A Project Report on ITC Bingo MBA Marketing

A PROJECT REPORT ON

“TO STUDY MARKET OF ITC’s BINGO ”

SUBMITTED TO SAVITRIBAI PHULE PUNE UNIVERSITY FOR PARTIAL FULFILLMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION-MARKETING (2015-2017)

BY

SAYED MOHAMMED FAISAL SHAUKATALI UNDER THE GUIDANCE OF DR. YOGITA GUPTA

1

SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION ADMINISTRATION AND RESEARCH

Sinhgad Institute of Business Administration and Research, Kondhwa (Bk.), Pune

Institution Approval Letter Summer Internship Program

Mr. Sayed Mohammed Faisal ShaukatAli of batch 2015-2017 is granted permission by the institute to do the Summer Internship Project titled “TO STUDY MARKET OF ITC’s BINGO” BINGO” from 20/5/2016 to 20/7/2016.

DR. YOGITA GUPTA

DR. AVADHOOT D. POL

Project Guide

Director

Place: Date:

2

INSTITUTE CERTIFICATE

This is to certify that the Project Report titled “TO STUDY THE INCOME TAX PLANNING AND E-FILING WITH RESPECT TO INDIVIDUALS ASSESSEES ” which is being submitted herewith for the award of MASTERS OF BUSINESS ADMINISTRATION, Pune is the result of the original research work completed by SAYED MOHAMMED FAIAL SHAUKATALI under my supervision and guidance and to the best of my knowledge and belief the work embodied in this Project Report has not formed earlier the basis for the award of any degree or similar title of this or any other University or examining body.

Dr. YOGITA YOG ITA GUPTA

DR. AVADHOOT ADHO OT D. POL

Place:

(DIRECTOR SIBAR)

Date:

3

DECLARATION

I, the undersigned, hereby declare that the Project Report titled TO STUDY MARKET OF ITC’s BINGO ITC’s  BINGO written and submitted by me to SAVITRIBAI PHULE PUNE UNIVERSITY, in partial fulfillment of the requirement for the award of MASTERS OF BUSINESS ADMINISTRATION is my original work and the conclusions drawn therein are based on the material collected by myself.

Place:

Sayed Mohammed Faisal Shaukatali

Date:

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INTRODUCTION Since its launch period in March, 2007, BINGO as a brand has been through a lots of ups and downs. Both Branding and Sales and Distribution aspects of marketing for BINGO have been explored and matured to a large extent. Though the product itself is considered to be in a growth stage, with a market share of 16% in the branded snacks food category, it has been successful to a large extent in creating the required Brand recall for the category. This project aims to study about ITC Bingo snacks and its competitor Frito-Lays. The  project provides information about ab out the various procedures followed by b y ITC with respect to distribution chain function, and client management. With the fast growing retail industry in India, competition has increased between the major market players. Companies are continually trying to engage and construct innovate ideas to service this market. The project includes a mix of observation, interview and questionnaires with scales. Initially a period of two weeks was dedicated to fieldwork under the guidance of area executives of ITC limited. An effort was made to understand the various servicing  procedure, the typical areas/locality and classes of customers. Regular interaction was done with retailers and distributors about the response and flow of product respectively. Through this it makes easy to understand the process of accessing the competitor’s response in that outlet.

One week was dedicated to collect information of Frito-Lays regarding their marketing strategy, Distribution Network and Other Useful Information from the company officials. This project also includes my observation at retail outlets. I concluded my project with some of my recommendation, questionnaire and additional contribution towards my recommendation.

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INDUSTRY OVERVIEW OVERVIEW OF SNACKS INDUSTRY IN INDIA Snacks are a part of Consumer Convenience/ Packaged Foods segment. Snack is described as a small quantity of food eaten between meals or in place of a meal. Snack food generally comprises bakery products, ready-to-eat mixes, chips, namkeen and other light processed foods. According to the ministry of food processing, the snack food industry is worth Rs 100 billion in value and over 4,00,000 tonnes in terms of volume. Though very large and diverse, the snacks industry is dominated by the unorganized sector. According to an Apeda survey almost 1,000 snack items and 300 types of savouries are sold across India. The branded snacks are sold at least 25% higher than the unbranded products. Savoury snacks have been a part of Indian food habit, since almost ages. Though there is no particular time for snacks, normally they are consumed at teatime. The variety is almost mind-boggling with specialties from all regions, which have gained national acceptance.

The industry has been growing around 10% for the last three years, while the branded segment is growing around 25% per annum to stand at Rs 5,000-Rs 5,500 crore, due to various reasons like Multiplex culture, snacking at home while watching TV, pubs and  bars (where they are served free). AC Nielsen's retail audit shows that the large sales volumes are due to a marked  preference for ethnic foods, regional bias towards indigenous snacks and good value-forvalue -formoney perception. Of course the branded segment is much smaller at Rs 2,200 crore, which is what makes it so attractive to food Companies Com panies that are looking at bigger shares.

