Kurkure
Kurkure
Kurkure
This case is written by the students of IoBM for their Marketing Analytics course
under the guidance of their teacher Mr. Naveed Ilyas for the purpose of learning and
understanding the importance of quantifying research analysis for successful
marketing in today’s world.
The contents of this case do not reflect on the inefficient or efficient marketing
strategies of PepsiCo. And the authors of this case are not trying to suggest better
management techniques but have only conducted research and written the case for
discussion in class and cannot be held liable if this document is reproduced in any
form.
In 1932, Elmer Doolin found the Frito Company in San Antonio, Texas, and began
making Fritos corn chips. Today Frito-Lay Company established in 1955, is the world
leader in the salty snack category, controlling more than 35 percent of the world
market in snack chips and 60 percent in the United States. Among the company's
well-known brands are five that generate annual sales of $1 billion each: Lay's,
Ruffles, Doritos, Tostitos, and Cheetos. In addition to its dominance of the potato
chip, tortilla chip, and corn chip sectors (the last of these led by the Fritos brand),
Frito-Lay has major brands in other categories, such as Rold Gold pretzels, Cracker
Jack candy-coated popcorn, and Grandma's cookies. About $4 billion of the
company's overall net sales are generated outside the United States, with sales in 42
countries. Lay's, Ruffles, and Cheetos are among Frito-Lay's major international
brands, along with such local favorites as Walker's in the United Kingdom and
Sabritas in Mexico. Frito-Lay Company is the snack food division of PepsiCo, Inc.,
generating about half of the parent company's revenues and two-thirds of its profits.
dominate the Local brands potato chips market and launched Kurkure salt and
pepper’s potato chips aimed mainly at children as a fun snack.
The industry for chips in Pakistan is worth PKR 24 Billion consisting of brands under
categories A and B. With Local brands holding 75% of the market share. Frito-Lay
wanted its own market share in the local industry which was being dominated by
Shahi with two superstar brands of potato chips, Fry’o and Popstar and another
competitor Zee company with a superstar brand, Cheery Balls.
On the other hand, some studies in lean and obese people have found that
snacking may lead to slower weight loss or even weight gain
Link: https://authoritynutrition.com/snacking-good-or-bad/
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Is it a flavour for the masses? The very brief
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Pepsi Foods Ltd, now known as Frito-Lay Ltd manufactures Pakistan's biggest snack
brands including Kurkure, Cheetos (puffs) and Lays. Frito-Lay presenting Lays
flavors like Bar B.Q and Masala to fulfill the taste buds of the Pakistani markets is a
case of globalization. It incorporates brands of PepsiCo. Counting Pepsi cola,
Aquafina, Mountain Dew, Marinda and 7up.
Frito-Lay is about great fun from making delectable bites to dealing with their 50,000
workers. Making great snacks for clients, while administering to the general
population, networks and nature they share. Frito-Lay is excited about working with
differentiated vendors, which does esteem expansion. Frito-Lay Co. endeavors for
trustworthiness, decency and respectability.
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Is it a flavour for the masses? The very brief
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credit facility by wholesaler and they are standing in peak hours outside schools
in areas are very small so children come out from school in break time , off time
and evening time which is play time for child to relax and take snacks or papar
common word for children.
The market for imported chips is little and restricted to simply top of the line
outlets and general stores in Pakistan and just a little portion of the market will
pay a premium for these items.
Pakistan is a standout amongst the most aggressive markets on the planet with
respect to chips and different snacks.
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Is it a flavour for the masses? The very brief
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Kids and youngsters are the target market of the snack and we have the
experience that the eating patterns of the Target Market are quickly
changing and they love to have Snacks constantly. Also, Potato and Corn
Snacks are named as a food substitution and being a light fast food is
getting renowned.
Another advantage for the stakeholders is that the way of life is enhancing
and going to be changed and furthermore due to satellite intrusion the
market will undoubtedly ensure an extensive lift.
