SNACKS _ NAMKEENS by Nirmalpandya

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									READY-TO-EAT SNACKS & NAMKEENS

Executive Summary
Indian snack food industry comprises of many Indian as well as MNCs. The Indian snack market reached a value of $307.7 million in 2001. The Indian snacks food market is of the order of 400,000 tones. This wide range of products are categorized under Potato / Banana Chips, Namkeens & FunFoods. The organized market for chips is estimated to be 6500 tons valued at Rs.2 bn. The market for branded chips has been growing at a fast pace of around 20-25 % annually. Since the majority of MNC's entered their venture in Ready-To-Eat Snacks & Namkeens. The project was conducted to study the overall industry for Ready-To-Eat Snacks & Namkeens. The research was conducted to study the actual buying behavior of the consumers and their preference for such a category of food. Research methodology being exploratory research Questionnaire method to interview consumers as well as retailers was adopted. Retailers were surveyed to know the actual market behavior, whereas the consumers were surveyed to know their preference and factors affecting their purchase. Secondary data on industry is collected through Internet, magazines & by visiting the people in the industry. The Research was a good experience & the final conclusion is that the consumers generally associate Ready-To-Eat Snacks & Namkeens with Time Pass. Majority of them prefers wafers to be their first choice with Fraiams being the second preference. Namkeens on other hand are usually preferred as hunger quencher and are eaten whenever the consumers are hungry. Ready-To-Eat Snacks & Namkeens are generally considered as take away food and hence the consumers generally buy 1-2 packs and does not store them. Through the research it was concluded that the consumers want even POPCORN to be included in this category which is also an opportunity for the manufacturers to launch a new product and extend their product width. Overall the industry is grooming and has vast opportunity to be cashed for the manufacturers.

Table Of Contents
PARTICULARS PAGE NO.

 INTRODUCTION ______________________________________________02  PROBLEM STATEMENT_________________________________________03  RESEARCH OBJECTIVE_________________________________________03  INDUSTRY OVERVIEW _________________________________________04  CATEGORIES & PRODUCT OVERVIEW __________________________05         POTATO CHIPS__________________________________________05 BANANA CHIPS _________________________________________06 NAMKEENS_____________________________________________07 FUN-FOODS____________________________________________09

PACKAGING ______________________________________________10 COSTING & PRICING________________________________________11 DISTRIBUTION ____________________________________________11 CONSUMER PROFILE________________________________________12

 SAMPLING DESIGN ___________________________________________15  RESEARCH DESIGN ___________________________________________15  DATA COLLECTION____________________________________________16  DATA ANALYSIS______________________________________________16   RETAILERS POINT OF VIEW __________________________________17 CONSUMERS POINT OF VIEW_________________________________22

 MARKETING & ADVERTISING STRATEGY___________________________26  FACTS & FIGURES ____________________________________________27  CONCLUSION & RECOMMANDATION______________________________28  APPENDIX___________________________________________________29   QUESTIONAIRE FOR RETAILERS_______________________________29 QUESTIONAIRE FOR CONSUMERS _____________________________30

 BIBLIOGRAPHY_______________________________________________31

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

READY-TO-EAT SNACKS & NAMKEENS
 INTRODUCTION:
India is one of the world’s major food producers but accounts for less than 1.5 per cent of international food trade. Food exports in 1998 stood at US$5.8 billion whereas the world total was US$438 billion. The Indian food industry’s sales turnover is Rs. 140,000 crore annually as at the start of year 2000. Exports of food products can become a valuable growth driver for the Indian food industry, leveraging the historic base and new specialty categories where India has great potential to emerge as a strong brand abroad, according to the latest update on the industry by McKinsey The report, released on Monday at Foodpro 2003, the exposition organized in Chennai by the Confederation of Indian Industry, has identified emergence of an organized retail sector, value additions and convenience driven by consumers, India's growing acceptance as souring hub and continued deregulation of the food sector as the four positive trends. It pointed out that mass market of basic foods, value added foods and exotic foods and their exports were the main opportunities for the Indian food industry adding that there will also be a significant growth in terms of input providers, logistics suppliers and retail. Indian snack food industry comprises of many Indian as well as MNCs. The Indian snack market reached a value of $307.7 million in 2001. It is one of the largest snack markets in the Asia-Pacific region. Only Australia, China, Japan and South Korea have won greater revenue from the sale of snacks. India contributes three percent to the total Asia-Pacific snack market revenue.
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PROBLEM STATEMENT

