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PGDBE Programme : PCL – I Marketing Integrated Assignment

Assignment Title Assignment 1 Assessor :
Student Name : Md. Naumaan Sheikh Year 2009

Given out Required Submission Actual Submission

on : Date : Date:

Submitted to :

OUTCOMES Assessment Criteria – To achieve each

outcome a student must demonstrate the
ability to :
To understand concept of branding and retail Ability to create strategy for organized retail in
strategy our country.

To understand the consumer behaviour Ability to understand the scenario consumer

likes and dislikes in decision making exercise
taking the marketing mix into consideration.

Explore various service strategy in fast food retail Compare and contrast how place strategy
can be used as service tool

Explore various sales organizations options Compare and contrast various organization
structure
Compare and contrast various financing
Explore various ways financing for expansion options and select the best one

Higher Level Skills

Students studying PGDBM will be expected to develop the following skills in this
assignment.
Cognitive skills of critical thinking, analysis and synthesis.
Effective use of communication and information technology for business applications.
Effective self-management in terms of planning, motivation, initiative and enterprise.

OVERALL ASSESSMENT GRADE GRADING OPPORTUNITIES

MERIT CRITERIA DISTINCTION CRITERIA

MET MET
M1 D1
M2 D2
M3 D3

Plagiarism is a serious college offence.

I certify this is my own work have referenced all relevant materials.
TUTORS COMMENTS

OUTLINE ASSESSMENT CRITERIA

PASS
A pass grade is achieved by meeting all the requirements defined in the assessment criteria for the
unit.
MERIT
In order to achieve a merit the students must:
M1 Identify and apply strategies to find appropriate solutions.
M2 Select/design and apply appropriate methods/techniques.
M3 Present and communicate appropriate findings.

In addition, students will also show your skills in selecting appropriate sources of finance from a wide
range and discussing in some detail the implications of making that selection. Illustrative figures will
be used but may not be based in research carried out. Issues relating to financial planning will be
raised but may not be covered in detail, or may omit one of the four key areas.
DISTINCTION
In order to achieve a distinction the students must:
D1 Use critical reflection to evaluate own work and justify valid conclusions.
D2 Take responsibility for managing and organizing activities.
D3 Demonstrate convergent, lateral and creative thinking.

In addition, to earn this grade the assignment must be meticulously planned and students must be
able to demonstrate an ability to anticipate and solve complex tasks in relation to the case study.
Students must demonstrate considerable research over and above class materials and synthesis
information accurately.

Name of Verifier :

Internal Verification Date :

 INTEGRATED ASSIGNMENT PCL I (MARKETING)

HALDIRAM’S MARKETING
“Our brand (Lehar) is nowhere near the dominance of Haldiram's."
- Manu Anand, Managing Director of Frito-Lay India.1

"It is far easier to sell something that the consumer is already accustomed to. The company (Haldiram's)

caters to the Indian palate, which is its primary driver of success."

- Neeraj Garg, Associate, AT Kearney.2

Over a period spanning six and a half decades, the Haldiram's Group (Haldiram's) had emerged as a
household name for ready-to-eat snack foods in India. It had come a long way since its relatively humble
beginning in 1937 as a small time sweet shop in Bikaner, in the Rajasthan state of India. In 2001, the turnover
of the Haldiram's was Rs 4 billion. The group had presence not only in India but in several countries all over
the world. Till the early 1990s, Haldiram's comprised of three units, one each in Kolkata, Nagpur and
New Delhi.

The Agarwals family that owned Haldiram's were always conscious of the need to satisfy customers in order to
grow their business. The company offered a wide variety of traditional Indian sweets and snacks at competitive
prices that appealed to people belonging to different age groups. Haldiram's had many 'firsts' to its credit. It
was the first company in India to brand 'namkeens'. The group also pioneered new ways of packaging
namkeens. Its packaging techniques increased the shelf life of namkeens from less than a week to more than
six months. It was also one of the first companies In India to open a restaurant in New Delhi offering
traditional Indian snack food items such as "panipuri," "chatpapri," and so on, which catered to the
needs of hygiene conscious non-resident Indians and other foreign customers.

Since the very beginning, the brand 'Haldiram's' had been renowned for its quality products. The company
employed the best available technology in all Its manufacturing facilities in India. Given the increasing
popularity of Haldiram's products, the group planned to expand its operations.

However, some analysts felt that Haldiram's still had to overcome some hurdles. The company faced
tough competition not only from sweets and snack food vendors in the unorganized market but also
from domestic and international competitors like SM Foods, Bakeman's Industries Ltd, Frito Lay India
Ltd.(Frito Lay) and Britannia Industries Ltd. Moreover, the group had to overcome internal problems as
well. In the early 1990s, because of the conflict within the Agarwals family, Haldiram's witnessed an
informal split between its three units as they started operating separately offering similar products and
sharing the same brand name. In 1999, after a court verdict these units started operating as three
different companies with clearly defined territories. This split had resulted in aggressive competition
among themselves for a higher share of domestic and international markets.

