Some updates on snacks war…

We have already seen a Big Fight between the great giants of IndianFMCG companies..

find it out..some more….

This article is contributed by arvind…

As tobacco-to-hotels major, ITC, set its eyes on this segment a couple of months back, with the launch of Bingo, this category is sizzling. Across the country the action is visible. In places like Bangalore, promotional events like games and competitions basedon Bingo have become a regular feature at large malls like Garuda and Forum on weekends. The brand also tied-up with the Aerosmith rock concert that recently happened in the city. Last week, Pepsico’s snack foods company, Frito Lay, announced a major branding initiative for its Kurkure brand. About 35 AC BEST buses in Mumbai, followed by the Metro in Kolkata would be branded by Kurkure.

The action is also visible at retail points. Small retailers, almost all of whom also sell ITC cigarettes, claimed they had been promised a premium if Bingo display was better. With its sole objective of deep distribution, ITC introduced mega-size wafer trolleys outside most mom-and-pop outlets. Lay’s, the top selling brand reacted with its own version oftrolleys parked next to Bingo’s display. Of course there were some places where ITC Bingo blocked out its competition. Across the country, Bingo has laid claimto the large format outlets by tying-up with big retailers like Future Group’s Food Bazaar. But not all organised retailers believe in monopoly.

At C3, Kolkata’s second largest retailer, Kurkure and Lays dominate the branded snack market. The retailer said they would rather offer choice to consumers. But there are genuine stock issues for Frito Lay, at least in some parts of Mumbai. In south Mumbai, a shop owner said, “We sell both Lays and Bingo. But we haven’t received supplies of Lays, which is in much demand,for the past one month.” Similarly, the owner of a distribution agency for Lays said there was a supply issue. The company executives could not be reached for comment. According to ITC Foods executives, the company has launched an advertising blitzkrieg across the country to create awareness among consumers. “The brand name Bingo signifies victory. We have employed various strategies to successfully create an identity in the market in a short span of time,” said ITC Foods Chief Executive Ravi Naware.

Frito Lay is reacting with consumer promotions. As a part of its Chai Time Achievers campaign, over the next few months the company will run a campaign where consumers can send in recipes using Kurkure, of which 25 winners would be selected. These families then would be featured on 1 million packs each before October 2007. The contest is being promoted through a television, radio and outdoor campaign, as well as interactive display units at the point of purchase. ITC claims that it has done its homework well. It spent close to two years for developing Bingo. The entry was prompted by the fact that there are few players in this segment. “We found that there was only one organised large player at the national level inthe packed snacks segment apart from some regional players. There is a big opportunity for us,” says an ITC executive. He adds quickly that the market for thepacked-snack-on-the-go segment in India is around Rs 2,000 crore and ITC is looking at grabbing a 50 per cent share of the market at the earliest. “We are offering a wide range to ensure that the consumer is not restricted to a monotonous taste,” adds Naware. Headds that Bingo has also got an interesting range in the pipeline.

But as of now, it’s still early days to say whether Bingo will emerge victorious. Foodworld representatives in Bangalore admit that Bingo has emerged as a “hot selling” snack. “It is being replenished on a daily basis,” a Foodworld representative said. “We are replenishing the stock every day in all metros and cities with population in excess of 10 lakh,” Naware adds. But in metros like Kolkata, consumers have not yet switched over from Lays and Kurkure. Smaller outlets in Kolkata confirmed that sales of Lays or Kurkure had not dipped. “Frito Lay is still cashing in on the popularity and brandloyalty that it managed to establish with consumers over the years. Although consumers want to try Bingo, Lays or Kurkure have not been replaced.”

Wishing the customers!!

As we all know that marketing in an art of attracting and keeping profitable customers, companies spend hell a lot of time in providing customized products to the target customers. Since customer is the king, companies now started to wish the customers by loyalty and rewards program by partnering with other companies to provide variety of benefits to the customers. With value and brand equity, companies now started focusing upon relationship equity.

