Sun Feast 4P's

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ITCs Sunfeast

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About ITC FoodsThe "Foods Division" is the most recent diversification of ITC Group. ITC's decision to enter

the foods business is part of a strategic decision to develop new product lines by synergising

its core competencies in building brands-- understanding the Indian consumer and strong

distribution network as well as its established culinary expertise. ITC Foods markets the

ready-to-eat category with its flagship brand "Kitchens of India" and "Aashirvaad

ReadyMeals". Apart from this-- ITC Foods also markets "Minto" - targeting the adult

confectionery market & "Candyman" - targeting the children's sweets segment. Under the

Aashirvaad brand-- ITC has already established Atta and salt. All these products have been

received very well by the consumers.

What is the core competency of ITC that is being leveraged when it decided to enter the

Foods market. ITC relies on three core competencies

1. The depth of distribution

2. Its brand building capabilities.

3. The ability of Quality outsourcing.

Sunfeast has been a success because of these three competencies of ITC.

Biscuit Industry in IndiaBiscuits and tea in the morning were a routine. So were the key market players and their

favourite products.

The two major players Britannia and Parle were busy biting of chunks of the national market

among themselves, with a host of smaller brands in various regions.

While the business was still very competitive, there wasn't anything groundbreaking. In2003, with ITC foraying into the segment, a lot of that changed.

At that time, Britannia and Parle held, between them over 82 per cent of the market in

value terms. The rest too was firmly held by smaller players like Priya Gold which had a

strong presence in the north. So, in essence, the market already had strong well entrenched

players. So how could a late entrant like ITC make its mark?

Nine years down the line, however, things have changed a lot. It is a classic story of the hare

and the tortoise. While it is far from winning the race, slowly and steadily, the tortoise is

gaining ground.


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The late entrant is already on the podium in the third place with as much as 7 per cent of

the market in terms of value by 2006. "ITC made hay when the sun wasn't shining," says a

consultant who's been tracking the industry for a long time. But first, why did ITC train its

eye on biscuits? Ravi Naware, chief executive, ITC Foods, makes it sound simple.

"We decided to enter the foods segment because it's a Rs 550,000 crore (Rs billion) market

in India. But only 6 per cent of this is branded and packaged. In developed markets, nearly

95 per cent of the food market is branded and packaged. So there was lot of scope for a

branded player."

In foods, biscuit was tempting. The Rs 4,000-crore (Rs billion) Indian biscuits market has

grown at 12-14 per cent year-on-year. Then, there was a business synergy. ITC was already

value-adding to wheat with its branded atta presence. By entering the biscuits segment, it

could also improve its bottomline further.

But despite the fast growth rates, the biscuits industry was not all rosy. Over the years, even

giants like Hindustan Lever had failed.

For instance, HLL which had flirted with biscuits under the Max brand exited in 2005. But

ITC's Sunfeast has a different story to tell so far. The strategist looks at the game plan of a

late entrant and how the biscuits industry has responded.

The latest statistics of 2010 point out that the total production of biscuits in India is

estimated to b earound 30 lakh MT, the organized sector accounts for 65% and the unorganized sector

accounts for 35%of the total industry volume. The organized sector is valued at above Rs 8000 crores. Thebiscuit industry is estimated to grow over 15-17% in the next few years and the per capita

consumption of biscuits in India is 2.0 kg. India is ranked 3rd after US and China amongst the global biscuits

producers. The export of biscuits is approximately 17% of the annual production and the imports are not

significant amount as compared to the total consumption. The penetration of biscuits in urban

and rural market is85% and 55% respectively. The Biscuit industry employs almost 3.5 lakh people

directly and 30 lakh people indirectly.


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ItCs sunfeast"Sunfeast"-- with the Brand Essence "Spread the Smile" connotes happiness-- contentment--

satisfaction and pleasure one would derive from great tasting and high quality biscuits. The

brand positioning and imagery is reinforced by the Sun mascot conveying the emotional and

gratifying aspects of the product.

Market Research by ITC

Before entering the segment, ITC dug into market research. Research revealed that the

category had gaps which ITC could settle into. Findings revealed that consumers wished to

taste new and innovative products. That was precisely what the competition had not done

in a big way.

Says Naware, "The biscuits industry had witnessed little innovation; Glucose was Glucoseand Marie was still Marie." The company decided that this could be its biggest point of

attack. In 2003, ITC launched Sunfeast with six ranges. But it was a calculated risk. ITC stuck

to category favourites like Glucose, Marie and Bourbon cream.

Along with that, it also launched innovations such as orange-flavoured Marie, Marie light

and butterscotch-flavoured cream biscuits. In 2004, Sunfeast followed this up with the

launch of Sunfeast Milky Magic. More recently, it also has launched the Sunfeast Snacky and

Sunfeast Golden Bakes.