BACKGROUND NOTE

In 1937, Ganga Bishen Agarwal, (popularly known as Haldiram), opened a small sweet shop in Bikaner, a
small district in Rajasthan. Bikaner had a large number of sweet shops selling sweets as well as namkeens.
'Bhujia sev,' a salty snack prepared by Ganga Bishen, was very popular among the residents of Bikaner and
was also purchased by tourists coming to Bikaner. In 1941, the name 'Haldiram's Bhujiawala' was used for the
first time.
In 1950, Prabhu Shankar Agarwal (Prabhu), along with his father Rameshwar Lal Agarwal (son of Ganga
Bishen), expanded the business by establishing a small manufacturing unit for sweets and namkeens in
Kolkata. The success of this unit motivated Prabhu to upgrade its machinery to Improve the quality of its
products. As demand for Haldiram's products increased, it was decided to scale up the company's
manufacturing and distribution activities.
In 1970, a large manufacturing unit was set up in Nagpur in the state of Maharashtra (India). In 1983, a retail
outlet was set up in New Delhi. The outlet became very popular not only among the Delhiites but also among
tourists visiting Delhi.

Haldiram's was able to achieve significant growth during the 1980s and 1990s. In 1992, a manufacturing unit
with a retail outlet attached to it was set up at the outskirts of Delhi. A year later, Haldiram's syrups and
crushes were successfully launched in the Indian market. In 1995, a restaurant was opened in New
Delhi. In 1997, realizing the potential of namkeens, the company set up a manufacturing unit in Delhi
exclusively for making namkeens.

In the mid 1990s, Haldiram's added bakery items, dairy products, sharbats and ice creams to its
portfolio. At the beginning of the 21st century, Haldiram's products reached millions of consumers not only in
India, but also in several other countries, including the US, Canada, UK, UAE, Australia, New Zealand,
Sri Lanka, Nepal, Japan and Thailand.

Analysts felt that the growing popularity of Haldiram's products could be attributed to its constant focus on all
the elements of the marketing mix. An article posted on the website apeda.com quoted some of the company's
strengths, "To sustain in the competitive market, Haldiram's has endeavored stress on its product quality,
packaging, shelf life, competitive price with a special emphasis on consumers satisfaction and its lingering
taste is amongst the best available in the world."

Agriculture and Processed Foods Export Development Authority (APEDA) is an autonomous institution which
provides financial, logistics related and promotional assistance to exporters of processed food Items from
India. Through its website apeda.com, It enables exporters to give a brief account of the company and their
products. .

THE MARKETING MIX

PRODUCTS

Haldiram's offered a wide range of products to its customers. The product range included namkeens, sweets,
sharbats, bakery items, dairy products, papad and ice-creams. However, namkeens remained the main focus
area for the group, contributing close to 60% of its total revenues.

By specializing in the manufacturing of namkeens, the company seemed to have created a niche
market. While the Nagpur unit manufactured 51 different varieties of namkeens, the Kolkata unit
manufactured 37 and the Delhi unit 25. The raw materials used to prepare namkeens were of best
quality and were sourced from all over India.

Haldiram's sought to customize its products to suit the tastes and preferences of customers from different parts
of India. It launched products, which catered to the tastes of people belonging to specific regions. For example,
it launched 'Murukkus,' a South Indian snack, and 'Chennai Mixture' for south Indian customers

Similarly, Haldiram's launched 'Bhelpuri,' keeping in mind customers residing in western India. The company
offered certain products such as 'Nazarana,' 'Panchratan,' and 'Premium' only during the festival season in gift
packs. These measures helped Haldiram's compete effectively in a market that was flooded with a variety of
snack items in different shapes, sizes and flavors.

PRICING

Haldiram’s offered its products at competitive prices in order to penetrate the huge unorganized market of
namkeens and sweets. The company's pricing strategy took into consideration the price conscious nature of
consumers in India. Haldiram's launched namkeens in small packets of 30 grams, priced as low as Rs.5. The
company also launched namkeens in five different packs with prices varying according to their weights (Refer
Table I).
TABLE I
PRICE RANGE OF ‘NAMKEENS’ OFFERED BY HALDIRAM’S

PACK WEIGHT PRICE (in Rs)

30 gms 5
85 gms 10
180 gms - 250 gms 18-35
400 gms - 500 gms 40- 70
lkg 95-200

The prices also varied on the basis of the type of namkeens and the raw materials used to manufacture it. The
cost of metallized packing also had an Impact on the price; especially in the case of snack foods. The company
revised the prices of its products upwards only when there was a steep increase in the raw material costs or
additional taxes were imposed.
1) Juice concentrates offered in different flavors.

