ITC Interrobang Case Challenge 2011 – Bingo!

Bingo! Mad Angles

ITC Interrobang Case Challenge 20111

Yesterday at The BT Marketing Hall of Fame Awards, Palace Towers, Mumbai (10th Oct
'09)

Satya looked around as he settled into his seat in the auditorium. As Marketing Chief for ITC’s
food business, he had to make these appearances as part of ‘Good PR’. It wasn’t exactly his cup
of tea- he was a fighter, someone who had worked his way to the top by wrestling with business
problems and driving his team to deliver.

‘As crowded as Churchgate Station’, he muttered to his colleague Ramesh, sitting to his right.
Ramesh was the Brand Manager in charge of Bingo!, ITC’s snack food brand and its newest baby.
Bingo! had been launched only two years ago, with much fanfare and brilliant, clutter-breaking,
TV commercials. Satya and Ramesh had redefined the market with snack-offerings in new
formats and flavours through Bingo!

Over the last two years they had worked together with feverish intensity on newer flavours,
marketing campaigns and media strategies. Ramesh and Satya had been in the middle of an
intense debate on how to increase ‘Bingo! Mad Angles’ market share, when Satya’s secretary
had interrupted, (much to Ramesh’s relief), to remind them that they had to be at the Business
Times Marketing Awards ceremony in exactly 45 minutes, and that they wouldn’t make it unless
they left immediately.

It was a glamorous evening – red carpet, a few Bollywood starlets, and the Who’s Who of
corporate India in full attendance. Finally the announcement came ‘And the winner for the Most
Innovative Marketing Campaign …goes to ……ITC for Bingo!. ‘Go on Ram, it's your big day’,
whispered Satya to his colleague, as the crowd broke into applause. Ramesh stepped forward to
receive the plaque and citation, as the applause built into a crescendo. As Ramesh made his way
back to his seat, shaking hands and high-fiving people all the way, a video on ‘Bingo! Mad
Angles’ started playing on the big screen. ‘ITC has created a brilliantly innovative offering, in a
daring bid to win market share in the Snacks market’, boomed a deep-throated voice-over to the
video which showed Mad Angles Ads and Mad angle packets in grocery stores occupying rack
after rack.

At the post ceremony cocktail party (Satya referred to it as ‘Air-kissing-fest Part II’), Satya and
Ramesh bumped into Vivek, Marketing Head of Frito Lays India – the dominant market leader in
the snacks market with 80% share. Just as Bingo! had begun to grab market share from Frito
Lays and all market-research data had indicated that it was ‘set for take-off’, Frito Lays counter-
attacked. A heady cocktail of brilliant distribution, smooth logistics, massive ad spends and
Bollywood stars was all set to block Bingo! in its quest for market share.

‘Congratulations, gentlemen!’ said Vivek, as he shook hands with Satya and Ramesh. ‘Thank
you’, said Satya, ‘Nice to see you in such a magnanimous mood’. Vivek smirked as he helped
himself to a handful of peanuts. ‘I don’t mind you guys winning a few awards if that’s what
makes you happy. I have a few market share trend reports on my desk in the office that make
me happy. Kurkure Desi Beats has also got a fabulous initial response’

Satya gritted his teeth. ‘I'm off now Ram. Let’s pick up that discussion tomorrow morning’.

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This Case is developed by and is the sole property of ITC Limited. This is for academic purposes only and is not
intended to be copied or displayed or reproduced at any place outside the Campus.

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ITC Interrobang Case Challenge 2011 – Bingo!

Ramesh was about to remind his boss that ‘tomorrow’ was Sunday, and that he had promised to
a get together for close friends. Something in his boss’ manner told him that Satya didn’t give a
damn about Sundays, or promises made to his friends. Ramesh had seen that look before. The
target was ‘locked in’. He now had to figure out how to achieve it.

Sometime in the early 2000’s at Virginia House, ITC Limited Headquarters, Kolkata

Indian Consumers in the eyes of manufacturers are almost like a “Bird of Gold”. With an Urban
population growing much faster than the total population it is expected to account for 37% of
Indian population by 2025 vis-à-vis just a 26% in 2005. It is forecasted that Indian GDP is to
grow at 7.3% for the next two decades against the 6.0% growth rate that India has seen in the
last two decades. This is expected to make India the 5th largest consumer market, behind US,
Japan, China & Britain.