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

RESEARCH OBJECTIVE

 Factors affecting the buying pattern of the consumer for Ready-To-Eat Snacks & Namkeens.  Find out the consumers buying habits.  Find out the consumer's future requirements.  To study the overall Ready-To-Eat Snacks & Namkeens industry.

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 INDUSTRY OVERVIEW:
The Indian snacks food market is of the order of 400,000 tonnes. At a low average price of about Rs.35-60 a kg. Largest share of this Rs.14 bn market still remains with unorganized sector comprising of local manufacturers. There is a wide range of product categories differentiated based on taste. This wide range of products are categorized under Potato / Banana Chips, Namkeens & Fun-Foods. Chips market is largely dominated by the unorganized sector in India, which manufactures potato chips with fat content ranging from 20% to 40% and moisture content as high as 3-4%. These products are manufactured locally and sold loose or in ordinary Polly-pouches. In the last 4-5 years, however, the organized market has grown considerably catering to upper/ middle class consumers in the urban areas. The organized market for chips is estimated to be 6500 tons valued at Rs.2 bn. The market for branded chips has been growing at a fast pace of around 20-25 % annually. Heavy promotions by branded chipmakers (like offering free gifts, toys etc with these products), has led to a major shift from unbranded to branded products. As per the views of MR. L.M AGARWAL (Executive Director of SM FOODS the manufacturers of PEPPY/PIKNIK) today the trend is shifting from unorganised to organised. So, the overall growth in the snacks food segment is happening between 10%-15% annually. However in the organized sector, the growth is happening at 50%-100% annually. The market is forecasted to reach a value of $459 million in 2006.

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 CATEGORIES & PRODUCTS OVERVIEW:

POTATO CHIPS:
 MARKET PLAYERS:
,

BRANDS

PRODUCTS

PRICE RANGE

PACKAGE

Salted Masala (American Stride Crème & Onion) FRITO-LAY'S Tangy Tomato (Australian Cilantro Surprise) Red Chili Chatka Hot & Sweet Premium Salted Premium Spicy Potato Salty Katli Potato Spicy katli Premium Salted Premium Spicy Potato Salty Katli Potato Spicy katli

Rs. 5/Per 16 Gm Rs. 10/Per 32 Gm Rs. 20/Per 100 Gm

Packed in Aluminum vacuumed Packs with preprinted Brand Name & Logo, Item Name & Package Details and MRP and Expiry Date Packed in Polly Propane Plastic Pouch with preprinted Brand Name & Logo, Item Name & Package Details and MRP and Expiry Date Packed in Polly Propane Plastic Bags With Brand Name and Price Tags.

GARDEN

Rs. 120 /Per Kg

JANTA

Rs. 100 /Per Kg

There are many others in the local organized sectors like Chheda, Raghuvansi etc in this category operating locally in a particular location. Recently Haldirams has come-up with new range of potato chips in three different tastes i.e. Paprika Chips, Pudina Treat and Classic Salted. Haldirams chips are also available in 75 GM packs for Rs.10/- as an inaugural offer.
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 MARKET LEADERS: Frito-Lay's is the market leader with a 53 % market share, followed by Uncle Chips with 24 %. The balance market is divided among small local players.

 TARGET AUDIENCE: Generally Potato Chips are targeted towards all age groups differentiated in taste. For e.g. Premium Chips (Normal salty chips) are targeted towards Kids & Old age group due to their softness, even further it is more specifically targeted based on taste, like Premium Salted is targeted towards kids and Both Premium salted / Spicy are targeted toward all age groups.