2) A fIat, thin, dried roll of kneaded floor mixed with spicy ingredients. It has a reasonably long shelf life, can be
toasted or fried in oil and served as a snack or taken along with food

3) Packing where in Aluminum was used which helps in preserving the freshness of the products being packed

PLACE
Haldiram's developed a strong distribution network to ensure the widest possible reach for its products in India
as well as overseas. From the manufacturing unit, the company's finished goods were passed on to carrying
and forwarding (C&F) agents. C&F agents passed on the products to distributors, who shipped them to retail
outlets. While the Delhi unit of Haldiram's had 25 C&F agents and 700 distributors in India, the Nagpur unit had
25 C&F agents and 375 distributors.

Haldiram's also had 35 sole distributors in the international market. The Delhi and Nagpur units together
catered to 0.6 million retail outlets in India. C&F agents received a commission of around 5%, while distributors
earned margins ranging from 8% to 10%. The retail outlets earned margins ranging from 14% to 30%. At the
retail outlet level, margins varied according to the weight of packs sold.

Retailers earned more margins ranging from 25% to 30% by selling 30 gms pouches (priced at Rs.5)
compared to the packs of higher weights. Apart from the exclusive showrooms owned by Haldiram’s, the
company offered its products through retail outlets such as supermarkets, sweet shops, provision stores,
bakeries and ice cream parlors. The products were also available in public places such as railway stations and
bus stations that accounted for a sizeable amount of its sales.

Haldiram’s products enjoyed phenomenal goodwill and stockists competed with each other to stock its
products. Moreover, sweet shops and bakeries stocked Haldiram's products despite the fact that the
company's products were competing with their own products.
Haldiram's also offered its products through the Internet. The company tied up with indiatimes.com, a website
owned by the Times of India group to sell its products over the Internet. Haldiram's products could be ordered
through a host of other websites in India and abroad. Giftstoindia.com, giftssmashhits.com, tohfatoindia.com
and channelindia.com enabled people residing abroad to send Haldiram's gift packs to specified locations in
India.

Region-specific websites enabled people to send gifts to specified regions. These include indiamart.com (Delhi
and surrounding areas), mumbaiflowersglfts.com (Mumbai), and chennaiflowers.com (Chennai and other parts
of Tamilnadu). These websites competed on issues such as delivery time, which varied between 48 hrs to one
week, delivery charges (some websites offered free delivery of products) and value added services (like
sending personal messages along with the gift packs).

PROMOTION
Haldiram's product promotion had been low key until competition intensified in the snack foods market. The
company tied with 'Profile Advertising for promoting its products. Consequently, attractive posters, brochures
and mailers were designed to enhance the visibility of the Haldiram's brand. Different varieties of posters were
designed to appeal to the masses.

The punch line for Haldiram’s products was, ‘Always in good taste.’ Advertisements depicting the entire range
of Haldiram’s sweets and namkeens were published in the print media (magazines and newspapers). These
advertisements had captions such as ‘millions of tongues can’t go wrong,’ 'What are you waiting for, Diwali?'
and 'Keeping your taste buds on their toes’.
'To increase the visibility of the Haldiram’s brand, the company placed its hoardings in high traffic areas such
as train stations and bus stations. Posters were designed for display on public transport vehicles such as
buses, and hoardings, focused on individual products were developed. Captions such as 'yeh com hain' (this is
com), 'chota samosa - big mazaa' (small samosa - big entertainment), 'yeh Kashmiri mix khoob jamega' (this
namkeen item will gel well) and 'oozing with taste' (for Rasgoolas) promoted individual products. For those
customers who wanted to know more about Haldiram’s products, special brochures were designed which
described the products and gave Information about the ingredients used to make it. Mailers were also sent to
loyal customers and important corporate clients as a token of appreciation for their patronage.

Packaging was an important aspect of Haldiram's product promotion. Since namkeens were impulse purchase
items, attractive packaging in different colors Influenced purchases. Haldiram's used the latest technology
(food items were packed in nitrogen filled pouches) to increase the shelf life of its products. While the normal
shelf life of similar products was under a week, the shelf life of Haldiram's products was about six months. The
company projected the shelf life of its products as its unique selling proposition. Posters highlighting the shelf
life of its products carried the caption 'six months on the shelf and six seconds in your mouth.' During festival
season, Haldiram's products were sold in attractive looking special gift packs.
The showrooms and retail outlets of Haldiram's gave importance to point of purchase (POP) displays.
Haldiram's snacks were displayed on special racks, usually outside retail outlets. The showrooms had
sign boards displaying mouth-watering delicacies with captions such as 'Chinese Delight,' Simply
South,' 'The King of all Chats'. Posters containing a brief account of the history of Haldiram's, along
with pictures of its products, were also on display at these showrooms.

