the indian snacking industry
TRANSCRIPT
-
7/27/2019 The Indian Snacking Industry
1/21
Fundamentals
Of
Marketing
Name :
Roll No :
Course/Semester :
College/University :
-
7/27/2019 The Indian Snacking Industry
2/21
The Indian Snacking Industry
Global market intelligence firm, Netscribes launched its latest report on the "Snacks
Market in India" that elaborates the competitive market scenario of the Indian snacks
market and its growth prospects. The report states that the Indian snacks market iswitnessing rising demand due to a variety of factors that are in turn is making the
market lucrative for manufacturers.
The Indian food and beverage sector is huge and highly competitive in nature. The
industry comprises of several sub-sectors such as fruits & vegetables, meat & poultry,
dairy, marine products, grains and consumer foods. Snack is one of the major
segments of the packaged food division, which comes under the broad category of
consumer foods. Though the snacks market in India is dominated by the unorganized
sector, the organized sector has shown remarkable growth in terms of market share in
the last few years.
The report provides a snapshot of the Indian snack industry which has witnessed
several changes since 1995. In the initial years, the market was dominated by two
players - traditional snacks player Haldiram and 'Uncle Chips' manufacturer Amrit
Agro. Eventually however, with the entry of global beverage and snacks player
PepsiCo, the market dynamics changed completely. Today, the market is dominated
by PepsiCo with of its massive product portfolio. Other major players include Parle
Agro, ITC, Parle Products, Balaji Wafers and Parle Wafers among others. A number
of regional players have also entered the market in the last few years and are giving
tough competition to the big players.
The snacks market is classified into two broad segments - Western and traditional
snack segments, wherein western snacks enjoy more popularity in comparison to thetraditional snacks. Moreover, the western snack segment is dominated by large
number of MNCs and organized snack manufacturers.
Factors drivig the growth of the snacks market in India include higher disposable
income leading to greater spending power by consumers, rapid urbanization leading to
busy lifestyle and subsequent inclination of consumers toward packaged food products
and aggressive marketing campaigns by all the players to break the product clutter and
attract consumers towards their brand. In addition to these, other factors include
-
7/27/2019 The Indian Snacking Industry
3/21
growing working women population, fast expanding retail network and the
convenience factor associated with snack consumption.
Though there is no specific regulation pertaining to snacks, quality standards laid by
FSSAI has to be followed by the industry players. Various government policies thathave been formulated for the food processing sector such as FDI, tax benefits and
export promotions are applicable for the snack category as well.
To sum up, the Indian snacks industry is a stable market at present and has strong
growth potential in the future years.
The Indian consumers taste and preferences have undergone a radical change in the
past two decades when it comes to snacking habits. Snacks which essentially are a
hunger quencher between meals were once limited to traditional food items like
pakoda, poha, samosa, upma, sheera etc. However, Lays (then Ruffles), Uncle Chips,
Haldirams and several unorganized players changed the snacking scenario in India.
There was something very interesting that was happening in the industry, something
that led to the industry growing to the tune of Rs. 6500 Crores by 2012.
The Indian consumer felt a growing need of having something that was tasty yet
hassle free as snacks between the meals. Traditional snacks lost out as they were
cumbersome to make and chips, namkeens, biscuits etc now became the preferred
choice of snack. Changing lifestyles, fast paced life, incessant advertisements,
stronger distribution channels and shrinking SKU sizes were the key reasons for these
changing snacking habits. The entry of several major FMCG players such as Pepsico,
ITC, Parle Agro and Britannia made sure that there wasnt a single moment of peace
-
7/27/2019 The Indian Snacking Industry
4/21
in the newly begun Snack Wars. And just then, a cute fat animal entered the
battlefield, apparently to fight the evil of hunger.
