Snacko India Limited

PRESENTED BY

PRAVESH MISHRA

Introduction

Snacko India was a local subsidiary of a European food giant

It entered into India in 1995 but was unable to succeed as expected

The company then adopted aggressive growth strategies aimed to becoming a market leader

It based its strategies on innovation, packaging, advertisement and promotion

Continued

The company was an innovator in using trade premium for capturing market share

Snacko had set up an innovation center in India to monitor local formats & tastes

It intended to grow by increasing the frequency of consumption in the metro markets

The company adopted penetration pricing in rural markets

Snack food industry in india

The processed snack food market in India was us $3 billion & growing at 15 % per annum

Potato chips itself were contributing about US $1.2 billion close to about 80 % of branded snacks category

The market was dominated by small sized packs & highly innovative

90 % of the products were priced at or below Rs.10 price point

Mortality rate of new brands was very high in the market

Major Competitiors in the Snacks market

Sales of major players in the Indian Branded Snackmarket (in US$ million)

Company Name 2008-2009 2009-2010

Pepsi 660 866

Haldiram 266 388

ITC foods division 130 173

Snacko 120 122

Total 1176 1549

Challenges before the Company

Primary concern was of the marginal value growth in the past years

Gradual loss of market share

Possible causes of flat growth in overall Sales

Design and effectiveness of the promotional activities and schemes

Regular follow up required for the new variants been launched

Snacko’s Distribution and Market coverage

Snacko’s products were being sold on impulsive and intensive distribution schemes

Point of sale visibility and promotional activities supplemented the sales

Window and Counter top displays were the main promotional activities done at retailer’s place

Snacko was trying to grow its market through Market Development strategy

Snacko’s distribution channel

Margin Breakups in Distribution channel

Overall margin Breakup

CFA’s 3- 3.5 %

Stockist/Distributors 5-12 %

Wholesalers 2-3 %

Retailers 5-15 %

Marketing and Promotion The company relied heavily on product innovation and

marketing communication

Created buzz by innovative formats and flavours, associating its brands with events

Opportunities for people to experience the products

It associated its brands and sub-brands with Indian cricket tournaments

Special additional packs

Continued

New add campaigns during league matches

Several below the line activities

Sponsored events in which print, radio and TV media were extensively employed

New product launch by 360-degree media approach

Trade promotion

Build demand at the middleman

Trade promotions included Special pricing, sales incentives, discounts,Trade shows and demonstrations

Tickets to sporting events

Snacko also used trade promotion for launching new flavor in order to increase the chances of trial and adoption by the consumer

They pushed slow moving brands through trade promotion activities

Continued

Retailers were offered incentives to provide additional shelf space

Company did not pay for this instead provided the equipment for posters and banners

The schemes ran for shorter period of time

Additional incentive was given to sales team to implement the scheme

Schemes were based on trust and relationship

Trade promotion schemes by Snacko for Retailers

On package premium Scheme which included Gifts

Rewards for retailers scheme

Price Offs for the retailers

Extra discounts for SR’s

Jhatpat Tez Brand offer

Tambola Scheme

Cramm Brand winner extravaganza

Scheme 1

Detailed Trade promotions Scheme 1

Brand Name No. of SKU's in a box

Offer per box Offer Worth

Cramm Asli 40-unit Carton 2.5 Cremo Units ₹ 55

Cramm Sizzler 40-unit Carton Battery ₹ 30

Cramm Kadak 40-unit Carton Mug ₹ 30

Cremo 40-unit Carton Scissors ₹ 30

Whistle 40-unit Carton Lock ₹ 30

Jhatpat Crackle 40-unit Carton Glue Stick ₹ 30

Detailed Trade promotions Scheme 2

Brand Name SKU type Offer per container Offer Worth

Cremo 80-unit Plastic Container

Free Calculator, Electric extension

₹ 125

Cremo 40-unit Carton Pen, Cutter, Bottle opener

₹ 30

Jhatpat Superhot 80-unit Plastic Container

Roto pen,Toilet saop, Audio CD

₹ 225

Whistle 80-unit Plastic Container

Clip hanger, Dish washer

₹ 175

Scheme 2

Suggestions for Snacko Snacko should implement pull strategy along with push strategy so

as to build and enhance its consumer base

The company should also focus more on enhancing the customer base with increase in distribution

It should use various coupons like Bounce back coupons and the concept of cross ruffing

Offering In package premiums to the customers

Continued

Introducing diet products for health conscious consumers

Organizing contests for customers with the purchase of Snacko’s products

Offering party packs through bundling of products

THANK YOU