new product launch mr - potato chips

RESEARCH METHODOLOGY

• 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

THE INDIAN WAFER SNACKS SEGMENT

PROMINENT BRANDS

MARKET SHARE

MICHEAL PORTER’S FIVE FORCE MODEL

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 quantity 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.

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.

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.

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.

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 otherChocolates, Biscuits, Wafers and local snacks like Chakli,

banana chips, farsan etc are all substitutes of one another.

Hence, the threat of substitutes is high.

ENTRY STRATEGIES BASED ON 4P’SProduct

Price

Place

Promotion

4 Ps

PRODUCT PRICE

PLACE PROMOTION

PRODUCT• Scrumpties will position itself with its Indian flavors such as Pani puri & also with the non vegetarian flavours

• The offerings under the Finger Snacks segment are unique and innovative

• The initial offerings are in mix of potato chips and figure snacks.

• These offerings would further differentiated by providing SKU’s at Rs.5,RS.10,RS.20

PACKAGING• Scrumties has done the packaging such that the product attracts the buyer.

• It launched packs with different quantity keeping in mind the specific consumer demand.

PRICE• Offering competitive pricing in order to penetrate the huge unorganized market of snacks.

• Price conscious nature of consumer• SKU’s 30gms- RS.5, 65gms-Rs.10,120gms RS.20• New pack in Rs.15 with 90ms

PLACE Manufacturers/products

Agents/brokers

Wholesalers/distributors

RetailersRetailers

Consumers and organizational end users

PROMOTION• On wheels promotion• Marketing campaign• Sponsorships• Brand ambassador

I try Scrumpties because it

stands apart, different from

the crowd

Differently shaped,

Funky and fun chips to have

Good traditional

Indian flavours but I love to

consume those

flavoured items as

dishes in the restaurant

Want a size like

thisHave

“Scrumpties”

Going mad after

Scrumpties

Yummy

Not able to differentiate whether it is Indian

or internation

al

73%

15%

5%3% 3% 1%

TOMA1

laysbingokurkurepeppypringleshaldirams

60%18%

10% 4%3% 3% 2%

TOMA2

bingolayskurkurehaldiramsBalajipringlespeppy

54%

23%

14% 4%2% 1% 1% 0%

TOMA3

kurkurebalajibingolayshaldiramspringlespeppyHippo

40%

34%

19% 8%

SUBSTITUTES

Chocolates Biscuits

Juice Farsan

65%

26%

9%0%

PLACE OF PURCHASE

General store

Super markets/ Department Stores

Kiranas

Others

57%27%

17%

FLAVOURS

Schezwan Chicken flavour

Prawns flavour

Mutton Curry flavor

CHI SQUARE

Chi Square test:Brand preference v/s AgeH0: They are IndependentH1: They are Dependent

With 0.05 as level of significanceReject H0Conclusion: Brand Preference is Dependent on Age.

Chi-Square Tests

Value dfAsymp. Sig. (2-sided)

Pearson Chi-Square 1.028E2a 15 .000

Likelihood Ratio 91.128 15 .000

Linear-by-Linear Association .287 1 .592

N of Valid Cases 215

a. 17 cells (70.8%) have expected count less than 5. The minimum expected count is .10.

Chi Square test:Brand preference v/s GenderH0: They are IndependentH1: They are dependent

With 0.05 as level of significanceReject H0Conclusion: Brand Preference is Dependent on Gender.

Chi-Square Tests

Value dfAsymp. Sig. (2-

sided)Pearson Chi-Square

12.516a 5 .028

Likelihood Ratio13.221 5 .021

Linear-by-Linear Association .020 1 .887

N of Valid Cases215


Chi-Square Tests

Value dfAsymp. Sig. (2-

sided)Pearson Chi-Square 9.213a 9 .418

Likelihood Ratio 10.311 9 .326

Linear-by-Linear Association 4.571 1 .033

N of Valid Cases 26


Chi Square test:Brand preference v/s Income

H0: They are IndependentH1: They are dependent

With 0.05 as level of significanceAccept H0Conclusion: Brand Preference is Independent of

Income.

Parameter Importance (I) Satisfaction(S) Opportunity Score OS= I+ (I-S)

Quantity 2.12 1.45 2.79

Taste 2.55 1.91 3.19

Flavours 1.4 1.48 1.32

Crispiness 2.53 2.58 2.48

Brand 2.78 2.21 3.35

Availability 2.11 2.29 1.93

OPPORTUNITY MATRIX

IMPORTANCE & SATISFACTION OF PARAMETERS

Quantity Taste Flavours crispiness Brand Availability0

0.5

1

1.5

2

2.5

3

3.5

Series1

BRAND COMPARISONSModified Multi Dimensional

Scheming

lays bingo kurkure hippo pringles

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

BRAND

brand


-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

TASTE

taste


-1.5

-1

-0.5

0

0.5

1

QUANTITY

quantity

“THE TASTE IS IT”

new product launch mr - potato chips

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