9/10/2018 Kurkure

Group C01
Abhigyan Roy (1801131)
Abhilasha Kamble (1801132)
Abhipraay Bajpai (1801133)
Abhishek Kumar Sah (1801134)
Aishanya (1801135)
Aishwarya R (1801136)
Anju G Nair (1801137)
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TABLE OF CONTENTS

Overview 2

PESTEL Analysis 2

Marketing Mix 3

SWOT Analysis 5

Porters 5 forces 6

Controversy 7

STP 8

Value proposition 9

Challenges ahead 9

Exhibits 10

References 12

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OVERVIEW
The Indian Snack Industry
India has undergone a massive change and expansion in the snack industry after the 20th
century. People have shifted from consuming namkeens from unorganised retailers to baked
chips from global brands. According to Euromonitor, the India‟s salty snack market is valued
at more than $2 billion and is expected to surpass sales of nearly $5 billion by 2020. The
CAGR of the industry is expected to grow in double digits by 2024. The reasons behind this
growth are lifestyle changes, rising urbanization, growing middle class population, local
availability and availability of snacks in small package size, low price and company‟s
strategies to focus on regional taste.
PepsiCo, foods and beverages giant, entered the country in the year 1989 and grew
exponentially over a short period of time. PepsiCo is now a global leader with net revenues
over US$ 65 billion and a portfolio consisting around 22 brands, generating more than US$ 1
billion each. PepsiCo India's diverse portfolio includes iconic brands such as Pepsi, Lay's,
Kurkure, Tropicana, Gatorade and Quaker.
PepsiCo developed and produced Kurkure, the perfect “namkeen” snack, in India in the year
1999. It was named after the Hindi word „Kurkura‟ and differentiated itself as a namkeen
rather than potato chips. Kurkure has been successful in capturing and dominating the Indian
snacks market since its inception. Kurkure is a brand worth Rs 1,000 crore and aims to
double its sales in the next five years. With ingredients as rice, corn and gram mixed with an
assortment of spices and flavours, buyers can SnackSmart™ and enjoy the taste of Kurkure,
cooked in healthier rice bran oil with 40% less saturated fats, zero trans fats and no additional
msg. These additions increment the ratio of the good fat and decrease the saturated fat by
40%.
However, with increase in awareness for healthy snack, the leading brands of the industry
have been challenged to innovate and appeal to that segment of the market.

PESTEL ANALYSIS
Political Factors
 Taxation policy: 12% GST on snack food is expected to increase the prices of all
products by 6-8%.
 As part of Health Menu Choices Act, the companies are requires to display the
calories on the food items which will affect the purchasing pattern of the customers of
that country.
Economic Factors
 Food inflation rate is expected to reach 4.7 % in 2020 while the cost of food to be CPI
of 139 (highest of all time).
 Disposable income is rising which is leading to increase in the purchasing power and
demand of good quality products.

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Social Factor
 Due to busy lifestyle, people are shifting towards more 'Ready to eat' food products
from preparing food from scratch. The younger generation is mostly appealed by the
branding look of the companies to match their lifestyles. Thus, companies are
changing their branding and look to market to the younger generation
 The literacy rate increased by 18.4% in India from 2000 to 2015, leading to more
awareness and shift of people towards healthier options.
Technological Factors
 Technological factors are the technological innovations that influence the operations
of the industry and the market, Automation, research, development and technological
awareness are the contributing factors. Technological advancements in operations and
automation can reduce the operating costs.
 Researches on the harmful effects of high calorie snacks can make the consumers
aware and force them to choose healthy substitutes.
Legal Factor
The legal factors pertain to the laws that influence the business environment in a country.
Consumer laws and safety standards are becoming stringent in the country.

MARKETING MIX
Product
Kurkure arrived as a corn based stick snack which offered a new variety of snacks to the
Indian consumers. With its launch in 1999, Kurkure opened doors for a new segment of table
snacks which appealed to every age group and positioned itself as a food that brought
families together and symbolized „light hearted fun‟.
Kurkure was an accidental product result of reverse engineering. The company intended to
compete against the potato chips with a product with a local touch. Upon its release, it struck
a chord with the consumers among with the name „Kurkure‟ meaning crunchy in Hindi,
played a big part in it. The consumers accepted the product as a snack with Indian-ness.
With time, they launched various flavours and named them after regions in an attempt to
develop a regional appeal. Having launched the product with its signature „Masala Munch‟,
there have been several flavours launched over the years keeping the varieties and regional
tastes in mind, in line with its sister competitor Lay‟s.
 Hyderabadi Hungama
 Solid Masti Twisteez Masala
 Chilli Chatka
 Green Chutney Rajasthani Style
 Naughty Tomato
 South Tangy Twist
 Puffcorn Yummy Cheese

