Comparative study between LAYS & BINGO PROJECT BY: SRIPRIYA SOURABH ROLL.NO- 1026 ROOM.NO- 37 DEPT. OF MARKETING B.COM(EVE) ST.XAVIER‟S COLLEGE(AUTONOMOUS), KOLKATA
RESEARCH OBJECTIVE •
To know which one is better, Lays or Bingo in terms of quality, price, availability and promotion.
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To know whether Bingo is giving a tough competition to lays.
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To know whether lays is giving any heed to the presence of Bingo in market and designing its marketing strategy in such respect or is happy and satisfied with its market leadership and keep a neglected attitude towards Bingo.
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To find out problems that Bingo is facing to establish and maintain its market share in the presence of a very much established and popular product lays and give personal recommendations in this regard.
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To find out which flavour of Bingo and lays is most preferred.
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To analyse reason for popularity of most preferred brand.
SNACKS INDUSTRY OVERVIEW •
According to the ministry of food processing, the snack food industry is worth Rs 100 billion in value and over 4,00,000 tonnes in terms of volume.
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Though very large and diverse, the snacks industry is dominated by the unorganized sector. According to an Apeda survey almost 1,000 snack items and 300 types of savouries are sold across India. The branded snacks are sold at least 25% higher than the unbranded products. Savoury snacks have been a part of Indian food habit, since almost ages.
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The industry has been growing around 10% for the last three years, while the branded segment is growing around 25% per annum to stand at Rs 5,000-Rs 5,500 crore, due to various reasons like Multiplex culture, snacking at home while watching TV, pubs and bars (where they are served free).
SWOT ANALYSIS • STRENGHT 1. Abundant availability of raw material. 2. Vast network of manufacturing facilities all over country. 3. Vast domestic market. 4. Urbanisation.
• WEAKNESS 1. Poor infrastructural facilities. 2. Lack of adequate quality control. 3. Insufficient supply chain. 4. High requirement of working capital.
• OPPORTUNITIES 1. Rising income level & changing consumption pattern. 2. Favourable demographic profile. 3. Development in contemporary technology. 4. Opening of global markets.
• THREATS 1. Affordability & cultural preference of fresh food. 2. High inventory carrying cost. 3. High taxation. 4. Competition between National & regional players.
ITC
(COMPANY PROFILE IN NUTSHELL) •
ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited., the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. The full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited„
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ITC Ltd is one of India's premier private sector companies with diversified presence in businesses such as Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, AgriBusiness, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Greeting Cards, Safety Matches and other FMCG products.
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Presently, ITC has a market capitalisation of nearly US $ 15 billion and a turnover of over US $ 4.75 billion. It employs over 21,000 people at more than 60 locations across India. ITC has been rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine.
PEPSICO INDIA
(COMPANY PROFILE IN NUTSHELL) •
PepsiCo entered India in 1989 and has grown to become the country‟s largest selling food and Beverage Company.
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PepsiCo India‟s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, etc.
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PepsiCo‟s foods company, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat and MSG.
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It manufactures Lay‟s Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands and the recently launched „Aliva‟ savoury crackers.
PRODUCT COMPARISION • • •
When we compare FRITO LAY and BINGO as a product they exhibit similarities in various ways: First and foremost both are available in potato chips form as well as other snacking form like KURKURE and CHEETOS of FRITO LAY and Bingo‟s MAD ANGLE and HATKE JHATKE. Secondly both FRITO Lay‟s product and Bingo‟s product are available in different packet sizes such as Rs 20 pack, Rs 10 pack, Rs 5 pack and so on. FRITO Lay‟s and Bingo‟s product are available in various flavours to suit the taste and preferences of different consumers.
In spite of various similarities there are a few differences which cannot be overlooked: • •
Bingo positioned itself as chips of Indian twist. The offerings under Finger snacks segment include pakora inspired „live wire‟ and Khakra inspired „mad angles‟. Bingo‟s MAD ANGLE has uniqueness in taste and in a way it cannibalizes other BINGO PRODUCTS.
PRICE COMPARISION The price of LAYS and BINGO is competitive in nature. Both charges same price for same packet sizes. However they have advantage over one another in following ways: •
The main objective of ITC was to compete effectively with players who were already there. Hence it launched direct frontal attack by introducing similar priced SKU‟s.
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Similarly the pricing strategy for LAYS is consistent with other competiting players. As this market is driven by high impulsive buyers of snack foods there is very little dichotomy in the pricing strategies of all major players.
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ITC enjoys cost advantage over competitors through its e-choupal initiative. This also facilitates timely supply of raw materials. ITC‟s printing and packaging business also leads to high quality, cost effective and innovative packaging.
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Recently FRITO LAY launched 3 SKU for its KURKURE brand in a bid to compete more aggressively.
