A

PROJECT REPORT ON

TO STUDY MARKET OF ITCs 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 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 ITCs
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 GUPTA DR. AVADHOOT D. POL

Place: (DIRECTOR SIBAR)
Date:

3
 DECLARATION

I, the undersigned, hereby declare that the Project Report titled TO STUDY
MARKET OF ITCs 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:

4
 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 the various procedures followed by 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 competitors 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.

5
 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-for-
money perception. Of course the branded segment is much smaller at Rs 2,200 crore,
which is what makes it so attractive to food Companies that are looking at bigger shares.

6
 GROWTH RATE OF READY MADE SNACK (POTATO
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 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, 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.

8
MAJOR PLAYERS
In case of chips manufacturing, PepsiCo India is the market leader in the country with

45% market share followed by Haldirams (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".

9
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

10
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, Agri-
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

11
Companies by Forbes magazine, among India's Most Respected Companies by Business
World and among India's Most Valuable Companies by 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'.

12
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.

PACKAGING: ITC's Packaging & Printing Business is the country's largest convertor of
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 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.

14
BRANDS OF ITC:

15
 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 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.

17
 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. Bingos
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. Bingos 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.

18
 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.
Bingos success in the market is backed by ITCs 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

20
 PRODUCT PORTFOLIO:

GRAMMAG
SKU NAME VARIETY MRP E
PREMIUM SALTED 5 17.5 GM
INTERNATIONAL CREAM ONION 10 35 GM
MASALA REMIX 20 55 GM

BINGO YUMMITOS RED CHILLI BIJLI 30 89 GM

JUICY TOMATO KETCHUP
FLAT CUT ( ONLY AVAILABLE IN
RS.10)
(SALT SPRINKLE & CHILLI
SPRINKLE)
ACHAARI MASTI 5 18 GM
CHAAT MASTI 10 45 GM
BINGO MAD MASALA MADNESS 20 90 GM
ANGLES

TOMATO MADNESS 30 140 GM

TOMATO TANGLES 5 18 GM

BINGO TANGLES SALTED TANGLES 10 40 GM

MASALA TANGLES 20 90 GM
MASALA TADKA 5 27 GM
BINGO TEDHE
MEDHE
ACHAARI MASTI ( ONLY
AVAILABLE IN RS. 10) 10 60 GM

Table No.2.2

21
 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.

WHATS 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 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 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 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:

25
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 per product develop this
process. Warehousing 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 moisture.

D) STORING

Storing includes the product placement in warehouse. Example: if products like atta, salt,
biscuits etc are kept next 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.

26
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 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, PepsiCos snack
foods division Frito Lay India (FLI) has become the clear leader in branded salty snack
segment with popular brands like lays, Kurkure, Uncle Chipps Cheetos and Lehar
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 arms length. Last year in
October 2009 Frito Lay India launched Indias 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 manufacturers 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 Lays potato chips are endorsed by Bollywood star Saif Ali Khan.

28
WINNING FLAVOUR
Lays, the world and Indias No 1 potato chips brand from Frito-Lay India, is all set to
provide some new lip smacking tastes to its consumers. 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

29
 Sustainable practices
THREATS
Increased Competition from private label
Increased input cost ( spices, Potatoes, corn)
SKU NAME MRP GRAMMAGE

PRODUCT PORTFOLIO :
30
 5 15 GM
10 30 GM
AMERICAN STYLE CREAM AND ONION 20 52 GM
35 95 GM
65 177 GM
5 15 GM
10 25 GM
INDIAN MAGIC MASALA 20 52 GM
35 95 GM
65 177 GM
5 15 GM
10 25 GM
TOMATO TANGO 20 52 GM
35 95 GM
5 15 GM
10 30 GM
CLASSIC SALTED
20 52 GM
35 95 GM
5 15 GM
SPANISH TOMATO TANGO 10 26 GM
20 52 GM
MAXX MACHO CHILLI 30 58 GM
MAXX SIZZLING BAEBEQUE 50 92 GM
MAXX HOT & SOUR PUNCH

WEST INDIES HOT N SWEET CHILLI 10 30 GM

CHEESE BALLS 10 30 GM

UNCLE CHIPS SPICY TREAT 20 60 GM

Table No. 2.3

31
 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

32
 RESEARCH METHODOLOGY

Data sources : Primary and Secondary.