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GROWTH RATE OF READY MADE SNACK (POTATO CHIPS/NAMKEENS) CHIPS/NAMKEENS) INDUSTRY YEAR 

POTATO CHIPS/ NAMKEENS GROWTH RATE

1990-91 to 1996-97

5.2

1996-97 to 2001-02

7.9

2001-02 to 2006-07

6.3

2004-05 to 2009-10

6.5

2009-10 to 2014-15

7 Table No. 2.1

As growth slows down and intense competition emerges from regional brands in potato chips, PepsiCo chips, PepsiCo and ITC and ITC are shifting their focus more towards newer and healthier forms of packaged snacks, the market for which is growing at twice the speed. While market leader PepsiCo wants to expand its Kurkure portfolio and add more  premium offerings, ITC plans to launch newer variants including multigrain and regional flavors under its Bingo brand to gain share, laying the pitch for a fresh marketing war  between the US giant and the For ITC, this latest thrust on newer forms of packaged snacks, also called finger snacks, comes after it gained more than 7% market share in 2014 in the category by launching as many as 18 flavors. It expanded manufacturing to five locations from two earlier, widened distributions and undertook a revamp in packaging. ITC's President for FMCG  businesses, Sanjiv Puri,  Puri,  said the company has cracked the formula in finger snacks by introducing innovative formats based on multi grains, pulses and "a distinctly better taste". Bingo has become its umbrella brand for snacks, which has also been extended into newer forms such as 'halwai-wala type hot chips' in the South. A senior industry executive said PepsiCo will extend Kurkure into pricier snacks segment which are currently under development to ensure there is no slippage of market share and 7

growth rate. It's a strategy which the company will adopt even for Lay's potato chips, as in its recent launch of Lay's Maxx range which is priced at Rs 30 per pack. PepsiCo is seeking to create new categories to differentiate itself from the rest. "PepsiCo India pioneered the creation of the organised snacks market in India and we are a clear category leader. As with other categories, when the market reaches a certain size, other  players enter and use low prices to try and gain share. However, we will continue to focus on value share by creating new demand spaces and hence are pursuing a premiumisation strategy," a Pepsi-Co India spokesman said, refusing to reveal further details. While the packaged potato chips market in India is growing at 10%, the growth is 20% in finger snacks. Both markets are valued at Rs 3,000 crore each. However, the competition is much more in chips where domestic players like Haldirams, Balaji Wafers, Prakash Snacks and MTR Foods too are expanding their presence. As per industry estimates, PepsiCo is still far ahead in overall packaged snacks segment with more than a 50% share, compared with ITC's 16%. This is after ITC gained share in finger snacks where it now enjoys a 27% share compared with PepsiCo's more than 46%. In potato chips, PepsiCo has 60% and ITC, 8%. ITC's food business divisional chief executive, C Dar, said while potato chips as a segment has become commoditised, the scope of innovation in finger snacks is much more and hence the ability to move up the value chain. A senior industry executive said defocusing on potato chips will help PepsiCo and ITC overcome the volatility and severe shortage of chips-grade potatoes in India. There is also  price fluctuation in potatoes, which takes a toll on margins. Bingo has now become the fastest growing brand for ITC in the FMCG business with a brand turnover of Rs 1,200 crore. PepsiCo's Lay's and Kurkure are worth more than Rs 1,000 crore each.

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MAJOR PLAYERS In case of chips manufacturing, PepsiCo India is the market leader in the country with 45% market share followed by Haldiram’s (27%). The ITC, which has made a late entry

in to chips processing market, has managed to get a market share of 16% with its potato chip

"Bingo".

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COMPANY OVERVIEW ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 18 billion and a turnover of over US $ 5.1 Billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies  by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC also ranks among India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products.

While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its  businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new

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 businesses are expected to garner a significant share of these emerging high-growth markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach.

ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing. ITC's production facilities and hotels have won numerous national and international awards for quality,  productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek corporate governance rating. ITC employs over 24,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3, 83,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder."

ITC Ltd is one of India's premier private sector companies with diversified presence in  businesses such as Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Pa ckaging, AgriAgri Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Greeting Cards, Safety Matches and other FMCG products. Presently, ITC has a market capitalisation of nearly US $ 15 billion and a turnover of over US $ 4.75 billion. It employs over 21,000 people at more than 60 locations across India. ITC has been rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable

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Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by b y Business Today.

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. ITC had a humble beginning and in the initial days it used to operate from a leased office on Radha Bazar Lane, Kolkata. On its 16th birthday on August 24, 1926, ITC purchased the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata. Two years later companies headquarter building; 'Virginia House' came on that plot. Progressively the ownership of the company Indianised and the name of the Company were changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of  businesses, the full stops in the Company's name were removed effective September 18, 2001 and the Company was rechristened as 'ITC Limited'.

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ITC IS INVOLVED IN FOLLOWING BUSINESSES: CIGARETTES : ITC is the market leader in cigarettes in India and has a wide range of

 popular brands such as Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut,Scissors, Capstan, Berkeley, Bristol and Flake in its portfolio.

co untry's largest convertor of PACKAGING: ITC's Packaging & Printing Business is the country's  paperboard into packaging. It was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It offers a variety of value-added packaging solutions for the food & beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries.

HOTELS: ITC entered the hotels business in 1975 with the acquisition of a hotel in

Chennai, which was rechristened Hotel Chola. Today ITC-Welcomgroup with over 70 hotels is one of the foremost hotel chains in India.

PAPERBOARDS: In 1979, ITC entered the Paperboards business by promoting ITC

Bhadrachalam Paperboards. ITC's Paperboards business has a manufacturing capacity of over 360,000 tonnes per year and is a market leader in India across all carton-consuming segments.

