BINGO CHIPS

A Marketing Management II Project

Submitted to Dr Ashish Dubey

Submitted By Vignesh P (PGP27370) Piyusa Pritiparnna (PGP27371) Subhrajith Chakraborty (PGP27385) Sumit Singhal (PGP27386) Soumo Deep Saha (PGP27384) Vikas Siddeshwar (PGP27392) Zanjurne Akshay (PGP27396)

Table of Contents
Sales and Distribution ........................................................................................................................ 2 Distribution Strategy for ITC Bingo ..................................................................................................... 3 Physical Distribution System: ............................................................................................................. 3 Physical Distribution Channel Flow Diagram ............................................................................... 4 Sales Force Design ......................................................................................................................... 5 Sales Promotion ............................................................................................................................. 5 Marketing Communications Objectives of Bingo ............................................................................ 7 The Approaches to Effective Marketing Communication: .............................................................. 7 Bingos Approach to the Marketing Communication: ..................................................................... 7 BINGO MESSAGE DECISION ......................................................................................................... 8 Media Decision Resorted to by the Company ................................................................................... 10 Segmentation .............................................................................................................................. 10 Television .................................................................................................................................... 11 Radio ........................................................................................................................................... 12 Print Media .................................................................................................................................. 12 Hoardings .................................................................................................................................... 12 No Brand Ambassadors ................................................................................................................ 12 Gaming Events ............................................................................................................................. 12 Railway Station Ads...................................................................................................................... 13

Sales and Distribution

Companies can differentiate themselves from the competition with the use of novel distribution strategies. Product (Customer Solution), Pricing (Cost) strategies can be copied by the competitors. In todays competitive world the novelty of a product can range from a few months to the maximum of a year before the competitor comes out with his own version of the product. Similarly, Promotional (Communication) strategy is existent only for short amount of time, after a span of time the customer gets used to the promotion and the company has to change the promos. Hence day by day, Distribution (Place) strategy is becoming important and can offer sustainable competitive advantage to any company. Channel strategy requires a channel structure and has long term implications as it cannot be changed overnight once it has been implemented. Primarily it depends on the relationship the company has with the channel owners and hence cannot be changed quickly. Distribution is also gaining importance in the light of the increase in the power of retailers in the marketing channels. Research has shown a proper Distribution strategy to lead to a reduction of distribution costs, which if not handled properly then distribution costs can be higher than manufacturing costs. Following table gives a brief idea of the breakdown of costs across various functions across industries. Autos Software Gasoline Fax Machines Distribution Manufacturing 15% 40% 25% 65% 10% 28% 19% 53% 30% 30% 40% Packaged Foods 41% 33% 26%

Raw Materials 45% and Components

Distribution Strategy also plays a significant role in the market share of the company. In general, Share of Mind = Share of Market Hence, by getting the channel members to focus on your products to a greater extent than your competitors, the company can gain market share and growth.

Distribution Strategy for ITC Bingo

ITC has a diverse product portfolio and has a presence in Cigarettes, Hotels, Packaging, Information Technology, Agri-Business, Branded Apparel, FMCG, etc. Bingo from ITC falls in the FMCG category. In general, FMCG thrives on distribution so the firm must have a well-established network in place. The firm must look at providing add-on schemes, value deals to dealers and retailers not provided by competitors. In this light, when launching Bingo, ITC already had a well-established distribution network through its cigarette and tobacco-related offerings which was leveraged in the case of Bingo. In addition to the big retailers like Big Bazaar, Spencers and medium sized retailers like Kirana shop owners, ITC distributed Bingo through the multiple retailers like cigarette and betel shop owners. Hotels, Restaurants, cafes were also used for distributing Bingo. This ensured that Bingo had a presence across the county. Bingo was differentiating itself from the competition by introducing 16 local flavours in its potato chips and hence needed to have a pan India presence equitable across the regions. The distribution strategy was hugely successful and within six month of its launch Bingo was available across 250,000 retailers across the country. The already existent delivery network was used and hence Bingo could penetrate deep into the market and had 17% of the market share within 8 months on its launch. Another point of differentiation in its distribution strategy was to distribute 4 lakh racks across all retailers to display the brand at the point of sale. This strategy was immensely successful and market leader Frito Lays had to copy the idea and sent in their own customised version of wafer racks to the retailers. After sometime of its launch ITC had an exclusive agreement with Future Group which led to Future group outlets like Big Bazaar, Food Bazaar, stocking only Bingo. With the highly fragmented snacks market this helped Bingo to further eat into the market share of Frito Lays.

