A PROJECT REPORT

ON

BINGO (AN ANALYSIS FOR EXPORTING INDIAN PRODUCT) A Project Report submitted in partial fulfillment of the requirements for the award of the degree of Post Graduate Diploma in Management (PGDM)

Submitted By:
Shweta Tanwar
(Enroll No. : 0101PG004)

ACKNOWLEDGEMENT
The success of any project depends largely on the encouragement and guidelines of many others. I take this opportunity to express my gratitude to the people who have been instrumental in the successful completion of this project. I would like to express my sincere gratitude towards, **************. I would like to thank him/her for his tremendous support and help. I felt motivated and inspired every time I attended his/her meeting. Without his/her encouragement and guidance, this project would not have materialized.

Shweta Tanwar Student ID : 0101PG004

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PREFACE
Practical knowledge has inestimable value for a student because theoretical knowledge is incomplete if it is not correlated with the practical knowledge. The work and experience gained during this period has increased my knowledge many folds. In this limited space and restricted standard a brief and comprehensive account has been produced in the light of recent work and latest information available from various sources. Today's world is a business world. Any business organization is a dynamic entity. Comparative study of Bingo is very useful for research of chips industry and its competitors.

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OBJECTIVES OF THE STUDY

To study the snacks industry as a part of food processing industry. To study the companys profile of ITC Ltd the makers of BINGO. To study the trends in snacks industry. To analyze and interpret the results of sample collected. To determine the future course of action by ITC. To find conclusions to our project.

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INDEX
Topic
I) II) Introduction to ITC Indian Snack Industry Overview

Page No.
1 3 4 5 9 9 12 15 16 17 18 18 19 20

III) About BINGO IV) Main Competitors V) Strategic Analysis

VI) Value Chain Analysis VII) Porters 5 forces Model VIII) SWOT Analysis IX) PEST Analysis X) Export of Chips(Bingo)

XI) Mature Market XII) Potential Market XIII) Challenges XIV) Bibliography

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EXECUTIVE SUMMARY
The project An Analysis For Exporting Indian Product aims at analyzing the prospects and challenges of Bingo which it face during the expansion in the local and global market. We aim to analyze the success, marketability and future growth prospects of BINGO.

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 tones in terms of volume.

The Bingo brand of chips was launched by ITC. The launch is symbolic of ITC Foods' distinct approach of introducing innovative and differentiated products in a largely undifferentiated market place. The idea was to get the consumer to take that first bites.

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. Its earlier foray into categories like atta and biscuits had already given it access to the supply chain.

This analysis provides information about the Export of Bingo which gives a detailed idea how we can find out the prospect globally and what are the challenges to export it.

This Project helped me to understand various challenges which take place while exporting local product, and to expand the organization by maiximising the consumers. And with this valuable Analysis, I am able to suggest about the different factors which can be taken into consideration before exporting the products.

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Introduction to ITC
Establishment: Incorporated on 24 August 1910 as the Imperial Tobacco Company of India Limited, the company's name was changed to ITC Limited in 1974. It is rated among the 'World's Best Big Companies' by Forbes magazine, ITC ranks third on all major profit parameters among India's private sector corporations. ITC employs over 20,000 people at more than 60 locations across India. It has a turnover of $3 billion. Growth and Diversification: ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 18 billion and a turnover of over US $ 4.75 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 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 practises 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 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 $ 2.8 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 15

enhancing

the

Company's

marketing

reach.

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 a corporate governance rating. ITC employs over 21,000 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, 88,000 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."

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INDIAN SNACKS INDUSTRY: An Overview 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, readyto-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. In the branded snacks market, to get down to basics, Frito Lay commands a share of 45%, followed by Haldirams at 27% and ITC at 16%. The rest is divided between a handful of new entrants, wannabes and many regional players. Of the wide range of snacks available, potato chips constitute a sizeable segment of the Indian snack food industry, according to India Infoline. The potato chip market is generally an unorganized industry. Nearly all potato chip snack products are manufactured and sold locally. There is also no uniform standard for packaging, as there is in Europe, the United States and other more developed regions. Many snack foods are sold loose or packaged in poly-pouches, which may only be folded, or in some cases, stapled closed. As the Indian economy continues to grow, and production standards improve, many snack food companies are making significant investments into plant equipment and packaging machinery. Pepsi Foods Ltd., now known as 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. Procter & Gamble's Pringles brand of potato crisp was launched in Delhi in 1999. Pringles is also a baked potato crisp, unlike many other potato based Indian snack foods that are fried. P&G currently imports the Pringles product and therefore the product has been priced at a premium and is marketed to a micro-niche.