About Parle AgroParle Agro is a trusted household name in the beverages industry and has been
refreshing India since two decades with leading brands like Frooti, consistent winner
of India's most trusted fruit beverage brand, Appy, Appy Fizz and packaged drinking
water, Bailley. A pioneer in the Indian industry, Parle Agro is associated with many
firsts. We were the first to introduce fruit drinks in tetra packaging, first to introduce
apple nectar and the first to introduce fruit drinks in PET bottles. In 2007, Parle Agro
forayed into foods with the launch of two confectionery brands, Mintrox mints and
Buttercup candies. This was soon followed by two more brands - Buttercup Softease
and Frewt clairs. Recent beverage products from Parle Agro include Saint Juice,
LMN and Grappo Fizz. In 2009, Parle Agro forayed into snacks with the launch of
Hippo, a move that will take the company closer towards its vision of becoming a
leader in the foods and beverages industry.
-
7/27/2019 The Indian Snacking Industry
5/21
The Curious Case of Hippo the Snack
Ask about Hippo the snack and a majority would say they have heard of it but ask
about who is the maker of Hippo and hardly anyone knows that its from the Parle
Agro Stable. Ask about what is Hippo and one would get varied answers: Chips, just asnack, munchies, bread snack and so on. However, Hippo is neither potato chips nor a
biscuit. Its a baked wheat munchy that is available in several unconventional
flavours.
Launched in 2009, Hippos value proposition is that its aHunger Killerthat is made
up of Wheat and Free of MSG (monosodium glutamate) & GMO (genetically
modified organism). Hippo differentiates itself from its competitors by the virtue of its
assortment of international flavours and a very unconventional brand endorserA fat
Hippo. The brands communication plays on the generic need platform i.e. Hunger
and the mascot Hippo is this earnest, easygoing guy who understands that often, we
don't take care of our health by neglecting to eat.
The Good!
-
7/27/2019 The Indian Snacking Industry
6/21
Most of Hippos Brand Promotional activities have been a grey area. The most
striking and notable aspect is of Packaging. Hippo packs have used bright and
unconventional colors solely to stand out of the clutter in shops. If we closely
observe its advertising campaigns, every campaign has aninterwoven socialmessage which is strikingly different from other competitor campaigns which usually
focus only on the taste.
The word HIPPOwritten is in huge font goes very well along the brand personality.
The Hippo mascot also is very conspicuous and a lot of effort has been taken to
promote the mascot as a friendly and affectionate character. . The creation of Hippo as
a mascot (and one that stays behind the scenes, as his face isn't shown throughout the
film) is, in a way, the brand's way of saying that the true heroes are its consumers, and
that Hippo cares for them. The innocence and goodwill associated with Hippo
associates a sense of happiness and positivity with the Brand Character.
The Bad!
-
7/27/2019 The Indian Snacking Industry
7/21
While Hippo has caught many eyeballs through its absolutely innovative
advertisements and brand promotions, there are several signaling and positioning
errors that the company has committed while communicating the brand.
The Advertisements
It is not clear whether Hippo is being portrayed as a healthy baked snack or notthrough the advertisements.
Hunger is the key highlight of Hippos advertisements but such a word alone cannotcreate a differentiation per se.
Hippo also suffers from an on/off kind of advertising strategy which will do moreharm than good especially in an industry like snacks.
Although there is a strong social message in the advertisements it has no realconnection with snacks and deviates from its actual value proposition.
A market such as snacks is heavily dependent on taste and how appealing the productis but Hippos promotions have seldom focused on these aspects.
-
7/27/2019 The Indian Snacking Industry
8/21
The Mascot
Hippos Mascot, Hippo the animal, isnot relatedto snacks in any way and is notvisually appealing.
It may in fact give out a wrong messageas Hippo is usually associated with termssuch as: Fat, Ugly, lazy and unhealthy.
F lop on Facebook
Although Hippo creates wall posts related to latest events, a tactic very similar toAmul Butter, it hardly talks about the product itself.
While Amuls Ads focus on somehow getting the butter into the advertisements,Hippos posts make no such attempt to create product awareness.
The Fabulous!
Using Br and to overcome the Technical glitches in Marketing
The Big Challenge
Hippo, a new entrant in the $1.5 billion Indian snack market, was launched in 400,000
stores across India. The sales and distribution network of Hippo was in a nascent
stage. It was essential to ensure consistent availability to encourage trail and first time
purchase. Stocks were drying up in stores by the hour and they found it challenging to
track and re-stock the empty stores quickly. The challenge was to track empty stores
quickly and plug the lag in supply and help Hippo cope with this super demand.
