Branded snacks segment is dominated by Frito-Lays (Pepsi’s Snack Division) with a market share of 40-45% divided amongst their five brands --- Lehar, Kurkure, Lay's, Cheetos and Uncle Chips. The total snack food market is estimated at Rs. 4,500-5,000 crore. Within this, the Branded segment notches up revenues of Rs. 2,000 crore, growing at the rate of 30% annually.
Bingo is ITC’s foray into this fast growing branded snacks segment. After reasonable success in Staples (Aashirwad), Biscuits (sunfeast), Ready-to-Eat (Kitchens Of India) and Confectionery (Candyman) businesses, this is ITC’s fifth major line in foods business. The branded snacks category is sub-divided into the traditional segment (Haldirams), Western segment (Lays and Uncle Chips) and the Finger snacks segment (Kurkure).
ITC the undisputable king of cigarette industry in India, over a period of time has done an astounding work on their distribution. But their efforts to brand a product in the minds of the consumer have always remained questionable or just futile. Decades ago, at the wake of anti-tobacco movements in India, people began realizing the ill effects of Cigarette and began reducing the numbers of cigarettes they consumed. The primary fall out of this was reduction in the sales of full packs of cigarette. This can also be attributed to the fear of lending cigarettes that pre-occupied the consumer’s mind. This made ITC realize that the most important issue in their distribution is availability.
ITC started servicing all the pan shops and mom and pop stores to sell their cigarettes. Cigarette being a completely Pull-based product never allowed the distributors to overload the retailer. The frequency of transaction was high, but the volume transacted was low (which was often 2 cigarettes, one to smoke and one to carry). Volatile sales of the product also meant that the salesman had to visit the pan shops (to distribute the product) at least twice every day.
A century of cigarette sales led to a clear distribution mindset in the company and they began lacking the mindset to brand products well. Their recent branding efforts, be their positioning or their advertisements, leaves a lot to be desired. This is clearly the reason why a very premium “ Kitchen of India” lost out of both the visibility (hence mind share) and consumers.
ITC has always been playing on the availability and a high margin factor and hence get their product pushed through the retailers. A dealer selling biscuits can push Sunfeast on an account of getting better margin from ITC than what Britannia can offer.
ITC the undisputable king of cigarette industry in India, over a period of time has done an astounding work on their distribution. But their efforts to brand a product in the minds of the consumer have always remained questionable or just futile. Decades ago, at the wake of anti-tobacco movements in India, people began realizing the ill effects of Cigarette and began reducing the numbers of cigarettes they consumed. The primary fall out of this was reduction in the sales of full packs of cigarette. This can also be attributed to the fear of lending cigarettes that pre-occupied the consumer’s mind. This made ITC realize that the most important issue in their distribution is availability.
ITC started servicing all the pan shops and mom and pop stores to sell their cigarettes. Cigarette being a completely Pull-based product never allowed the distributors to overload the retailer. The frequency of transaction was high, but the volume transacted was low (which was often 2 cigarettes, one to smoke and one to carry). Volatile sales of the product also meant that the salesman had to visit the pan shops (to distribute the product) at least twice every day.
A century of cigarette sales led to a clear distribution mindset in the company and they began lacking the mindset to brand products well. Their recent branding efforts, be their positioning or their advertisements, leaves a lot to be desired. This is clearly the reason why a very premium “ Kitchen of India” lost out of both the visibility (hence mind share) and consumers.
ITC has always been playing on the availability and a high margin factor and hence get their product pushed through the retailers. A dealer selling biscuits can push Sunfeast on an account of getting better margin from ITC than what Britannia can offer.
Their Recent ads for the product Bingo has been built on what a marketer would call “No Positioning” Strategy. The ad is funny, amusing and also a little stupid towards the end when the customer realizes that its an ad for 'potato wafers'. Foods historically are being shown aesthetically in advertisements with tastefully done visuals (even if it means showing a solution of red sand and water in the place of home-cooked Rasam). Trying to be different, Bingo Ads comes up with stuffs unrelated to the product in the beginning (that’s probably what they are trying to do) and the ad closes, by the time the product is on the screen. Customer looking at this ad can happily move ahead without even realise what the product was. This will never even push the consumers to try out the product even when it is at an arms' reach and with the delicious Lays stacked next to it.
God Save Bingo … With some of Bingo’s Flavors tasting funny, God Save Consumers as well.