The Potential market for the Snacks likewise exists in Gulf Countries and
Central Asian States, which has not yet been tapped.
According to Dawn News, 65% of the aggregate national volume is sold in the
urban areas while 35% in the rural markets. Supply could be stretched out to
rural zones, as there is a lot of opportunities to get better. Pakistan's significant
population lives in second and third level urban communities and additionally
rural zones which portray that there is a vast uncatered market there which can
be utilized as an opportunity.
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Is it a flavour for the masses? The very brief
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Micro Snacks
Macro Snacks
Macro Snack is an offer giving an entire food to fulfill hunger, similar to a sandwich
or a pizza. While micro snacks are almost like a food item, snacks like bread rolls and
chips. These snacks are considered as an extravagance item as they don't come in the
main 5 need things' record of fundamental need of the regular purchasers.
The target market for KURKURE SALT AND PEPPER's that is, Children take these
bites to class and enjoy them during their meal break. Aside from this youthful
grown-ups and youngsters have chips during a hangout, travel or at different times
during the day. Likewise, having snacks encourages youngsters to satisfy their
appetite during their relaxation hours and furnishes them with a truly necessary push
of energy between their meals.
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Is it a flavour for the masses? The very brief
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Majority of the unbranded chips are manufactured at local bakeries, large retailers
who have introduced their own line of chips products, domestic small businesses and
wholesalers who usually exist and operate from wholesale markets of Karachi like
Jodia Bazar, Chadi Line, Khajoor Market, Bolton Market, Baldia Market, Kharadar
Market, Rancholine Market and Musaline Market and Shahabuddin Market.
The unbranded category – also prominently known as “Khulla Maal” is still having a
dominating prominence because unbranded chips are considered as a value for money
because of their high gram to price ratio. It’s relatively cheap and provides more for
less.
Monthly income of households is roughly around PKR 12,000, therefore for emerging
market consumer’s snacks are still considered as a luxury product for routine
munching and that’s why unbranded chips have a significant size share as it caters the
need of lower end consumers, who are the masses and the country’s core consumer
base.
This situation is a valuable indicator for strong brands and leading market players to
consider the lower income class market, to expand the size of their market share
because two-third of the population of emerging markets – including Pakistan – live
at the Bottom of Pyramid, so targeting them will not only increase the company’s
market share but will also amplify the overall pie size of branded chips market for
Local brands category.
Target Audience
Pakistan has approx. 1,575 geographical rural populations, which have the total
population 51.42% as of 2015 (World Bank).
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Is it a flavour for the masses? The very brief
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Problem Statement
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Is it a flavour for the masses? The very brief
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Kurkure salt and pepper's should capture the whole market utilizing a push
methodology, which will be costing more. Frito-Lay has a vast supply system and
keeps up a decent association with its vendors so it can make its products accessible
and go up against the market pioneers. This procedure will require a handsome
promotion spending plan for the perception building plan.
Kurkure salt and pepper's should build up itself as a brand for the majority. It would
need to make a fun brand identity and brand recognition to catch its young target
market.
The Snack business is one of the quickest developing ventures of Pakistan with a
market estimation of around PKR 20 Billion, having a yearly normal development
rate of around 6 to 8 Percent. In the mid 80's the nibble business was ruled by bread
rolls and corn-based items. Be that as it may, amid the most recent 2 decades, the
request has moved more towards Potato based chips. The atmosphere variety in
Pakistan enables potatoes to be collected three times each year. Also, with such a
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Is it a flavour for the masses? The very brief
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Competition
Reply: Local brand items including Shahi make up to 75% of the market While FLP
have 10% piece of the pie, the greatest percentage of branded crackers
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34 TONS,
98.6 TONS, 3.84%
11.13%
FLP
Snack City
88.1 TONS,
9.95% Kolson
0.6 TONS, OPTP
482.1 TONS, 0.07%
180.3 TONS, Oye Hoye
54.45% 20.36% 1.7 TONS, Shahi
0.20%
B Brand
Ismail Industries:
It is one of the biggest nourishment organizations in Pakistan, which sends out its
extensive variety of cookies, candy parlor and snacks to around 40 nations. In its
Snack category Ismail Industries has a Snack City division, which has three items to
be specific Kurleez, Chillz, and Fillz. Kurleez is the market pioneer in the crease
chips class, their costs for various SKUs raging from Rs.5 to Rs.50.