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Many of these flavours developed an emotional connect with the vernacular masses helping
Kurkure become one of the products that sold equally well across flavours. [Exhibit 1]

Pricing
Kurkure went ahead with the strategy of value based pricing in a market where it had to
compete with the local snacks (both packaged and non-packaged). It launched all its flavours
priced at Rs. 5, Rs, 10 and Rs. 20. It portrayed itself as a family snack and hence also added a
Rs. 30 variant offering quantity that a family can come together and enjoy. The Rs. 10 variant
was a big success and remains the most popular choice among masses till date [Exhibit 2].
The Rs. 5 variant served well as people would end up buying even when they weren‟t as
hungry. A couple of new variants of Rs. 15 and Rs. 25 were also subsequently launched to be
sold exclusively at railway stations. The pricing has remained the same with time in the snack
segment unlike the beverage business of PepsiCo.

Place
Kurkure utilized PepsiCo‟s already strong supply chain network and maintained its presence
across all types of selling points ranging from local kirana stores to supermarkets [Exhibit 3].
To compete with the small yet strong regional players, it promoted its regional flavours from
place to place. These flavours‟ supply was limited according to the demands and was not as
universal as the Masala Munch flavour.
Kurkure occupied a large number of stacks across stores increasing the visibility of the
product. This strategy helped the sales as it was easily accessible for the consumers. Many of
the consumers who went to the stores ended up buying Kurkure even when they didn’t
intend, simply due to its presence [Exhibit 4] and the craving it struck immediately
[Exhibit 5].
With its success in the Indian market, Kurkure was subsequently launched in Pakistan in
2007, where it reached similar success.

Promotion
With the target of portraying itself as a namkeen substitute for tea time for a family, Kurkure
developed ad films with witty storylines and catchy taglines. Their advertisement in the early
2000‟s featured Juhi Chawla in conversation with her family members, showing how a packet
of Kurkure brought them together to fight and crack jokes. The ads were so successful that
Kurkure and Juhi Chawla became synonymous with each other. Later on the likes of Boman
Irani and Kunal Kapoor were added as part of the family. Since the late 2010‟s Parineeti
Chopra took over the role of the family member showcasing the same dramatic family
bonding over the same packet of Kurkure.
Over the years, these ads also delivered some of the catchiest taglines which connected
immediately with the consumers. Its earliest tagline, “Kya kare control nahi hota” helped
establish Kurkure as a snack with a high craving. “Khoob karare, khoob chatpate” sold its

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crunchiness along with the name. Another tagline which sold its value offering as an
enjoyable snack was “Jo bhi khaye, kha ke mast”. Next came its most recognizable slogan
“Tedha hai par mera hai”. The embodiment of Kurkure sticks along with the rhyming phrase
remains one of the most famous brand commericals for any brand in the Indian market.
Further ads concentrating on the family connections were portrayed through its Diwali ads,
with the festival being a time when the snacks consumption increases among most Indian
households.

Packaging
Kurkure was sold in bold colours like Orange and shades of Green with each colour being
associated with the flavour it offers which created an image in the minds of the consumers
where they could easily recognize the respective flavour names via its colour. Its packets
featuring family pictures also reflected the brands onus on families as a target audience.

SWOT ANALYSIS
Opportunities
 Rising income level and changing consumption pattern: If India is to continue on the
path of high growth, the income is expected to almost get triple in the next 20 years.
Increased disposable income level of the middle class and rural population will in turn
lead to the increased consumption of goods and services overall.
 Opening of the global markets
 Shift in the customer preferences: Due to busy lifestyles, the demand for a packaged
food product has increased in India as people are shifting to „ready to eat‟ food
products.
 Growth in diet segment (with increasing health awareness): Customers now look for a
healthier, but with a good flavour option in the food market. This has shifted the
attention towards the brands which incorporate newer technology and come up with
health benefits and fast foods.
 People are using snack food as a replacement for meal.