The Fabulous Soluti on
Hippo blurred the line between sales, distribution, and consumer by using socialmedia as an information channel to fill the gaps in its distribution network. Hippo got
his followers on Twitter to send him a tweet @HelloMeHippo whenever they were
unable to find Hippo packs at a store. Thus the customers not only became a feedback
channel but also as an inventory tracking interface. A core cell was set up to collect
and disburse this information to the respective sales teams which restocked the store
within hours.
-
7/27/2019 The Indian Snacking Industry
9/21
Results
Tweets poured in from 45 cities across India. At zero cost, Hippo had 400 additional
people helping with Sales & Distribution over Twitter equivalent to almost 50%
of the strength of its Sales & Distribution network itself. Sales rose by 76% in thefirst few months of its launch. The campaign even helped Hippo identify, gauge
demand, and prioritize its high potential new markets.
Exploi ting the deli cious connection between Cr icket and Snacking
The Big Challenge
Hippo, upon its launch faced two main challenges. Firstly, it had to stand out of the
clutter of an already crowded snack market and secondly, to create a strong brand
preference and recall for Hippo Toasties in the mind of an average Indian Consumer.
The key point to address this challenge was to associate Hippo with what the average
Indian connects the most to. Cricket, was the obvious answer.
The Fabulous Soluti on
-
7/27/2019 The Indian Snacking Industry
10/21
Hippo launched a campaign called the Indian Food league that catered to the Indian
Fans love for snacking while he enjoyed his T20 matches. The IFL comprised of nine
regional teams symbolised by the regions most popular dishes, with Chennai being
represented by Idli Sambhar, Mumbai by Pav Bhaji and Delhi by Papdi Chaat. Otherdishes include Kanda Poha, Aloo Paratha, Daal Baati, Masala Dosa, Roshogolla and
Dum Biryani representing the regions Pune, Punjab, Rajasthan, Bangalore, Kolkata
and Hyderabad, respectively. So essentially, a Mumbai Vs Bangalore match for
Hippo became a match between Pav Bhaji and Masala Dosa. Every Todays Special
mirrored the match schedule.
Results
IFL received overwhelming response with Hippos sales going up during the IPL
season. This also proved to be a classic example of using crowd-sourcingin brand
building and developing customer engagement.
Using Augmented Reali ty to enthrall audience The Chal lenge
With the launch of Meri Maa campaign, Hippo aimed at entering the regular Indian
Household by selling its proposition of providing food like a mother. It was in line
with its positioning of Killing Hunger. Hippo faced a challenge of establishing a
strong brand connect with a maternal figure and realized the potential of technology in
simulating a life-like scenario to instill this proposition onto the customer.
The Fabulous Soluti on
-
7/27/2019 The Indian Snacking Industry
11/21
Hippo Momline was a campaign that used augmented reality while trying to bring the
rich essence of a mothers cooking in a ready-to-eat snack. Hippo website identified a
packet of Hippo Round Round using an augmented reality set-up and a web cam.
Once the packet was identified, a customized visual would pop-up depending on the
packet a person had bought. The visual, that was seen once the packet faced the web
cam, was that of a mother who told the visitor about Hippos tasty snack and how it
followed her recipe. The option of calling ones mother was also available for a
visitor. All he needed to do was feed in his mobile number along with his mothers
mobile number and the website would connect the two parties.
Result
This campaign was a runaway success and was nominated for many awards. This
campaign resulted in 2,50,000 calls made across 35 cities and towns just during the
-
7/27/2019 The Indian Snacking Industry
12/21
festive season. Hippo mom line caused a spike of 16% sales in Hippo Round Round in
Indian cities while towns saw a 37% spike which is phenomenal considering the size
of the Indian snack market.
InsightsThere seems to be a clear disconnect between the company lens and the consumer
lens.