BANANA CHIPS:
 MARKET PLAYERS:


BRANDS

PRODUCT

PRICE RANGE

PACKAGE Packed in Polly Propane Plastic Pouch with pre-printed Brand Name & Logo, Item Name & Package Details and MRP and Expiry Date Packed in Polly Propane Plastic Bags With Brand Name and Price Tags. Packed loose in plastics bags

GARDEN

Black Pepper Salty Yellow Spicy Red Black Pepper Salty Yellow Spicy Red Black Pepper Salty Yellow Spicy Red

Rs. 120 /Per Kg

JANTA OTHERS

Rs. 100 /Per Kg Rs. 80 /Per Kg

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There are no recognized brands in this category. The majority of the banana chips sector is captured by local manufacturers distributing it loose to the retailers, who then packs it in 150gm (Rs.12/-), 250gm (Rs. 20/-) & 500gm (Rs. 35/-) in a normal plastic bags with only price stickers stuck to it. Tomato punch to this category of chips has been a runaway success.

 MARKET LEADERS: Majority of the market share i.e. 65% is divided amongst the unorganized sector distributing it locally, Garden being the major player amongst the local brands with 27% and the remaining is distributed amongst the other local brands like Raghuvansi, Janta, Chedda, etc.  TARGET AUDIENCE: Banana Chips like potato chips are targeted towards all age groups; the Spicy Red Flavor is generally targeted to young and middle age groups whereas the tomato punch is targeted towards kids and old age groups.

NAMKEENS:
 MARKET LEADERS: BRANDS FRITO'SLEHAR PRODUCTS Alu Bhujia Bikanari Bhujia Gujarati Khatta Metha Navratna Mix Natiyams (Moong Dal Masala Punch) PRICE RANGE Rs. 20/Per 200Gm Rs.20/150Gm Rs.5/30 Gm
7

PACKAGES Packed in Aluminum vacuumed Packs with pre-printed Brand Name, Item Name, MRP and Expiry Date

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HALDIRAMS

SM FOODSPEPPY NAMKINS GARDENS

OTHERS

Alu Bhujia Bikanari Bhujia Mix Farsan Chevada Spicy / Salty Sev Bhujia Chevada Sev Nadyadi Chevada Sev Chevada Mix Farsan Sev Chevada Mix Farsan

Rs.42/400 Gm Rs.20/200 Gm Rs.3/30 GM Rs.5/50 Gm

Packed in Aluminum vacuumed Packs with pre-printed Brand Name Packed in Aluminum vacuumed Packs Packed in Polly Propane Packs With Brand name & MRP. Packed Packs In plastic

Rs.60/80 Per Kg Rs.60 / Kg

There are many other local manufacturers with different varieties of namkeens ranging from Rs.60 to Rs.80 per kg. Fried Cashews and other dry fruit items are most costly ranging from Rs.200 to Rs.250 per kg and are generally available loose as per the consumer's requirements.

 MARKET LEADER : Haldirams Bhujia is a market leader in this category whereas Frito-Lehar captures the majority of the market for the small packs ranging from Rs.2 to Rs.10. Other players like Garden, Raghuvansi, Chedda etc hold a majority of the market for Chevada & Sev. SM FOODS has been recently introduced Peppy Namkeens.

 TARGET AUDIENCE : Namkeens are generally targeted towards all age groups and the target differentiated is based on regional taste preference for e.g. Bhujia's are famous in Rajasthan whereas Chevada's are famous in Gujarat & Fried Cashews is most preferred in Goa.

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FUN-FOODS:
 MARKET PLAYERS :

BRANDS FRITOKURKURE

PRODUCTS Masala Twistys Red Chili Chatka Peppy Cheeseballs Peppy Ringos Piknik Corn puffs Peppy Hi protein crispies Peppy Minerette Cheeseballs Salty FRAIAMS Spicy FRAIAMS

PRICE RANGE Rs.5/22 Gm Rs.10/55 Gm Rs.20/140 Gm

PACKAGES

Packed in Aluminum vacuumed Packs

SM FOODS PEPPY

Rs.5/15 Gm Rs.10/33 Gm

Packed in Aluminum vacuumed Packs Packed in Aluminum vacuumed Packs Packed Bags in Plastic

BONKERS OTHERS

Rs.5/30 Gm Rs.5/75 Gm

There are many local players in this category that deal only in FRAIAMS and others fried Fun-Foods. Generally Consumers are willing to purchase the branded ones because they come in many different tastes like Red Chili Chatka, Cheseeballs etc.  MARKET LEADER : Since they are very few players in this category, PEPPY Products holds majorities of the market share especially Cheeseballs & FRAIAMS. Frito's-Kurkure is new to the market but still is at the second place. Bonkers and others cover a small segment.

