The document provides an overview of the Indian wafer snacks market. It discusses the estimated market size of Rs. 4,500-5,000 crores annually, growing at 30%. Major players include Frito-Lay with a 45% market share, followed by Haldiram and Bingo. The document then analyzes the industry attractiveness using Porter's 5 forces model and discusses the lifecycle stages and marketing strategies of key players like Frito-Lay, Bingo, and 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)

2. Introduction to the Indian Wafer Snacks Segment
 The size of the Wafer Snacks Segment in India is estimated to
be 4,500 – 5000 crores
 The market is growing at 30 percent annually
 The branded players account for 2,000 crores of the market size
 Major branded players include Frito-
Lay, Bingo, Haldiram, Balaji, Parle
 Potato Chips and Potato based items account for 85 percent of
the total snacks segment.
 As per Nielsen’s Retail Audit, Frito-Lay commands 45% market
share, followed by Haldiram at 27% and Bingo at 16%
 The rest is divided between new players such as Smart
Chips, regional players such as Balaji and handful of unorganized
players

3. Prominent Brands and their offerings
•Lays
•Kurkure
Frito-lay •Lehar Namkeen,
•Cheetos
•Uncle Chipps
ITC •Bingo
Parle •Musst Bites & Stix
• Smart Chips
Snacks • Cheeslings
Other •Balaji Wafers
• Haldiram
Players •Yellow Diamond among other local players.

4. Analyzing Segment Attractiveness
(Porter‟s 5 forces)

5. Industry Attractiveness (Porter‟s 5 forces)
Threat of new entry:
 As the market is growing at 30 percent annually, new
entrants may consider it a profitable venture
 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)
 New players with a distinct USP and marketing strategy
may find it easier to enter the market (Bingo Strategy)
 Unorganized players still account for half of the total wafer
segment, thereby discouraging market entry
 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.

6. Industry Attractiveness (Porter‟s 5 forces)
Competitive Rivalry
 High Competition – Branded Players involved in cut-
throat competition to increase market share, entice new
consumers, find new markets
 Low Quality differences among branded players.
 Quality difference between branded and unbranded
offerings is offset by low price offered by unbranded players
 Cost of switching is low as all players have a similar
pricing strategy
 Brand Loyalty is high for branded players
Hence, the threat of competitive rivalry is high.

7. Industry Attractiveness (Porter‟s 5 forces)
Bargaining power of suppliers
 Suppliers provide raw materials such as potatoes, spices and
other ingredients. Their ability to raise input costs is high.
 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)
 Shortage of any input material may also affect production
and thereby impact distribution.
 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.

8. Industry Attractiveness (Porter‟s 5 forces)
Bargaining power of consumers
 Frito-Lay enjoys a healthy lead with a 45 percent market
share for it’s portfolio of products
 Competitor differentiation is in terms of variants and
communication.
 Ability to substitute is high as brands are priced similarly
and distribution problems for one brand promote sales for the
other.
 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.

9. Industry Attractiveness (Porter‟s 5 forces)
Threat of substitutes.
 Indian Snack Segment is high-volume, low-involvement
driven (thrives on impulse buy)
 All snacks are considered to be substitutes of each other
Biscuits, Wafers and local snacks like Chakli, banana
chips, farsan etc are all substitutes of one another
Hence, the threat of substitutes is high.

10. Industry Attractiveness (Porter‟s 5 forces)
Final Verdict
The market is unattractive for players who:
 Aim to be a me-too product with no significant
differentiation
 Do not have a well-established distribution network
 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.

11. Understanding
The
Market Structure

12. MARKET STRUCTURE
Market • Fritolay (45 percent cumulative share
consisting of Lays, Kurkure, Uncle Chipps,
Leader Cheetos and Leher)
Market • ITC‟s Bingo (16%) posing a threat to Lays
through its direct frontal attack
Challenger
• Balaji and local players such as Yellow
Market diamonds. Also included are unorganized
offerings, aimed at the price-sensitive, less
Follower loyal audience.
• Parle Monaco‟s Smart Chips which has
Market identified itself a niche of the more health
conscious section of the audience by offering
Nicher them a baked variant of chips.

13. Stages in the
Lifecycle
of the Category

14. Lifecycle Stages of the Wafer Segment
Product Development Stage
This stage is characterized by
• No Sales & Profit
• Product Testing – identifying a sample target group to
evaluate the potential of the product
• Research & Development – aimed at constantly
improving/differentiating the product
• 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, vada pav , samosas, etc
were the popular choices among the Indian audience. Based
on this information, the company decided to develop flavors
with an Indian taste.
• Test Marketing – may be conducted by launching the
product in one or two markets initially.

15. Lifecycle Stages of the Wafer Segment
Introduction STAGE
• The product is launched in the market, either as a single
variant or multiple variants, single SKU or multiple SKU‟s. In this
case, it is advisable to go for multiple SKU‟s to off-set price-
sensitivity.
• 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
• 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.
• FMCG thrives on distribution so the firm must have a well-
established network in its place. The firm may look at providing
add-on schemes, value deals to dealers and retailers not
provided by competitors.