Company Lens Consumer Lens
Conscious deviation from Category norms
to create differentiation and gain attention
Hippo being fat/unhealthy weakens its
brand proposition as mascot
Attempt to create a self made category
called Munchies
Unable to differentiate its munchies from
other snacks like chips/wafers due to lack
of signaling
Trying not to cater to niche health snacks
but to delicious product that pampers the
taste buds
Confused Positioning between Baked and
Healthy OR Tasty and indulgent
Campaigns like Pyar batt te challo and
Flavors without borders in tune with
main theme Hunger killer
Lack of association between snacks and
war/ conflict situations. Difficult toconsumer to relate war/brotherhood with
snacking
The company has made mistakes but at the same time carried out some good branding
initiatives. The company needs to reevaluate its Brand Positioning and Signaling in
the snacks market and reduce the consumer dissonance it is causing due to
contradictory signaling. The aspect of association of social themes with snacking also
needs to be reconsidered and also reframed to impress upon people the reasons to buy
Hippo which is a product in the impulsive buyingcategory and not an emotional or
value based one. The company is using Digital media effectively although here also it
presents symptoms of weak brand associations. Once the signaling and brand
positioning are re-evaluated, Hippo does seem to have a bright future ahead!
Brand Analysis Count
-
7/27/2019 The Indian Snacking Industry
13/21
Another brand has entered into the highly competitive snack- food market. The brand
Hippo was nationally launched recently by Parle Agro. The Indian branded snack-
food market is worth Rs 6500 crore has now become a battle ground of titans.
Indian snack-food market growing at 25% p.a is witnessing marketing fight worth
watching. The players are trying every tricks of the trade. This intense marketing
competition has expanded the market and also created new segments. One such new
segment is the healthy snack segment.
Marketers were aware of the gradual trend among consumers towards healthy foods.
Although this trend is limited to certain sections of society, marketers are calculating
that healthy snack-foods will become a mainstay category in the snack-food market.
Infact Ms Indra Nooyi of Pepsico had openly stated her vision of Pepsico leading the
healthy food movement.
The healthy snack segment in the Indian Snack market has got a big boost in recent
times with the launch of Aliva brand by Pepsico and Monaco Smart Chips by Parle.
Earlier, Lays tried its hand by launching a low-calorie version to counter Bingo's
claim of 'baked not fried 'proposition. The high profile campaign of Monaco Smart
Chips featuring Aamir Khan put the spotlight on the healthy angle of snacks.
Hippo calls itself " Delicious Baked Munchies ". This baked wheat based munchy isneither a potato chips nor a biscuit, but something in between ( source Business India).
The munchies are available in Pizza flavor,Chinese Manchurian, Hot N Sweet, Thai
http://3.bp.blogspot.com/_1pKvii0Z9Cs/S5YyA1ubqNI/AAAAAAAACTc/HSRQMPpSsIw/s1600-h/Hippo.gif -
7/27/2019 The Indian Snacking Industry
14/21
Chilly , Yoghurt Mint Chutney and Indian Chatpatta. The
brand is priced at Rs 10 per pack.
Hippo is currently running its launch campaign across channels.
Watch the ad here :Hippo
Hippo has tried to position itself differently from the rest of the brands. While the
other snack brands have positioned itself on product properties, Hippo brand tried to
take the generic need platform.
For example :
Lays is positioned as a convenient snack,
Bingo on the different tastes,
Aliva also on health + taste
Monaco Smart Chips on health ( baked ).
Hippo is being positioned as a hunger- killer. The brand wants to be a guilt-free snack
for hunger moments. The brand is banking on two properties - made from wheat and
free of MSG & GMO to prove its healthy snack claim.
The brand also chose a different way to communicating its positioning to the
consumer . The brand is trying to tell a story. The story is based on the premise that '
Hunger is the root cause of all evil. So the brand motto is ' fight hunger, fight evil'.