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 TARGET AUDIENCE : Fun-Foods is generally targeted to Kids & Youths who do majority of purchase. Fun-Foods and less preferred by middle age and old age groups. But Frito's-Kurkure is targeted in general as it can be also categorized under Namkeens.

 PACKAGING:
Leading players try to woo consumers with attractive packaging and designs. Generally all branded companies uses the technology of packing the product with nitrogen filled aluminum vacuumed pouches, which help to keep the product fresh for a longer shelf life, but also increases the cost. Smaller manufacturers like Garden Foods, Raghuvanshi Exports, Janta etc use Polly Propane plastic pouches for packaging the products. The pouches are pre-printed with Company Name, Brand Name, Product Name, Ingredients, Mfg. Date & Best Before Date. MRP is then stamped by a machine before packing the products. Generally these packs are provided to the retailers in a series (Lar Form) with a hanging stand. When the products are to be distributed outside the country or in a bulk then the pouches are packed in Boxes with Company Name, Item Name & Brand Name printed on it.

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 COSTING & PRICING:
Raw material and packaging are the two major cost components. The organized players follow rigorous quality control of raw material and maintain high hygiene standards at their manufacturing facilities. This results in a much higher cost of production, thereby making them price uncompetetive in comparison to there small scale unorganized counterparts. Packaging is a major cost, accounting for half the price of the product. Normal Polly propane plastic bags costs on an average Rs.2 per pack whereas the aluminum packs costs around Rs.2 to Rs.4.5 approximately based on size. The Boxes cost around RS.5 (Minimum) to Rs.32 (Maximum) based on size and quality. Generally manufacturing companies have a profit margin of around 20% to 25%. Local Retailers are given 30% to 35% margin whereas in case where the products are distributed through distributors the margin of 30% to 35% is distributed amongst the Distributors, Super Stokers & Retailers. For e.g. A 55gm pack of Frito's-Kurkure is pricing around Rs.10 of which Rs.3 is distributed amongst Distributors & local Retailers. Out of the remaining Rs.7 Companies profit is around Rs.1.75 to Rs.2. Packaging costs around Rs.2 and distribution and manufacturing costs around Rs.3 to Rs.3.25.

 DISTRIBUTION:
Distribution is also one of the key parameters for expanding market share. Frito-Lays has the advantage of access to Pepsi's a formidable distribution network whereas products like Uncle Chipps is retailed through around 600000 outlets across the country.

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Generally Companies are having their sales vehicles that are loaded on daily basis and are distributed to local retailers. Some companies appoint Distributors. Distributors have to give a proposal with a market research like storage facilities, infrastructure, retail outlets in area, market leader, types of products available in the market etc. In some companies the products are delivered to the retailer twice a week (e.g. Frito India), while in some companies on daily basis (e.g. Garden). The products are generally sent in Boxes on an average each box contains 80 packs of 30 gm or 30 packs of 150 gm. Distributors are solely responsible for the sales in the particular area he is operating in. Every Distributor should have a specified number (varying from company-to-company) of minimum shops in his area. Distributors generally have small vans (rickshaws) and employ salesmen on commission basis who loads the products from the distributors storage and distributes it amongst the retailers. Companies nowadays have even started distribution through their websites. For e.g. companies like SM FOODS have recently launched a website Peppyland.Com, which, apart from being an interactive medium for kids, will also deliver its brands at their doorstep. It services one-lakh retail counters across the country by employing a total strength of 300 sales personnel and distributors nationwide.