GREETING, GIFTING & STATIONERY : ITC's stationery brands "Paper Kraft" &

"Classmate" are widely distributed brands across India. The Paperkraft designer stationery range consists of notepads & multi subject notebooks in hard, soft covers & multiple binding formats including spirals, wiros etc. ITC's Greeting & Gifting products include Expressions range of greeting cards and gifting products.

SAFETY MATCHES : ITC's brands of safety matches include iKno, Mangaldeep,

VaxLit, Delite and Aim. The Aim is the largest selling brand of Safety Matches in India. ITC also exports premium brands to markets such as Europe, Africa A frica and the USA. 13

AGGARBATTIS: ITC has launched Mangaldeep brand of Aggarbattis with a wide

range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Tarangini, Anushri, Ananth and Mogra. Mangaldeep is also being exported to USA, UAE, Bahrain, Nepal, Singapore, Malaysia, Oman and South Africa.

LIFESTYLE RETAILING : ITC entered the Lifestyle Retailing business with the Wills

Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). In 2002, ITC entered into the popular segment with its men's wear brand, John Players. In 2005, ITC introduced Essenza Di Wills, an exclusive line of prestige fragrance products.

FOOD: ITC made its entry into the branded & packaged Foods business in August 2001

with the launch of the "Kitchens of India" brand. In 2002 it expanded into Confectionery, Staples and Snack Foods segments. ITC's brand in Food category includes: Kitchens of India, Aashirvaad, Sunfeast, Mint-O, Candyman, and Bingo!

AGRI EXPORTS : ITC's International Business Division (IBD) is the country's second

largest exporter of agri-products. ITC exports Feed Ingredients (Soyameal), Food grains (Rice, Wheat, and Pulses), Coffee & Spices, Edible Nuts, Marine Products, and Processed Fruits.

E-CHOUPAL: The e-Choupal model of ITC has been very effective in tackling the

challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries.

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BRANDS OF ITC:

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AWARDS ITC constantly endeavors to benchmark its products, services and processes to global standards. The Company's pursuit of excellence has earned it national and international honors. ITC is one of the eight Indian companies to figure in Forbes A-List for 2004, featuring 400 of "the world's best big companies". Forbes has also named ITC among Asia's'Fab 50' and the World's Most Reputable Companies.

ITC has several firsts to its credit: ITC is the first from India and among the first 10 companies in the world to publish its Sustainability Report in compliance (at the highest A+ level) with the latest guidelines of the Netherlands-based Global Reporting Initiative (GRI), a UN-backed, multistakeholder international initiative to develop and disseminate globally applicable Sustainability Reporting Guidelines.

ITC is the first Indian company and the second in the world to win the prestigious Development Gateway Award . It won the $100,000 Award for the year 2005 for its

trailblazing ITC e-Choupal initiative which has achieved the scale of a movement in rural India. The Development Gateway Award recognizes ITC's e-Choupal as the most exemplary contribution in the field of Information and Communication Technologies for development during the last 10 years. ITC e-Choupal won the Award for the importance of its contribution to development priorities like poverty reduction, its scale and replicability, sustainability and transparency. ITC has won the inaugural 'World Business Award' , the worldwide business award recognizing companies who have made significant efforts to create sustainable livelihood opportunities and enduring wealth in developing countries. The award has been instituted  jointly by the United Nations Development Programme, International Chamber of Commerce and the HRH Prince of Wales International Business Leaders Forum .ITC is the first Corporate to receive the Annual FICCI Outstanding Vision Corporate Triple Impact Award in 2007 for its invaluable contribution capital for the nation. ITC

has won the Golden Peacock Peaco ck Awards for 'Corporate Social Responsibility (Asia)' in 2007, the Award for ‘CSR in Emerging 16

Economies 2005’ and ‘Excellence in Corporate Governance' in the same year. These

Awards have been instituted by the Institute of Directors, New Delhi, in association with the World Council for Corporate Governance and Centre for Corporate Governance. The Company's Green Leaf Threshing plants at Chirala and Anaparti in Andhra Pradesh are the first units of their kind in the world to get ISO 14001-environment management systems certification. ITC's cigarette factory in Kolkata is the first such unit in India to get ISO 9000 quality certification and the first among cigarette factories in the world to  be awarded the ISO 14001 certification.

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ABOUT BINGO

The Bingo brand of chips was launched by ITC on 14th March 2007 with an aim to capture at least 25 percent market share of the Rs 2000 crore branded snack market within five yrs. The launch is symbolic of ITC Foods' distinct approach of introducing innovative and differentiated products in a largely undifferentiated market place. Bingo’s

launch was strategically timed around the World Cup. The idea was to get the consumer to take that first bite. This was an extremely ambitious target according to observers as the market was dominated by the Frito Lay group (owned by Pepsi Co) with a slew of brands like Lays, Kurkure and Uncle Chipps holding 50 per cent of the market share. The other was the Haldiram group with 25 percent of the market share. Bingo’s portfolio includes an array of products in both Potato Chips & Finger Snacks segment. Bingo! is positioned as a youthful and innovative snack, offering the consumers a choice of flavours that are fast  becoming popular. Bingo used combination of leveraging synergies, building on consumer insights and high decibel advertising can win the game. The company leveraged its existing distribution network and relationship established with farmers. Its earlier foray into categories like atta and biscuits had already given it access to the supply chain.