16. Lifecycle Stages of the Wafer Segment
Growth
• Depending on the success in the growth stage, the firm
may aim at product improvement. In terms of
SKUs, packaging, etc.
• The company may introduce newer variants through
continuous R&D
• The firm may undertake sales promotion such as extra
grammage, freebies, etc.
•Example: The sales of Lays multiplied through the
introduction of “Tazo”
• If the product was launched in smaller markets, the firm
may consider increasing distribution coverage.

17. Lifecycle Stages of the Wafer Segment
Maturity
The market becomes saturated. Hence, the firm may place
emphasis on :-
Product Modification
Re-branding Strategies
Distribute in selective profitable
areas
Exit out of markets where the
product doesn’t get the desired sales
numbers

18. Lifecycle Stages of the Wafer Segment
Decline
• The Company may withdraw the product
from the market. If in-case of a multi-brand
company, the company may focus on profitable
brands (cannibalize its weaker brands)
• The firm may adopt a permanent sales
promotion strategy such as buy one-get one
free, discounted price, more grammage in case
of large unsold inventory.

19. Marketing Strategy adopted by Frito-lay
(The Market Leader)

20. 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.
• One of the power brands under Fritolay comes in 5 different
Lays flavours. Tomato Tangy, Classic Salt, Cream „n‟ Onion are the
popular “westernized” variants, while “Magic Masala” and “Lime
Masala” are aimed at craving the Indian-taste.
• Launched in 1999, the brand symbolizes the spirit of India with its
Kurkure Indianized farsan-like flavors. The newly launched “Desi Beats”
variants are a direct answer to Bingo‟s strategy of launching
Indianized flavours.
• Launched in 1995 provides variety from other Fritolay offerings
Cheetos such as Cheese Puffs & Masala Balls. The product differentiation
is apparent in terms of design and shape. Also the inclusion of
„cheese‟ as an input material distinct it from other brands.
Leher • A salt farsan-like snack aimed is a direct alternative to the
offerings of unorganized players.
Namkeen

21. Marketing Strategy of Frito-Lay
Pricing Strategy
 The pricing strategy for Lays is consistent with other
competing players. As this market is driven by high-
impulsive buyers of snack foods, there is very little
dichotomy in the pricing strategies of all major players.
 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.
 Recently, however Fritolay launched a Rs.3 SKU for it‟s
Kurkure brand in a bid to compete more aggressively.

22. Marketing Strategy of Frito-Lay
Promotional strategy
 Realizing the direct threat posed by Bingo to its market share, Fritolay
revamped its‟ branding strategy for all leading brands.
 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,
 “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.
 “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
 Aside from Juhi Chawla, the company also signed on Kareena Kapoor
for the “Desi Beats” version of Kurkure.
 Other initiatives include posters at unconventional retail points such as
cyber cafes and telephone booths, a tie-up with South-Western
Railways, known as “Kurkure Express” to increase brand visibility.

23. Marketing Strategy of Frito-Lay
DISTRIBUTION STRATEGY
 Being first in the market through its acquisition of Uncle
Chipps, Fritolay already has a well-established network of
distributors and retailers pan-India. The brand loyalty enjoyed
by Lays was leveraged during the launch of Kurkure, Cheetos
and the recently launched “Aliva”
 Frito-Lay has a distribution network of 30 CFAs and 2
RDCs who service 800 distributors who sell to 4 lakhs retailers.
 Fritolay boasts of reaching more than 1 million retail
outlets countrywide covering 100 towns. The Company, with its
manufacturing plants in Punjab and Pune, aims at investing
20 crores to extend distribution facilities to improve coverage
and increase product shelf life by 120 days.

24. Marketing Strategy adopted by Bingo
(The Market Challenger)

25. Marketing Strategy of Bingo
Product strategy
 Bingo positioned itself as chips with an Indian twist.
The 16 flavors introduced at launch were carefully
developed through R&D.
 The initial offerings were a mix of potato chips and
finger snacks.
 The Potato chips segment includes variants like
masala, salted, tomato inspired by the snacking habits of
the Indian consumer
 The offerings under Finger Snacks include the pakoda
inspired „Live Wires‟ and Khakra inspired „Mad Angles‟
 These offerings were further differentiated by providing
SKU‟s at Rs. 5, Rs.10 and Rs. 20

26. Marketing Strategy of Bingo
Pricing strategy
 The main objective for ITC was to compete effectively with
players who were already there. Hence, it launched a direct
frontal attack by introducing similar priced SKU’s.
 ITC already enjoyed cost advantage over competitors
through its e-choupal initiative. This also facilitated timely
supply of raw materials.
 ITC’s printing and packaging business also lead to high-
quality, cost-effective and innovative packaging.