Haldiram’s also diversified into the restaurant business to cash in on its brand image. The company
established restaurants in Nagpur and Delhi. The restaurant at Nagpur devised an innovative strategy to
increase its business: it facilitated people who were traveling by train through Nagpur station to order food from
places where stockists of Haldiram’s Nagpur unit were located. The customers could order for lunch/dinner by
sending a demand draft (DD) or cheque to the Nagpur unit or giving the same to specified local distributors
belonging to the Nagpur unit. Along with the DD/cheque, customers had to provide information such as the
name of the train, its likely time of arrival at Nagpur, their names and coach and seat numbers.
Haldiram's restaurants in Delhi also used innovative ways to attract customers. The restaurant located at
Mathura road had special play area for children. To cater to NRI's and foreign tourists, who hesitated to
consume snack foods sold by the roadside vendors since these was not prepared in a hygienic manner, the
Haldiram’s restaurant located In South Delhi used specially purified water to make snack foods Including pani
puri and chat papri') . These promotional strategies helped Haldiram's to compete effectively with local
restaurant chains such as Nathus, Bikanerwala and Agarwals and with western fast food chains, such as
McDonald's and Pizza Hut.

POSITIONING
The above initiatives helped Haldiram's to uniquely position its brand. Haldiram’s also gained an edge over its
competitors by minimizing promotion costs. Appreciating the company's efforts at building brand, an analyst
said, "Haldiram once was just another sweet maker but it has moved into trained brands first by improving the
product quality and packaging.
Through its clever products and brilliant distribution It had moved into the star category of brands."Haldiram's
earned recognition both in India and abroad. The Nagpur unit of Haldiram's was conferred the International
Food Award: by the Trofeo International Alimentacion of Barcelona, Spain for having maintained high
standards in quality and hygiene, at its manufacturing unit.

The Delhi unit was awarded the Keshalkar Memorial Award by the All India Food Preservers Association In the
mid 1980s in recognition of its efforts for popularizing ethnic Indian foods in India and abroad. In 1994, the unit
was awarded the International Award for Food & Beverages by the Trade leaders Club in Barcelona, Spain.
The unit also received the Brand Equity Award in 1998. Manohar1al Agarwal, who played a key role in the
success of the Delhi unit, was included in the eighth edition of distinguished leadership by the Board of
Registrars of The American Biographical Institute. Haldiram's was also admitted as the member of Snack Food
Association, US.

THE ROAD AHEAD

In the financial year 2001-2002, the combined turnover of all three units of Haldiram's was estimated at Rs. 4
billion. The company targeted a growth of 15% for the financial year 2002-2003. Analysts felt that, given the
competition in the industry, Haldiram's needed to develop new initiatives to achieve this growth

The competition in the ready-to-eat snack foods market in India was intensifying. Frito Lay India ltd. (Frito Lay),
one of Haldiram's major competitors, was expanding its market share. Instead of directly competing with the
market leader Haldiram's, the company launched innovative products in the market and backed them with
heavy publicity. Frito Lay's product range consisted of a mixture of traditional Indian and western flavors which
appealed to younger and older generations. Its products Included Lehar Namkeens, Lehar Kurkure (snack
sticks), Lays (flavored Chips), Cheetos (snack balls), Uncle Chips and Nutyumz (nut snacks). Frito-Lay was the
first company to launch small 35 gm packs namkeens priced at Rs. 5 and also the first company in the
organized sector to launch Aloo Bhujia.

Another competitor, SM Foods, introduced a range of innovative products. The company launched India's first
non-wafer chips in 1988. SM offered products under two main brands - Peppy and Piknik. Under Peppy, it had
sub brands such as Cheese Balls, Ringos, Hi Protein Crispies, Potato Rackets, Hearts, Veggie Treat, Mixtures
and Minerette. Under Piknik, it had Protein Pin, Junior and Corn Puffs.

Haldiram's also faced tough competition from domestic players such as Britannia Industries Ltd., Bikanerwala
Foods and ITC. In addition, FMCG major HLL had also announced plans to enter the snack food market.
Analysts felt that Haldiram's lagged behind competitors in offering snack foods targeted at children, who were
always eager to try new flavors in every product category. They felt that the company concentrated too much
on traditional Indian items such as Bhujia Sev and Moong Dal.

Haldiram's had in fact, taken steps to fill the gaps in its portfolio. Rajendra Agarwal, the owner of the Nagpur
unit said, "We want to expand our market by Introducing snacks that will appeal to younger people. There will
be no growth in the traditional snacks category.” The unit planned to launch products such as flavored ready-
to-eat popcorn and a product similar to Lehar Kurkure. Mr. Agarwal was weighing several options to fund his
expansions. He was approached by several banks to fulfill his expansion plans but he was not sure how to go
about the expansion.