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BEFORE THE LAUNCH RESEARCH:

After making the decision to launch Bingo it started by sending a crossfunctional team of eight individuals were sent across the country to research the snacking habits of the Indian consumer. After travelling to 14 cities and speaking to more than 1,000 people, the team came back with an insight that Indian consumers were looking for novelty and excitement in existing snacks. The team found that while vada pavs and samosas still sell vada pav with cheese and  paneer-filled samosas, or for that matter, tomato-flavored khakra were the ones that excited the Indian consumer. Based on this information, the company decided to look at chips with innovative flavors. Taste: For the recipes, the company went to the chefs in its hotels. The chefs came up

with 16 flavors with innovative twists like bindaas masti chaas, chatkila nimbu achar and tandoori paneer tikka-flavoured potato chips, chilli and tomato-flavored mad angles  —  inspired by khakras  —   and other snacks. The organized snacks category is subdivided into the Traditional segment (Bhujia,Chana etc) dominated by Haldiram. The second category is the Western segment (potato chips,cheese balls,puffs etc) and the Finger snacks segment which is an adaptation of traditional snacks to the western format. The latter two categories are dominated by the Frito Lay group. ITC has launched an aggressive marketing campaign to gain entry into and capture a sizeable market share in the extremely competitive world of snack foods. Bingo’s success in the market is backed by ITC’s strong distribution network, which

allows it to stock its products in shops that previously did not sell snack food. Additionally, ITC Foods provides shopkeepers with plastic molded shelves that allow local vendors a convenient way to stock their product, and the company benefits by increased visibility for its brand. The packaging is very attractive with dominant variant color, crimp border colors and a  pictorial view of the flavor. This property of flavor depiction is very informative for consumers and a layman can also associate with it. Bingo has a unique musical sound that is loved by everyone. It is one of the properties that are remembered by everyone and it is used to recall the brand by every age group. 19

GREY AREA OF BINGO



ITC has a diversified business portfolio where it provides various products. ITC tobacco distribution network which has reach across a country with its 2 million outlets. The ITC has cigarette brand are available at almost all the pan shop across the country. So the company should have to improve the supply chain so that it can provide bingo at every place in different packaging.



Brand awareness for Bingo is less in comparison to lays which reduces the sale of  bingo. Selling of lays is higher because it is a preferred brand and because of  perception of people that Lays is a brand but not bingo. The company has to strengthen it availability of product by providing the product at small scale and large scale.



The advertisement was not so good which capture the market. A lot of reaction to the Bingo advertisement has been very negative. The advertisements are sometime classified as irritatingly humorous and some consumer does not like the adverts. Though the objective of the advertisement is to create a immediate brand recognition for an impulse buy product, the negative response of the advertisement could also shun potential customer.

MAIN COMPETITORS:



FRITO-LAY



LAYS



KURKURE



UNCLE CHIPPS



CHEETOS



HALDIRAM



REGIONAL PLAYERS LIKE BALAJI

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PRODUCT PORTFOLIO:

SKU NAME

VARIETY

MRP

GRAMMAG E

PREMIUM SALTED

5

17.5 GM

INTERNATIONAL CREAM ONION 10

35 GM

MASALA REMIX

20

55 GM

RED CHILLI BIJLI

30

89 GM

ACHAARI MASTI

5

18 GM

CHAAT MASTI

10

45 GM

MAD MASALA MADNESS

20

90 GM

TOMATO MADNESS

30

140 GM

TOMATO TANGLES

5

18 GM

SALTED TANGLES

10

40 GM

MASALA TANGLES

20

90 GM

MASALA TADKA

5

27 GM

10

60 GM

BINGO YUMMITOS

JUICY TOMATO KETCHUP FLAT CUT ( ONLY AVAILABLE IN RS.10) (SALT SPRINKLE & CHILLI SPRINKLE)

BINGO ANGLES

BINGO TANGLES

BINGO MEDHE

TEDHE ACHAARI MASTI AVAILABLE IN RS. 10) Table No.2.2

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(

ONLY

BRAND IDENTITY : A brand which is for the whole country by providing the customers with tastes (flavors) from all around India. Bingo identifies itself as a brand which is youthful, fun and colorful. The unique shapes in which it comes, which makes it easily recognizable amongst the consumers.

WHAT’S IN THE NAME BINGO! 22

SWOT ANALYSIS FOR BINGO STRENGTH 

Large Distribution network



Abundant availability and easy access to raw material



Vast domestic market



Urbanisation.

WEAKNESS Lack of adequate quality control & testing methods when compared top 

international brands like Lays or Pringles 

Low availability of adequate infrastructural facilities and technology as it is a new entrant in this segment



High requirement of working capital.

OPPORTUNITY

23



Expansion of current markets.



Rising income levels and changing consumption patterns.



Favorable demographic profile and changing lifestyles.



Integration of development in contemporary technologies offers vast scope for rapid improvement and progress.

THREAT Competition between national and international players. 



Competition from unbranded players.



Affordability and cultural preferences of fresh food especially unbranded ones.



High inventory carrying cost.



High taxation.



High packaging cost.

BINGO DISTRIBUTION CENTRES OF ITC IN PUNE –  PUNE –  TOTAL  TOTAL NO. OF OUTLETS-7500 24

OBSERVATION AT WD POINT UNIQUE SALES IN KHADKI PUNE WHOLESALE DEALER OPERATIONS

ITC has various distributors as per area/regions who follow the chain of transferring the  products to their clients. These T hese distributors are independent proprietors/ partners who are the mediators between the company and the customer. Apart from the basic relation of a mediator, the distributor plays a very important role as it passes consistent raw information as to which product is performing in the market. Following are the important functions followed by distributors: ORDER TAKING PROCESS

The order taking process starts from the customer point from where a Purchase Order (P.O.) is sent directly to the distributor of ITC via salesman. Further, the P.O. is manually transferred into an Order Booking Report by the accounts head, further it's classified as  per the availability of the products and then Load Slip is prepared. The Load slip is send to the stores head that dispatches the products as a s per specification and order.

