A PROJECT REPORT ON

‘BINGO’
(A COMPARATIVE STUDY)
A Project Report submitted in partial fulfilment of the requirements for the awards of the degree of

MASTER OF BUSINESS ADMINISTRATION
TO By ESHA GOEL
E. NO. - 0271333907 Under the guidance of

Ms. Radhika Batra

MARCH 2008 esha

STUDENT’S DECLARATION
I here by declare that the Project Report conducted on HMR Institute of Technology and Management Hamidpur, Delhi

‘BINGO’
(A COMPARATIVE STUDY)
Under the guidance of

Ms. Radhika Batra

Submitted in Partial fulfilment of the requirements for the Degree of

MASTER OF BUSINESS ADMINISTRATION TO
This is my original work and the same has not been submitted for the award of any other Degree/Diploma/Fellowship or other similar titles or prizes.

Place: Date:

CERTIFICATE
This is to certify that the Project Report on

HMR Institute of Technology and Management Hamidpur, Delhi

‘BINGO’
(A COMPARATIVE STUDY)
Submitted in partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION
TO G.G.S. INDRAPRASTHA UNIVERSITY, NEW DELHI
Is a record of work carried out by ESHA GOEL

Under my supervision and guidance and that no part of this report has been submitted for the award of any other degree/diploma/fellowship or similar titles or prizes.

FACULTY GUIDE Signature Name Qualification: : : Ms. Radhika Batra (Signature & Seal of Learning centre.)

HMR Institute of Technology and Management Hamidpur, Delhi

Contents

1. INTRODUCTION
1.1 General Introduction 1.2 Objectives of Project 1.3 Industry Profile of Food Processing Industry A) Indian Food Processing Industry B) Indian Snacks Industry: An Overview C) SWOT analysis of Indian Snacks Industry

2. PROFILE OF THE ORGANISATION: ITC Ltd.
A) Establishment B) Growth and Diversification

3. STUDY OF SELECTED RESEARCH PROBLEM
3.1 Statement of Research Problem 3.2 Statement of Research Objectives 3.3 Research Design & Methodology 3.4 Analysis of Data 3.5 Summary of Other Findings 3.6 Recommendations and Conclusions APPENDIX A) Questionnaire Sample B) Bibliography
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CHAPTER.1

INTRODUCTION

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CHAPTER.1 INTRODUCTION 1.1 GENERAL INTRODUCTION
The project purports to decipher the satisfaction level as well as the preferences of consumers pertaining to the various flavours of BINGO- a new range of savoury snacks launched by ITC. We aim to analyse the success, marketability and future growth prospects of BINGO. We also intend to study the spending habits and motivation of consumers for buying snacks. Basically we intend to find out the most popular flavour of BINGO in the market from our sample. Snacks as such are a very minor part of the food processing industry because snacks sector is largely unorganised. Here we will also look into the market trends in snacks over the years. For this a survey was conducted in Delhi where respondents were asked to fill a questionnaire. The data was collected and analysed to obtain conclusions. This report carries an introduction of the company profile, detail of the methodology followed detailed data analysis and the results so obtained with the variety of graphs along with given.

1.2

OBJECTIVES OF THE STUDY

1. To study the snacks industry as a part of food processing industry. 2. To study the company profile of ITC Ltd the makers of BINGO. 3. To study the trends in snacks industry. 4. To analyse and interpret the results of sample collected. HMR Institute of Technology and Management Hamidpur, Delhi

5. To determine the future course of action by ITC. 6. To find conclusions to our project.

1.3 INDUSTRY PROFILE OF INDIAN FOOD PROCESSING INDUSTRY

A)

Indian Food Processing Industry

Food processing industry in India is a sunrise sector that has gained prominence in the recent years. Availability of raw materials, changing lifestyles and relaxation in policies has given a considerable push to the industry’s growth. This sector is among the few that serves as a vital link between the agriculture and industrial segments of the economy. Strengthening this link is of critical importance to improve the value of agricultural produce; ensure remunerative prices to farmers and at the same time create favorable demand for Indian agricultural products in the world market. A thrust to the food processing sector implies significant development of the agriculture sector and ensures value addition to it.

Ministry of Food Processing Industries
The Ministry was set up in 1998 and the industry segments that come under its purview are:
• • •

Fruit & Vegetable processing (including freezing and dehydration) Grain Processing Processing of Fish (including canning and freezing)

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Processing and refrigeration of certain agricultural products, dairy products, poultry and eggs, meat and meat products

Industries related to bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery, savory snacks, malt extract, protein isolate, high protein food, weaning food and extruded food products (including other ready-to-eat foods)

• • • •

Beer, including non-alcoholic beer Alcoholic drinks from non-molasses base Aerated water and soft drinks Specialized packaging for food processing industries.