Though Haldiram's had increased its focus on advertising and promotion in the last couple of years, still more
initiatives in this direction were necessary. Frito Lay's expenditure on product promotion was much higher.
With successful ad campaigns such as "control nahin hotha" (it is irresistible) for the Lehar brand of namkeens,
the company made sure that it attracted the attention of viewers. According to media reports, Haldiram's
lagged behind competitors in the area of customer service. A report in Deccan Herald that Prabhu Shankar
Agarwal, the owner of the Kolkata unit, was arrested on charges of manhandling customers only reiterated this
opinion. The report also mentioned that a few of the company's restaurants did not possess the minimum
requirements, such as sufficient seating arrangements and adequate parking lots.

Haldiram’s also had to deal with problems created by spurious products. Some companies claiming to be close
associates of the original Haldiram’s of Bikaner used the Haldiram’s brand name in their products. For example
the ‘Haldiram Madanlal’ company claimed that its proprietor, Anil Kumar Agarwal, belonged to the Haldiram’s
family of Bikaner. The manufacture of spurious products threatened to dilute the Haldiram’s Brand image apart
from affecting the sales.

According to some analysts, many of the problems facing Haldiram's arose due to an informal split between its
three units in the early 1990s. The split occurred when Prabhu Shankar Agarwal, who was heading the Kolkata
unit of Haldiram's, filed a complaint in the court against the Delhi and Nagpur units, alleging breach of contract
when they opened a sweet shop in New Delhi in 1991. This led to a bitter court battle for many years. The
court delivered a final verdict in 1999, when Haldiram's units were formally split as three separate companies
with specific businesses. It was a challenge for the top management to reorganize the sales organization to
best cater to customers.

The consequences of the split were a matter of concern. Though on paper, the three companies had clearly
defined boundaries within which they should operate, in practice, they did not stay within their boundaries.
They penetrated each other's territories and competed among themselves for a larger share of the snacks
market. Analysts felt that competitors would take advantage of this split. Since the scope for increasing market
share in India was limited, these companies began to compete aggressively in international markets. They
used the internet, not only to market their products but also to compete with each other. Each company
claimed that its products were superior to those of the others in terms of quality. For instance, an
advertisement in 'haldiramusa.com', a web portal that sold the products of the Delhi company in the US, read,
"Our items come specially packed from the Original Haldiram's of Delhi offering superior taste and superior
quality, the only Haldiram approved by the US FDA (Food and Drug Administration). Try the Delhi stuff and you
will never touch the Nagpur Haldiram packets that most grocery stores store." Analysts were of the opinion that
the internal rivalry among its own companies may lead to dilution of Haldiram's brand equity.

Haldiram has hired your Company ABC Consulting where you are employed as a consultant to advice
them on the following questions which they want advice for. You are required to make a report of 5000
words to be submitted to their top management.

QUESTIONS

1. "The company caters to the Indian palate, which is its primary driver of success". In the light of this
statement, critically examine and suggest the Retail marketing and branding strategies to be adopted
by Haldiram's to capture a sizeable market share of the organized namkeens and sweets market in
India.

2. In the modem competitive scenario, promotion is a key element in the marketing mix of a company.
Critically analyze the promotion strategies adopted by Haldiram's to suit to Indian consumer’s buying
behavior for namkeens and sweet market.

3. Namkeens contribute a major share of the revenues of Haldiram's. Given the competitive scenario in
the salty snack foods market in India, where competitors such as Frito Lay are introducing several
innovative products, what customer service measures must Haldiram's take to remain competitive?
Explain in detail with reference to place and distribution strategy.

4. Haldiram’s product have become like FMCGs. It is very important to have an effective sales
organization. Suggest an organization structure on all India basis which can compete with Frito Lay and
others.

5. Haldiram’s need to expand in a fast growing market requires funding for expansion. Suggest various
financing means available, with calculations, to suggest of the most lucrative option available.
EXECUTIVE SUMMARY

Haldiram, the brand names that is always associated with quality product and service. It took more than six
decades to become the leading manufacturer of Indian savory snacks.

The savory snacks industry has been immensely through all these years to form an industry of about $425
millions. And the market potential for this industry is estimated to be around $ 1 billion. The savory snacks
market is divided into organized sector and an unorganized sector. Currently, about 45 % of the market is
being served by the organizes sector and the balance 55% is served by the unorganized sector.

Presently the company has 20% market share of the organized sector and overall about 7.5% of the market
share, with a turnover of $30 million.

Q4. Haldiram’s product have become like FMCGs. It is very important to have an effective
sales organization. Suggest an organization structure on all India bases which can compete
with Frito Lay and others.
Ans: Haldirma is become like FMCG Organization. So it is very important to have
an effective Sales Organization. As Haldiram catered to all India and also its International
brand. I would suggest for Geographical sales organization structure for India. Because in
India we have deferent taste in deferent location, So we need to catered according to the
customer’s taste or consumer’s test.