DELIVERY PROCESS

The Delivery process starts after the goods are been loaded in trucks and are ready to move towards clients' stores. One copy of received P.O. is taken along with original and duplicate copies for reference. At the clients store the foods need to be arranged as per the P.O., which is inspected by an official with the help of the Good Inspection Note Further after the inspection the official sings on the duplicate copy and provides a Goods Receipt Note which is filed for reference and proof.

WAREHOUSING & INVENTORY MANAGEMENT:

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Warehousing and inventory management is the prime duty of a distributor. The distributor has to maintain all the inventories monthly; he does this by following a system of Estimated Consumer Demand. Estimating average three months sale of various  products individually and thin keeping additional stock of 7 days da ys per product develop this  process. Warehousing Warehou sing is done very systematically as per the direction mentioned on the  product box i.e.: A) STACKING

Stacking includes the maximum capacity at which the product could be kept on one another i.e. a limited amount of boxes/cases only can be kept vertically over another. B) HANDLING

Handling includes the ease of using the product. Example: Glass products have to be used very carefully to avoid damages. Whereas non-breakable products could be used with more ease as chance of damages are low. C) FLOORING

Flooring includes the type storage required for particular products. Example: products like atta, salt etc require a wooden or carpeted flooring to avoid it catching catch ing moisture. D) STORING

Storing includes the product placement in warehouse. Example: if products like atta, salt,  biscuits etc are kept k ept next n ext to products like agarbatti, soaps, perfumes etc it may catch the fragrance of those products leading to unhealthy outcomes. Care is taken to control Pest and other mishaps in the warehouse and proper ventilation and hygiene system is desire for better storage.

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ITC & Frito lays follow the same distribution channel. The distribution channel starts from the factory from where the goods are transferred to the wholesale dealer with the approval of Clearing and Forwarding Agent transferred to the wholesale dealer with the approval of clearing and Forwarding Agent. Further the goods are supplied to the Key Accounts Distribution Center from where they are redistributed to the Outlets. The flow of this distribution channel is a two way process as the demand for the products arises from different retail outlets, which are ordered to the Distribution Center and further coming up the flow the demand reaches the factory. In ITC DS use VAJRA Machine for booking the order and show the products adds upcoming products, price, margin, size in this machine. VAJRA look like a big mobile  phone under this all information relate to products are in the machine. Order which is taken by the machine sinks to the data to branch office. WD system operator makes the Invoice and sends goods to market next day. ITC give the K 4(Delivery cost) to the WD and also give the salary of sales man and salary of supervisor distribution cost per vehicle and give the supply cost of e-choupal. In ITC Branch Manager Quarterly, Area Manager monthly, Area Executive weekly visited in the market communicates with customer directly. They interact with customer and if customers have any problem related to goods and services which are provided by company they try to solve. They check stock is properly in the market or not displays and ads are properly done or not. ITC use software that is called SIFY. All the bills and detail information product wise, variant wise summarize sales reports are make in the help of this software. Format of sales report code of them goods are in this.ITC give 3% margin to his distributors and  bear vehicle cost 380 Rs per vehicle. ITC give training to his sales man for selling the goods in the market and give the training how to use sales tools in the market how h ow to communicate with customer.

ABOUT FRITO LAYS : 27

Frito-Lay is the world's largest manufacturer and distributor of snack foods and is a wholly owned subsidiary of PepsiCo. Since its entry in India in 1989, PepsiCo’s snack

foods division Frito Lay India (FLI) has become the clear leader in branded salty snack e, Uncle Chipps Cheetos and Lehar segment with popular brands like lay’s, Kurkur e,  Namkeens. Frito Lay India produces its snacks at its state-of-the-art plants in Channo (Punjab), Pune (Maharashtra) and Sankrail (West Bengal). The company operates over 40 distribution centers that serve more than 2,500 active stockists, reaching approximately 1 million retail outlets that in turn make the product available at an arm’s length. Last year in October 2009 Frito Lay India launched India’s first of its kind large scale ten month long

consumer engagement program Give Us Your Delicious Flavor (GUYDF). Frito-Lay India Ltd. produces India's largest snack food manufacturer’s brands, including Ruffles, Hostess, Cheetos and Uncle Chips. Frito Lay's story is an example of how American recipes were adjusted to satisfy local tastes. Kurkure is fully developed in India, has become the torch bearer of fun and lovable human quirks. It developed an even stronger identity through celebrity associations with Juhi Chawla [2003] and Kareena Kapoor [2008], well-known actors in Indian Cinema, while Lay’s potato chips are endorsed by Bollywood star Saif Ali Khan.