The brand has adopted the mascot Hippo who is in the forefront of eliminating hunger
and thus eliminating evil. Hippo has the tagline " Hippo Fights Hunger ".
http://indianbrands.blogspot.com/2010/03/hippo-fight-hunger.htmlhttp://indianbrands.blogspot.com/2010/03/hippo-fight-hunger.htmlhttp://indianbrands.blogspot.com/2010/03/hippo-fight-hunger.htmlhttp://2.bp.blogspot.com/_1pKvii0Z9Cs/S5YyKWXAChI/AAAAAAAACTk/3gPpE6An-rY/s1600-h/hippo+logo.jpghttp://indianbrands.blogspot.com/2010/03/hippo-fight-hunger.html -
7/27/2019 The Indian Snacking Industry
15/21
Although the brand has tried to tell a story and successfully created an initial hype, I
have serious reservations about the differentiation of the brand. The brand has taken
the " Hunger" platform, but how is it different from other snack-foods that offer samequalities ? How is Hippo different from a Bingo or Monaco Smart Chips ? .
I feel a lack of uniqueness in the brand. The problem of lack of differentiation will
come into forefront when the initial consumer interest dies down. Without a clear
USP, the brand needs to constantly stay on top of the Share of Noise to drive the sales.
If you observe the campaigns of Parle Agro brands, the company adopts a " On/Off "
kind of advertising strategy. Sometimes there are lot of ads, and sometimes, there is
no sign of any brand communication. In a category like Snacks such intermittent burst
of ads may not work. One needs to have a steady continuous stream of campaigns
( ATL and BTL) to drive the sales.
From the first campaign, I don't see any attempt from the brand to create a
differentiation. What the brand had tried to do was to establish brand familiarity which
it had done successfully. But the brand needs to find a meaningful differentiation if it
wants to survive for the long term. The brand can develop its positioning further using
its core brand promise of " Guilt-free snack for hunger moments ".
One of the most striking aspect about this brand is the packaging. The company has
put in lot of work behind making the packaging stand out in stores. Since the purchase
of snacks are highly spontaneous, the packaging offers immense strategic importance.Hippo has really differentiated itself from the rest of the crowd in the packaging front.
Another aspect of the brand is its emphasis on ' After-Marketing". After- Marketing is
what the brand does after it has sold itself to the consumer. Like Appy Fizz, Hippo has
cleverly used the packaging to engage the consumers after the purchase. The pack
contains interesting information and one-liners which takes the brand-consumer
conversations beyond advertising .
-
7/27/2019 The Indian Snacking Industry
16/21
As a new product launch, Hippo has done all the right marketing moves. The brand
has a catchy name , good product qualities, excellent packaging, nice pricing,
distribution reach etc. It has also created right kind of noise in the media during thelaunch. The real test is after the initial euphoria. The brand is fighting players with
deep pockets. It will be interesting to watch how Hippo takes on the giants.
Market dynamics:
In India the branded snack category is approximately of 6500 crore and is growing at
the rate of 20-25 % per year. Competitors in this market are Pepsi Cos Frito Lays
(with Lays, Kurkure and Uncle Chips), ITCs Bingo and Parle Products Musst (Bites,
Stix and Chips) and Sixer.
Hippo has been launched under five flavors: Pizza, Chinese Manchurian, Hot-n-Sweet
Tomato, Thai Chilli and Yoghurt Mint Chutney. Each variant will be priced between
Rs. 5 and Rs. 10, initially.
Communication:
Creative Land Asia every time comes with the surprises by bringing new clutter
breaking ideas. Some of them have potential sustain over very long period. Be it SaintJuices Juice the way god meant it to be (100% juice, nothing else), Frootis why
grow up, LMN or Appy, all most all ideas have potential to establish the brand.
Hippos commercial trying to convey that the root of all the evil is hunger and Hippo
has the answer for it. Hippo is a sweet cook and he cares for all. He is disappointed
http://3.bp.blogspot.com/_zmYmcqDVjGI/S3FC0SsqBWI/AAAAAAAAAIg/9bou82_aHQ8/s1600-h/hippo.jpg -
7/27/2019 The Indian Snacking Industry
17/21
with few people in the world because they dont understand what the biggest enemy of
humanity is.