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 17

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. Before the Launch Research: After making the decision to launch Bingo it started by sending 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 paneerfilled samosas, or for that matter, tomato-flavored khakra was 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.

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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.

Main Competitors: 1. Frito-Lay Lays Kurkure Uncle Chipps Cheetos 2. Haldiram 3. Regional Players like Balaji

Comparison of Prices: Product Price (ITC Ltd) Bingo Rs. 5 Rs. 10 Rs. 20 Product Price (Frito Lay) Lays Rs. 5 Rs. 10 Rs. 20 Uncle Chipps Rs. 10 Rs. 20 Kurkure Rs. 5 Rs. 10 Rs. 20 Product Price (Haldiram) Namkeen Rs. 5 Rs. 10 Rs. 20

Major Strategies Adopted by ITC for Bingo 1 Product - Assortment of flavours and eye catchy packaging. 2. Price - Pricing Strategy 19

3. Place - Widespread availability at big and small retailers across the country. 4. Promotions - T.V. Advertisements 1. Product Bingo! positioned itself with its Indian flavors such as Tandoori Paneer, Tikka, Spice Paneer etc. For the South Indian market, Bingo! had flavors such as Chatkila Nimbu Achaar, Achari Masti etc. The segmentation was mainly done on basis of the age of the people. The primary target for Bingo is 18-30 year old people, who are willing to try out new flavors more easily than the small kids. The initial offerings from Bingo include an array of products in both Potato Chips & Finger Snacks segment. The Potato Chips offerings comprise of four innovative variants inspired by the snacking habits of different parts of the country as well as Masala, Salted and Tomato flavors. Additionally a dairy option has also been introduced under the potato chips offering. The offerings under the Finger Snacks segment are equally unique presentations with innovative finger foods like the pakoda inspired Live Wires, Khakra inspired Mad Angles and the specially developed time pass snack in the form of Tedhe Medhe. Each offering under this segment is available in two variants making it a total of 6 products in the Finger Snacks portfolio. Packaging- ITC has done the packaging such that the product attracts the buyer. Apart from it has also launched packs with different quantity keeping in mind the specific consumer demand.

2. Price When ITC launched Bingo, its main challenge was to compete with the players who were already there. To overcome this challenge, ITC realized that they have to offer products at a price which is either equal or less than what the competitors are offering. To do this, they planned to capitalize by leveraging the strength of the groups other businesses. ITCs printing and packaging business provided high-quality, cost-effective, and innovative packaging. ITC also enjoyed cost advantages over its competitors owing to its electronic procurement system called e-Choupal. This helped ITC to compete with the best. Initial pricing of ITC bingo is a direct frontal attack on Frito Lays with pricing of Rs 5, 10 and 20. Now Frito Lays has launched small packs of Rs 3 each. It needs to be seen whether ITC can leverage upon its huge distribution network to counter this.

3. Place ITC has adopted a Market Challenger strategy with the launch of Bingo! and has chosen a combination of flank and frontal attack against the market leader Frito Lays. The Company has distributed more than 4 lakh large racks, to display the brand at all points of sale. The racks 20

created so much impact that even competitors like market leader Frito-Lays introduced its own version of wafer racks. Within six months of the launch, Bingo was available in more than 2,50,000 retailers across the country. ITC has made a strategic alliance with Future group according to which all retail stores of Future group like Food Bazaar, Big Bazaar, and Kishore Biyanis Fair Price etc will stock only ITCs Bingo. HORECA (hotels, restaurants and cafes), entire cigarette distribution network including betel shops are being used to distribute the product to a wide range of consumers. Initially Bingo sponsored many Bingo Remix nights in various clubs as well.