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WINNING FLAVOUR Lay’s, the world and India’s No 1 potato chips brand from Frito-Lay India, is all set to

 provide some new lip smacking tastes to its consumers. consu mers. The four short listed flavors from a whopping 1.3 million ideas came from four winning consumers, each of whom gets Rs 5 lakh for their dialogical flavor ideas. Cheesy Mexicana, Tangy Twist, Mastana Mango and Hip Hop Honey & Chilly from a three month long Give Us Your Delicious Flavor (GUYDF) campaign.. The four flavors will be sold in the market across India for the next two months with the theme bachega sirf tastiest (survival of the tastiest). The flavor that elicits the maximum consumer votes will not only continue to stay in the market as the mega winner, but its ideator would be awarded a grand prize of Rs 50 lakh and 1% of sales revenue.

SWOT ANALYSIS FOR LAYS STRENGTH 

Strong well-known Brand



Large market Positive Share



Diverse product portfolio



Concentrating on expansion in emerging market



Product innovation

WEAKNESS 

Heavy Relaince on Distribution Channel (Retail Intermediaries)

OPPORTUNITIES 

Meeting changing customer preferences



Health and nutrition space



Increased focused on ethnic foods and local tastes

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

Sustainable practices

THREATS 

Increased Competition from private label



Increased input cost ( spices, Potatoes, corn)

SKU NAME

MRP

PRODUCT PORTFOLIO : 30

GRAMMAGE

5 10 20 35 65 5 10 20 35 65 5 10 20

15 GM 30 GM 52 GM 95 GM 177 GM 15 GM 25 GM 52 GM 95 GM 177 GM 15 GM 25 GM 52 GM

35 5 10 20 35 5 10 20 30 50

95 GM 15 GM 30 GM 52 GM 95 GM 15 GM 26 GM 52 GM 58 GM 92 GM

WEST INDIES HOT N SWEET CHILLI

10

30 GM

CHEESE BALLS

10

30 GM

UNCLE CHIPS SPICY TREAT

20

60 GM

AMERICAN STYLE CREAM AND ONION

INDIAN MAGIC MASALA

TOMATO TANGO

CLASSIC SALTED

SPANISH TOMATO TANGO MAXX MACHO CHILLI MAXX SIZZLING BAEBEQUE MAXX HOT & SOUR PUNCH

Table No. 2.3

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OBJECTIVE



To do comparative study of Bingo and Lays by analysing their Prices to Retailers and Distribution Process.





To find out the most demanded variant of Bingo in the market and ranking of Bingo with Lays in terms of offers and quality of service, given to the retailers.

To understand Challenges and gather suggestions from the retailers through which the overall performance of Bingo can be improved

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RESEARCH METHODOLOGY



Data sources

:

Primary and Secondary.



Data approaches

:

Questionnaire.



Sample size

:

80 Retailers



Sample procedure

:

Convenience sampling.



Research Design

:

Descriptive.

is simply the framework or plan for a study, RESEARCH DESIGN: Research design is used guide in collecting and analyzing data. FOR THE STUDY: for conducting that research Descriptive research design is selected

DESCRIPTIVE RESEARCH DESIGN: Descriptive research   is also called Statistical Research. The main goal of this type of

research is to describe the data and characteristics about what is being studied. The idea  behind this type of research is to study frequencies, averages, and other statistical calculations. Although this research is highly accurate, it does not gather the causes  behind a situation. Descriptive research is mainly done when wh en a researcher wants to gain a  better understanding of a topic. That is, analysis of the past as opposed to the future. Descriptive research is the exploration of the existing certain phenomena. The details of the facts won’t be known. The existing phenomena’s facts are not known to the persons.

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

Sampling design:



Sample Unit: o



Retailers

Sample size: o

The sample size of the report is 80 in numbers.

DATA COLLECTION METHOD: Primary data:

The primary data are those which are collected afresh and for the first time, and thus happened to be original in character. There are several methods of collecting primary data  particularly in surveys. For the study: Questionnaire method is used for collecting the data while conducting the

research. Secondary data:

The secondary data are those which have already been collected by someone and which have already been passed through the statistical process. Secondary data may either be  published data or un- published data. For the study: Internet is used for collecting the data while conducting the research.

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DATA ANALYSIS AND INTERPRETATION

Price of SKU ( Rs.)

PTR  Bingo

Lays

5 10 20 30 35 50 65

4.56 9.12 18.31 27.33 NA NA NA

4.55 9.09 18.18 27.27 31.82 45.45 59.09

Table No. 5.1

In below chart X-axis shows the various prices of packets available in market and Y-axis shows the respective rates at which retailers buys from company. 5.1 Price to Retailer

Fig.5.1 Interpretation:

As per above Bar chart if we compare the Prices to Retailers, which means the rates at which they purchase goods from company, both the company have minute difference in PTR. But it also denotes that there is an absence of SKU above Rs 30 in Bingo variants so it has good opportunity to launch its products in different prices to compete with competitors.

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5.2 Wholesale dealers Margin Comparison between Bingo and Lays

 Normally the below graph shows the margins which they got from company. WD Margin Bingo 5.50%

Lays 5.50%

6.00% 5.00% 4.00% 3.00% Series1 2.00% 1.00% 0.00% Bingo

Lays WD Margin

Table No.5.2

Interpretation:

The above graph indicates there is no difference between margins which wholesalers got from company. The above data collected from the authorized wholesale dealers of company by asking them questions about margin.

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5.3 Do you think the Bingo and Lays orders delivered to you on time?