Keeping these perspectives in mind ITC Limited diversified into other FMCG sectors like “Food”
and “Personal Care”. ITC entered the Food business in 2002 with brands like “Sunfeast” in
biscuits (now India’s third largest brand), “Aashirvaad” in staples (now India’s largest Wheat
Flour Brand), Minto & Candyman in confectionery (India’s largest confectionery manufacturer
in the operating segment). Later in 2005 ITC successfully ventured into the wet snacking arena
with India’s first Instant Pasta.

Today, pre lunch, Satya’s office, at ITC Foods Division Headquarters, Bangalore

Ramesh woke up as the alarm went off at 7. The last evening had barely sunk in. It felt great
when years of hard work gets recognized. This is what he had always dreamt of.

He looked out of his window to notice a quiet and peaceful Bangalore morning. He wondered if
this was the silence before the storm. After all, what Vivek had mentioned last night was indeed
concerning. Bingo!’s shares had stagnated over the last few months and the Frito Lays decline
had been somewhat arrested. More concerning than that had been the launch of KurKure Desi
Beats. This was Frito Lays entry in to the triangular format snack similar to Bingo! Mad Angles
which was the most accepted amongst all Bingo! snacks with a significant share of the finger
snacks industry.

He picked up his Blackberry and was surprised to find mails at mid night from the sales head,
Mukesh. He knew Mukesh was also in Mumbai city the previous day on a market visit. What had
happened in Mumbai? Was this regarding KurKure Desi Beats? Is there some other problem?,
these thoughts crossed his mind as he clicked on the track ball to check the mail.

Satya was visibly disturbed when Ramesh entered his office sharp at 9. Not exactly the mood he
wanted Satya to be in after Mukesh’s mail. ‘Reshma is on her way, she will take ten more
minutes’ said Satya sipping on to his black coffee. Reshma was the head of product development
for ITC snack foods and had been closely involved with the brand since the last 2 years. It was
no surprise that Satya had also called her in for the meeting.

Ramesh apprised Satya about Mukesh’s mails and that was enough to change the look on Satya’s
face from one of disturbance to one of extreme concern. Not only Frito Lays, but also other
discount players like Balaji & Yellow Diamond had launched triangular shaped snacks in the
market. In fact there was confirmed news of Haldiram, another discount player dominant in
parts of North, of launching a triangular shaped snack next month.

Discount players typically offer twice the grammage as full price players at the same price. They
have significant cost advantages over the full price players account;

1. Limited or no advertising
2. No merchandising in the form of racks

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ITC Interrobang Case Challenge 2011 – Bingo!

3. Lower grade of packaging

4. Distribution cost advantages account their regional approach
5. A different quality product

Although discount players were small in size, contributing to 27% of the snacks industry, one
could not afford to ignore them. These players were largely dominant in the Western parts of
the country where they controlled more than 50% of the market. In fact, 2 of the largest
snacking markets of the country – Gujarat and Maharashtra were dominated by discount
players. Discount players, till now, had been dominant only in the Potato chips part of the
industry. However, with growing ambition, they found it hard to ignore the lucrative finger
snacks market. This was one of their attempts to change the game in the finger snacks market as
well.

A typical grammage comparison between discount and full price players can be seen in
Annexure 2

The shares of discount players across the key regions and segments can be seen in Annexure 3

‘Don’t worry Satya, Frito Lays has not been able to match the product strengths of Bingo! Mad
Angles’ said Reshma as she gulped down the last sip of her Elaichi tea. ‘ I have had an expert
panel test the panel the whole of last week on all product parameters’ She continued, ‘and Desi
Beats is not up to the mark’. Reshma showed a number of slides which evaluated the product on
a number of sensory parameters such as taste, texture, aroma, mouth feel, bite size and flavour.
She concluded ‘Satya, we have made the Mad Angles product after years of research and the
recipe is a closely guarded secret. I don’t think competition can imitate this product any time
soon’

Satya & Ramesh got some confidence. However, both also knew that consumers never really
bought ‘products’, they bought ‘brands’. Just having a superior product will not suffice in this
battle. KurKure Desi Beats already had a new campaign with Kareena Kapoor as the brand
ambassador. Bingo!, till now, had stayed away from using celebrities to promote the brand.
Further, Lays was out spending Bingo! on a factor of 3.5 : 1 in putting behind monies on
advertising and promotions.