4. Promotion T.V. AD Campaign: Bingos launch was strategically timed around the World Cup to cash in on the tremendous popularity that such leisure and cocktail snacks would find among cricket lovers in the country. The idea was to get the consumer to take that first bite. Not only the flavours but also the advertising was supposed to have an Indian touch. Within a month of the launch of the initial advertisements, 70% of the viewers could recall the brand thus capturing a share of the mind of the consumers. Brand recall along with 16 flavors in three SKUs helped ITC to capture 16% of market share in just 18 months. The advertising strategy used humour to sell Bingo. Bingo!s advertising follows the AIDA model (Attention, Interest, Desire, Action). The clutter-breaking ads with their slapstick humour and irrelevant themes garnered enough eyeballs to create awareness of the product and generate an interest towards the product in the minds of consumers. The ads are simply insane & nonsensical to the point of being bizarre & utter crap. And that is why they are so funny. This resulted in high product trials. Whats interesting is the fact that Lays uses a brand ambassador approach with the celebrities having mass appeal such as Saif Ali Khan, Juhi Chawla & M S Dhoni whereas Bingo has managed to do well without one. It still doesn't have an ambassador. Bingo! Mad Angles Twister is a crazy application with which can turn the status messages upside down on facebook which can make the users and viewers go crazy trying to figure out your secret of that twisted message. So this was another kind of strategy being used for promotional purposes apart from advertisements , ringtones and videos promoting the same.

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. Bingo has managed to do a dent in Lays market share. Is the fact that ITC spend close to 3 years researching, finding and analyzing the Finger snack segment to come up with its own indigenous variety responsible for Bingo's success 21

The 'insanity' in Bingo's promotion is a carefully knitted strategy that was instrumental in Bingo's instant success. Marketing Guru's call it "Disruptive Advetisement" This is one those cases where advertisement/promotion has been the biggest factor in the success of a brand. The fact that ITC has a well established distribution network has also helped it increase consumer interaction points. The adverts which were full of humor, cheesy & non-sense jokes, and relevancy with the brand helped in establishing the brand Bingo. While I agree the theme of the adverts were irrelevant from the product point of view, they were relevant and totally associated with the brand image (which was also present in its tagline - No confusion, only great combinations). With the help of all the above strategies, ITC finally tasted success in Bingo in 2008 when it became a profitable business for the first time since its launch in 2007.

Major Hurdles faced by Bingo Brand Loyalty of Lays customer is posing threat to Bingo Stagnant Market Share Unawareness of the variety of flavours introduced by Bingo Threats of local players

STRATEGIC ANALYSIS
Value Chain Analysis Of Bingo Chips

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The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain consists of a series of activities that create and build value. They culminate in the total value delivered by an organisation. The 'margin' depicted in the diagram is the same as added value. The organisation is split into 'primary activities' and 'support activities.'

Primary Activities Inbound Logistics. Here goods are received from a company's suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organisation. Bingo receives its raw 23

materials from potato vendors from the plantation area. Bingo has its own vehicles for carrying the goods which reduces its cost of transportation. Operations This is where goods are manufactured or assembled. Bingo chips has a big factory unit at Gurgaon where FritoLays also has a factory. Since the factory is located in National Capital Region which itself is a big market for snack lovers. Outbound Logistics The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer. Marketing and Sales Bingo promoted its products through many promotional events,it has tie ups with many retailers , opened many outlets and mass media campaign through actors ,heavy advertisements done during the cricket world cup 2007.Bingo also went online and opened their own website. Bingo also launched many online games to spread their product to people who were below 25 years. ITC spent around 50 lakhs for advertsing Bingo chips through web. Service Bingo has varied flavours which caters to the needs to all the types of customers in the country. ITC has started the campaign for providing education to the school children.

Support Activities Procurement. This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. They will be responsible for outsourcing (components or operations that would normally be done in-house are done by other organisations), and ePurchasing (using IT and web-based technologies to achieve procurement aims).Bingo uses poly bags which contain the chips. ITCs procurement and manufacturing synergies across divisions have helped it to reduce costs for Bingo as well. Its e-choupal model for direct procurement is also well known, under which ITC partners with over 100,000 farmers for spices and wheat procurement. This kind of rural pedigree is hard to beat. Technology Development