This question asked to retailers to know about Bingo Bin go and Lays delivery after order . Respondents Bingo 0 44 36 0

Timely Delivery Strongly Agree Agree Disagree Strongly Disagree

Lays 10 67 3 0

Table No. 5.3

120 100 80 60

Respondents Lays Respondents Bingo

40 20 0 Strongly Agree

Agree

Disagree

Strongly Disagree

Fig. 5.3

Interpretation: If we compare the above bar chart we can interpret that the most of retailers are agreed towards the timely delivery of Lays as compare to Bingo. This means that Bingo needs to improve its delivery system in order to match demand and supply in market. Even as a  bar chart indicates out of 80 retailers 44 retailers are agree and 36 retailers are disagreeing.

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5.4 Please assign a value from 1 to 5 for service given by Bingo and Lays?

In this question generally indicates after sales service given by delivery person in terms of product setting into racks, payment received from retailers etc. In case of rating value ‘1’ denotes poor and ‘5’ denotes excellent. Ratings 1 2 3 4 5

Poor

Excellent

Bingo 1 0 28 50 1

Lays 0 0 0 30 50

Table No. 5.4 90 80 70 60 50 40

Lays

30

Bingo

20 10 0 0

0

0

0

Poor

0 Excellent

Fig.5.4 Interpretation:

If we compare a service provided by both the brand, Lays is having a upper hand over Bingo. So we can say that, Bingo has very good potential to increase its service quality and distribution network to satisfy and retain retailers as well as consumers for long

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 period. By providing proper training to delivery people may help Bingo to increase its service standards. 5.5 Please mark 1 to 5 for Bingo and Lays for their overall Distribution Process.

The overall distribution process includes from order by salesman to the end consumers. In case of rating value ‘1’ denotes poor poo r and ‘5’ denotes excellent.

Poor

Excellent

Ratings

Bingo

Lays

1

0

0

2

2

0

3

50

5

4

26

47

5

2

28

Table No.5.5

60 50 40 30

Bingo Lays

20 10 0 0

0

0

0

Poor

0 Excellent

Fig.5.5 Interpretation:

As the Bar chart shows many Retailers have given highest ratings to Distribution process of the Lays as compare to the Bingo. It is an good opportunity for Bingo to focus on distribution network to fulfill retailers and consumers needs.

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 Now the following questions qu estions asked to retailers to know the various challenges they faced and how to overcome it by taking their suggestions to improve Bingo performance. 5.6 Which are the trade promotional offers you received from Bingo and Lays? Offers Discount in Bill Money back Free Packets Gift / Voucher  None

Bingo 25 2 50 0 3

Lays 70 0 0 0 10

Table No. 5.6 80 70 60 50 Bingo

40

Lays

30 20 10 0 Discount in Bill

Money back

Free Packets

Gift / Voucher

None

Fig. 5.6

Interpretation:

If we compare the various promotional offers provided by Bingo and Lays, now as per the Bar chart Lays only Provide discounts into the bills whereas Bingo Provide free  packets of Product and discount as well, so Bingo has good opportunity to focus on other  promotional activities to attract retailers. retailers.

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5.7 What is your expectation in terms of bingo delivery?

Duration of Delivery

Respondent

Same Day

10

One Day

45

Two Days

20

More than two Days

5

Table No. 5.7

DELIVERY DURATION DURATION Same Day

One D ay

Two Days

6%

More than two Days

13%

25%

56%

Fig.5.7 Interpretation:

The present delivery period for Bingo and Lays are three days and one day respectively. If we see above pie chart 56 % of retailers feels that Bingo should be delivered in one day after order. Prompt delivery is very important in distribution process so they should focus on their logistic operations to match demand and supply.

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5.8 What are the challenges you face to sale ITC Bingo? Challeges Quantity of Product Packaging of Product Taste of Product Brand Loyalty about other Products Unavailability of Rack/Hanger Delay in Delivery  None Others

Responses 7 6 17 46 31 59 4 0

Table No. 5.8 70 60 50 40 30 20 10 Responses

0

Fig. 5.8 Interpretation:

As we can see the various challenges faced to sell a Bingo by retailers showed in bar chart ,the major challenges include Delay in Delivery during given period , the brand loyalty of other competitors in the market and unavailability of racks to store products. So to overcome it they should remodify the existing delivery route with increase in number of high speed transportation facility.

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5.9 Which is the most selling Variant of Bingo at your outlet? Variants Yumittos ( Chips) Mad angles Tangles Tedhe Medhe Flat Cut chips.

Responses 25 56 9 42 10

Table No. 5.9 60 50 40 30 Responses 20 10 0 Yumittos ( Chips)

Mad angles

Tangles

Tedhe Medhe

Flat Cut chips.

Fig. 5.9

Interpretation :

These are the major five variants of Bingo available into market but as per the retailers  preference Mad Angle and Tedhe Medhe are the popular and most selling variants. It is clear that Bingo’s Mad Angles dominates the market for Bingo so ITC has a greater

 potential to increase their focus on such variants by knowing the customer needs to increase market share.

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5.10 Which criteria would you recommend for bingo to beat other competitors? Criteria Focus on Quality / Taste

Responses 27

Focus on Packaging / Grammage Focus on Margin and Schemes Focus on distribution More Promotion / Advertisements Other

28 46 41 12 0

Table No. 5.10

Other More Promotion / Advertisements Focus on distribution Responses

Focus on Margin and Schemes Focus on Packaging / Grammage Focus on Quality / Taste 0

10

20

30

40

50

Fig.No.5.10 Interpretation:

There are different criteria to beat competitors in market so as per the retailers view bingo should focus on providing schemes to retailers as per their consumption and distribution channels in order to increase the productivity.

