CASE STUDY 3: HALDIRAMs GROUP SEEKING THE RIGHT MARKET MIX Questions and Answers Q1.

. Analyse the strategies used for marketing mix. Ans: The marketing strategies for Haldirams Group can be analysed under the following categories: 1. Products: Haldiram offered a wide range of food products to its customers to show its ability in diverse fields but continued to emphasize on the namkeen that generated 60% revenue for the company. Haldiram group has always given most importance to the feelings and demands of the local masses. Thats why they come out with food products with fancy packings and eye catching labels like Nazarana. This is also the reason they launched 'Murukkus,' a South Indian snack,'Chennai Mixture' for south Indian customers and bhelpuri for western india. By doing this they allowed the people to spend their money on food items and still keep in touch with their culture and tradition in a new way. 2. Pricing: Haldiram group launched its various products at very competitive price in an attempt to monopolize the unorganized namkeen market of india. By providing its products in very small packets, as small as 30g(for Rs. 5/-) they were able to appeal to the taste buds of a common Indian man. 3. Distribution: Haldiram group has a very strong distribution policy. 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. . 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%.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. The company tied up with indiatimes.com, a website owned by the Times of India group to sell its products over the Internet, this is obviously a very innovative way to reach to a modern man with something that he is very comfortable with. 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), mumbaiflowersgifts.com (Mumbai), and chennaiflowersgifts.com (Chennai and other parts of Tamilnadu). These websites

delivered in a period of 2 days. Delivery charges and value added service charges were also taken. 4. Promotion: Haldiram went seriously into promotion of its products after it started getting intense competition from international companies as well as the local vendors. They went into collaboration with profile advertising9 for promoting their products. The punch line of haldirams product was always in good taste. They started advertising their entire product range in print media as well on television with very catch lines like millions of tongues cant go wrong , chat samosa-big maza, ye corn hai etc. what you see is what you buy keeping this mind, 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. Special brochures were designed for customers describing the rich heritage of the group and distributed among customers to attract them more. namkeen the most selling product of the haldiram group started getting packed in attractive ways. Technology was given due importance and by packing the namkeen in nitrogen filled pouches, the shelf life was improved to 6 months. Haldiram always promoted of this fact too. Posters highlighting the shelf life of its products carried the caption 'six months on the shelf and six seconds in your mouth. To attract NRI customers who wanted to try Indian street food but were hesitant because of the unhygienic conditions, haldiram restaurant in new delhi started using specially purified water. Because of these and several other landmark steps taken by haldiram, it was able to gain edge in local and international competition. The Nagpur unit of Haldiram's was conferred the International Food Award by the Trofeo International Alimentacion of Barcelona14, 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 Award15 in 1998. Manoharlal 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 Institute16. Haldiram's was also admitted as the member of Snack Food Association, US17.

Q2. What are the future prospects of haldiram? Ans: in the financial year 2001-02, the combined turnover of haldiram was Rs. 4 billion. They continue to aim higher but analysts feel they have to innovative to progress at a faster rate. Frito Lay India Ltd. (Frito Lay), one of Haldiram's major competitors, is 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 consist of a mixture of traditional Indian and western flavors which appealed to younger and older generations. Its products included Leher Namkeens, Leher 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. Though Haldiram's has 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 is much higher. With successful ad campaigns such as "control nahin hotha" (it is irresistible) for the Leher brand of namkeens, the company is making sure that it is attracting the attention of viewers. Clearly, Haldiram needs to spend more money on advertising and come up with something unique, something that it can it has developed on its own. Keeping up with traditional values is good, but it needs to show that it is ready to take on the modern world as well. Haldiram group is facing some internal as well as external problems. According to the reports 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 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. Things like these are only diluting the brand image of the haldiram company. Some analysts believe that many problems that the company is facing is due to the informal split it had in 1990s. the split came as a result of an alleged breach in contract that resulted in three separate companies with specific boundaries. But the boundaries were never respected. 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 business territories.Moreover, these companies

are targeting each other for gaining an advantage in market. International giants are also taking advantage of the split. The family can try to resolve the issue and if they cant merge with one another, then they should atleast try to respect the boundaries. Haldiram has the goodwill of the Indian man, it should try to explore the international market more. E.g there is no manufacturing unit of haldiram outside india. If they start investing in units outside the country, not only will they have a bigger customer bank to serve, earning in foreign currency can increase their turnover too. And availability of a larger market can also help the groups to respect each other more. Competition among each other leads to price rise that will not be appericiated.Masses see haldiram as one manufacturing unit and thats how they should see it. Its beneficial for the company as well as the masses. Q.4. In recent times, the turnover of Haldiram is increasing. Discuss the possible reasons.