27. Marketing Strategy of Bingo
Promotional strategy
 Bingo was strategically launched at the time of world cup to cash
in on the popularity of snacks among the cricket lovers of the
country.
 The advertising strategy revolved around slapstick humor and
irrelevant themes to hold eyeballs, garner attention and
interest, and stand out from the clutter.
 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.
 While its competitor Fritolay focuses on celebrity
endorsements, Bingo chose a different route. It didn’t have an
ambassador!
 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
 Bingeonbingo.com and Mad Angles Twister Application
(Facebook) were other initiatives in online media.

28. Marketing Strategy of Bingo
Distribution strategy
 ITC already had a well-established distribution network through
its cigarette and tobacco-related offerings which was leveraged in
case of Bingo.
 Further, the company distributed 4 lakh racks across all
retailers to display the brand at all Points-of-sale.
 Within 6 months, Bingo was available across 2,50,000 retailers
across the country.
 A crucial alliance with Future group which lead to all future
group retail outlets like Big Bazaar, Food Bazaar stocking only
ITC”s Bingo
 HORECA (Hotels, Restaurants and Cafes), Local betel shops
are all being used to distribute Bingo to a wide range of audiences

29. Marketing Strategy adopted by SMART
CHIPS
(The Market NIChER)

30. 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 Salted
Tangy Tomato
Crazy Chat
Macho Masala

31. Marketing Strategy of Parle‟s Smart Chips
Pricing strategy
Similar to competitors, Smart Chips comes in two SKU‟s. Rs. 5
for a 25 gm pack and Rs. 10 for a 50 gm pack
Promotional strategy
 The ad campaign, handled by Thoughtshop
Communications, features Aamir Khan advocating the benefits of
baked chips over the fried ones taking a subtle shot at competing
brands
 The ad highlights the USP of the product in a humorous way
without sounding to preachy or serious, which enables it to stand
out from the clutter.
Distribution strategy
 Being a veteran player in the food and snacks segment, Parle
already has a well-established framework of distribution through
its biscuits and other snack offerings. This has enabled Parle to
distribute Smart Chips effectively, reaching millions of retail
outlets.
 Thus, with the advent of Smart Chips, Parle has carved out a
small niche for itself aimed at the health conscious snack-lovers.

32. Frito-Lay's Success Mantra – Right Strategy at the Right Time
If you‟re not the first in the market, compete head on
and if possible acquire the competitor
Being first in the market, in 1992, Uncle Chipps enjoyed tremendous success. When Fritolay entered India in 1996 with
its brand “Ruffles”, it went head on with Uncle Chipps but still couldn‟t gain significant market share. However, post
2000, it bought out Uncle Chipps for an undisclosed sum, thereby wiping out its sole competitor in the branded wafer
market.
Consistent Communication
Fritolay‟s communication is one of its key strengths. It has managed to create a distinct image for all its brands –
Kurkure, Lays among others. Any launch of a new variant/line extension is supported by a 360 degree marketing
campaign to create awareness and induce trials.
Respond to Competitor‟s threats
When Bingo started eating into Fritolay‟s market share, the company proactively responded by launching it‟s own
versions of Indianized flavours spread across all it‟s brands. Taking a cue from its competitor in terms of increased
audience interaction and online marketing, Fritolay expored new mediums of advertising which lead to the launch of the
massive “Chala Change Ka Chakkar Campaign”

33. Learning‟s from the competitors.
• A well-planned full frontal attack on the leader may
sometimes yield fruitful results (Bingo)
• A thorough analysis of the leader‟s offerings will reveal
missed opportunities (Smart Chips)
• Once a USP over the leader and other competitors is
identified, it must be communicated in simple and clear
terms (Smart Chips)
• Innovative advertising and communication, if done
right, helps stand out from clutter and reach the target
audience.
• If there is no significant product or distribution
differentiation, focus on the other 2P‟s namely Price and
most importantly promotion.

34. REFERENCES
TEXTUAL REFERENCES
1) Marketing Strategy – Walker, Mullins, Boyd
2) Marketing Strategy & Plans – Michael Vaz
3) Class Handouts – Prof. Dr. Amit Rangnekar
WEB-BASED REFERENCES
1) http://www.imagesretail.com/support_jan_suplychain.htm
2) http://www.televisionpoint.com/news2009/newsfullstory.p
hp?id=1244814371
3) Official Websites of Fritolay, Parle, Balaji, Bingo among
other brands
4) http://www.afaqs.com/perl/news/story.html?sid=20324
5) http://www.moneycontrol.com/news/business/frito-lay-
loses-snack-mkt-share-to-itcs-bingo_300325.html
6) http://www.bizdewz.com/parle-monaco-smart-chips-vs-
lays-or-aliva/
7) http://www.afaqs.com/perl/news/story.html?sid=25651
8) 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

35. THANK YOU