 CONSUMER'S PROFILE:

Snack foods are impulse purchase products, and there is an element of indulgence associated with them. It does not figure very high on the shopping list. A consumer buys it only if it catches his eye at the outlet or is accompanied by a child who finds potato chips a fun snack. So leading players have stressed on
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attractive packaging and promotions targeted at children to increase consumption. As these products are general fun eat, brand loyalties are not strong and consumers look for novelty and new flavors. There is no notable difference in consumption pattern across various age groups. Snacks like Wafers & Chevadas are generally preferred for the daily consumption whereas fun-foods like Cheeseballs and Twistys are sold more in schools, Colleges, Railway Platforms and Movie Theatres. Kids generally prefer FunFoods whereas all age groups generally prefer Wafers and other snacks. Taste varies widely across the regions. For instance in South, banana chips are extremely popular which do not find many acceptances in other parts of the country. In east, Paaprichaat is very successful whereas in Mumbai, tomato punch has been a runaway success.

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 SAMPLING DESIGN:

 TARGET POPULATION

The respondents are classified in two categories i.e., Retailers & Consumers. Retailers are surveyed to know the actual purchase of the consumers; whereas the Consumers are surveyed to know their preference. All the respondents were above the age of 18 and are residents of Mumbai city.

 SELECTING A SAMPLING TECHNIQUE
The sampling was done on a random basis whereby the respondents visited and primary data is collected. The Respondents were selected as per convenience sampling.

 RESEARCH DESIGN:

A research design expresses both the structure of the research problem and plan of investigation used to obtain empirical evidence on relation s of the problems. The research design was Exploratory in nature. The Exploratory research is done to provide insights into, and an understanding of, the problem confronting the researcher. As Exploration research serves the other purposes like the area of investigation may be so new or so vague that a researcher needs to do an exploration just to learn something about the dilemma facing the manager.

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The Exploratory research benefits from the use of the following methods: 1. Survey of Experts. 2. Pilot Surveys. 3. Analysis of Data. 4. Qualitative Research. Secondary Data and the Data from the Questionnaire were used to do the Analysis. This Exploratory research was done to give the insights about Consumers buying behavior. The factors affecting their purchase of Ready-To-Eat Snacks & Namkeens

 DATA COLLECTION:

The Primary data was collected through questionnaire administered to both Retailers & Consumers. The questionnaire method was selected because it translated the information needed into a set of specific question that the respondents can and will answer. The questionnaire motivates and encourages the respondents to become involved in the interview to co-operate, and to complete the interview.

Another advantage of the questionnaire is that it minimizes the response error. The Secondary Data was collected through Internet, Business journals.

The questionnaire was designed keeping the overall objectives and the information required. The questionnaire given to Retailers was aimed to finding out the present
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purchasing pattern for Ready-To-Eat Snacks & Namkeens. The questionnaire administered to the Consumers was aimed at finding out their preference & factors affecting their purchase decision for Ready-To-Eat Snacks & Namkeens.

 DATA ANALYSIS :

Data Analysis is being done arranging the data in tabular forms. Graphical Representation and using SPSS Software.

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 CONSUMERS BUYING BEHAVIOUR ANALYSIS:
 RETAILERS POINT OF VIEW
1.

Generally preferred as Ready-To-Eat Snacks; Out of the 50 retailers surveyed 26 of them feels that the consumers generally prefer Wafers as the best form of Ready-To-Eat Snacks as they are available in many flavours which gives them a variety to choose. Whereas 15 believe that Namkeens are usually preferred & 9 has the opinion that Fraiams are mostly preferred.

i

most preferred ready-to-eat snacks s
60

0 0 0 2 0 0 2 0 0

Percent most preferred ready-to-eat snacks

50

52

40

30

30

20 18 10 Wafers Namkeens Fraiams

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2. Consumers Preference of brands vis-a-vis their acceptance;

r ,

t t

30

Out of the 50 retailers surveyed 20% of the retailer says that the consumers asks for a

20

21

particular snacks.
15

brand Of this 60%

of 10 of

Count

consumer asks for
10 yes th ey do ask for

consumers

them are brand loyal, whereas 40% of them prefer whatever 42% brand is of but available. asks for
6 4 4
Un branded anyh ing yes, b ut accepts any thin g no accepts anythin g brand ed

0

consumers do initially

Brand preference

they also fall in the category of the 40% of the consumers who asked for brand i.e. they prefer whatever is available. Remaining 38% of the consumers are not worried about brand they just ask for particular product and buy branded if available or anything.