Threats
 Affordability and cultural preference of fresh food: People are also getting more
fascinated by fresh food over packaged food, which available to them at a much
affordable range.
 High taxation under GST: Due to increased taxation under GST, the snack market is
forced to increase its prices or suffer on margins.
 Competition among national and regional players: Local players in the snack market
are coming up with the similar product but with a much lower price that may shift the
market share for national players.

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 Rise in the supermarket shelf fees: The supermarkets are charging significantly high
fees for the shelf space that will have huge impact on the costs for the company.
 Increasing input costs (spices, corn etc)

Strengths
 Kurkure has diverse product portfolio like Chilli Chatka, Hyderabadi Hungama,
Naughty Tomato etc. It also has flavour targeting specific geography like Punjabi
Tadka.
 Kurkure can leverage the strong brand image of PepsiCo.which has been in the
market for the past 19 years.
 It has a very strong distribution channel and has reach in tier 3 and villages as well.
 It has a huge financial backup from PepsiCo so it can afford an aggressive marketing
strategy.

Weakness
 Kurkure is considered unhealthy and due to the growing income level and changing
lifestyle of middle class in India and awareness towards health- conscious food, this is
also becoming unpopular and affecting the brand image.

PORTER’s 5 FORCES
Competitive Rivalry
The number of competitors and their ability to threaten the company is explained by the force
competitive rivalry. When the number of competitors, the number of equivalent products and
services they offer are high, the power of the firm gets reduced.
For Kurkure, the competitive rivalry is quite high, considering that there are a number of
substitutes in the market. The main competitor is ITC Bingo which have a large number of
variants. Other competitors include
The threat of new entrants
The power of a company is also impacted by the force of the new entrants. If the capital and
time required to enter a market is comparatively low then, the position of the company gets
weakened. An industry with strong barriers to entry is relatively safe for existing companies.
For Kurkure, the threat of new entrants is low. In packet snacks market, there are a number of
established players like PepsiCo, ITC Bingo etc. For a new entrant, it is hard to gain market
share.

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The threat of substitutes

Competitive substitutes are those products that can be used instead of a company‟s products.
Threat of substitutes increase if the substitution is easy and economic. Thus, a company‟s
power gets weakened with the presence of substitutes.
For Kurkure, the substitutes are Haldiram‟s, Patanjali snacks, different types of biscuits and
nutri-bars are potential substitutes for Kurkure. [Exhibit 7]
Supplier Power
The power of suppliers is about how easy is it for suppliers to drive the price of goods and
services. It depends on the number of suppliers, the vastness of distribution channel and the
cost of switching from one supplier to another. Fewer the number of suppliers and higher the
dependence on suppliers, suppliers can exert more pressure on a company.
For Kurkure, the power of suppliers is low. It is easy for Kurkure to switch from one supplier
to another and the supply chain of an corporation like PepsiCo is well manged and vast.
Buyer Power
The buyer power is about the ability of buyers to drive the prices down. It depends on the
number of buyers, switching cost for buyers and significance of each buyer. The smaller and
more powerful the buyer base is, higher is their power.
For Kurkure, the power of the buyers is high. The switching cost is minimum for the buyers,
for the competitors and substitutes are priced similarly.

CONTROVERSY
The controversy of Kurkure having plastic content came into effect when a video of a man
burning a Kurkure stick went viral and what was left behind was only some sort of plastic
residue. The residue which was actually a compound called Acryalamide, which is formed
when chips are fried at a very high temperature, was the reason for creating the plastic like
residue when burnt and gave the impression that the product contained plastic. This created
an outrage across all social media platforms. Kurkure lost some of its loyal customers who
started looking for alternate brand. PepsiCo had to spend Rs 2 Cr to tackle the social media
problems. It laid out notices on its website highlighting that it was safe to consume kurkure
and also held open events where they asked bloggers to come and see the production process
and review it. Inspite of the setback, Kurkure has regained its market position through various
marketing campaigns, over the next few years.

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STP ANALYSIS
Segmentation

The brand has segmented the market on the basis of geography into Gulf and South Asian
countries. Within India, the market has been further segmented into several regions. The
market is segmented on the basis of psychographic segmentation in lifestyle as….,
personality as …. and behavioural segmentation in occasion, benefit, loyalty status, usage
rate. Kurkure has been able to capture demography with various factors.
Kurkure segments the regions with „Indian palate and profile‟, including South Asian and
Gulf countries, as well as parts of Canada. Further, the brand can be compartmentalized into
health- conscious population and people who enjoy snacking. It appeals to consumers as an
outdoor adventure/picnic snack. Kurkure is popular as party snack as well.