Another aspect of this TVC is of sharing. After watching the commercial consumer is
influenced to do the same in real life (but it is not true in the case of every ad). E.g.:When customer sees Cokes ad (Open Happiness) or Dairy Milks ad (Kuchh Mithas
Ho Jaaye), customer recognizes the emotion attached to the product. In most of the
cases, when customer feels or want to feel the similar emotions in real life situation,
he/she will buy the product. TVC of Hippo in same way influences the viewers to
share the love by giving others Hippo Munchies. Since love and share situations occur
in life very frequently, so consumer can identify themselves in such situations.
Music, incidents and lyrics are so nice that people can enjoy this TVC. Ad conveys
the message in such a simple way that viewers can easily understand it.
When it comes to individual website of the Parle Agro's products, either they are
incomplete or not the detailed one. The ideas behind the brands have the potential
create wholesome experience for customers even through social media, because most
of the ideas are fresh and young, which appeals the youth. Youth spends their good
amount of time on social media, so this opportunity should be leveraged.
-
7/27/2019 The Indian Snacking Industry
18/21
Advertising Policy
Parle Agro, a trusted household name in the beverage industry and an upcoming
player in the foods segment, released the first TVC for its new snack brand HIPPO.Having completed a nationwide rollout since its launch in June last year, the brand has
come out with its first television commercial. With social consciousness high on the
company agenda, HIPPOs first ad is a light hearted and satirical take on an issue with
social relevance.
The TVC is based on the belief that hunger is the root cause of evil - therefore kill
hunger, kill evil. The campaign highlights the evils of society being resolved by
offering HIPPO in situations of conflict, restoring cheer, goodness and happiness
amongst people.
The entire film is seen through the eyes of Hippo, the brand mascot who is on a
mission to make the world a happier place by fighting hunger. Throughout the film,
Hippo relentlessly fights tribulations such as terrorism, child labour, violence and
adulteration by offering HIPPO munchies to people. The line in the TVC, Hippo ka
manna hain ki duniya mein harr buraayi ki jadd hain bhook. Toh please, bhooke mutt
raho (Hippo believes that the root of all evil in the world is hunger. So please, dont
be hungry), explains the HIPPO philosophy. The classic Kishore Kumar number,
Pyaar baante chalo which plays in the background further strengthens the brands
message of spreading love through snacking.
The insight that an empty stomach is the devils workshop stands true when one
observes how an irritable or grumpy mood can be changed by killing hunger. Thus
food is a great way of calming one down. The HIPPO ad campaign shows everyoneresolving their problems and celebrating the 'fight' over hunger with packs of HIPPO.
This approach not only breaks category norms but generates interest as well.
Speaking on the ad campaign, Nadia Chauhan, Joint Managing Director & CMO,
Parle Agro, said, With the new TVC for Hippo, we have attempted to move away
from category norms. Hippo doesn't want to be a me-too brand in a category cluttered
with frivolousness in its communication. In he TVC, we have tried to integrate a
-
7/27/2019 The Indian Snacking Industry
19/21
social message into the brand in order to add soul and purpose to HIPPO. Hippo has
taken snacking responsibly by positioning itself as a solution for hunger.
The commercial, shot in Mumbai, has been released in seven languages. It is
conceptualized by Creativeland Asia and directed by Equinox Films. The 100-secondad has 50 and 20 second edited versions airing on TV as well.
A website, www.hippofighthunger.com, has also been created to generate buzz around
the brand and take the proposition forward. It will involve contests and other
engagement properties. Some corporate social responsibility initiatives are also being
planned, apart from outdoor and radio advertising.
-
7/27/2019 The Indian Snacking Industry
20/21
CONCLUSION AND RECOMMENDATIONS
Promotions Seasonal Combo packs Tie up sales with Frooti Title sponsors for programs targeting youth
So, make Hippo available not only in general stores but also in all collegecanteens and bus stands, railway stations
Advertising Increase budget allocation towards TV advertisement to reach all segments Promote Healthiness of the munchies Focus on taste and variety of flavours Theme for advertisementvarying with flavour
7060 57
13 140
10
20
30
40
50
60
70
80
-
7/27/2019 The Indian Snacking Industry
21/21
END OF PROJECT