PLACE COMPARISION •
Let us discuss step by step the advantages FRITO LAY have over ITC with regard to distribution channel and vice versa: Being first in the market through its acquisition of UNCLE CHIPPS, FRITO LAY already has a well established network of distribution and retailers. The brand loyalty enjoyed by LAYS leveraged during the launch of KURKURE, CHEETOS, and recently launched ALIVA.
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FRITO LAY boasts of reaching more than 1 million retail outlets countrywide covering 100 towns. The company with its manufacturing plants in Punjab and pune aims at investing 20 crores to extend distribution facilities to improve coverage and increase product shelf life to 120 days.
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ITC already had a well established distribution network through its cigarettes and tobacco related offerings which were leveraged in case of BINGO. Further company distributed 4 lakh racks across all retailers to display the brand at all point of sale.
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A crucial alliance with FUTURE GROUP which lead to all Future GROUP retail outlets like Big Bazaar, Food Bazaar stocking only ITC‟s BINGO.HORECA (hotels, restaurants, and cafes”), Local Betel shops are all being used to distribute BINGO to a wide range of audience.
PROMOTION COMPARISION •
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When we talk about promotion strategies for LAYS and BINGO they show remarkable differences: Bingo was strategically launched at the time of world cup to cash in on the popularity of snacks among cricket lovers of country. The advertising strategy revolved around slapstick humour and irrelevant themes to hold eyeballs garner attention and interest and stand out from clutter. As the product is aimed at youth digital media was heavily used. For instance, the Bingo National Gaming championship across 4 cities with more than 25000 participants.BINGEONBINGO.COM and MADANGLE TWISTER application (FACEBOOK) were other initiatives in online media. Realizing the threat posed by BINGO to its market share. FRITO LAY revamped its branding strategy for all leading brands. For Lays, the company signed Saif Ali Khan and MS Dhoni.Indianized version of Lays were also launched after Bingo‟s success with Indian flavours.These include chaat street. CHAI- TIME ACHIEVERS- A kurkure centric campaign promoted the idea of heavy audience interaction by sending recipes for new flavours. Other initiatives include posters at various unconventional retail plants, a tie up with south western Railways known as KURKURE-EXPRESS to increase brand visibility.
SURVEY RESULT (FOR CONSUMER)
SAMPLE SIZE- 100 Ques 1: Do you like to have Potato chips? PIE GRAPH SHOWING LIKING OF POTATO CHIPS YES
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Out of 100 respondents 94 likes to have Potato chips.
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This shows that there is large potential for potato chips market.
NO
6%
94%
Ques 2: Which is your favourite brand in Potato chips?
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Majority of respondents 73% voted for Lays as their favourite brand of Potato chips.
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Bingo is way behind only 15% voted bingo as their favourite brand.
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Haldirams is favourite for 7% of them whereas 5 % respondents like other brands & is their favourite.
PIE GRAPH SHOWING FAVOURITE BRAND OF RESPONDENTS LAYS
7%
BINGO
HALDIRAMS
OTHER
5%
15%
73%
Ques 3: What makes a particular Potato chips brand your favourite?
PIE GRAPH SHOWING WHAT MAKES RESPONDENTS SELECTED BRAND FAVOURITE QUALITY
10%
AVAILABILITY
PROMOTION
BRAND LOYALTY
5%
23% 62%
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USP of food is it‟s quality.
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When respondents were asked the reason to vote a brand their favourite, they answered: - 62% respondents says Quality is what distinguish their favourite brand from others. - According to 23% respondents Availability is another major factor. - Whereas 10% respondents because of promotion done by brands - 5% vote goes due to Brand Loyalty.
Ques 4: How do you rank BINGO Chips…
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16% respondents rank Bingo chips on top.
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2nd place is given to bingo by 34% respondents.
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41% respondents ranks Bingo as an average potato chips.
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8% respondents rank it poor.
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Overall Bingo holds a decent position in eyes of respondents.
PIE GRAPH SHOWING RANK ORDER OF BINGO CHIPS TOP
NEXT BEST
9%
AVERAGE
POOR
16%
41% 34%
Ques 5: Do you think Bingo is giving tough competition to Lays?
PIE GRAPH SHOWING RESPONSE ON ''BINGO GIVING COMPETITION TO LAYS'' YES
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New still good enough to compete with old & well established.
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49% of consumers says that yes Bingo is giving tough competition to Lays.
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The rest 51% believe that Bingo has still a long way to go.
NO
49%
51%
SURVEY RESULT OF RETAILER’S QUESTIONNAIRE - sample size : 50 Ques 6: Which snacks brand do you stock? •
Most of the Retailers which constitute 71% prefer to stock both Lays & Bingo.
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They don‟t want to lose any scope of earning profit.
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18% of the retailers prefer to stock Lays
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11% retailers stock only Bingo & that too because of agreement with ITC.
PIE GRAPH SHOWING SNACKS BRAND WHICH RETAILERS STOCK LAYS
BINGO
BOTH
0%
NIETHER OF THEM
18%
11%
71%
Ques 7 : Brand which is purchased most by Consumer is?