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3. Consumer's preference of pack vis-à-vis quantity of packs generally bought;

r l c I

a b

c

-

30

Out the

of

the

50

retailer generally

surveyed 18 of them says that consumers
22 18

20

prefer the pack of 16gms i.e. of Rs.10/-, whereas 26 of them are of the opinion that pack of 32gms is more

Count

10

IN WHAT NUMBERS
1-2

preferred by the consumers. Only 6 of the retailer feel that the consumers prefer 100gms pack. Almost 88% of the retailers say that consumers

3
0 16 32

4 2
100

3-4 5-6

WHICH SIZE IS PREFERRED

generally buy 1-2 packs, whereas only 10% say that they buy 3-4 packs. Only 2% of the retailers say that they buy 5-6 packs. This clearly depicts that Ready-To-Eat Snacks and Namkeens are generally considered as Time Pass Food and are not generally stocked by the consumers.
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4. Brands generally stored by the consumers;

r

W HICH BRAND STORED
JANTA 10.0% RUFFL ES GARDEN 12.0% 26.0%

Out of 50 retailers surveyed almost 100% of them generally store Ruffles/Lays. But given a specific option 26% of them stores Ruffles, 22% stores Lays, 30% stores Haldirams, 12% stores Garden & 10% stores Janta. Haldirams amongst all brands has upper hand due to its brand name and also because they are available in both categories i.e. Wafers & Namkeens. Amongst the Namkeens Haldirams is the market leader whereas Wafers are concerned Ruffles/Lays captures the major chunk of the market.
HAL DIRAM 30.0% LAYS 22.0%

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5. Consumers preference of Product Categories.

PRODUCTS / CONSUMERS WAFER NAMKEENS FRAIAMS

CHILD 7 2 35

YOUNG 15 39 9

OLD 28 9 6

TOTAL 50 50 50

40 35 30 25 20 15 10 5 0 WAFER 7 2 NAMKEENS 9 9 6 FRAIAMS 15 28 CHILD YOUNG OLD 39 35

Out

of

the

50

Surveyed Retailers 28 of them feels that old age consumers prefer Wafers. 15 of them feel that young age people prefer Wafers, whereas 7 feel that children's Wafers. As Namkeens prefer far as are

concerned 39 of them

says Young prefers Namkeens most, Whereas 9 feels old prefer Namkeens and only 2 feels that children's prefer Namkeens. In case of Fraiams 70% of them agrees that Children's are more interested in Fraiams i.e. Cheese Balls etc., whereas 18% of young & 12% of the old age consumers are interested in eating Fraiams as Ready-To-Eat Snacks & Namkeens.

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 CONSUMERS POINT OF VIEW 1. Consumers Association of Ready-To-Eat Snacks & Namkeens

r

Product Association
30

20

21 18

Frequency

10

11
Std. D ev = . 78 Mea n = 1. 80 N = 50.00 1. 00 1. 50 2. 00 2. 50 3. 00

0

Product Association

Out of 50 consumers surveyed almost 42% of them generally associates Ready-ToEat Snacks & Namkeens with Time Pass. But given a specific option 36% of them associates it with Tasty Food, 22% as Hunger Quencher.

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2. Consumers prefer Ready-To-Eat Snacks & Namkeens during

r

s Generally eats during

Any Time of the day 8.00 / 8.0%

Du ring Movies or wh i

Since Ready-To-Eat Snacks & Namkeens are associated with mostly Time Pass they generally i.e. 36% of time eaten when the consumer are in entertaining mood.