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Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments. Human Resource Management (HRM) ITC build business leaders who create value. Who believe that the future belongs to those who are able to create it. Which is why it values integrity, creativity, passion, a 'will do' attitude and the will to succeed above all else. Together, these empower the prople to take risks, to experiment, to set their own goals and win in the market place. In turn, ITC encourage those who are eager to take the initiative to continuously learn and experiment. These are the qualities which will help us remain contemporary and relevant at all times. The management believe that the most enduring way to retain talent is to enable the people to continuously add value to themselves. At ITC we believe that our mission to enhance value creation for the stakeholder can only be achieved through the quality and commitment of our people. Towards this end, we continuously strive to unleash the potential of each individual. We leverage human capital for competitiveness by nurturing knowledge, entrepreneurship and creativity. We believe it is these strengths that will help us successfully compete in a globalised environment and exploit emerging opportunities. We reward the will to succeed and the desire to compete with the best in the world. We stimulate the drive to be the best and take immense pride in being Indian. We take an integrated view of structures, competencies, tasks and processes and link all these to our long-term goals. Our performance management systems focus on performance, meritocracy, equity and the upholding of company values. We keep our work environment simple, informal and flexible with a strong emphasis on human values. We value ideas and give people the space to execute them. We keep our people intellectually stimulated and give them the freedom to take their own decisions. And the responsibility to make ITC grow through innovation and experimentation. We have remained a vibrant company for nearly ten decades now because of our ability to manage change proactively and to reinvent ourselves continuously without compromising the ideals and values that have sustained us over the years. Firm Infrastructure.

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Since bingo is a product of ITC which contains the huge varied products in its factory , The snack can be organised in a well fashioned way. ITC has one of the best infrastructure in the world for food products. Hence the manufacturers can produce Bingo chips in large numbers.

Porters 5 forces model for Bingo chips

Threat of new entry: Since snack products is a growing market , ITC may face new threat from Parle,Britannia who have tried their hand in selling Biscuits. Also the cost of chips of various companies like FritoLays are similar to bingo. The new entrant may penetrate the market by reducing the price.

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ITC has not yet conquered the market and hence there are chances that the new entrant may enter in to the scene.

Bargaining power of supplier: The bargainign power of the supplier refers to the ability of the suppliers to raise input prices, or to raise the costs of the industry in other ways. Bingo is weak in providing the supplies to the retailer or the wholesaler. It cannot bargain the price to the consumers since it has not achieved the significant percent of market share in the snack industry.

Bargaining power of buyer: Since bingo chips has 13 percent market share , it is keen to provide good service to the customers and increase its market share. It has increased its content by 50 percent to create a new taste among the customers. Since the snack market has a demand from the customers through out the year, the bargaining power of the buyer will be

Competitive rivalry: Frito Lays has started a website(www.kurkure.co.in) to engage people to participate in public forum and online games . This is an attempt to indirectly drag the customers towards the product. But Bingo has tough competition from Parle which is now eying a 25 per cent market share through an aggressive marketing and distribution strategy. Mayank Shah, Group Product Manager, Parle Products, says, We have witnessed good demand for our snacks. More people are trying our products and we will continue doing activities to generate more trials. Parle has increased the volume of Musst in west, east and north and is now in the process of replicating it in the south. But Parle and Frito Lay can hardly afford to under-estimate Bingo. Dar says the company has several other surprises up its sleeve, which are at various stages of development and completion. Though he refuses to give details, analysts say Bingo, which is already worth Rs 400 crore, has the ability to shake up the market. Since variety is the core of a snacks brand to retain consumers interest, the company asked the chefs at its hotels to suggest 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 second part of the variety came through irreverent and fun campaigns. Consumers were asked to design the ads for Bingo using the angular shape of the chips as the central theme. Marketers call this crowd sourcing, which serves two purposes it engages the end-consumer and the campaign is done at the lowest possible cost. 27

Bingo 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. Analysts believe the Bingo story is also about well-leveraged distribution. The company, for example, distributed more than 400,000 large racks, to display the brand at all points of sale. The racks created a huge impact. The importance of Bingo is evident from the fact that potato-based snacks are the largest product segment (85 per cent share) in the Indian snacks market, followed by snack nuts, chickpeas and other pulse-based savoury snacks.

Threat of substitution: Kurkure may be considered as a substitution product for bingo. With TV ads and online forums , Kurkure has advertised heavily to attract customers. Bingo has not penetrated in to the market and there is a chance of being substituted by the other products. Also the various flavours

SWOT ANALYSIS
ITC, the brand owner of Bingo, and various other brands, primarily the Tobacco industry, is strong enough to compete with global players. This as an added advantage can prove ITC to be an Indian Multinational company though. The diversified presence in various industries viz., 28