The brand communication in most cases, especially in low involvement categories like snacks,
builds suitable product perceptions over a period of time. Further, product superiority had still
not been validated by the consumer.

‘Ramesh, what about the product testing of Mad Angles versus Desi Beats’ quizzed Satya.

‘Sir, I had briefed Aziz and the results will be in by tomorrow’ responded Ramesh. Knowing
what Satya was about to instruct, Ramesh picked up the phone to call the head of consumer
research, Aziz.

Aziz informed that the first cut results had come in but the detailed report will be available only
on Monday.

‘Aziz, I want to see these results TODAY post lunch’ said Satya keeping down the phone. Just as
he handed over the phone to Ramesh, his phone buzzed and he picked up the phone ‘Yes Ma’am’
muttered Satya.

This was Naina on the other line. Naina, a dignified and a sharp women in her late forties was
the divisional chief executive of ITC Foods. Ramesh knew that she was in the US for a business
conference. Ramesh wondered behind her reasons on calling on a Sunday afternoon.

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ITC Interrobang Case Challenge 2011 – Bingo!

‘Thanks so much Ma’am..... and we will certainly discuss the equity research with you tomorrow’
said Satya keeping down the phone. Apparently Naina had called Satya to congratulate him on
the BT awards. She also wanted to discuss the Bingo! brand equity research. This was a project
which had been initiated by Satya a few months ago. Aziz had presented the results last week
and while most things were looking fine, there were some pertinent concerns as well.

Satya said ‘Ask Aziz to summarize the equity as well in our meeting post lunch. He also asked
Reshma to leave for the day. Ramesh wondered when he would leave. There was a small
celebration planned at home in the evening to celebrate the BT award but Naina’s call bothered
him. This issue was suddenly getting serious. Very serious.

Between 2005 & 2007 at ITC Foods Division Headquarters in Bangalore and ITC
manufacturing facility at Uttaranchal

India is practically composed of many mini-countries in themselves – "the United States of

India" as Satya likes to call it. Habits differ (almost every few miles!), taste preferences differ
and as a consequence even the food eaten is very different by state. Hence any product that
needed to address such a large cross-section of people needed to be customized to try and offer
a unique organoleptic experience to the target consumer.

Snacking as a habit has existed in India over generations, be it Tea time snacks (both morning
and evening tea accompaniments) or mini meals which are as much huger quenchers as they
are taste lures. With increasing urbanization, the consumer is far more mobile today and hence,
is in the need for mini meals prior to actual dinner times. Mobility also means the need for
convenience, a need that is quite well met by packaged snacks.

Thus the first step for ITC in designing its new Snacks brand was to understand the category of
snacking from the consumer perspective. To this end an extensive consumer understanding
study was instituted to gain an in-depth understanding of the varying preferences of taste &
food and how these differed by region.

What is the world of snacking and what has changed from the recent past?

True to the diversity that India has, “Snacking” also has various regional lingo’s – like ‘Nashtha”
in North and West, “Jalkhabar” in East and “Morumoru” in South. Hence the need is to
understand the peculiarities of snacking across regions.

Refer to Annexure 4 for key snacking trends across India

What are the prime snacking occasions and what are the important needs to snack?

Snacking as the word suggest is highest during the evening, i.e. post 6pm in the evening –
universal across different consumer segments. Like most food categories snacking also happens
primarily “In home”, however significantly more than 1/4th of the consumption happens outside
of home.

For a range of needs on snacking, please refer to Annexure 5

Who is the consumer, and which segment should ITC target?

Having arrived at the key “Need states” to be targeted it was essential to identify the core target
profile for the category. A large study was conducted with over 2500 consumers across the
country. It was found that Dry Packaged snacks were consumed more during 4pm to 6pm. It

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ITC Interrobang Case Challenge 2011 – Bingo!

was also found that a substantial section of tweens and youth consumes dry packaged snacks
between 10 am and Noon. However post 6pm snacking was mainly “Fresh and Hot” snacks.

