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    Snacko India LTD

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    Sagita Simanjuntak
    Snacko's sales growth has been flat at 2% compared to the industry average of 24%. Its market share has decreased from 10% to 8%. To address this, Snacko should focus on the large unorganized rural retail market by launching potato chips. An integrated sales promotion strategy using push and pull tactics can boost sales and regain market share. This involves trade promotions to incentivize rural retailers and consumer promotions like contests to attract customers.

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    Snacko India LTD

    Uploaded by

    Sagita Simanjuntak
    486 views17 pages
    Snacko's sales growth has been flat at 2% compared to the industry average of 24%. Its market share has decreased from 10% to 8%. To address this, Snacko should focus on the large unorganized rural retail market by launching potato chips. An integrated sales promotion strategy using push and pull tactics can boost sales and regain market share. This involves trade promotions to incentivize rural retailers and consumer promotions like contests to attract customers.

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    Snacko India Ltd

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    Snacko's sales growth has been flat at 2% compared to the industry average of 24%. Its market share has decreased from 10% to 8%. To address this, Snacko should focus on the large unorganized rural retail market by launching potato chips. An integrated sales promotion strategy using push and pull tactics can boost sales and regain market share. This involves trade promotions to incentivize rural retailers and consumer promotions like contests to attract customers.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    486 views17 pages

    Snacko India LTD

    Uploaded by

    Sagita Simanjuntak
    Snacko's sales growth has been flat at 2% compared to the industry average of 24%. Its market share has decreased from 10% to 8%. To address this, Snacko should focus on the large unorganized rural retail market by launching potato chips. An integrated sales promotion strategy using push and pull tactics can boost sales and regain market share. This involves trade promotions to incentivize rural retailers and consumer promotions like contests to attract customers.

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    ABDUL hadie + ADITYA laksmana + BIMA ruditya ESTIE nurina + ETGAR equator + HANIF widyanto

    UNIVERSITAS INDONESIA

    in our daily life

    SNACKS

    SNACKS INDUSTRY: INDIA


    Processed Snack Food in India is worth around US$ 30 Billion
    Branded Snacks is about 46% of total market

    overview of current market

    Retail Structure is dominated by unorganized retailers


    3 Million retailers 2/3 located in rural areas Majority of total snack industry

    Competition is extremely intense


    Mortality Rate of new brands up to 70% Pepsico, Haldiram, ITC Foods, Snacko

    Major Players

    CASE STUDY: SNACKO INDIA LTD

    company profile

    Entered India market circa 1995 By 2010, SNACKO is in TOP 4 of Indian snack food industry
    Growth Strategy: Based on Innovation
    Products Packaging Advertising Promotion Inorganic Growth through M&A

    SNACKOs Distribution Channel CFA


    Distributors

    Factory
    Wholesalers

    Retailers

    Consumers

    MAIN ISSUE: FLAT SALES GROWTH


    Sales of Major Players
    Company Pepsico Haldiram ITC Foods Snacko Total 2008
    Sales

    current condition

    2009

    Market Sales Share

    Sales Market Growth


    Share

    Sales of Major Player


    1000 900 800 700 600 500 388 266 130 120 173 122 660 866

    660 56% 866 56% 266 23% 388 25% 130 11% 173 11% 120 10% 122 1176 1549 8%

    24% 31% 25%

    400 300

    2%
    24%

    200 100 0

    2008

    2009

    Pepsi

    Haldiram

    ITC

    Snacko

    Main Issues as of Nov 10: Sales Growth is marginal


    o

    Only 2% growth against industry average of 24%


    Down from 10% in 2008 to 8% in 2009

    Market Share is decreasing

    WHAT HAVE SNACKO DONE?


    The PROMOTION MIX approach:
    1 ADVERTISING
    print, radio, TV media, internet and mobile

    the promotion mix

    2 PERSONAL SELLING
    Below-the-line (BTL) activities, Sales Representatives, experiential marketing

    3 SALES PROMOTION
    Consumer and Trade Promotions

    CONSUMER PROMOTION TRADE PROMOTION

    4 PUBLIC RELATIONS

    Fun Race, brand associations through Indian Cricket Tournament

    WHAT HAVE SNACKO DONE?


    Snackos Trade Promotion schemes:
    (+)

    trade promotion schemes

    (-) Gifts could get lost or damaged Irrelevant and insignificant to retailers Distributors could make fake reimbursement

    Attached gift to the packages of brand of snack

    Gifts could easily be seen by retailers Gifts incentivize retailers to sell the products Ditributors can give favorable rewards to retailers based on conditions

    Flexibility to distributors in managing rewards/gifts to retailers

    Extra discounts to SRs to focus on high-margin brands & products

    Motivate SRs to sell Snackos products more aggressively

    Less profit margin in sales revenue Low-margin brands & products become less preferable to sell

    WHAT HAVE SNACKO DONE?