36.00 / 36.0%

Whenever Feel Hung ry 56.00 / 56.0%

Majority of the consumer's i.e. 56 eats it whenever they feel hungry. Mostly Namkeens are more preferred as hunger quencher. Only 8% of the consumers are ready to eat Ready-To-Eat Snacks & Namkeens any time of the day. Fraiams are majorly eaten whenever the consumers are watching movie or TV. Wafers on other hand are eaten any time of the day; no specific time or mood is associated with eating of wafer.

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3. Consumers purchase vis-à-vis their storing habits

r l c I

a b

c

t

30

Out
28

of

50

consumer

surveyed 78% of them do not store Ready-ToEat Snacks & Namkeens. Of which 28 of them buy 1-2 packs, 6 buy 3-4
how often purchased

NO OF CONSUMERS

20

packs 22%

and

5

buy

on

10

1-2 week 3-4 week

regular basis. Remaining generally stores Ready-To-Eat Snacks & Namkeens. Of which 4 buy 1-2 packs, 1 buys 34 packs, 4 buy 5-6 packs

6 4
0 Yes

4 2
No

5

5-6 on regular basis

PRODUCT STORED

and 2 of them buy on regular basis.
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4. Consumer rating of their Preference

PRODUCT/PREFERENCE MOST PREFERENCE GENERALLY PREFERENCE LEAST PREFERENE TOTAL

WAFERS 28 18 4 50

NAMKEENS 23 18 9 50

FRAIAMS 12 30 8 50

Out

of

50 wafers,

surveyed 23 of

NAMKEENS

FRAIAMS

WAFERS

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

4 18

9 18

8

consumers 28 of them prefer them prefer Namkeens

30 28

LEAST PREF GENERALLY PREF MOST PREF

and only 12 of them has the Fraiams far as as the of there option. 2nd the prefers prefer and 30 most As preferred

23 12

preference 18 of them 18

consumer is concerned Wafers, Namkeens

prefers Fraiams. With reference to the consumers least preference only 4 of the 50 surveyed consumers prefer wafers as their last option; whereas 9 of them has Namkeens as their last option and 8 of the has Fraiams as their last option. Fraiams as whole is generally been selected as substitute to Wafers & Namkeens.

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 MARKETING & ADVERTISING STRATEGIES:
 Market Research is been conducted amongst the retailers before launching of any new product under any categories.  Branded products are generally advertised through TV ads, which are supported by POPs & other promotional materials hanging at the retail shops.  Companies like Garden Foods have their distribution vehicles painted with the product name and item names that move around the market, which in a way is publicity for them. They even organize a snack fair once in a year in Bandra Reclamation Club and invites other manufacturers to have their stalls in the fair.  Companies generally provide iron racks to be kept in the retail shops for which the retailers are given a margin of 4% to 5% extra. Companies like Frito-India on regular basis send some marketing tips to their distributors.  SM Foods PEPPY has also launched certain promotions for both its dealers (scratch and win contests) and consumers (Wheels and Wings, a do it yourself toy) to make its brands more popular.  Companies provide incentive schemes to their distributors on achievements of certain targets. Some companies even distribute awards for the highest sales amongst the distributors. Normally local brands & small manufacturers do little advertising through sales vans and POPs. Companies like SM Foods, Frito-India etc. uses Print and Audio-Visual medium for advertising their products.

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N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

Generally the company launches a new product in the market and then starts advertising on media and the POPs and other promotional activities back these ads by the companies.

 FACTS & FIGURES:
 The Growth rate of Fun-Foods Market is expected to grow by 8% whereas market for Potato Chips is expected to grow by 9.3% by the end 2006-2007.  Demand of Potato Chips/ Namkeens is expected to reach 790 thousand Metric Tonnes whereas For Fun-Foods is expected to reach Rs. 50 bn by the end of 2006-2007.  SM Foods has grown from a sales turnover of Rs 5.96 crore in 1993-94 to Rs 29 crore during 1999-2000. This marks a growth of over 350 per cent over a period of five years, a growth rate of 77 per cent each year.  SM Foods has earmarked more money for marketing this year and is spending close to Rs.5 crore on a media blitz.  Uncle Chipps a Delhi based food products company has an annual turnover of Rs600mn.  Garden Foods has a daily sales turnover of around 8-10 thousand-kg.  Britannia Industries Ltd has introduced a new range of traditional Namkeens called Britannia Snax in Mumbai. Targeted at the youth segment, the new range includes seven varieties of traditional Namkeens like `Bikaner ki Bhujia' and `Rajas-thani Alu Bhujia'. The new range is priced between Rs 5 and Rs 20. (SOURCES: Market Indicators & Forecast 2002 edition)