Physical Distribution System:

The groups efforts to improve the economic condition at the grass root level have helped it in improving its image beyond from being a tobacco manufacturer. The multiple distribution channels that the company has are helping to synergize intra and inter divisional efficiencies. The group has successfully capitalized on the strengths of each of its existing businesses to foray in the new product categories or markets.

ITC leveraged its 2 million retail outlets distribution network of its cigarette brands for entry in the FMCG market. The established distribution network eased the groups penetration in the highly competitive market dominated by other large companies like Unilever and Procter & Gamble. The branded packaged foods and personal care brands of the company capitalized on the ITCs unique eChoupal advantages including the company recognition, distribution, network reach to the grassroots level, and procurement benefits like cost and quality optimization.

For instance, the Aashirvaad branded products of the company capitalized on these advantages to garner cost and quality optimization, which has enabled the brand to become the leader amongst the national branded players. Furthermore, the group has leveraged on the cuisine and bakery knowledge of its hotel and restaurant business to launch packaged food products reflecting the customer needs. The lifestyle retailing business has thrived on the trade mark and service expertise of its hotel business.

In the same way, ITC has also exploited its existing strong distribution channel for the launch of Bingo as well. Go to any supermarket or kirana store, Bingo is highly visible. In India there is no company that can match the distribution strength of ITC and this has helped this new launch very much in terms of Shelf Space and retailer support.

The Company distributed more than 4 lakh large racks, to display the brand at all points of sale. The racks created so much impact that even competitors like market leader Frito-Lay's introduced its own version of wafer racks. This incredible leveraging of distribution system is credited by many as major cause of Bingo's success. Physical Distribution Channel Flow Diagram

The distribution starts from ITC to the Wholesale Distributors called WDs through the Account Executives and the Supervisors. The Supervisor is the person responsible for Stocking, Routing, Sales Planning. The Salesman is person who is facing the channels to which the goods have to be sold. The salesman is the person who is the link between the Wholesale Distributor and the Retail outlets which sell the product; he is also part of the merchandising team.

Sales Call process: The information flows from the bottom level Retail Outlets to the Wholesale Distributor through the Salesman; here the information related to the below activities is passed on to the higher level. y y y y y y Stock Check Arrangement on racks New Stock rotation on rack Expired stock Air out packets Unsold/Obscured Packets

These channels even calculate the Sales loss if any even for the smaller outlets.

Sales Force Design

Recommendations for improving sales force: 1. Personal selling has the advantage of being one-to-one with the customer but there is far less control over the message than with say, advertising. 2. This is because profit may not be proportional to sales. It is also not an indication of the call effort required and the accessibility of their location has to be taken into account. 3. Different territories will have different opportunities in terms of increased business which will not bear any relation to the current level of sales, e.g. a territory that currently has a low sales volume may provide plenty of opportunity to increase sales with new and existing customers. 4. Use a number of selection and training methods and then evaluating them. This evaluation can be carried out in a number of ways. 5. This should promote discussion of the advantages and disadvantages of various compensation plans. With the use of commission some of the selling risk is passed to the sales person, whereas with a fixed salary the company takes all the risk. 6. Bonuses can be used to repair mechanism for problems with commission as commission is only paid for the achievement of sales or profit and ignores, for example, achievement of other selling related tasks. 7. It may become unprofitable to offer commission rates if the cost of obtaining higher sales levels becomes unprofitable. 5

8. Here the benefits of sales quotas can be discussed in that they set specific targets which can be used for performance measurement and they can also reflect different conditions that may exist in territories. 9. It would probably make sense to use one sales force as the product is fairly similar and the customer may be interested in more than one insurance policy and may not wish to deal with a number of different reps. 11. Sales territories differ in their sales potential and the conditions for its realization. There are a number of exogenous factors that will affect territory potential.