The Ministry of Food Processing Industries, GoI, has estimated the size of the Indian food market at US$ 191 bn (Rs 8,600 bn). The processed food market is projected to be over US$ 100 bn, of which the primarily processed food market accounts for 60%, while the value-added processed food market is around 40%. The average annual growth of the food processing industry has been around 8% between FY01-FY06. The segments that have driven the growth are the beverages and meat & meat products and processed fish sectors. The food processing industry in India has a share of 1.5% in the total GDP of the country, and as part of total manufacturing accounts for 9%. India’s share in world trade in respect of processed food is about 1.6%. An extensive and highly fragmented industry, the food processing sector largely comprises of the following sub-segments: fruits & vegetables, milk and milk

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products, beer & alcoholic beverages, meat and poultry, marine products, grain processing, packaged/convenience food and packaged drinks. A large number of players in this industry are small sized companies, and are largely concentrated in the unorganized segment. This segment accounts for more than 70% of the output in volume terms and 50% in value terms. However, though the organized sector is comparatively small, it is growing at a much faster pace

B) 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, 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 tonnes in terms of volume.

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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 mindboggling 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-formoney 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 Haldiram’s 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 HMR Institute of Technology and Management Hamidpur, Delhi

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.

C) SWOT Analysis of Snacks Industry Strengths
• • • •

Abundant availability of raw material Vast network of manufacturing facilities all over the country Vast domestic market Urbanisation

Weaknesses
• •

Low availability of adequate infrastructural facilities Lack of adequate quality control & testing methods as per international standards HMR Institute of Technology and Management Hamidpur, Delhi

Inefficient supply chain due to a large number of intermediaries High requirement of working capital

Opportunities
• • •

Rising income levels and changing consumption patterns Favourable demographic profile and changing lifestyles Integration of development in contemporary technologies such as electronics, material science, bio-technology etc. offer vast scope for rapid improvement and progress

Opening of global markets

Threats
• • • • •

Affordability and cultural preferences of fresh food High inventory carrying cost High taxation High packaging cost Competition between national and regional players

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CHAPTER.2

PROFILE OF THE ORGANIZATION: ITC Ltd.

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CHAPTER.2 PROFILE OF THE ORGANISATION

ITC LIMITED
A) 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. 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.

B) 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

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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

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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 enhancing the Company's marketing reach.

ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing.

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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CHAPTER.3

STUDY OF SELECTED RESEARCH PROBLEM

HMR Institute of Technology and Management Hamidpur, Delhi

STUDY OF SELECTED RESEARCH PROBLEM
3.1 STATEMENT OF RESEARCH PROBLEM

In the branded snacks market, to get down to basics, Frito Lay commands a share of 45%, followed by Haldiram’s at 27% and ITC at 16%. The rest is divided between a handful of new entrants, wannabes and many regional players. Out of these ITC’s Bingo is a new entrant in the market, which was launched in 2007. ITC has launched Bingo in a wide variety of flavours and formats, ranging from potato chips to finger snacks. Because of its different and catchy advertisements Bingo has created a buzz in the market. Therefore, our aim was to find out the most popular flavour of Bingo among all the offerings. We began our analysis by dividing people into those who like to eat snacks and those who don’t. We based our study on the survey of people who like to eat snacks. This survey was conducted in Delhi. To collect the data we designed a questionnaire.

3.2 STATEMENT OF RESEARCH OBJECTIVES
The main objectives of our research were as follows:  To find out what percentage of population likes to eat snacks.  To find out which flavour of Bingo is most preferred.

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 To analyse the reason for the popularity of the most preferred snack.  To know the satisfaction level of people who eat Bingo.  To find out how much people spend on snacks weekly.  To find out the preferences of people for different brands.

3.3 RESEARCH DESIGN & METHODOLOGY
Research design is the basic framework which provides guidelines for the rest of research process. It specifies the methods for data collection and data analysis .In this research project we have used the survey method of data collection, to be more specific questionnaire method. We conducted a survey in Delhi. Out of the universe of 500 our sample size is 50. Respondents in the sample size were asked to fill the questionnaires to gather the data.

3.4 ANALYSIS OF DATA
In order to extract the meaningful information from the data collected an analysis of data is done using pie charts, bar graphs etc. The first objective of the research project is concerned with finding out what percentage of people likes to eat snacks. The pie chart given below is clear on the percentage of people who like to eat snacks. Out of 50 respondents 36 like to eat snacks while 14 don’t.

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no, 14, 28%

yes, 36, 72%

Our second objective is concerned with finding out which flavour of Bingo is most preferred.

Table showing the responses of people: Flavours Masala Potato chips Salted Potato chips Tomato Potato chips Chatkila Nimbu Achar Potato chips Tandoori Paneer Tikka Potato chips Mad Angles Tedhe Medhe Livewires Respondents (value) 3 1 3 1 3 22 1 2 Respondents (percentage) 8% 3% 8% 3% 8% 61% 3% 6%

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3%

6%

8% 3% 8% 3% 8%

Masala Potato chips Salted Potato Chips Tomato Potato chips Chatkila Nimbu Achar Potato Chips Tandoori Paneer Tikka potato chips Mad Angels Tedhe Medhe

61%

Livewires

The above table and pie chart shows the responses of the people. It is clear that Bingo’s Mad Angles dominates the market for Bingo. The second spot is shared by two flavours equally—Masala potato chips and Tandoori Paneer Tikka potato chips. Third most popular format of Bingo is Livewires and the fourth spot is shared by Salted Potato Chips, Chatkila Nimbu Achar potato chips and Tedhe Medhe.

