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ITC: Enduring Value

Media Centre


Racks to riches 08 Jan 2008

Business Standard

ITCs entry into wafers with Bingo emerges the winner.

A year ago, ITC Foods was looking at new business segments to expand its product portfolio. The packaged snacks category was growing at approximately 25-30 per cent every year. But it had only one national player — PepsiCo’s Frito-Lay.

Ten months after it entered the category with its wafer snack brand, Bingo, ITC’s foray into the Rs 1,800-crore branded snack market has fetched the company a 16 per cent market share across the country (Source: AC Nielsen).

Brand Derby respondents voted Bingo the most successful brand launch of the year. Seventy per cent voted Bingo as a very successful launch, with another 19 per cent describing it as somewhat successful.

Bingo’s success story is about how a combination of leveraging synergies, building on consumer insights and high decibel advertising can win the game.

There were many advantages for ITC to enter this segment. The company could leverage its existing distribution network and also source from farmers easily, as its earlier foray into categories like atta and biscuits had already given it access to the supply chain.

“The rapid growth and the synergies we could draw from our existing business led us to make an entry into the packaged food segment,” says Ravi Naware, chief executive, foods division, ITC.

Once this decision was made, a cross-functional 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-flavoured khakra were the ones that excited the new and more demanding Indian consumer. Based on this information, the company decided to look at chips with innovative flavours.

For the recipes, the company went to the chefs in its hotels. The chefs came back with 16 flavours with twists like bindaas masti chaas, chatkila nimbu achar and tandoori paneer tikka-flavoured potato chips, chilli and tomato-flavoured mad angles — inspired by khakras — and other snacks.

The company decided that youngsters in the age group of 16-30 are the most experimental and hence they would be the primary target audience. “Youngsters, we knew, would give us a try. If we lured them into buying Bingo, we could enter the home and reach the rest of the family,” explains Naware.

But there was another challenge. Advertising in the category was extremely crowded. Every week, two-three new brands (many of them, local) are launched and more often than not, they are targetted at the youth.

To break through the clutter, the company decided to bank on humour. The brief to its advertising agency Ogilvy & Mather was, “The ad must register the brand name and appeal to the youth.”

O&M responded with not one, but five ads based on disconnected humour. A boring description on flamingos gets twisted when the voice over explains that while flamingos have a long beak to help them find food, they do not have the mouth-watering combination of tandoori paneer tikka and potato chips that Bingo has to offer.

The entire campaign was a series of similar spoofs. The advertisements worked in the company's favour, believe brand analysts. “Bingo touched a chord with consumers through humour and irreverent advertising. ITC dominated media of every kind, but with good creatives and a good product, hence they have been successful,”says brand consultant Harish Bijoor, CEO, Harish Bijoor Consults.

ITC also ensured that it reached its audience through every possible medium. It first created a website www.bingeonbingo.com with offers, online games, downloads and even mobile games. The site was advertised with banners on websites such as Yahoo!, Rediff and Sify.

On television, 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.

It also had around 20 spots on a variety of radio channels and advertised in most leading national dailies. In the top-30 cities, over 1,000 outdoor hoardings advertised the product.

According to industry estimates, ITC spent close to Rs 100 crore on marketing. Without revealing spends, Naware agrees that ITC had a big budget. He says, “We have created a huge brand recall and ensured that we have repeat purchases. Hence the ad spends were completely justified.”

But, analysts believe the Bingo story is more about well-leveraged distribution. “I would attribute 50 per cent of the brand’s success to the company’s wide spread distribution network and its efforts to leverage that distribution,” says Sunil K Alagh, chairman, S K Advisors.

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.

“Consumers who see the ad would only buy it when they see the product. So, we tried to get maximum visibility at the point of sale. After all in India, joh dikhta hai, wahee biktha hai,” says a smiling Naware.'

© ITC Limited