Sales Promotion
y y y y y y Promotional events Multimedia campaign Tie ups with retail firms 4-5 % higher margin Tie up with Aero smith Rock concert High decibel launch campaign strategy

Central to finding which flavours will stay and which will go is the rack system. It has helped in determining everything from the relative speed at which variants move to the actual mix of brands in various regions. Frito-Lays pioneered rack-based selling, creating merchandise that really stands out. ITC claims to have taken this even further. Such has been the impact of colourful plastic-moulded shelves that shopkeepers have been chasing us to stock the product. He adds that besides shelves and stands, ITC introduced counter-top models and has a couple of more innovations in the pipeline. The first target is to get placement of all merchandising units across the market in a month's time, and then have more options ready to be introduced.

On the distribution front, Frito-Lays covers close to a million outlets. The availability stretches to even Ladakh and Leh. Other players allege that with the competition kicking in, Frito-Lay's salesforce have been more persuasive than ever before with retailers . Bingo is leveraging ITC's vast distribution expertise and finds itself in many outlets that traditionally did not stock snack food. ITC is keen on a 360-degree approach .The traditional boundaries which existed between trade channels are disappearing . So be it a grocery outlet or paanwalla , ITC are targeting all.Bingo has a greater presence in certain channels. The second player has opened up opportunities that we had not perceived in the past. Frito-Lay was taken off the shelves of Big Bazaar and Food Bazaar outlets on account of commercial terms differences and trade margins. While the move enabled Big Bazaar to push their private label brand Tasty Treat, Bingo too grabbed the available shelf space in these outlets. The brief from ITC is clearly to break the monopoly which Lays has over the market. The first leg of 6

the campaign involved drilling the Bingo brand name into the target audience. It had to break the clutter to attract attention.Bingo has been spending a lot of money and has communication that's highly visible and salient. From a perspective of saliency, they've got the task done. Time will tell what their positioning really needs to be crystallised on. JWT is trying to associate Lays more closely with the youthful segment, while Kurkure with its focus on tea time, is more family-oriented . ITC is trying to change habits of people and encourage more regular, habitual consumption.We are currently short on supplies and deciding on two new manufacturing units. As both Lays and Bingo are priced higher their sees no competition. Bingo is likely to target the HORECA (hotels, restaurants and cafes) segment, many of which have no branded snacking options on offer. The success of Bingo is on account of the aggressive strategy adopted on all fronts - product, pricing, promotion and distribution.

Marketing Communications Objectives of Bingo

Objective of Marketing Communication is to coordinate and integrate all marketing communication tools, avenues, functions and sources within a company into a seamless program that maximizes the impact on consumers and other end users at a minimal cost. Communication efforts aim at strategically controlling or influencing the customers and other stake holders by sending across the specific message along with the brand value to create a profitable relationship. The Approaches to Effective Marketing Communication: To set its objectives for effective marketing communication, an organization has to decide upon: y y y y y Whos the target and how are we intercepting their decision process. What attention is paid by the target audience at the major point of interception? What shall be the frequency of communication to make the audience react positively? Calculating desired results in terms of positive outcome or sales from the audience addressed. Selecting the media mix to maximize audience in the target group.

Bingos Approach to the Marketing Communication: At the time of its launch, Frito-Lays were the market leader in potato chips and snacks category, therefore Bingo has used the market challenger strategy. It has used a combination of flank and frontal attack. To intercept the attention of target audience, Bingo communicated the uniqueness of Indian flavors to target the Indian customers. Some of the flavors launched by Bingo include : Chatkila Nimu Achaar & Spicey Tanoori Paneer. Additionally Bingo launched a other finger snacks that drive their roots from directly from the Indian kitchens e.g. khakra in the form of Mad Angles.

