Clever strategising on ITC's part has put Bingo in the number one slot within six months of its launch.
In March this year, when ITC launched its branded snack Bingo, Ravi Naware, divisional chief executive, expressed his desire to capture at least 25 per cent market share in the next five years.
Most observers felt it was an ambitious target. The Rs 2,000-crore (Rs 20 billion) branded snack market (the un-branded market is more than twice as large) was dominated by Frito Lay with brands like Lays, Kurkure and Uncle Chipps, the latter being acquired from Amrit Agro about six years back. It was the market leader with a share of close to 50 per cent, whereas Haldiram came next with a 20-25 per cent share of the pie.
It has never been easy for any new entrant to grab a quarter of the market, especially when it is pitted against a cash-rich multinational like Frito Lay, which is owned by PepsiCo.
Less than six months later, Naware can only be blamed for setting a modest target. In certain areas, Bingo's market share has touched 50 per cent; in no market is it less than 15 per cent. "With the kind of response we have got, we are looking to garner an overall share of 50 per cent in the future," says Naware.
Little surprise then, Frito Lay is devising new strategies and pumping money into research and development to regain the market share. Says K K Goel, sales head, Haldiram: "I think that market leader Lays could have been affected by Bingo."
Only, people at Frito Lay beg to differ. "Since Lays entered the market, every year there have been new entrants, but no one has affected us. We continue to grow in the market and we are growing as per our plans. Lays continues to be a dominant player in the salty snacks segment," says Manu Anand, managing director, Frito Lay India.
According to the industry sources, however, the company is said to have revamped Lays by reducing the saturated fat content by 40 per cent.
Experts say this will not be enough to counter ITC's strategy of catering to Indian tastebuds with very Indian flavours. "Our idea was to offer a totally differentiated product, which had a combination of Indianness in terms of flavours, texture and choice," says Naware.
With flavours such as Masala Chaas, Chatpata Nimbu and Paneer Tikka, it has variants with truly Indian flavours. Though Frito Lay has had flavours like the recently launched Mint Magic and others like Latino, Spanish Tomato Tango, Cilantro, ITC has chosen to go the Indian way with success.
In fact, Lay's attempt at Indianisation with its Chaat Street range failed to take off.
"Our Chaat Street range has been discontinued. The range could not sustain itself in terms of supply-chain and so, like a lot of our other innovative products, it was discontinued," Anand said.
However, Frito's other offering in the segment, Kurkure, with somewhat more Indian flavours has been a huge success.
The company has, in the past, talked of taking the brand to overseas markets with a large Indian population. With Bingo, ITC seems to have beaten Frito Lay in its own game.
But Naware feels that the market needed a snack that it could relate to, and that's what Bingo has provided. "The category is an impulse buy category and, thus, you need to offer the right product that leaves a lasting impression on the consumer," he says.
What ITC has done is that, apart from offering different flavours, it ensured that it reaches almost every nook and corner of the country and gets a prominent display at the outlets. As Naware puts it, "We want Bingo to be available at an arm's length of the consumer."
Advertising and promotion, was another area, where the company looks to have scored. If the 16 variants of Bingo had a regional flavour, so did the advertising. "Since the product had an Indian flavor, we wanted the advertising to be on the same lines," he says.
It might still be early days and ITC could face reverses in the future, but at the moment it looks like Bingo could become a case study for marketing students.