Procter and Gamble in the US but was later sold to Kellogg's in 2012. Pringles potato chips brand is available in several flavors to customers among different countries. Pringles the market nicher offers snack chips, wheat and potato based, they contain less fat than other chips brand. They are mostly targeted at health conscious consumers. It is even packaged differently in a cylindrical can plus they have longer shelf life than other chip brands and is convenient to use in terms of handling of the product by the consumer as it has a light and neat packaging. The product packaging has been done based on the flavor of the chips which appeals to the consumers. Pringles follows a premium pricing in its marketing mix as the costs of producing the chips are low but high price levels are maintained to encourage favorable perceptions among the consumers in terms of quality of the product and they appeal to the higher end of the market (Pringles Marketing Mix (4Ps) Strategy). Pringle’s in India are mostly stored in grocery stores, supermarkets, convenience stores, shopping centers, departmental stores etc. Sources Similarity Balaji Wafers - WikipediaCompare text Balaji Wafers andNamkeengroup, basedinRajkot, Gujarat, India, manufactures anddistributes potatochips andother grain-based baggedsnacks invarious flavours. https://en.wikipedia.org/wiki/Balaji_Wafers 5% Parle Wafers - Taking on Lays ! | MBA Skool-Study.Learn.Share.Compare text bingois a successful brandtoday andcompetes well withlays because they didn’t copy anyone. they were original andunique (sometimes vague) intheir flavorsthey have launcheda product whichlooks like a copy of lays indesignandtaste. we agree that quality is not compromised. 4%
  • 15. quality is not compromised. https://www.mbaskool.com/business-articles/marketing/156-parle-wafers-vs-lays.html 4%