United Snacks:
United Snacks is a youthful and forthcoming industry player with its trade name Oye
Hoye; gathering pieces of the pie because of its lively, in vogue and unique brand
identity, Oye Hoye has an assortment of flavors like Salt, Masala, Tomato, Bar BQ
and Cheese. Costs extend from Rs.5 to Rs.10.
Kolson:
Kolson is a set up player in Pakistan's Snack industry with its brands Slanty, Potato
Chips, Twitch and Snackers being extremely mainstream among the youthful target
segment. Their costs run from Rs.5 to Rs.10. Its leading product is Slanty, which
comes in three flavors; plain salted, vegetable and Jalapeno.
OPTP:
One Potato Two Potato (OPTP) and its finger chips is immediate rivalry for Frito-
Lay, which has a scope of flavors like Garlic Mayo, seasoning salt, Masala, Salt and
Pepper. Costs run from Rs. 20 to Rs. 50. These finger Chips are just being offered in
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Is it a flavour for the masses? The very brief
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Karachi for the time being with organization hoping to grow to different urban areas
of Pakistan too sooner rather than later.
Local Competitors:
The Local Competitors in Karachi offering snacks in a similar classification are
Shahi, Zee, Sundar, Batoota and others with Shahi and other Local brands having the
biggest piece of the pie in the snack market of Karachi. More finished Shahi's Fry'o
and Popstar are the organization's best brands and these two brands alongside Zee's
Cheery balls are the greatest obstacle to Kurkure salt and pepper's prosperity, as these
brands are the most famous and the best brands in this classification.
Exhibit B
Market Share of potato chips in Karachi
11.13%
3.84%
FLP
9.95% 0.07% Snack City
Kolson
OPTP
54.45% 20.36% Shahi
Oye Hoye
B Brands
0.20%
Nearby brand which is our local brands having 61 percent of piece of the pie
(8000 tonnage) with the market reach and accessibility in Average of (both Shahi
and local brands) 923 outlets out of 1104 outlets uncovers that Local brand isn't
costly when contrasted with marked snacks with greatest reach to zones where
social class B and C lived. These regions are thickly populated comprise of low
pay level gatherings like Korangi, landhi, Ittehad town, banaras, Pehalwan goth,
Azam Basti, Akhter province and qayum abad and so on. Youngsters stash cash
level is low in these regions that is the reason they want to purchase local brand,
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Is it a flavour for the masses? The very brief
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which is of Rupees 2 least and high in amount. Exchange edges are high on Local
brand for instance ZEE PAPAR Selling cost is 2 retailers get rupees 12 edge on
bundle of 24 pieces. Whereas Slanty chips give 1 parcel free on per dozen buy.
Youngster recognition to purchase 5 chips parcels for 10 rupees when
contrasted with branded he will get just two bundle it is because of reality that
exchange profit, retail profit, pocket money level of children zone insightful and
amount matters most to kids with regards to purchase crackers or snacks.
Another reality is that little retail shops, kiryana stores acquire high net revenue
on trading of nearby brands.
