Snacko India Ltd:
Leveraging Trade Promotion For Competitive Advantage
Presented By:
Group 7 & 8
GD Sulthan | Bittu | Meenakshi | Sreejan | Vasundhara | Ankit | Raju | Kumar Abhishek | Shahal
Overview of Market
• Processed Snack Food In India Is Worth $3 Bn
• Branded Snack Food Is About 46%
• Unorganized 3 Million Store Dominated Market (2/3 In
Rural Areas)
• Major Players – Pepsico, ITC, Haldiram, Snacko Etc.
Company’s Profile
Entered Market in 1995
Growth Strategy – Based on Innovation
Acquire local subsidiary to gain 20% market share in
branded snacks
Strategies – Promotion, Product, Packaging, Advertising,
Inorganic Growth
Factory
Modern Retailer’s
Central
CFA Warehouse
Distributor Modern Retailer's
retail Point
Wholesaler
DISTRIBUTION
CHANNEL
Retailers
Consumers
Nature of Consumer
Distributed evenly between organized and unorganized
Per capita consumption was 700 gm vs 7 kg of
worldwide
Low priced and volume are very critical
Customer need new flavor, taste, format, packaging
About Product
Low involvement product
Customer can’t go to next shop if unavailable
Purchase pattern vary from daily to weekly
Wholesalers/ Retailers view about
product
They don’t care until margin is same
Promote products of high margin even if it is of local one
Organized stores tries to maintain branded stock
Retailer need advertising items like banner, poster, standee
Retailers need regular promotion so that they can increase sales
Marketing
Manager
Channel National Sales
Brand Manager Manager Manager
Regional Sales Channel
Manager Development
Manager
Area Manager Merchandising
Manager
Organization
Structure
Sales Officers Merchandising
Officers
Organized Retailing
Licensed Retailers
Hypermart, Supermarket, large retail stores
Annual Growth rate – 25-30%
Good for promotion and advertising strategy
Unorganized Retailing
3 million store, average size of 50 sq. feet
2/3rd of store in rural areas
Stores like – Paan shop, General store, etc
Discussion Questions
Nature of consumer, retail behavior, and relevance of trade
promotion
How to promote the sales of snack product and objective of trade
promotion
Analysis of various given schemes
Consideration/Improvement in promotion for next implementation
Trade promotion impact on the nature of
the product
Snack foods are mostly impulse purchase products
In Indian market, the consumption of snacks increased as per the increase in disposable
income.
The snacks are mostly positioned towards the billing counter, there is no distinguished
seasonality to the buying pattern
Point-of-salepromotion such as window and countertop
displays are important
Displays are successful in moving additional products at regular price by attracting the
attention of hurried customers
The billing waiting time attracted children/ adults to do indulge in instant cart addition.
India’sper capita consumption of snacks was very
less as compared to developed markets
The Indian consumer mentality does not look at snacks as high indulgent product
The craving for a snack drives the consumption pattern
Since the consumption is on a crave basis and not on regular eating pattern it was
less in Indian Market as compared to European or North American market
Market development was necessary for market
growth
Since the market for readymade snacks in India was relatively new, the market
needed to be developed and penetrated simultaneously
With the launch of every new product the market to be catered for needed to
assessed and the taste for the product needed to be developed
Since the distribution strategy is of push model, hence
promotions are important to convert sales at the retail end
The incentive scheme adopted by the manufacturer helped them push more
stock at the retailers end.
Increased stock level at the retailers end created pressure on the trade to
clear inventory, and increased sales to the customer
Merchandising equipment consisting of point-of-purchase
material and product stands to improve the sales at the
interface with customers
Additional shelf space were required to stock up more inventory in push model
The trade was not done on monetary terms for additonal shelf space, however
the manufacturer provided with promotional stands and banners to increase
visibility and sales
Trade promotion is an integral part of their growth
strategy
Inorganic growth and innovation in product for capturing the market needed
promotion to capture eyeballs
New products required marketing communication to
capture eyeballs
Promotion also helped the organization communicate the new product
variants to educate the consumers on the PODs with other snacks
(own/competitor)
Trade promotion schemes
1. Gifts attached with the snacks package
2. Flexibility to distributors to manage the rewards for retailers
3. Extra discount to SR on SKUs
4. Jhatpat Tez Offer, US$3.50 per pack of 40 units
5. Tambola scheme
6. Cramm brand Winner Extravegenza
1. Gifts with snacks package
Included
To make the Cramm brand the focus of TP,
the multiple approach has been adopted.
Gift items so as to not ignore the sales of Cramm,
its formats /variants and other brand formats,
eg., Cremo and Whistle
The transparent stickers reduces need for training on the part of the sales force
Reduces the need to educate retailer
Induces retailer to opt for a item and extra purchase of a variant
Not Included
Lacks the choice of retailer in gift items
Prizes may be considered of low value by the retailer
2. Rewards for retailers managed by
distributors
Included
Distributor gets interested in carrying additional stocks of Cremo
Large pack of Cremo brand is the
focus
Not Included
Possibility of distributor not making a
good choice of gift due to personal
interest of extra margins
Varying gifts needs extra training for the sales force
3. Extra discount to SR on SKUs
Included
Incentivize the sales representative
Not Included
The total amount may not work out to be substantial enough to
make a difference
Could be desirable to offer some household item
The SR might prefer the support of Trade deal to deal with retailers
SR might not push the less popular SKU/Brand
4. Jhatpat Tez Offer, US$3.50 per pack of
40units
Included
The local freedom has been given to the sales force and distributor
to share the cash incentive
Disposal of extra stocks available with the distributor
Not Included
New package may create problem of storage because of already
existing other size of package
New package may cannibalize other size, subsequent reduction in
volume
No incentive to the retailer, retailer is ignorant about the scheme
It may lead to extra stocks with the retailer
5. Tambola scheme
Included
Concentrate on a brand and all sub-brands under it.
Creates excitement like a game
The brand is strong so there is no likelihood of hitting the equity
Not Included
Need training of salesperson
Would require effort on the part of the salesperson to educate the
retailer
May lose interest in the game and brand
6. Cramm brand Winner Extravaganza
Included
Creative idea to attract consumers
It is on an established brand and its variant
Creates buzz
It outlines the task that is to be carried out by the salesperson,
merchandisers, media and sales teams
Not Included
It is not how the retailers gets incentivized for his/her efforts
Requires training of salesperson and merchandisers
The detailed coordination may have some snags in implementation
Key Takeaway
Sales’s force Understanding and Education
Seeding new market
Focus on “Jhatpat” and “Cramm”
Scheme 2 is better for increasing sales
