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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 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 Bhujia18.
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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."19 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. According to media reports, Haldiram's lagged behind competitors in the area of customer service.
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18] Paste of mashed potatoes and gram flour, fried and added with salt and spices.
19] In an article ‘It All Snacks Up'in Brand Equity, Economic Times dated December 11, 2002.
Case Code : MKTG048
Themes: Marketing Mix
Case Length : 10 Pages
Period : 1990-2003
Organization : Haldiram Group
Pub Date : 2003
Teaching Note : Not Available
Countries : India
Industry : Ready to Eat Snack Foods
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