Market pioneer brands like Shahi and other Local brands have the best nearness in
Cabins, Corner House shops, Popshops and Riders Mobile shops. They do this by
utilizing Suzuki get autos, which have a limit of around 100-120 Bundles. These
brand manufacturers designate a particular distributer to win in the gigantic market at
a cost of Rs. 37 to Rs. 38 for every Dozen. Additionally, other evaluating
methodologies include the producer pitching to providers at Rs. 40 to Rs. 45. With
offering in mass going for as low as Rs. 38 or as indicated by whatever other
motivating force plots which differ from organization to organization. The RTM
methodology of Competitors, for example, Shahi ordinarily includes offering through
two courses in particular Wholesaler, Distributor, and vendor, in Wholesaler supply
the item is passed onto retailers and wholesalers. In the vendor route, the item is
moved to the wholesalers and sub-distributors who at that point exchange it to
retailers.
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Is it a flavour for the masses? The very brief
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Exhibit C
RTM strategy of Competitors
Retailers
Wholesaler-
B-Brand
Distributor
Wholesalers Retailers
Wholesalers Retailers
Supplier
Sub-Suppliers Retailers
Numeric Distribution
𝑁𝑜. 𝑜𝑓 𝑜𝑢𝑡𝑙𝑒𝑡𝑠 𝐾𝑒𝑒𝑝𝑖𝑛𝑔 𝐵 𝐵𝑟𝑎𝑛𝑑 𝐶ℎ𝑖𝑝𝑠
𝑁𝑢𝑚𝑒𝑟𝑖𝑐 𝐷𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝐵 𝐵𝑟𝑎𝑛𝑑 =
𝑁𝑜. 𝑜𝑓 𝑡𝑜𝑡𝑎𝑙 𝑜𝑢𝑡𝑙𝑒𝑡𝑠
= 86% ∗
This indicates B-Brand is winning everywhere throughout the market and has the best
dispersion among the different players (i.e. A brands). The denominator here is the
discount number of outlets since B-Brands are dispersed for the most part through
wholesalers. B-Brands have a tendency to stay away from retailers as the rack is as of
now reserved by the A-Brand Players.
(* The numeric utilized is taken from the Capstone Project Heavy-Weight Challenge
Data. The information probably won't be precise because of brisk fluctuations in the
wholesale segment anyway may demonstrate a genuine picture of the situation)
This indicates B-Brand Chips are performing moderately better in it's category.
Notwithstanding, the Sales Volume how lesser percent than the unit volume which
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Is it a flavour for the masses? The very brief
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demonstrates that B-Brand deals with the cost-leadership approach and the item is
extremely low-priced.
(* The numeric utilized is taken from the Capstone Project Heavy-Weight Challenge
Data. The information probably won't be precise because of fast vacillations in the
wholesale segment anyway may demonstrate a genuine picture of the situation)
Business Model
Frito-Lay's supply demonstrate uncovers that the organization is producing their stock
in Lahore, which fills in as a point of convergence for the dispersion of snacks and
crackers crosswise over Pakistan. Production amenity and choice of location depend
on the accessibility of raw materials, which is direct material (corns) exceptionally
accessible in Punjab territory at reasonable costs.
1. Rahber trader is catering 33 areas in Karachi and is covering the most number
of areas.
2. Hiramal 1 is catering 16 areas in Karachi.
3. Hiramal 2 is catering 16 areas in Karachi.
4. Ali Enterprise is catering 14 areas in Karachi.
5. Ibad traders are catering 12 areas in Karachi.
6. Friends distributers are catering 17 areas in Karachi.
7. Kd -5 is catering 13 areas in Karachi.
Retail environment
Retail trade administration for snacks and crackers industry comprises of;
a) General trade which incorporates retail shops, kiryana stores, little walk-ins,
Grocery stores, Medical stores, Bakeries and Kiosks.
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Is it a flavour for the masses? The very brief
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current exchange that incorporates Super Mart, Mini Mart and Petro Mart.
Worldwide current exchange, which incorporates Hyper-Mart.
d) Wholesalers
Market research
Qualitative Research
Individual meetings were directed with distributors of snacks and cracker industry in
Karachi's market keeping in mind the end goal to get an entrance to showcase bits of
knowledge in regards to supply channel management of Frito-Lay and their rivals.