Tobacco, Stationaries, food processing etc makes the base of the company stronger, and this invariably adds as a biggest strength to the BINGO brand. The strengths of the Brand is readily overshadowing the weaknesses, so does the opportunities to threats. But, the company should not conclude on this cold base to enjoy the benefits in the hand, rather a focus on the minor weaknesses and threats should lead to a path that paves way for the possibilities of being a brand leader, overcoming stiff competitions from Multinationals like FritoLays and Pringles, National competitors and the local products. STRENGTHS: Availability of Raw materials Availability of Manufacturing facilities Domestic markets Urbanization Catering the market distribution

WEAKNESSES: Insufficient infrastructure In-prominence in quality control, unable to meet the international standards High working capital Lack in innovation on variants Large number of intermediaries thus causing a slog in distribution

OPPORTUNITIES: Change in consumer patterns Rise in income level of customers Change in lifestyle and demographies Opening of new international markets Integration of new technologies

THREATS Prevalence of cultural taste brands High taxation Inventory cost Stiff competition with regional players Close competing Multinational brands

PEST ANALYSIS PEST analysis is one, that is merely a framework that categorizes environmental influences as political, economic, social and technological forces. Sometimes two additional factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can easily 29

be subsumed in the others. The analysis examines the impact of each of these factors (and their interplay with each other) on the business. The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans. PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The use of PEST analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. PEST also ensures that companys performance is aligned positively with the powerful forces of change that are affecting business environment. PEST is useful when a company decides to enter its business operations into new markets and new countries. The use of PEST, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment. POLITICAL The ITC brand is a house hold brand in India. The political scenario in India is such that the open invitation to the MNCs to be a part of Indian Snack Industry and on the other hand the government is conservative in Indian brands too. ECONOMICAL ITC rightly introduced Bingo in the market when there was less or no supply for Lay's in the market for a prolonged time. With this way, they developed this product,the advertisements were gived a keen focus. The same worked when the Mom-and-Pop stores across the country agreed for the trendy display of Bingo. SOCIAL To cater the Indian demography is a herculean task with taste spread all over the country. Thus to satisfy the customers in their taste and demography, Bingo offers sixteen variants, each specially made for the respective demography. The product profile, in longer run may be truncated by keeping those products that doesn't market well.

TECHNOLOGICAL The close competitor of Lay's which banks on the sentiment of being trendy and cool, though with a larger market share of 45%, is running behind Bingo in Innovation they incorporate with the product. Bingo has special variant which is baked and non fried variety of chips that can prove to be against trans fat in its covers. This in turn will not fail to attract those people who consider themselves to be strict against the usage of oily snacks.

EXPORT OF BINGO
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BACKGROUND The potato chip industry is continually growing around the world, especially in Southeast Asia, but local potato supplies are insufficient to meet processor needs. Snack food manufacturers in countries such as Japan, ASEAN and Mexico continue to show interest in importing US potatoes, but due to a variety of reasons such as market access issues and a lack of technical knowledge, have not fully pursued this. Other snack food manufacturers in countries such as Korea and Taiwan are currently purchasing chipping potatoes from the US but must continually deal with phytosanitary issues. Chip-stock growers have been exporting US chipping potatoes for several years and continue to refine the export process. There is a plethora of opportunities in the export market for chipping potatoes. Other potato producing countries are already finding success in tapping these markets, however, their potatoes seem to be of inferior quality, and the US can compete on a quality and availability basis. CURRENT MARKETS Japan Japan has a window of time where domestic chipping potatoes can not sufficiently supply local demand. The USPB has finally gained entry for fresh chipping potatoes to enter Japan for processing from February to June. With this access, the market holds great potential, but the processors have little knowledge of and no experience with US potatoes. In coming years the Board will also need to work on increasing market access. Malaysia US chipping potatoes and varieties are new to Malaysian snack food manufacturers. The Malaysian market for chipping potatoes has great potential for growth as it has not been entirely tapped. There are six major snack manufacturers in Malaysia that produce potato chips, the major four will be the initial target for the Board. Malaysia is not a significant producer of potatoes and does not produce chipping potatoes; therefore, they must rely entirely on imports.

