22-06-2013, 02:54 PM
Indian Wafer Snacks Market
Indian Wafer.pptx (Size: 1.47 MB / Downloads: 52)
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
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.
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.
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
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.
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.
Marketing Strategy adopted by Frito-lay (The Market Leader)
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.
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.