Individual meetings uncover factors, which incorporate accessibility, brand
inclination, service recurrence and so forth. Keeping in mind the end goal to decide
top 5 selling brands and get the understanding of nature of the segment which
incorporates SKU, channel management at distribution and wholesale level.
Quantitative Research
A study was led in 1188 outlets served by 7 distributers in Karachi. Overview
depended on a poll covering bits of knowledge with respect to the Shop's name,
Owner's name, Area, Brand inclination rating accessibility of FLP variations and
rivalry snacks in Karachi's market. Reason for this exploration was to discover
answers to the accompanying focuses in snacks and crackers market of Karachi.
Target Audience
Frito-Lay has pointed its new chips, Kurkure salt and pepper's at kids, matured
between 5 years of age or more. The social class is classification B and C, which is
down paid population in Karachi. Kurkure salt and pepper's can be consumed as a
snack to fulfill hunger in the middle of legitimate meals. Likewise to give youngsters
a jolt of energy alongside a component of fun. Pakistan has approx. 1,575 towns
which have the aggregate population 61.24% starting at 2015 (World Bank).
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Is it a flavour for the masses? The very brief
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Marketing strategy
Push strategy
Typically, as all B-Brand Players do, as entry and exit boundaries are unimportant in
this industry, each player begins off with push procedure where they stream the items
in the business sectors and have a tendency to make request out of supply by offering
motivations to the wholesalers. Kurkure salt and pepper's did likewise yet the
motivating forces weren't sufficiently pleasing for the wholesalers subsequently the
item must be ceased for some time and arranged for relaunch with an alternate
technique.
Kurkure salt and pepper's wasn't appropriated in each corner. It was a strategy to
stream in those business sectors were substantial buys are made of B-Brand Products
like Jodia Bazaar, Nazimabad No.2, Khajoor Bazaar and Ranchor Lines.
Brand loyalty
There is unimportant brand faithfulness with regards to nearby brands of chips, as the
clients just need an appetizing eatable accessible effectively at a low cost and a decent
amount to fulfill hunger in the middle of suppers and get a jolt of energy.
Growth
Increasing population
According to the industry findings carried out the market mix in respect of the potato
chips is as follows:
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Is it a flavour for the masses? The very brief
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15%
30% 5-10 years
11-20 years
20%
21-35 years
36 and above
35%
The target market of potato chips is kids, adolescents, and youths. 70% of
youngsters eat snacks at school and crackers are their first decision as they are
to bring along with and have different and scrumptious taste.
As per Dawn News, 60% of the general national volume is sold in the urban
focuses though 36% in the country markets.
Buying power
Almost all wage level particularly beneath 5,000 and even over 10,000 can
purchase and expend LAY'S
Elite class of our general public are not expending excessively when
contrasted with the center and lower white collar class
LAY'S chip is such sort of item, which doesn't have any confinement of age or
sex.
Before 1990, the greater part of Pakistani was in Picking or incautious
purchasing conduct with respect to the nibble business, as there was relatively
few decisions around. We can review that amid our youth crackers was
considered as Fasting Food. After financial progression, multinational
organizations, for example, Pepsi and Coke have gone into Pakistani FMCG
industry and changed the condition. The real errand to advertise things as
crackers is to convey Consumer from Picking to Variety chasing and after that
to Problem fathoming conduct, to change fasting Food to Fast Food.
Uncommonly Pepsi propelled Lays in Pakistan in June 2005 and makes a
feeling of eating and furthermore influenced the buyer's taste buds.
According to a SMEDA review right around 800 snack things and 170 kinds
of savories are sold crosswise over Pakistan. The marked bites are sold no less
than 25% higher than the unbranded items. Flavorful bites have been a piece
of Pakistani nourishment propensity, since nearly ages. In spite of the fact that
there is no specific time for snacks, ordinarily they are consumed at break
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Is it a flavour for the masses? The very brief
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time. The assortment is nearly marvelous with claims to fame from all
locations, which have increased national acknowledgment.