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CONCLUSION:



Both the company Bingo and Lays have minute difference in PTR. But it also denotes that there is an absence of SKU above Rs 30 in Bingo variants so it has good opportunity to launch its products in different prices to compete with competitors.



There is no difference between margins given to wholesalers from Bingo and Lays.



The most of retailers are agreed towards the timely delivery of Lays as compare to Bingo. This means that Bingo needs to improve its delivery system in order to match demand and supply in market.



If we compare a service provided by both the brand, Lays is having an upper hand over Bingo. So we can say that, Bingo has very good potential to increase its service quality and distribution network to satisfy and retain retailers as well as consumers for long period.



Many Retailers have given highest ratings to Distribution process of the Lays as compare to the Bingo. It is a good opportunity for Bingo to focus on distribution network to fulfill retailers and consumers needs.



Promotional offers provided by Bingo and Lays, Lays only Provide discounts into the bills whereas Bingo Provide free packets of Product and discount as well,

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so Bingo has good opportunity to focus focus on other promotional activities to attract attract retailers.



The present delivery period for Bingo and Lays are three days and one day respectively. Delivery is very important in distribution process so they should focus on their logistic operations to match demand and supply.



The major challenges faced by retailers are Delay in Delivery during given  period, the brand loyalty of other competitors in the market and unavailability of racks to store products. So to overcome it they should remodify the existing delivery route with increase in number of high speed transportation facility.



These are the major five variants of Bingo available into market but as per the retailers preference Mad Angle and Tedhe Medhe are the popular and most selling variants. It is clear that Bingo’s Mad Angles dominates the market for Bingo so

ITC has a greater potential to increase their focus on such variants by knowing the customer needs to increase market share.



There are different criteria criteria to beat competitors in market so as per the retailers view Bingo should focus on margin by providing schemes to retailers as per their consumption and distribution channels in order to increase the productivity.

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LEARNINGS



How to establish long term relationship with Retailers as well as customers by creating awareness and fulfilling three needs.



How to approach and convince retailers to increase their order quantity and distribution in order to optimize sales into market.



Daily and monthly report generation through ERP system at distribution points to fix or to know targets into market.



How the ITC and other competitors are promoting their products through retailers to capture market share and to increase consumer awareness into the market.



Gain knowledge about the various marketing (both ATL & BTL) activities, the way in which they alter and affect the consumers mind.



A survey helps me to find out what kind of product do they look and what the range they prefer is. It also included many variables like brand loyalty. Quality, distribution process etc.



There will always be conflict between channel partners, you need to set up  process and slowly work towards them becoming the norms so that a certain amount of stability and predictability builds into the system.

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CONTRIBUTION :  Number of Bingo Slab sold in three months: Bingo Slab Details ( scheme ) Total Rs.3600 Rs.8000  No. of Month Slab Slab Slab April 8 1 9 May 20 2 22 June 31 4 35 Below chart indicates, no. of bingo slab, Rs.3600 slab and Rs.8000 slab schemes sold over the period of time as well as the second chart shows the monthly increased Bingo sale.

Table No.7.1 40 35 Bingo Slab Details ( scheme ) Rs.3600

30 25

Bingo Slab Details ( scheme ) Rs.8000 Slab

20 15

Bingo Slab Details ( scheme ) Total No. of  Slab

10 5 0 April

May

June

Fig. 7.1

48

49

RECOMMENDATION 

Increasing the efficiency of distribution system. Ensuring every shop in the area must have ITC’s product.



Analyzing and identifying major competitors. Keeping a tab t ab on their strengths and weakness and accordingly preparing own strategy.



Increasing awareness for ITC products among the consumers and retailers.



Visibility of Products in Shops.



Appointing knowledgeable salesmen who can market products to retailers effectively.



Tie up with regional/local newspapers running competitions at the time of festive season.



There is vast distribution gap between ITC Bingo snacks and Frito-Lays which has to be filled up in order to increase the sales for that ITC should consider: (a)Width of Distribution: total number of outlets covered should be increase in order to bridge the distribution gap. For that ITC should (b) Increase the number of DS, Prompt Delivery of Products (c) Ready Stock: there are many areas around the city where supply through through loading auto is not possible for that ready-stock should be made available



We can increase the total margin/Scheme given to retailers.

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LIMITATIONS : 

Area of operation I have conducted survey only in Pune’s Selected area (Khadki,

Bopodi, Pashan, Aundh, Bavdhan, Baner, Balewadi) thereby ignoring other major  parts of India which is also a market for both Lays and Bingo. 

Time Limitation - Time was the major constraint for this research work as we had to complete our project in two months.



Sample size - I surveyed 80 retailers which is very less in ratio to total retailers for Lays and Bingo.



Sample selection method - I selected Top Retailers & asked them to fill my questionnaire so there were few respondents who were not in category of having Lays or Bingo.



Respondent’s error - some respondents were unable to answer because of

unwillingness as well as inability.

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BIBLIOGRAPHY 

“Malhotra, N.K. N.K. (2011)”,

Review of marketing research, U.K., Emerland group

 publishing limited, Vol. 8 

http://www.itcportal.com/businesses/index.aspx



http://www.reviews42.com/compare/?product=bingo-mad-angles&product=lays baked



http://www.business-standard.com/india/news/itc-foods-not-sostraight/453435/



http://www.fritolay.com/our-snacks/lays.html



http://www.marketlineinfo.com/

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