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 CONCLUSION & RECOMMANDATION:
Ready-to-eat snack food industry is quiet a potential market with consumers not being brand loyal there is always a scope for new entrants with new innovative products. Consumers generally like to try some new products emerging in the markets. There are no recognized brands in Banana Chips in India, which is a highly potential market. Products like Popcorns have not yet touched the Indian market i.e. there are no branded popcorn packs, which can be persevered for few days. Small-unorganized local manufacturers capture the majority of the market share in 14-bn snacks food industry. Branded players have attractive packaging to woo the consumers, which in turn increases their prices in comparison with their regional counter-parts. Companies keep on coming up with new schemes like a pack of 100Gm free with 2Kg etc. recently companies have also started given freebies along with the product for e.g. the companies give free Tattoo with the packs to attract Kids. Due to lack of brand loyalty product reach and availability is most important for increasing the market share, so Distribution channel plays a major role. Companies need to encourage their distributors with some incentives or gifts. Companies should provide proper training on marketing and sales to their Distributors as well as Sales Force. Overall ready-to-eat snack food market is estimated at 350,000 ton, of which the organized market for chips is estimated to be 6500 tons valued at Rs2bn. The market for branded chips has been growing at a fast pace of around 20 per cent. Today the companies are entering more into Namkeens category as there are very few players and the Namkeens are of regional tastes.

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 APPENDIX :

(QUESTIONAIRE FOR RETAILERS)

1. Which of these Ready-To-Eat Snacks & Namkeens is most preferred by consumers?  Wafers  Namkeens  Fraiams

2. Which of these do the consumers mostly prefer?  Branded Snacks  Unbranded Snacks  Any of These

3. Does the consumers asks for the particular flavour or they prefer any flavour?  Yes, they do ask for particular flavour.  Yes, they do ask for particular flavour but if not available prefer whichever is available.  No, they accept whichever flavour is available. 4. What is generally preferred by whom?  Wafers preferred by _________________________________________.  Fraiams preferred by _________________________________________.  Namkeens preferred by _________________________________________. 5. Which size of pack do the consumers generally prefer?  16 gms  32 gms  100 gms  500 gms  1kg

6. Which of this brand do you store?  Ruffles  Lays  Haldirams  Garden  Janta

7. What number of packs do the consumers generally buy?  1-2  3-4  5-6
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(QUESTIONAIRE FOR CONSUMERS) 1. What do you prefer to have as Ready-To-Eat Snacks?  Wafers  Namkeens  Fraiams

2. With what do you associate Ready-To-Eat Snacks & Namkeens?  Time Pass  Tasty Food  Hunger Quencher  Just like Other

3. When do you generally have Ready-To-Eat Snacks & Namkeens?  Whenever Feel Hungry.  During Movies or while watching TV.  Any Time of the day. 4. Do you store Ready-To-Eat Snacks & Namkeens?  Yes  No

5. Rate the products from 1-3 among as per your preference (With 1-most preferred 3-least Preferred)?  Wafers  Namkeens  Fraiams

6. Which of this brand do you store?  Ruffles  Lays  Haldirams  Garden  Janta

7. How often do you buy such Ready-To-Eat Snacks & Namkeens?  1-2 a week  3-4 a week  5-6 a week On Regular Basis

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 BIBLIOGRAPHY:
I thank the following people for providing valuable information & guidance  Mr. Rajeev (Marketing Executive, Garden Foods)  Mr. Rajesh Gandhi (Sales Supervisor, SM FOODS)  Mr. Rajesh Shah (Distributor, Frito-Lays)  Local Retailers  Consumer Respondent

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