While the main competitor has positioned itself as stylish & cool- having international tastes; Bingo has positioned itself as Innovative, Adventurous and Experimentative with uniquely Indian tastes. Thus the most important point of differentiation conveyed by Bingo was to position it as an Indian brand with unique offerings for Indian customers and their tastes. Based on this objective, they have developed their punch line: Bingo: NO CONFUSION, GREAT COMBINATION! which specifically refer to the combination of Indian tastes with the convenience of on-the-go packaged snacks mostly offered in western tastes by the competitors. In addition to the unique Indian value proposition, Bingo has focused on the fun part. The name itself, BINGO, is catchy, easily pronounceable, recallable and has a fun-tone to it. To have a high recall factor to their campaign Bingo has used humour in all its advertisement. Also to build up a stronger brand Bingo has launched an array of products from potato chips to various finger snacks under the same name, each having its separate advertisement and unique selling proposition but interlaced with the similar elements of fun, humour and being Indian. Bingo has been majorly successful with its marketing communication objectives, together with a strong hold on supply & distribution channels in India, it has been able to capture 16% of Indian snack market. However as a way forward, it has to increase its market share by converting the high share of mind and heart into actual sales. For this they will have to drive the point of differentiation message even harder to get a clear advantage from other brands in a cluttered market. Also with the Bingo brand, there are too many flavors and verities, some of which are not doing too well; Bingo need to withdraw these while continue to launch newer flavor that could find more mass appeal with Indian customers.

BINGO MESSAGE DECISION

Designing the Communication India is composed of 28 distinct states with differing languages, mindsets, and habits; tastes and preferences in snack foods are accordingly diverse. Popular snack items range in format from dosas to popcorn to pani puri. ITC conducted research to understand the immense diversity of snacking tastes across India. Armed with the results, ITC decided that there was an opportunity to offer varied flavors and textures within their snack range, which included both Western products such as potato chips, cheese balls, etc., and "finger snacks," a relatively new segment in which traditional offerings are adapted to the Western format.

The Bingo! name was the result of a nine-month, iterative research process. It was short, catchy and not locked into a specific category. As a result, unlike Frito-Lay, ITC was able to use one name to market both potato chips and finger snacks. In the Savoury Snacks segment, Bingo! demonstrated robust sales performance and penetrated new markets, gaining further consumer franchise, driven by innovative, clutter breaking communication. In the initial days, Bingo's task was to acclimatise probable consumers with a new snack on the block. For this, support from various mass media such as radio, outdoor and television was used. The next part was establishing the fact that Bingo has the maximum variety of flavour combinations, including Chatkila Nimbu Achar and Tandoori Paneer Tikka. Later, individual formats were highlighted and that is where the Mad Angles and Hatke Jhatke (street fight) ads fitted in. Communication Strategy Research revealed that snacking thrives on constant injection of excitement and on the image value of the brand. The battle for consumer mind space in snacks category is just as intense. For a category like chips, there is no substantial perceivable point of difference in the product, in the end bingo is just as much of chips as lays is. Hence, to acquire mind space the recall factor has to be more. Bingo ads are downright stupid but they bring emotion (humour) because of which it gets registered in mind. It is tough to do enough to be on top of ones mind in matter of seconds. The team behind the Bingo chips ads seem to pull this off every time. Those brands which found high acceptance among the youth gained acceptance among the rest of the family as well. The role of communication became clearly defined in this context It is about product combination. The brand name is also important because there is a monopoly in the chips sector with Frito Lays. So these were the two points which was taken into consideration while creating TVCs for Bingo . Since it is the snacking category, the ad makers O & M had the liberty to get away with stuff which is irreverent and fun. Creative Execution The creative execution was basically a play on words rhyming with Bingo. So, in first half of the film, the plot that unfolded was completely unrelated to snacks or Bingo. Themes like flamingos, the hunt for a terrorist named Django, language learning programmes were dealt with. The idea was to lead the viewer into thinking that they were watching some snippet on National Geographic or on teleshopping, and then the ad would break into the Bingo product window with the central voiceover