Last year, Loyalty Solutions and Research Limited (LSRL), a company funded by ICICI Venture focusing on enhancing customer experience through loyalty and rewards programs, launched “i-mint”. This is India’s first and truly national coalition loyalty and consumer rewards program, where India’s leading brands Airtel, HPCL, ICICI Bank, Indian, Lifestyle and MakeMyTrip.com.com have come together. i-mint will allow consumers to reap benefits through the largest ecosystem of business partners on a single rewards platform. This gives Consumers avail the opportunity of best benefits through this program provided by the leading brands of the country.

Whirlpool also recently launched a loyalty program called “magic club” partnering with other brands like Kohler, Hidesign.
I think this kind of programs will enhance customer convenience and build relationship with the target audience.
But how do companies measure their profitability ?

“Why Five”?!!

In this modern era of growing technology, everyone is talking about “ Wi Fi”. But in marketing is it necessary to think “Why Five”?
Yes. Many FMCG companies have started focusing upon the price point of Rs 5. This strategy is mainly used to expand the penetration of that particular category, which customers generally feel that the product is not essential. E.g.: Maggi and the second one is to involve in or to be more competitive than other brands which helps company to attain the price sensitive customers E.g.: Pepsodent

The pioneers of this strategy are the tea manufactures like Brooke bond. The history happened when coca cola launched it’s “the paanch strategy” which becomes a huge success. This campaign roped in all the marketers to fix Rs 5 for their brand. Eventually the amount spend by the coca cola and Pepsi in promoting this strategy helped other players who had priced at Rs 5.

The other reason behind these strategy might be that Rs 1 and Rs 2 are limited to certain brands like candies and shampoos. But Rs5 brings in more category of products. Even I feel that marketers mainly use this price point to first change the buying behavior of the customer, then slowly drag them to the next stage of price stages. It happened in the case of Scotch Brite where Rs 5 scrub pad was not available now because its price is Rs 6 that comes with a new package.

Some of the brands that HLL sells for Rs 5 are Pepsodent, Pond's Talc, Pond's Cold Cream, Rin, Taaza, Fair & Lovely, Clinic Plus and Lux.

Source: business line

Snacks War!!

Increasing competition by the entry of new players like ITC's Bingo brand among crossover snack brands has led PepsiCo India's Frito Lay Division to stretch the equity of Kurkure. It created the `bridge category' between namkeens and potato chips through this brand. It is in a heaviness to innovate its offerings to the target customers.

Kurkure: Strategy used
Kurkure has tied up with the South Western Railways to have a branded train, under which a brand name would feature along with the train's name in all announcements, on reserved tickets, on reservation charts, on destination boards of the train, coach indication slips and during all information dissemination about the train.
Its another strategy is to get more personal with the customers by launching “chai time contest” which makes real people famous.
It is chiefly focusing on round pricing strategy, with introduction of more new variants

Bingo: Strategy used
Bingo has struck at the small shops, to whom it's offering a margin that's 4% to 5% higher than what Frito Lays is paying. If the display is good in the retail shop, that retailer is paid more. The idea of bingo is to get the consumer to take that first bite. ITC's offerings are priced at par with Frito's and the USP is as many as 16 variants in one go.
Source: business line, marketing practice.blogspot.com

Godrej: A fine market follower!!

Even though science says that the outer skin color cannot be changed by applying the fair creams externally, Indians have a perception that fairness is the real beauty and it can be achieved easily. Even I have tried “Fair and Handsome”. But regrettably it failed.


Theodore Levitt, in his article” Innovative Imitation” argued that the strategy of the product imitation is lucrative as that of the product innovation. Godrej made the right way through it.
With the FMCG major HLL’s” Fair& lovely” and Cavin kare’s “Fair Ever” holding a majority of the market share and they are in a severe competition to grab a dominant position in the Indian fairness cream market. Cavin kare was considered to be a prominent player because “Fair ever” was launched with the USP of ‘a fairness cream with saffron’ and the brand associated itself with the herbal characteristics.
In this circumstance Godrej created a new product category, fairness soaps by launching its FairGlow Fairness Soap. It was positioned as twin advantage soap, a clean fresh bath and the added benefit of fairness. Then Godrej had decided to furnish direct competition against the major player by extending its brand by launching “FairGlow fairness cream”.