Data approaches : Questionnaire.
Sample size : 80 Retailers
Sample procedure : Convenience sampling.
Research Design : Descriptive.

RESEARCH DESIGN: Research design is simply the framework or plan for a study,
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 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 wont be known. The existing phenomenas facts are not known to the persons.

33
 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.

34
 DATA ANALYSIS AND INTERPRETATION

PTR
Price of SKU ( Rs.) Bingo Lays
5 4.56 4.55
10 9.12 9.09
20 18.31 18.18
30 27.33 27.27
35 NA 31.82
50 NA 45.45
65 NA 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.

35
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 Lays
5.50% 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.

36
5.3 Do you think the Bingo and Lays orders delivered to you on time?

This question asked to retailers to know about Bingo and Lays delivery after order.
Respondents
Timely Delivery Bingo Lays
Strongly Agree 0 10
Agree 44 67
Disagree 36 3
Strongly Disagree 0 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.

37
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 Bingo Lays

Poor 1 1 0
2 0 0
3 28 0
4 50 30
Excellent 5 1 50

Table No. 5.4

90
80
70
60
50
40 Lays
30 Bingo
20
10
0
0 0 0 0 0
Poor 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

38
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 and 5 denotes excellent.

Ratings Bingo Lays

Poor 1 0 0
2 2 0
3 50 5
4 26 47
Excellent 5 2 28

Table No.5.5

60

50

40

30
Bingo
20 Lays

10

0
0 0 0 0 0
Poor 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.

39
Now the following questions 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 Bingo Lays

Discount in Bill 25 70
Money back 2 0
Free Packets 50 0
Gift / Voucher 0 0
None 3 10

Table No. 5.6

80

70

60

50

40 Bingo
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.

40
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
Same Day One Day Two Days More than two Days

6% 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.

41
5.8 What are the challenges you face to sale ITC Bingo?

Challeges Responses
Quantity of Product 7
Packaging of Product 6
Taste of Product 17
Brand Loyalty about other Products 46
Unavailability of Rack/Hanger 31
Delay in Delivery 59
None 4
Others 0

Table No. 5.8

70
60
50
40
30
20
10
0 Responses

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.

42
5.9 Which is the most selling Variant of Bingo at your outlet?

Variants Responses
Yumittos ( Chips) 25
Mad angles 56
Tangles 9
Tedhe Medhe 42
Flat Cut chips. 10

Table No. 5.9

60

50

40

30
Responses
20

10

0
Yumittos ( Mad angles Tangles Tedhe Medhe Flat Cut chips.
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 Bingos 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.

43
5.10 Which criteria would you recommend for bingo to beat other competitors?

Criteria Responses
Focus on Quality / Taste 27
Focus on Packaging / Grammage 28
Focus on Margin and Schemes 46
Focus on distribution 41
More Promotion / Advertisements 12
Other 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.

44
 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,

45
 so Bingo has good opportunity to focus on other promotional activities to 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 Bingos 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 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.

46
 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.

47
 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

30 Bingo Slab Details (

scheme ) Rs.3600
25
Bingo Slab Details (
20
scheme ) Rs.8000 Slab
15
Bingo Slab Details (
10 scheme ) Total No. of
Slab
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 ITCs product.

Analyzing and identifying major competitors. Keeping a tab 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
loading auto is not possible for that ready-stock should be made available

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

50
 LIMITATIONS :

Area of operation I have conducted survey only in Punes 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.

Respondents error - some respondents were unable to answer because of

unwillingness as well as inability.

51
 BIBLIOGRAPHY

Malhotra, 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/

52