Monday, March 15, 2010

Bingo with an Unconventional Attitude

Pranab talukdar | iim s

Scientists at Bingo Mad Labs have come up with a simple substitute for the conventional clinical preg-check card. All you have to do is nibble at a Bingo Mad Angle Achaari Masti snack to find if your tummy is going to bulge more. According to David Ogilvy, the new Bingo Mad Angle Achaari Masti ad both entertains and true to its spirit. It is "no confusion," only "great combination" of taste and fun.

I hope this reminds you the famous bingo ad that was screened during the 2007 world cup.
The Bingo brand of chips was launched by ITC on 14th March 2007. During the time, 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.

Snacks category is divided into the Traditional segment (Bhujia, Chana etc) and the Western segment (potato chips, cheese balls, puffs etc) and the Finger snacks segment dominated by the Frito Lay group. The total market size could be to the tune of Rs 4,000 crore, of which Rs 2,000 would be organised, growing at 25 percent per annum. The unorganised sector could be growing faster than the organised sector. You can always see a chaat-papriwala doing brisk business every time you walk down the road.

ITC spent nearly 40% of their media budget on digital media, because they felt this would be the best way to connect with the market. Bingo brand building was through the digital media, something unheard of, for Indian companies. According to Ravi Naware, divisional chief executive (foods), ITC, two things were important. First was consumer insight and for that ITC invested heavily finding out what tickled the Indian consumer’s taste bud, what turned him on. ITC put a whole team of chefs in place to craft new flavours for this category. Idea was to tempt the consumer with flavours that are exotic, but not strange, somewhat different from what is available in the market. The second is the manner in which you launch your product, the communication/execution part and the distribution strategy. ITC evolved a completely new and modern merchandising solution for the launch which included attractive stands and other display material for Bingo at the retailer ends. The communication strategy with a heavy dose of humour has also been different and daring.

Bingo launch was around the 07 World Cup. “A Happy Coincidence”, according to Mr. Naware. The innovative ad was telecasted on almost all channels- national, regional, sports, news and kids’ channel. The sudden media blitzkrieg left a mark on the audience mind. The objective was achieved as Bingo was in the pure impulse purchase category. In certain areas market share touched 50% and not less than 15% in other areas. ITC launched website to target the youth and then for its “Bingo mad Angles- Aachari Masti”. Viral marketing was used to create brand awareness. It also sponsored various events at colleges and a lot of happenings of channel V- targeting the youth. On the negative side, some reaction to the Bingo advertisements has not been very encouraging. The advertisements are sometimes classified as ‘irritatingly humorous’.

Customization and SKUs
Bingo has 16 variants (priced at Rs 5, Rs 10 and Rs 20 a pack). A good majority of these are region-inspired. Like the mustard for eastern parts and paneer tikka for North Indian market. But there are some generic national flavours, such as premium salt, tomato and chilly formats. The potato chips are available in many flavours Masala Chaas, Chatpata Nimbu and Paneer Tikka. In addition to these 4 flavours, the classic flavours of Masala, Tomato and Salted are also available. In the finger snacks segment pakoda inspired chips like Live Wires, Khakra inspired Mad Angles, and corn based chips like Tedhe Medhe.

On the other hand, several SKUs caused problems in forecasting and stocking. Retailers were taking a small variety of each variant leading to frequent stock out situation for popular ones.

Packaging and Production
The packaging of the product has been slick and eye catching. Bingo is available in packets in myriad colours like orange, blue, red, yellow, green and purple. Not only do bright colours attract the attention of little children but also of adults. Snack food is an impulse buy. The bright coloured stands with the Bingo label on top make it more visible in a shop. Bingo is the most seen brand in snacks and thus increasing its chances of being bought.

On the production front, the strong farm linkages of ITC (e-Choupal) ensure that only the selected grades of raw materials are used for Bingo.

The large, country wide distribution network of ITC built up over the years was a key factor in Bingo’s ubiquitous availability. In small town’s villages, one won’t find a Lays or a Haldiram but a Bingo along with the local unbranded snacks. It has also entered into an agreement with the Food Bazaar chain of outlets for retailing of Bingo which is not there for Frito Lays and Haldiram. Bingo was also offering a 4% to 5% higher margin than that of for Frito Lays. Overall, ITC is fast catching up Frito Lays’ national reach of 8 lacs outlets.

Bingo learnt from a failed pricing strategy of Frito Lays. Lays increased its price from Rs 10 for 35 grams to Rs 15 for 45 grams. This affected the sales of Lays and it finally went back to the Rs 10 formula. Bingo priced its 16 SKUs at Rs 5, Rs 10 and Rs 20 a pack and had a consistent pricing strategy. Combing this pricing with the innovation of the product won the heart of the Indian consumer and also higher margin for channel members made them happy.

Having written all this, I would like to mention a quote of Mr Ravi Naware during an interview with Financial Express, “With Bingo nothing was planned, we went wherever and whenever there was a good opportunity”.

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