Targeting

Among the above mentioned segments, the segments that will have a better reach for Kurkure
would be children, young adults [Exhibit 6]. These are the segments that will increase the
profitability of Kurkure. By targeting these segments, it covers the whole family and thus
positions itself as a family snack. And also by young adults, it targets the adventurous youth
who carry snack with them during travels.

Positioning
Kurkure is positioned as a playful and chatpata snack where in all the family members get
together and having fun time like watching movie and playing while eating Kurkure. Creative
taglines such as “Kurkure family”, and “Is kahani mein bhi kuch kurkure hona chaiye”
clearly portrays this positioning strategy.

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VALUE PROPOSITION
Functional value
Kurkure offered a different taste and experience compared to the other potato chips. It
showed how normal ingredients in kitchen like rice, corn etc. The crunchiness of Kurkure
offered a rich experience for customers which were not provided by other brands. With its
rich mix of spices, it offered a unique experience at the snacks table for customers.
Economic Value
The pricing of Kurkure was such that it offered a greater economic value to the customers
compared to the western potato wafers. The potato wafers were double the price of Kurkure
hence, Kurkure was perceived as a more economically valuable for its customers.
Emotional value
Kurkure was perceived as a healthier snack compared to others as it was made from
ingredients like rice, corn etc and rice bran oil with zero trans- fat and cholesterol. It created
an emotional link with its various tag lines like, “Kya karein control nahi hota”, “Jo bhi
khaye kha ke mast”, “Teda hai par mera hai”. It introduced many variations of Kurkure in
flavours specifically targeted to the Indian regional experiences like “Tamatar Hyderabadi
Style”, “Malabar Masala Style”, “Hyderabadi Hungama” etc which other products did not
offer and hence was able to attain emotional value for customers who could enjoy the snack
with their own traditional tastes.

CHALLENGES AHEAD
Kurkure enjoyed a long period as a dominant player in the Indian snack industry. However,
with the changing food habits of the people, PepsiCo aims to focus on promoting healthier
line of products in the future. This leaves Kurkure in a tight spot, particularly when they are
aiming to double their sales in the next 4-5 years. The brand not only faces stiff competition
from players in the same snack category segment such as ITC Bingo, Haldiram‟s, Patanjali
etc, but also from PepsiCo‟s own line of health food products such as Quaker Oats which
appeal to the younger generation.

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EXHIBITS
The exhibit contains responses from a survey floated for a general Q&A about Kurkure to
people across age groups to analyse their perception about the brand and their buying
behaviour.
[1]

[2]

[3]

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[4]

[5]

[6]

[7]

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REFERENCES
1. https://theprint.in/governance/delhi-hc-does-not-find-kurkure-plastic-jokes-funny-orders-social-media-
giants-to-erase-them/89049/
2. http://www.pepsicoindia.co.in/media/Press-Releases/release_10_06_12.aspx
3. http://www.pepsicoindia.co.in/media/Press-Releases/release_12_07_12.aspx
4. https://www.moneycontrol.com/news/business/pepsico-aims-to-double-kurkure-sales-in-next-5-years-
2542623.html
5. http://www.indiantelevision.com/mam/headlines/y2k4/may/maymam128.html
6. https://www.financialexpress.com/industry/pepsico-aims-to-increase-nutrition-in-products-ceo-indra-
nooyi-visits-local-eatery-in-chennai/376749/
7. https://www.thehindubusinessline.com/companies/pepsico-india-aims-to-double-kurkure-sales-in-next-
4-5-years/article23437296.ece
8. https://www.livemint.com/Consumer/6l27hPML69yI3Jc4hPN6NP/Social-media-platforms-take-down-
posts-on-Pepsi-Kurkure.html?utm_source=scroll&utm_medium=referral&utm_campaign=scroll
9. https://www.ontario.ca/laws/statute/15h07
10. https://timesofindia.indiatimes.com/business/india-business/snack-food-association-demands-5-gst-
rate-on-food-products/articleshow/59239360.cms
11. https://tradingeconomics.com/india/consumer-price-index-cpi
12. https://www.news18.com/news/india/international-literacy-day-2018-lessons-from-the-past-for-a-
more-literate-future-1512795.html

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