The third objective was to analyse the reasons for the popularity of the most preferred flavour. For this the respondents were asked what do they like most about Bingo. Following pie chart shows their responses.

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5% 13%

8%

47%

Taste Variety Quality Price Quantity Packaging

16% 11%

From the above pie chart we can see that people like the taste of Bingo the most i.e. they like to eat Mad Angles Because of its unique format and flavour.

Fourth objective was to find out how much people are satisfied with Bingo. Following pie chart shows the satisfaction level of people:

unsatisfied 17%

very satisfied 44%

somewhat satisfied 39%

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The fifth objective was to find out how much people spend weekly on snacks.

No.of people 25 20 15 10 5 0 Money Spent 5 20 Below 50 11 50-100 Above 100

From the above diagram it is clear that most people spend below Rs.50 on Snacks. And very small part of the sample spends more than Rs.100 on snacks weekly. Our sixth and last objective was to find out the preferences of people for different brands. Here, we aim to find out the most popular brand of snacks excluding Bingo.

14 12 10 No. of people 8 6 4 2 0

13 9 7 5 2

Lays Kurkure Uncle chips Pringles Haldirams namkeens

Snacks Brands

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In the above graph we can see that Frito Lays is the most popular brand among people followed by Uncle Chips and Kurkure. Next is Haldiram’s Namkeens. The least popular brand appears to be Pringles. It may be because Pringle is based on American recepies and tastes and the Indian public has not been able to warm up to the American tastes. Also, Pringles is imported which makes it a little more expensive than Indian snacks.

3.5 SUMMARY OF OTHER FINDINGS

16 people out of 36 people who like to eat snacks feel that as compared to other brands Bingo is much better. Other 12 feel that Bingo is somewhat better and 8 feel that Bingo is about the same as other brands. None feel that Bingo is somewhat worse or much worse than other brands.

When asked how often they eat Bingo 22 people said once a week or more often, 11 people said everyday and 3 people said 2-3 times a month.

3.6 RECOMMENDATIONS AND CONCLUSIONS
After conducting the survey we are in a position to say that ever since its launch Bingo as a preferred brand is on a rise. Although Frito Lays is the most popular brand Bingo has carved a niche for itself. Bingo is in the growth stage of its life cycle. Given more time it is capable of capturing a larger market share and giving tough competition to other brands. Overall people seem to be satisfied with Bingo. HMR Institute of Technology and Management Hamidpur, Delhi

APPENDIX

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RESEARCH PROJECT ON THE STUDY OF BINGO
This is survey on Bingo by Esha Goel for the partial fulfilment of the requirements for the awards the degree of MASTER OF BUSINESS ADMINISTRATION. So kindly give your response to these questions:-

QUESTIONNAIRE on
Name: _______________________ Age : ________ Signature: ___________________
General Instructions: 1. Answer all questions. 2. Indicate your answer by marking a tick against an appropriate option. 3. Mark only one option in all questions. Q1. Do you like to eat snacks? Yes ___ No ___ Q2. Have you heard of ITC’s BINGO? Yes ___ No ___ Q3. Have you ever tried BINGO? Yes ___ No ___ Q4. Which flavour do you like the most? 1. Masala Potato Chip 2. Salted Potato Chip 3. Tomato Potato Chip 4. Chatkila Nimbu Achar Potato Chip 5. Tandoori Paneer Tikka Potato Chip 6. Mad Angles 7. Tedhe Medhe 8. Livewires Q5. How often do you have BINGO? Once a week or more often Everyday ___ ___ ___ ___ ___ ___ ___ ___

___ ___

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2 to 3 times a month Q6. How much do you spend weekly on snacks? Below Rs. 50 ___ Rs. 50-100 ___ More than Rs. 100 ___ Q7. Overall, how satisfied are you with BINGO? Very satisfied ___ Somewhat satisfied ___ Unsatisfied ___ Q8. What do you like about BINGO? Taste ___ Variety ___ Quality ___ Price ___ Quantity ___ Packaging ___

___

Q9. Compared to other snacks (such as Kurkure, Lays, Pringles etc.) that are available, would you say that BINGO is? Much better ___ Somewhat Better ___ About the same ___ Somewhat Worse ___ Much Worse ___ Q10. How likely are you to recommend BINGO to others? Definitely will recommend ___ Probably will recommend ___ Not sure ___ Probably will not recommend ___ Definitely will not recommend ___ Q11. How did you first discover BINGO? Advertising- T.V, Newspaper, Radio Friends/ Family Saw it in store Other

___ ___ ___ ___

Q12. Before switching on to BINGO, which snack did you prefer? Lays Kurkure Uncle chips Pringles Haldiram Namkeens _____ _____ _____ _____ _____

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BIBLOGRAPHY
SME rating agency of India ltd. www.allbusiness.com http://www.financialexpress.com/news/Just-munch-it/271873/0 www.itcportal.com

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