Name: Gaurav Vasani Roll No: A063 Sub: Sales Promotion

Snacko India Limited: Leveraging Trade Promotions For Competitive Advantage Case Analysis in Brief:Introduction: Snacko India was a local subsidiary of a European food giant. It entered into India in 1995 but was unable to succeed as expected. The company then adopted aggressive growth strategies aimed to becoming a market leader. It based its strategies on innovation, packaging, advertisement and promotion. The company was an innovator in using trade premium for capturing market share. Snacko had set up an innovation center in India to monitor local formats & tastes. It intended to grow by increasing the frequency of consumption in the metro markets. The company adopted penetration pricing in rural markets.

Snack food industry in India:

The processed snack food market in India was us $3 billion & growing at 15 % per annum. Potato chips itself were contributing about US $1.2 billion close to about 80 % of branded snacks category. The market was dominated by small sized packs & highly innovative. 90 % of the products were priced at or below Rs.10 price point. Mortality rate of new brands was very high in the market.

Major Competitors in the Snacks market:

1. Pepsi2. Haldiram3. ITC Food Division4. Snacko

Challenges before the Company:

Primary concern was of the marginal value growth in the past years. Gradual loss of market share. Possible causes of flat growth in overall sales. Design and effectiveness of the promotional activities and schemes. Regular follow up required for the new variants been launched.

Snackos Distribution and Market coverage

Snackos products were being sold on impulsive and intensive distribution schemes. Point of sale visibility and promotional activities supplemented the sales. Window and Counter top displays were the main promotional activities done at retailers place. Snacko was trying to grow its market through Market Development strategy.

Marketing and Promotion:

The company relied heavily on product innovation and marketing communication. Created buzz by innovative formats and flavours, associating its brands with events. Opportunities for people to experience the products. It associated its brands and sub-brands with Indian cricket tournaments. Special additional packs. New add campaigns during league matches. Several below the line activities. Sponsored events in which print, radio and TV media were extensively employed. New product launch by 360-degree media approach.

Trade promotion

Build demand at the middleman. Trade promotions included Special pricing, sales incentives, discounts, Trade shows and demonstrations. Tickets to sporting events. Snacko also used trade promotion for launching new flavor in order to increase the chances of trial and adoption by the consumer. They pushed slow moving brands through trade promotion activities. Retailers were offered incentives to provide additional shelf space. Company did not pay for this instead provided the equipment for posters and banners. The schemes ran for shorter period of time. Additional incentive was given to sales team to implement the scheme. Schemes were based on trust and relationship.

Trade promotion schemes by Snacko for Retailers

On package premium Scheme which included Gifts Rewards for retailers scheme Price Offs for the retailers Extra discounts for SRs Jhatpat Tez Brand offer Tambola Scheme Cramm Brand winner extravaganza

Recommendation:

Snacko should implement pull strategy along with push strategy so as to build and enhance its consumer base. The company should also focus more on enhancing the customer base with increase in distribution. It should use various coupons like Bounce back coupons and the concept of cross ruffing. Offering In package premiums to the customers. Introducing diet products for health conscious consumers. Organizing contests for customers with the purchase of Snackos products. Offering party packs through bundling of products. Focus on unorganized market in the rural areas to boost sales. Change business strategy by diversifying Snacko products to include the more popular potato chips to boost sales. Integrated Sales Promotion used to deliver more focused results to regain market share.