Strategy used by Godrej:

Godrej launched the website fairglow.com and involved in the online promotional campaign called “FairGlow face of the fortnight” where a winner is selected and awarded with prizes.
The company also launched the ‘FairGlow Express,’ the first branded local train in India partnering with the western railways. The FairGlow cream was also launched in a affordable sachet.
The market leader HLL later launched Lux Skincare soap, positioned on the sunscreen stand followed the market follower Godrej to make its presence in the new product category.

HLL‘s Delicious kwality Strategy!

It is crystal clear that Hindustan lever limited is still the undisputed leader in India in the FMCG sector. Its exceptional strategy and focus upon the marketing plan made it as the leader. HLL main focal point is to enter into the ice cream industry under the brand name “Kwality walls”. Its progress in this segment has been made through merger and strategic alliances with the Indian groups.

Strategy used:
As marketing strategy in the introduction stage, it introduced range of products like feast, softies, Max and Viennetta, Vanilla Gold, Black Currant Sundaes which targeted the take-home segment. In the next stage, in expanding the segment, it had a alliance with the pizza corner in developing “home delivery concept”, which uses distribution network of the pizza corner to make home delivery for the customers.
HLL also involved in “activation and visibility strategy” in which it mainly focuses upon various promotional campaigns to increase the brand awareness and brand visibility. Its announced a special contest for valentine’s day. It next campaign for its Feast range ‘What’s on your stick?’.
HLL also launched innovative campaign called “Ek Din Ka Raja” which was awarded the 'Best Promotion Campaign in India'. This campaign also awarded Silver for the ‘Best Idea or Concept’ and a Bronze for the ‘Best use of Direct Marketing’. This campaign is about picking up 10 lucky customers and giving them 10 lakh rupees to spend on a single day. For its summer promotion it had a alliance with the cartoon network

Positioning:
Some brands under Kwality walls are
Feast range of ice creams was positioned as a 'youth ice cream brand with an attitude'.
Cornetto was positioned as the product for romantic and special moments.
Sundaes positioned as an offering, which helped bring families together for fun and enjoyment

Scotch Brite: An innovative strategy of a hiding giant

An average Indian may not know that the brand “Scotch Brite” is yet another innovation owned by one of the world’s most innovative company “3M India limited”. It always uses “product innovation” as the special attacking strategy for the competition while entering into the segment. Scotch Brite is one such brand which is a scrubber used for cleaning utensils, which is launched in India and all over the world.

Strategy Used:
Since Indians believe that steel scrubbers are better, it is now coming with the steel scrubber under the brand name” Steelo” which serves the taste of the Indian customers better. At the same time, the company also promotes Scotch Brite Scrub pads through various promotional campaigns like super saver offer and conducting housemaids meet to create awareness about scrub pads.
3M is only organized player and pioneer in this segment which faces severe competition from local manufacturers. The price range of the product starts from Rs5 to overcome the competition from cheap priced products in the market.
The product quality is good and the scrubbers are now coming with “S” shaped pads for more convenience for the consumers. The company also involved in direct marketing where the company staffs gets appropriate feedback from the customers

Today in the Indian FMCG segment, the competition is becoming so severe that the companies are started using their corporate names in the TVC ads to grab a dominant place in the minds of the consumers, as an entity which as real love for its environment. Some of the companies are HLL, ITC, TTK and so on. Even HLL have changed its name to Hindustan Unilever Limited; in bring its global name into India. In this situation, 3M is not giving importance in associating the corporate name with its brand. It is already displaying the name of the company in the packages. But customers are not identifying it.
Is corporate identity important for 3M? If so, will this pioneer attach its corporate name with its brand in the future?