Penetration levels ( consumed atleast once a week ) declines by age group. It is highest in the
10-19 age group ( almost 90% ) and drops to 75% in the 26-35 age group. Proportion of heavy
users ( 4-6 times a week ) also declines with age.

Also considering the depth of consumption by individuals a consumption concentration curve

was created which showed that the heavier “dry packaged snackers” belonged to SEC AB and
were of 15-25 years of age. There was however no gender bias in it.

This segment of “New India” youth were the core target segment for the category. This also
implied that badge value, trendy and a constant buzz value would lead to a success.

Origin of Mad Angles

Within the packaged salted snacks segment there was need to be differentiated. The search
hence began with basics – the hunt for a “differentiated product”.

It was observed that consumers preferred a Sweet & Sour Taste over the rest of the “Indian”
flavours. They found this kind of flavour to have a very high synergy with “Snacking” and
compared it to some of the “Indian traditional snacks” like Vada Pav, Dabeli & Pani puri.
Consumers slotted most of the existing flavours from the house of Frito Lays in the “Khatta
Meetha” (Sweet & Sour) segment, whereas the existing traditional dry snacks were primarily in
the Salty Zone. Please refer to Annexure 5 for flavour continuum.

Consumers also voiced the dissonance of having monotony in the shapes and sizes of the dry
snacks which are currently available. They were looking for something with a different shape
and even with a larger size, but apt for a trip to the mouth.

The insight was to take a ‘Habit’ snack and try and tweak its construct to deliver a popular
‘Western’ snack. The innovation could be done along Product development vectors of Texture,
Taste (through flavours) or shape / size, thereby creating an irresistible combination. A case in
point would be the snack “Khakhra”, a popular dry snack found in almost every household in the
Western Region. This is a popular snack option, thanks to it crispy texture and a universal base,
which can take on multiple accompaniments such as pickles / sauces. So an original &
innovative format came about, inspired from the Khakhra, but being westernized through the
transformation of size, shape and texture as well as the modern seasoning.

This led to the creation of Bingo! Mad Angles.

Marketing Bingo! Mad Angles

Core consumer proposition

Bingo Mad Angles offered the consumers the familiarity of a "Habit" Indian Snack - in terms of
flavour and texture, in a modern trendy and innovative format of a triangular product. Hence it
was the "Perfect Snack"

As an outcome of this prolonged & exhaustive research, the ITC team identified a platform that
cut across cultures & one that automatically elicited the interest of the youth – Humour. The
communication thought of “Perfect from all Angles" expressed in a light hearted manner was
born out of this critical insight.

In line with the platform chosen even the names given to the flavours like "Achari Masti" &
"Tomato Mischief" were catchy, & youthful

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ITC Interrobang Case Challenge 2011 – Bingo!

Today, post lunch, Satya’s office, at ITC Foods Division Headquarters, Bangalore

Biting on to a chip of Fiery Red Tomato, Aziz indicated that the product testing with the
consumer for Bingo! Mad Angles versus KurKure Desi beats had been very positive. All 3
flavours of Mad Angles were tested against both the flavours of Desi beats in 3 zones – North,
West & South.

While the test had as many as 16 sensory parameters, on some of the critical parameters such as
overall likeability and taste likeability, Mad Angles was a clear winner. Aziz closed his
presentation with a summary slide.

Ramesh quickly noted down “SOUTH” in bold on his notebook. South, although, contributed to
only 18% of the industry, was very important for Bingo! as it contributed to more than 30% of
Bingo! sales by value. He had to discuss these results with Reshma the next day.

Satya, looking somewhat comforted now, still knew that things are very different when
consumers consume a “Brand”.

‘OK, Good, discuss these with Reshma and let's move on to the summary of the equity study’ He
said puffing away his favourite brand.

The Mad Angles equity study looked good. The brand was performing well across regions and
was being perceived as being funny, humorous & irreverent. All these were the values which
ITC wanted to instil the brand with. In fact, on most of the metrics, the brand was performing
much better than the new brand launch norms.

On why consumers have liked Mad Angles, they had indicated its great taste and mouth feel, its
unique shape and some exciting Indian flavours. To summarize, consumers liked the brand on
each and every aspect. Ramesh had not seen consumers providing such a positive response for
any brand across the various brands even during his consumer interactions during the snacks
U&A.