Haldiram’s south to customize its products to suit the tastes and preference of
customers from deferent parts of India. It launched the products, which catered to the taste of
people belonging to specific regions. For exm. It launched “Murukkus” a south India snack and
“Chennai Mixture” for south Indian customers.

Geographic Sales Organization

 Line position:

National Sales
Manager

Regional Sales
Manager

District Sales Managers

Salespeople

Q3. Namkeens contribute a major share of the revenues of Haldiram's. Given the competitive
scenario in the salty snack foods market in India, where competitors such as Frito Lay are
introducing several innovative products, what customer service measures must Haldiram's take
to remain competitive? Explain in detail with reference to place and distribution strategy.

Ans: Competitive scenario in the salty snack food market in India.

The Namkeen Market:

As the ethnic foods category is growing, cash-rich companies make a beeline for a
share of the salty snacks market. Around 1,000 snack items are sold in India spanning various
tastes, forms, textures, aromas, bases, sizes, shapes and fillings. Some 300 types of savories sell
here and the overall snack product market (inclusive of sweetmeats) is estimated at Rs.25,000
crore.
The branded salty snacks market (size: 1200 Crores) is 40% of the total market
(size: 3000 Crores), It's bustling nevertheless. The branded segment is increasing at the rate of
25% per annum whereas the entire market is increasing at the rate of 7%. In the past 2-3 years
the unbranded sector has witnessed a decline of 5% per annum. Indians seem to be snacking on
ethnic foods with a vengeance. This is good news for the corporate sector, given that the past
few years have seen a perceptible shift towards the branded sector at the cost of the unbranded
segment.
 The Salty snacks market in India is very diverse largely comprising of an
unbranded segment which comprises of homemade namkeens, mithai shops and loose
namkeens. However the branded segment has been increasing rapidly lead by the revolution
carried out by market leaders Haldiram Foods and Frito Lay-India. Other major players in the
branded market include:

1. Haldiram Foods

2. Frito-Lay India: Its products included Leher Namkeens, Leher Kurkure (snack sticks), Lays
(flavored Chips), Cheetos (snack balls), Uncle Chips and Nutyumz (nut snacks).

3. SM Foods: Under two main brands - Peppy and Piknik. Under Peppy, it had sub brands such
as Cheese Balls, Ringos, Hi Protein Crispies, Potato Rackets, Hearts, Veggie Treat, Mixtures
and Minerette. Under Piknik, it had Protein Pin, Junior and Corn Puffs.

4. Mc Fills-India: No time, No where, No Place etc.

Haldiram Foods:
Over a period spanning 65 years, the Haldiram's Group (Haldiram's) had
emerged as a household name for ready-to-eat snack foods in India. It had come a long way
since its relatively humble beginning in 1937 as a small time sweet shop in Bikaner, Rajasthan.
In 2001, the turnover of the Haldiram's was Rs.400 Crore. The group had presence not only in
India but in several countries all over the world.
The company offered a wide variety of traditional Indian sweets and snacks at
competitive prices that appealed to people belonging to different age groups. Haldiram's had
many 'firsts' to its credit.

· It was the first company in India to brand 'namkeens'.

·The group also pioneered new ways of packaging namkeens.

·Its packaging techniques increased the shelf life of namkeens from less than a week to more
than six months.

Since the very beginning, the brand 'Haldiram's' had been renowned for its quality products.
The company employed the best available technology in all its manufacturing facilities in India.

Namkeens remain the main focus area for the group, contributing close to 60% of its total
revenues.

Haldiram’s has got 4 firms, based at Delhi, Kolkata, Nagpur and Bikaner (branded as “Bikaji “)
These firms are separate entities managed by 4 different brothers, 3 of them (given below) use
the same brand name - Haldiram’s. While the Nagpur unit manufactures 51 different varieties
of namkeens, the Kolkata unit manufactures 37 and the Delhi unit 25 - This is due to different
regional markets, and the varying tastes.
The raw materials used to prepare namkeens are of best quality and sourced from all over India.

In our interview with the Haldiram’s Marketing Representative at the Mumbai Office, we were
informed that Haldiram’s invests in R & D at the rate of churning out 2-3 products every 2
months.

This just shows that Haldiram’s has come a long way from being the heavy-weight market
leaders, and have now realized the importance and threat of competition.

Frito-Lay India:
Pepsi entered India, with some of its mega brands in soft drinks and snacks. The snacks
division, which was renamed Pepsi Foods and Marketing Company (Today known as Frito-Lay
India), mainly had big names like Ruffles (Today present as Lays) and Hostess (Chips), Cheetos
(Corn Snacks). For quite some time none of these brands did well in India. In 1994 Hostess and
Cheetos as taken out of the market and the division was left with ruffles which was also not
doing very well. The average Indian thinks chips as western junk food whereas namkeen is
considered as ideal snacks. Hence in 1995 Pepsi foods started marketing namkeens (made by
Bikanervala Foods) under the brand name ‘Lehar’.

