PepsiCo’s FritoLay & ITC Foods in mkt warfare

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Mumbai, Feb 4: The market dynamics will soon change in the Rs 2,500 crore branded snacks sector in India. To gain a leading edge in the overcrowded category, ITC Foods, a new entrant with a market share of 16% is drawing up a fresh game plan. For starters, ITC Foods is doubling up its distribution network and hiking its ad budget by 30% this quarter. Meanwhile, PepsiCo’s FritoLay is reinvigorating its product portfolio to sustain its leadership in the sector. The company has roped in MS Dhoni to bat for its flagship brands.

To pump up volumes, FritoLay is in the process of rolling out an aggressive marketing campaign led by its star endorsers, Saif Ali Khan, MS Dhoni and Juhi Chawla. According to industry analysts, ITC and PepsiCo will soon wage a pitched battle for market share and mind share in the highly competitive sector.

On the company’s strategy, Ravi Naware, chief executive officer of ITC Foods said, “We are getting ready to launch a media-blitz for ‘Bingo’ next month. We forayed into this sector in March 2007 and our market share today stands at 16 %. Our goal is to capture a 50 % share in this sector.” Created by Ogilvy & Mather, ITC’s new ad campaign will harp on the ‘quality of Bingo’ in its communications. As part of its inorganic growth strategy, the company is also scouting for acquisitions in domestic markets, said Naware.

Across the road, FritoLay is in the process of rolling out a high-voltage interactive promotion titled Chala Change Ka Chakkar to woo new consumers. According to Gautham Mukkavilli, managing director of FritoLay India, “This is s one of the biggest interactive promotions undertaken by us since 2001. With this move, we hope to gain market share and mind share in this sector.”

Industry analysts point out that ITC has been steadily stealing market share from Pepsi ever since it entered this sector in March 2007.”