explaining that the birds, terrorists, characters should not be confused with Bingo since none of them had the irresistible combinations that Bingo had. Also they did a very good teaser, which was a viral campaign, before revealing the brand. It had a set of five to six ads that ran through the Internet. The promotional launch began with viral mails, followed by TVC. The campaign later broke with outdoor, print and radio, with eight spots across channels. For the chip variant, the first ad was about how a man and a fire fighting machine were combined for the Red Chilli Bijli flavour. This took home the message of 'No Confusion. Great Combination', the brand's tagline. This was followed by the Mad Scientist series, where crunchiness and another flavour were part of the highlight. Subsequent advertising focused on the unique combinations of base and flavor and the crunchy texture of the potato chips. The first leg of the campaign involved drilling the Bingo brand name into the target audience. It had to break the clutter to attract attention.O & M , the ad agency behind the Bingo ads , were able to build buzz and badge value while establishing the brand name, in a manner that was clutter-breaking and appealed to the youth. Also they were able to establish combinations in an interesting and memorable way. The communication was highly visible and salient The Bingo campaign is a type of "disruptive advertising". Coupled with heavy media spends, it registered the brand name well in the minds of the consumers. Also, the differentiated nature of the product catering to Indian tastes meant that it was going to get adequate trials. ITC's distribution network ensured that this objective was met.

Media Decision Resorted to by the Company

When ITC announced its foray into the Rs 2,000-crore (Rs 20 billion) fast-moving branded snack market it had one major competitor - Frito-Lay. Its advertisement campaign as well as media decisions had to be highly unique and effective in order gain a market share of this market dominated by Frito lays. Bingo designed a campaign that was characterized as a high decibel advertising to compete against the existing market leader. For that it segmented the market to target appropriate audience and designed its media campaign accordingly.

Segmentation
Demographic- age wise segmentation: the company decided to target the youths in the 20-35 age group.

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Since the company's target audience is people in the age group of 20-35, the company began with Internet. It created a website www.bingeonbingo.com, which has free offers, games, downloads and even mobile games. The site has been advertised with banners on websites such as Yahoo, rediff and Sify. A glimpse of the home page of the site is below:

It prompts user to explore the Bingo campus based on his mood. Fist we have to choose a taste an accordingly we can have a view of the campus. It also offers a few characters to choose from while a user enters the site to gauge his style preferences. The website only allows users with age 12 and above to register. Mad Angles Twister Application (Facebook) was another initiative in online media.

Television
It launched big on television, too. The company booked 10 to 15 spots per channel per day on youth channels such as MTV and Star World, mass Hindi channels like Zee and Star TV, and news channels. Meanwhile, the company's radio commercials can be heard between 8 and 10 a.m. and between 6 and 8 p.m. as research revealed that most youngsters travel during these hours and listen to 11

the radio then. A glimpse of the television advertisement (from Bingo red chilly combination commercial ) is below:

Radio
About 20 spots a day were booked on channels such as Radio One and Radio Mirchi.

Print Media
The company has not left out the print media. To familiarize consumers with its products, the company advertised in most leading national dailies.

Hoardings
In top 30 cities, over 1,000 outdoor hoardings were booked to carry images of the product. Like Frito-Lay, ITC, too, has designed a merchandise rack for its products. The company planned to distribute this to 500-600 thousand retail shops to ensure visibility at the point of sale. ITC also launched another campaign for mid-May. In that campaign the company communicated the character and qualities of its brand to develop its personality.

No Brand Ambassadors
Bingo appointed no brand ambassador for its media campaign. Unlike its competitors like Frito Lays having brand ambassadors MS Dhoni and Saif Ali Khan and Kurkure having Juhi Chawla and Kareena Kapoor as brand ambassadors Bingo focused more on the creativity of the advertisements to ensure brand recall.

Gaming Events
It also sponsored a national gaming championship to promote the brand. Bingo National Gaming Championship was organized across 4 cities with more than 25,000 participants.

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Railway Station Ads

In order to increase the market share Bingo came up with innovative ideas like the railway station campaign. It tied up with Indian railways to insert recorded announcements in same tone and manner as railway announcements in selected railway stations that Bingo offers 25% extra in its packs. It gave them a high stopping power as well as brand recall as people initially thought the announcements were authentic railway announcement untill they heard the trademark bingo sound.It was how the selection of a completely new media gave it an edge over its competitors where other medias were cluttered with competitors products.

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