Today apart from Lehar Kurkure which has been indigenously developed, Frito-Lay brings in
internal recipes and oil management practices, besides proprietary seasonings and raw
materials, while Bikanervala does the actual manufacturing.

Where Frito-Lay edges past the leader is on the sound bytes front. The brand has consistently
(24 weeks a year on mainline channels) played up `irresistible' taste through its `control nahi
hota' ad pitch. The marketer is now working on flavours suited to South and West India to broad
base its reach and to fulfill the category's need for continuous infusion.

Frito-Lay manufactures its major chunk of snacks in its factories at Channo in Punjab and
Ranjandgaon in Pune. These two plants have a combined annual capacity of 17,000 tonnes.
About 10 per cent of its products are outsourced from the Rs 50-crore Bikanervala Foods. They
have recently set up an 80 crore plant in West Bengal (15,000 tonne capacity) with a view to
gain up to 50 percent market share in the North-east region. Since south contributes 32 percent
of the Namkeen consumers Lays is also planning to foray into that market to increase its market
share from 9 to 30 percent.

Frito-Lay India consistently makes profits in the snack foods business for Pepsico India and
manufactures leading snack brands like Lays Frito-Lay India, PepsiCo's consistently profit-
making snack foods arm, is turning the spotlight on desi snack foods for its Lehar Namkeen
brand. While Lay's, the flagship brand of Frito-Lay, remains the leading potato chips brand, the
acquired Uncle Chipps is being pushed in smaller towns. Other brands in Frito-Lay's portfolio
include Lehar Kurkure and Cheetos.
Apart from the above two giants there are many other existing players such as SM foods,
Mcfills and other regional players.

Other Upcoming Brands & Failures:

It is no coincidence that cash-rich biscuit majors, Britannia and Bakeman's, have made a
strategic beeline for the salty snacks market (Snaxx in 2000). Bakeman's has begun rolling out
namkeens in eastern markets, with a manufacturing base in UP.

Though Britannia has rolled out six varieties of namkeens only in Delhi, Calcutta and Chennai,
it's making sure it grabs attention. In Delhi, for example, the marketer has been announcing the
arrival of its ethnic snacks through outdoor media -- at bus shelters, lamp posts, the works. An
ad blitzkrieg is expected three months down the line to coincide with a national launch.

The scenario may appear hunky-dory, but success rates are not consistent. As Uncle Chipps Co
Ltd (UCCL), found out, Yumkeenz was hardly an experience it would like to see recorded in
history. The brand was created in 1996 through a state-of-the-art plant equipped with Dutch
machinery. The namkeens included a versatile mix of ingredients, but the brand was snagged on
taste, value and quality. That UCCL is part of the Rs 650- crore Amrit Banaspati Group
Company (with diverse interests in edible oils, milk products and paper) didn't help. Neither did
the legacy of Uncle Chipps potato wafers, which till a few years back boasted a 70 per cent
share in the potato wafers market.

THE Rs 900-crore Mother Dairy Fruit and Vegetable Ltd, a 100 per cent subsidiary of the
National Dairy Development Board, has finally entered the snacks segment with the launch of
namkeen under the brand name of `Aa Ja Kha Ja'. Interestingly, the company has entered into a
tie-up with the Delhi-based Bikanervala Foods to manufacture the namkeens, while Mother
Dairy Fruit and Vegetable will do the marketing. The product will be pushed through the
`Accha Hai, Sachha Hai!' tagline, which is also the punch line for Safal and will be made
available through the Safal and Mother Dairy booths across Delhi. The launch is yet another
indicator of the cooperative's aggressive expansion plans.

Place and Distribution Network:

Haldiram's developed a strong distribution network to ensure the
widest possible reach for its products in India as well as overseas.

 It was also one of the first companies in India to open a restaurant in New Delhi offering
traditional Indian snack food items such as "panipuri," "chatpapri," and so on, which catered to
the needs of hygiene conscious non-resident Indians and other foreign customers.

 Apart from the exclusive showrooms owned by Haldiram's, the company offered its
products through retail outlets such as supermarkets, sweet shops, provision stores, bakeries and
ice cream parlors.

 The products were also available in public places such as railway stations and bus
stations that accounted for a sizeable amount of its sales.