    (+)

    trade promotion schemes


    (-) Makes other Snacko products less favorable

    Jhatpat Tez Brand Offer

    Helps to reduce inventory of slow moving products Flexibilty for retailers to choose favorable promotional items Strengthen Jhatpat Tez Brand Image Stimulate retailers to display Snackos variety of products with prizes Flexibilty for retailer to choose favorable promotional items Strengthen Cramm Brand Image

    Tambola Scheme

    Insignificant incentives to retailers Too many items to be fulfilled by retailers Makes other Snacko products less favorable Most costly scheme compared to the others (TV ads, prizes and efforts)

    Cramm Brand Winner Extravaganza

    Remarks: Most of the trade promotion schemes offered to retailers are irrelevant and insignificant

    QUESTION OF THE DAY

    the dilemma

    The National Sales Manager wanted to know:

    WHY SALES GROWTH WAS FLAT


    in the last couple of years?

    What should they DO to

    boost sales growth regain market share

    REFERENCES AND ANALYSIS

    tackling the issues

    Problem identification: FLAT SALES GROWTH


    2% sales growth last year against industry average of 24% A strategic issue: couldnt be solved with marketing strategy only

    THEORY Strategy Development 1 The three levels of strategy


    1) Corporate-level Strategy 2) Business-level Strategy 3) Marketing-level Strategy Cocentric Diversification

    Product Improvements

    Product-Line Extensions
    New products for same market

    REFERENCES AND ANALYSIS


    Business-level Strategy
    FACTS 1

    tackling the issues

    Organized market for potato chips:


    5,000 tons Valued at $1.2 Billion 80% of branded snacks category

    Opportunity to gain market share in snack industry Marketing-level Strategy


    FACTS 2 new product: potato chips

    Retail structure is dominated by unorganized stores 2/3 of total stores in rural areas Majority of sales in snack industry

    Trade Promotion with focus on rural areas

    REFERENCES AND ANALYSIS


    THEORY Marketing Mix 2 The 4Ps

    tackling the issues

    Price
    4Ps

    Comparable with competitors (non-issue)

    Utilize suitable Sales Promotion Promotion

    Place

    Improve distribution channel to the rural areas

    Conduct market research Product and launch chips product

    REFERENCES AND ANALYSIS


    THEORY Promotion Mix 3 Communication Toolkit Advertising

    tackling the issues

    Optimizing printed ads targeted specially to rural areas (down-to-earth contents)


    Preparing Sales Kits which are easily understandable for mostly lowincome people

    Promotion Mix

    Personal Selling

    Sales Integrated Sales Promotion Promotion with push and pull strategy

    Public Charitable events, events at Relations local schools and communities

    INTEGRATED SALES PROMOTION


    Push Strategy
    Trade Promotion

    our proposal

    Distribution Channel
    Reward for distribution channel members for achieving certain targets (e.g. discount, paid vacation, etc.)

    Retailers
    Implementing schemes allowing retailers to obtain higher margins by achieving certain sales targets

    Pull Strategy
    Consumer Promotion

    Bundling Products to Attract Consumers


    With attractive gifts or other snacko products

    Cramm Winner Extravaganza


    Lucky draw contest with lots of gifts to attract consumers and promote it through TV ad and printed media

    IN-FOCUS: RETAILERS
    Higher Margins for Retailers
    Incentives to Increase Reseller Purchases and Inventories

    the ultimate push strategy

    There are some incentives for Motivating Retailers: Slotting Allowance Quantity Discount Free Goods Cooperative Ad Program

    Incentives to Increase Local Promotional Effort

    Promotional Allowance Off Invoice Discount

    Sales Target Achievement Benefit

    Incentives to Increase Personal Selling Effort

    Reward from Sales Contest

    SNACKO CASE STUDY ANALYSIS


    Strategy Development 1) Corporate-level Strategy 2) Business-level Strategy 3) Marketing-level Strategy
    Advertising

    the strategic roadmap

    Price
    Promotion

    Personal Selling Sales Promotion

    Push Strategy
    Trade Promotion

    Retailers

    4Ps

    Place
    Product

    Public Relations

    Pull Strategy
    Consumer Promotion

    RECOMMENDATIONS

    things to do

    Focus on unorganized market in the rural areas

    Boost Sales

    Change business strategy by diversifying SNACKO products to include the more popular potato chips Integrated Sales Promotion used to deliver more focused results
    Push and Pull strategy to motivate retailers and attract consumers

    Regain Market Share

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