Central America With the Central American-Dominican Republic Free Trade Agreements (CAFTA-DR) in place, the opportunities for exports of chipping potatoes to the Central American region should increase significantly. Although Costa Rica does grow potatoes, snack manufacturers in the market have a need for US chip-stock potatoes to supplement domestically grown potatoes that do not meet industry requirements. Fresh potatoes are not grown in large volumes in El Salvador, and therefore, the country traditionally imports their potato products and major snack manufacturers are in need of good quality chipping potatoes for production. In Guatemala, US fresh potatoes will face competition from locally grown potatoes that are sold at low prices; however, snack producers require a higher quality chipping potato for production. Vietnam 31

The economy in Vietnam continues to increase. Tourism has rebounded and fast food and Westernstyle snacks are becoming increasingly popular with the younger population, providing more opportunities for US fresh potatoes to enter the market. Logistical constraints, market demand and competition still need to be determined. MATURE MARKETS Korea Korea is currently purchasing potatoes from US suppliers, but market access problems have limited exports. Improvements to the market access agreement are required to fully develop this market. Taiwan Taiwan is another country that is currently purchasing US chipping potatoes for production; however, stringent phytosanitary requirements remain an issue. Thailand The three main snack manufacturers in Thailand have been purchasing US potatoes for production for the last several years. Sales of US chipping potatoes to Thailand have increased from 92 MT in the 2004/05 marketing year to 8,491 MT in 2008/09, an increase of over 9,000%. The Philippines There are three major chip manufacturers in the Philippines, all of which are purchasing US chipping potatoes for production. Marketing year 2005/2006 was the first year since 2000/2001 that The United States has exported fresh potatoes to the Philippines. Since 2005/2006, US chipping potato exports to the Philippines have increased by nearly 1,000 percent from 235 MT to 2,542 MT.

POTENTIAL MARKETS Mexico Mexico experiences extreme shortages of chipping potatoes despite extensive investments in local production. In the last few years, the USPB has made strides in educating Mexican snack manufacturers about US chip-stock. Unfortunately, unjustified market access restrictions block US potatoes from reaching the processing plants in Mexico. Indonesia Although the major Indonesian manufacturers of potato snacks remain the same, the growth potential of the potato snack category has attracted new players to the market. There are three main manufacturers in Indonesia, only one of which has the capability to produce potato chips from whole potatoes. While approximately half of the potatoes used for production are grown locally, the other half are imported from other countries. While the market is open to US potatoes, in the past, the United States has only exported limited quantities of fresh potatoes to Indonesia. The Board must work with the largest manufacturer to enter the market.

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Russia Russia has a very high consumption of potatoes. During the Communist era, potato production was organized throughout Russia and neighboring countries. With the collapse of the Soviet Union, production is sporadic and unable to meet domestic demand. There is a potential opportunity for US chip-stock potatoes, particularly in Far Eastern Russia. Market access still needs to be determined, as well as logistical constraints, market demand and competition. China China has the largest population in the world and is the worlds largest potato producer. Even though China has its own local production, inefficiency is rampant and quality is very poor. US fresh potatoes are still not allowed into China. Efforts to remedy this could take years, but the potential demands that access be pursued. The USPB is aware of great potential to export chipping potatoes because of the opportunity to initiate a processing protocol. CHALLENGES Since the chip-stock programs inception, the USPB has worked with targeted countries to grow US chipping potato exports. As the program develops, the USPB must prioritize markets to decide when the USPB should exit a market and when a market meets the criteria for entry. Foreign chip manufacturers are unfamiliar with US chipping potatoes, the varieties grown here, the year round supply capabilities and the high quality. They also believe the longer shipping times and the use of storage potatoes make them inferior to fresh dug Australian potatoes. There is a need for education and increased contact between US growers and shippers and the snack manufacturers in the markets. There will always remain uncertainties when exporting to new markets. The USPB must determine how to communicate with chip-stock growers to facilitate exporting to new markets. The USPB has also been challenged with finding supplies for export markets. Because many of the trade leads and requests from export markets are spot purchases, there has been limited supply to meet those needs. Since the programs implementation, US growers have run into quality issues when chipping potatoes arrive at their destination country. Not being able to determine the technical barriers to shipping chipping potatoes to foreign destinations is becoming a greater challenge, as more and more US chipping potatoes are being exported. Market access barriers, ranging from a complete ban in China to quotas in Korea and Thailand to time windows in Japan to geography restrictions in Mexico, are the biggest barrier to increased exports of US chipping potatoes. The US has also recently faced issues with US potato quality upon arrival and has experienced containers rejected because of rot. Because this is not a phytosanitary issue, the US must work with foreign inspectors to ensure this does not continue to happen.

BIBLIOGRAPHY
http://www.uspotatoes.com/downloads/Chips_and_Chipping_Potatoes-Export.pdf

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