Haldiram's developed a strong distribution network to ensure the

widest possible reach for its products in India as well as overseas. From the manufacturing unit,
the company's finished goods were passed on to carrying and forwarding (C&F) agents. C&F
agents passed on the products to distributors, who shipped them to retail outlets. While the
Delhi unit of Haldiram's had 25 C&F agents and 700 distributors in India, the Nagpur unit had
25 C&F agents and 375 distributors.
Haldiram's also had 35 sole distributors in the international market. The Delhi
and Nagpur units together catered to 0.6 million retail outlets in India.

Distribution network of Haldiram:

Co.
Manufacture
unit

C&F Agent

Distributer’s

Retailers

Consumers
Q1."The company caters to the Indian palate, which is its primary driver of success". In the
light of this statement, critically examine and suggest the Retail marketing and branding
strategies to be adopted by Haldiram's to capture a sizeable market share of the organized
namkeens and sweets market in India.
Ans: Haldiram's offered a wide range of products to its customers. The product range
included namkeens, sweets, sharbats, bakery items, dairy products, papad and ice-creams.
However, namkeens remained the main focus area for the group, contributing close to 60% of
its total revenues.

Market size of the Organized Namkeen market in India:

The Indian snacks market is worth around US$ 3 billion, with the
organised segment taking half the market share, and has an annual growth rate of 15-20 per
cent. The unorganised snacks market is worth US$ 1.56 billion, with a growth rate of 7-8 per
cent per year. There are approximately 1,000 types of snacks and another 300 types of savouries
being sold in the Indian market today. Potato chips and potato-based items are the most popular
products with more than 85 per cent share of the salty snack market, the report said. In the
organised potato chips market, Pepsi and Haldiram’s are some of the leading players.

There is a big market for snacks in India as urban Indian consumers eat ready-made snacks 10
times more than their rural counterparts. Indians in the western regions eat the maximum
amount of snacks, followed by the people in northern region.

“Consumers are willing to pay a premium for both value-added private and branded products,
creating immense opportunities for manufacturers and retailers,’ the report stated. “There is a
widespread recognition in India that consumers are likely to replace light meals with snacks”, it
further added.

Structure of Indian Market

a) Organised Sector

The majority of organised retailers source imports through distributors due to the relatively
small number of outlets that exist. Modern practices, such as importers sourcing mixed
containers directly from the exporting nation and retailers establishing direct links with
importers, are becoming more widespread. Most distributors cover just one major city and the
adjoining area.
Imported snack products are confined to traditional outlets in upmarket areas catering to richer
consumers.
b) Non-organised Sector

The vast majority of product is sourced from domestic providers, with the share of imports
negligible. Where foreign product does appear in the non-organised sector, “a significant share”
comes through illegal channels, said one analyst. Imported goods are attractive because they
have a 50% higher sales margin compared to domestic products.
Q.2 In the modem competitive scenario, promotion is a key element in the marketing mix of a
company. Critically analyze the promotion strategies adopted by Haldiram's to suit to Indian
consumer’s buying behavior for namkeens and sweet market.

Ans. To find out consumers buying behavior and purchase habits for Ready-To-Eat
Snacks & Namkeens.

Promotion strategies adopted by Haldiram:

 Haldiram's product promotion is increased due to competition in the snack foods market.

 The company tied with 'Profile Advertising' for promoting its products.

 attractive posters,

 brochures and mailers were designed to enhance the visibility of the Haldiram's brand to
appeal to the masses.

 To increase the visibility of the Haldiram's brand, the company placed its hoardings in
high traffic areas such as train stations and bus stations.

 Posters were designed for display on public transport vehicles such as buses, and
hoardings, focused on individual products were developed.

 Captions such as 'yeh corn hain' (this is corn), 'chota samosa - big mazaa' (small samosa-
big entertainment)

Marketing Mix Decisions

• Story of local brand getting it right:
– “Our brand is nowhere near the dominance of Haldirams”

– “Haldiram’s caters to the Indian palate, which is its primary drivers of

success”
• Haldiram’s Marketing Mix Decisions

– Product
• Wide product range (51 varieties of “namkeens” (salty snacks) from one
manufacturing unit alone!), customized for local tastes
• First Indian company to brand namkeens
• High quality and hygiene standards
• Packaging to increase shelf life from less than a week to more than 6 months
– Pricing
 • Competitive with huge unorganized market
• Launched in multiple sizes, including 30 gram (1 oz.) packets @ Rs. 5 (10 c)

Marketing Mix Decisions

• Haldiram’s Marketing Mix Decisions (continued):

– Place (Distribution)

• Strong network: C& F agents "distributors " retailers (nearly 1 million)

• Margins to ensure goodwill
• Company-owned showrooms, online sales (region-specific websites)
– Promotion (Communications):
• Low key until competition intensified
• Tag line in advertising: “Always in good taste”
• Attractive packaging (impulse purchase)
• Shelf life: “Six months on the shelf and six seconds in your mouths”
• Results
– Strong brand equity
– Success breeds competitive intensity: Frito-Lay intensifies product innovation