HALDIRAM'S GROUP - SEEKING THE 'RIGHT'
MARKETING MIX
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continued from : THE ROAD AHEAD
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."[1] The unit planned to launch products such as
flavored ready-to-eat popcorn and a product similar to Leher Kurkure.
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 Leher brand of namkeens, the company made sure that it
attracted the attention of viewers. |
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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 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 business territories.
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 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 .
QUESTIONS FOR DISCUSSION
[1]
In an article 'It All Snacks Up' in Brand Equity, Economic Times dated December 11, 2002.
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