They are value delicate where Local brand is offering in most remote zones.
Generally childrens purchase snacks whome required high amount with low
cost since little retail locations around there appreciate high retail edges like to
offer neighborhood mark rather than A brand which is less in amount and high
in cost. Another observation about childrens they incline toward most extreme
no of snack bundles buy in given pocket cash level.
Potential demand
The total crisps (potato chips, etc) market is over Rs20bn as compared to Rs15bn
in 2014.
Currently, in chips manufacturing, Frito-Lay is the market leader in the country
with 45% market share in Potato snacks category. The Snack city (Kurleez),
OPTP & Oye Hoye, which has made a late entry in to chips processing market,
has managed to get a market share of 25%. There are also the Kolson, Bunnys,
Golden, Super Crisp, etc. in the competition
The mix of Branded and Unbranded Chips available in the Market meets the
demand of the present market. There is 60% of the population, which is Brand
Loyal. However remaining 40% of the Un-branded Market can be attracted
through heavy Advertisement Campaign
The industry has been growing around 30% for the last three years, while the
branded segment is growing around 25% per annum, 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, which is what makes it so attractive to food Companies that are
looking at bigger shares. Growth rate of readymade snack industry.
Market opportunities
About 40% of the Potato Chips Market includes un-branded chips which can be
pulled in through Heavy marketing Campaign
Advertise more in shops and rural regions
Supply could be stretched out to rural territories as there is a lot of opportunity to
get better
Emerging Pakistan
Web and TV media has expanded the consciousness of various world culture and their
eating habits. Pakistani buyer is begun searching for new tastes and willing to pay bit
additional cost for that. Extending Mall culture multiplexes and different pathways
make new advertising open doors for snack industry.
Brand awareness
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Is it a flavour for the masses? The very brief
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Because of creative stamping procedures and accessible stages for ad. Pakistani buyer
is gradually changing, his purchasing conduct from looking to critical thinking. Brand
mindfulness in FMCG industry is expanding.
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Is it a flavour for the masses? The very brief
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In pre-offering, the sales order booker needs to make calls multi-day before
supply. Order booker needs to visit outlets and take their requests and 24-hour
supply truck goes to those outlets and drops their individual orders. At the point
when Pre dealer books the order, OBI (Order Booking Invoice) will be produced
and at the season of supply, DBI (Delivery Booking Invoice) will be created from
PJP of pre-seller.
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Is it a flavour for the masses? The very brief
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Already both – immediate and circuitous channels were dynamic for General
Trade. However, now all outlets are engaged through Indirect Channel just i.e.
organization supplies stock to wholesalers and after that its merchant's
obligation to supply it to all the individual outlets. The points of interest related
with this model are as per the following:
Reduced Credits
Lowering the Cost
Increase the liquidity proportion
Credit terms are currently managed by the distributor
Recommendations
The intended interest group, which is youngsters, is effectively exhausted doing day
by day homework and concentrate in school. They require a break and it is vital for
them to have a fabulous time in it as that refershes their mind and enhances their
focus. It is each kid's entitlement to enjoy-time as much as it is its entitlement to have
the education. Kurkure salt and pepper's can endeavor to make this observation in
buyers' brains that it is putting forth a fun snack as well as a fun answer for long and
exhausting days in school.
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Is it a flavour for the masses? The very brief
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To remain at the highest point of the brain of kids, KURKURE SALT AND
PEPPER's pack of crackers must have one of the following play-off, which will
inspire them to purchase and attempt the new offering.
A shriek with a name on it. The name gives the client a feeling of
proprietorship. It will give its purchasers an inclination that the brand
administers to each individual exclusively. The methodology will bring about
repurchase, as children will purchase increasingly with an inspiration that their
name could turn up.
KURKURE SALT AND PEPPER pack can incorporate stickers like Ben-ten
and Barbie to connect with its clients.
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