Satya said, ‘One of the problems of innovation is that we may get trials from the initial few but":

1. How do we get trials from the larger masses?

2. How can we continue to maintain the loyalty of the existing franchise?
3. A number of "me-too" products were being launched by competition particularly
Desi Beats from Kurkure - How should we respond?
4. The Discount players were copying the format and giving additional quantities -
How should we respond?
5. The brand seems to have taken off in Non South markets but still appears slow off
the blocks in South.
We are funny and mad, all right. But are these values enough for long term loyalty. After all,
ultimately the consumer is looking for a great tasting product. "We have never communicated
that gentlemen"

Ramesh heaved a sigh of relief as Satya walked out of his room towards his car. He thought of 2
women he needed to call urgently.

Asha, his wife, the get together later this evening had to be postponed. And Nisha, head of
planning at Ogilvy Bangalore, to take her through today’s discussions.

Put yourself in Ramesh’s shoes, summarize the problem and work out the possible solutions to
Satya's posers.

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ITC Interrobang Case Challenge 2011 – Bingo!

Annexure 1

Contribution by Contribution Value Growth of

region for each within region by each format
format format
Potato Finger Potato Finger
% of PC % FS
Wafers Snacks Wafers Snacks
All India (U+R) 65% 35% 15% 15%
North Zone (U+R) 40% 37% 67% 33% 14% 19%
East Zone (U+R) 13% 16% 62% 38% 12% 14%
West Zone (U+R) 29% 29% 65% 35% 22% 15%
South Zone (U+R) 17% 18% 64% 36% 6% 10%
All % pertain to value shares

**Finger Snacks example : Kurkure, Mad Angles, Tedhe Medhe, Chataka Pataka etc.

Annexure 2

Potato Chips grammage comparison of Full Price and Discount players

Price Point Full Price Discount
Rs. 5 14 Gms 25 Gms
Rs. 10 30 Gms 55 Gms
Rs. 20 70 Gms 110 Gms

Annexure 3

Industry construct; Full price and discount players

Potato Chips
Region Full Price Discount
All India 71% 29%
North 83% 17%
East 89% 11%
West 35% 65%
South 91% 9%

Finger Snacks
Region Full Price Discount
All India 75% 25%
North 81% 19%
East 94% 6%
West 48% 52%
South 90% 10%

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ITC Interrobang Case Challenge 2011 – Bingo!

Annexure 4

Key snacking trends across India:

Consumers from the North look out for Snacks which are “Hot & Fresh”, snacks which give “Non
Traditional Flavours” and also “International Brands”. They have a low preference for dry
snacks. Consumers in the West of the country have similar preferences as that of North but they
favoured sticking to the “traditional” palate. The highest set of repertoire consumption happens
in the North followed by the West. Consumers in the East of the country have fewer options in
Snacking, also unlike North they prefer to consume more of “Local Dry Snacks” but have a trait
similar to that of consumers from the North; they too show preference for non-traditional
flavours. Snackers from the South are the most restrained set. They also experiment with the
least set of options. Unlike the other regions preference for traditional flavours/dishes is the
highest in South. Despite some behavioural similarities the Snacking Basket is very “region”
based.

Annexure 5

Needs and Occasions of snacking:

Although the time of day is relatively similar across consumer groups the need to snack was
quite different. The largest Need Segment was “Time Pass”. Packaged branded salted snacks had
a very high synergy with the platform of “Bonding & Time pass”.

“Hunger” is another significantly large snacking need. This need segment could also be further
subdivided into “Physiological need” (Dying to eat) and “Psychological Need” (Pick me up).
However in both the states synergy with packaged branded snacks were very low. Indian
traditional hot & fresh snack dominated the space.

Being out of home and enjoying the “freedom of youth” is an occasion when packaged branded
snacks plays the role of an enabler. Importance of packaged salted snacks at occasions when
you are out of home and having a blast with family is also very low.

The smallest of need states was “Special Occasions”. Special occasions have an overwhelming
role of “High Badge Value” and “Extreme Indulgence”. However if it’s a college going crowd and
a simple date then packaged finger snacks might appear in the list, else again has a very low
synergy.

This Case is developed by and is the sole property of ITC Limited. This is for academic purposes only and is not
intended to be copied or displayed or reproduced at any place outside the Campus.