PIE GRAPH SHOWING WHICH BRAND POTATO CHIPS IS DEMANDED MORE BY CUSTOMERS FROM RETAILERS LAYS
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Consumer demand is the major tool for product‟s success of failure.
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As per retailers Lays occupies 76% of total demand share.
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Rest 24% share is occupied by Bingo.
BINGO
24%
76%
Ques 8: Which snacks brand provides you with better profit margin?
PIE GRAPH SHOWING SNACKS BRAND WHICH PROVIDE WITH BETTER PROFIT MARGIN. LAYS
50%
BINGO
50%
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It is very interesting to know that both brands- Lays & Bingo provide same profit margin to Retailers.
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Profit margin offered to retailers are 10-20 paise per packet.
Ques 9: Which company is quick at making goods available to retailers when they run out of Stock? •
According 58% respondents both companies are quick in making goods available to them.
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Whereas 23% respondents find Frito Lays a quicker company.
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The rest 15% voted for ITC.
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4% retailers believe that both the companies are slow.
PIE GRAPH SHOWING COMPANY WHICH IS QUICK AT MAKING CHIPS AVAILABLE TO RETAILERS FRITO LAYS
4%
58%
ITC
BOTH
NONE
23%
15%
Ques 10: Do you think that after launch of Bingo in 2007 Lays is facing tough comnpetition? •
The same question was asked from consumers & the answer was 50-50.
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But in case of Retailers the result is differrent.
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60% of the retailers thinks that Lays is facing tough competition.
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Rest 40% respondents thinks that Bingo is far behind Lays.
PIE GRAPH SHOWING RETAILERS OPINION ON WHETHER LAYS IS FACING TOUGH COMPETITION OR NOT YES
NO
40%
60%
FINDINGS •
Majority of people like to have potato chips as snacks. So there is a good market potential for potato chips.
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The packet size preferred by consumers for branded snacks is medium size RS 10 packet.
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Lays is the market leader in the branded snacks market followed by Bingo, however there is huge gap between them.
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The quality and availability is the major factor for consumers to prefer their favourite brand.
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Most preferred brand of Frito lay is Lays followed by Kurkure.
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Bingo‟s Mad Angle is most preferred among offerings of Bingo and Achari masti is most liked flavour.
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Most of the people feel that Bingo is giving a tough competition to lays.
RECOMMENDATIONS •
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Bingo‟s Mad Angle inspired by Khakra is the most preferred offering under Bingo so marketer must concentrate on it to maintain its popularity. Lays uses celebrities as their Brand ambassadors to endorse their product and their advertisements stands out in clutter. Though Bingo‟s humour element in advertisement makes the ad unique it must not ignore the competitor‟s approach and design the Ads accordingly. Bingo should effectively use pull and push promotion strategy to win and capture larger market share. As lays always participates in world cup promotion and other sponsorships, Bingo should not overlook such platform. Since ITC has a packaging division it can best utilize it for cost effective and innovative packing for the Bingo product to capture consumer‟s attention. Consumer‟s preference of brand is link with the quality of brand so ITC should strive hard to maintain and upgrade its quality. ITC should try to differentiate its product and try to come out of “ME TOO PRODUCT” shell.
LIMITATIONS •
AREA OF OPERATION- I have conducted survey only in Kolkata thereby ignoring other major parts of India which is also a market for both Lays and Bingo.
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Time Limitation- Time was the major constraint for this research work as we had to complete our project in two months.
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Sample size- I surveyed 100 consumers 50 retailers which is very less in ratio to total consumers and retailers for Lays and Bingo.
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Sample selection method-- I randomly selected people & asked them to fill my questionnaire so there were few respondents who were not in category of having Lays or Bingo.
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Respondent‟s error- some respondents were unable to answer because of unwillingness as well as inability.
CONCLUSION •
After conducting the survey it can be said that ever since its launch, Bingo as a preferred brand is on a rise. Although Lays is the most popular brand Bingo has carved a niche for itself. This is due to ITC‟s powerful and creative marketing and branding strategies which has created a buzz in market.
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Bingo is in the growth stage of its life cycle. It has been taking the shelf space of popular brands like Frito Lays due to its strong distribution and marketing strategies. Given more time it is capable of capturing a larger market share and giving tough competition to other brands.
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Overall the advertising used by ITC is creating impact on purchasing decision of people and due to its popularity it was easy to conduct the research since the respondents were aware of Bingo and people seem to be satisfied with Bingo.
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However Lays is a better established brand and enjoys brand loyalty and to retain this brand loyalty the marketing strategies used by Pepsi Co especially advertisement is really remarkable.Therefore in this situation ITC‟s Bingo really has to strive hard to maintain and increase its market share. Moreover Lays is an international brand and this makes its establishment stronger. Bingo has a long way to go in fighting strength to strength with Lays.
THANK YOU