Analysts believe that just because Sunfeast was a new brand, helped matters. Says aconsultant, "The biscuits industry had not witnessed any major product innovation in years.

Consumers were just waiting for something new, something fresh, when Sunfeast

happened."

Even the competition had not made things better. Between 2000 and 2005 neither Parle nor

Britannia launched any major new product. Yes, Britannia did re-launch its Tiger brand in

2005.

But Britannia claims that it is looking at more than just products. Richa Arora, general

manager and head of marketing and innovations, Britannia Industries, says, "We are not justlooking at new products, but tapping newer opportunities -- such as different occasions as

well as out-of-home consumptions."

In 2005, before Diwali, Britannia launched Occasions -- boxes of assorted biscuits priced

between Rs 50 and Rs 200 -- which the company claims has been very successful.

In 2006, however, the industry has seen a flurry of innovations from the big two. Digestive

Marie -- was launched by Parle in early February 2006. Britannia launched its new double-

flavoured Mariegold and 50-50 Chakkar. And Parle is all set to launch at least two new

products before the end of this year.


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What is Marketing Mix?The marketing mix is a business tool used in marketing and by marketing professionals. The

marketing mix is often crucial when determining a product or brand's offering, and is often

synonymous with the four Ps:price,product,promotion, andplace

The marketer E. Jerome McCarthy proposed a four Ps classification in 1960, which has since

been used by marketers throughout the world.

When marketing their products firms need to create a successful mix of:

The right product Sold at the right price In the right place Using the most suitable promotion.


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4 ps of MarketIngfor

ItCs sunfeast


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Product MixIn July 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie

and Cream Biscuits. Sunfeast's brand essence connotes happiness, contentment,

satisfaction and pleasure. In a span of 9 years, Sunfeast has well-established presence in

almost all categories of biscuits and is also a key player in the pasta and instant noodles

segments.

ITC has always taken a very aggressive approach from the day it entered the FMCG sector

and has been giving a very tough fight to the already established players because of the

financial muscle that it has and the wider and deeper reach that ITC has got even in the rural

markets because of its tobacco business. This always provides it an edge even over the

established players in the market as not many players in India have got such a deep and a

wider reach for making the products available to customers in almost every nook and corner

in India.

Sunfeasts Products

Sunfeast Milky Magic

Packed with goodness of milk these deliciously

nutritious crisp and crunchy biscuits are a favorite

among mothers and kids. Milky Magichas the Magic of

2 - A perfect balance of energy that aids physical

strength and mental ability. These biscuits strike the

right balance of milk and wheat which helps in an all

round development and nurturing of the child.

Sunfeast Marie Light

Sunfeast Marie Light Original :This ideal teatime biscuit is made from the finest quality wheat high in fibre and keeps one

light and healthy through the day.

Sunfeast Marie Light Orange :It has the distinction of being one of the most successful innovative Marie biscuits and is

liked by one and all.

Sunfeast Marie Light Oats:

The first of its kind in India, Sunfeast Marie Light Oats is enriched with the goodness of


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Sunfeast Dark Fantacy

Inspired by the Master Chefs of ITC hotels, it is the richest of

chocolate vanilla biscuits. These biscuits are created using

carefully chosen premium ingredients for a sensory

experience unlike any other. Dark Fantasy is more than a

biscuit, its a luxurious mix ofaromatic cocoa and vanilla.

Sunfeast Dark Fantacy Choco Fills

Sunfeast Dark Fantasy Choco Fills is the

latest and the most premium offering from

the portfolio of Sunfeast.

An exquisite combination of luscious

chocolate filling enrobed within a perfectly

baked rich cookie outer. An offer that fully

epitomizes the brand promise of "Pure Indulgence".

Sunfeast Glucose

For those light hunger pangs, a wholesome & nutritious choice

as these golden brown biscuits are made from the best quality

wheat. Sunfeast Glucose biscuits are ideal not just for kids but

for adults too.

Sunfeast Dream Cream

A truly scrumptious range of cream biscuits that have become an instant hit with children.

ITCs chefs have put their legendary skills into these biscuits to deliver truly tasty cream

biscuits.

natural wheat fibre and soluble oats fibre.


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Strawberry CreamThe first of its kind cream biscuit with special strawberry flavor

crystals that will keep the creamy flavor linger on.

BourbonA special delight for all those chocolate lovers.

Orange CreamExperience a tangy twist in biscuits with every Orange

Cream.

Butterscotch CreamAnother first, the taste of butterscotch ice-cream in cream

biscuits.

Sunfeast Snacky

Bigger than most others in the salted biscuit

category, Snacky is light and crispy like no

other. From kids to adults, its the quintessential

Family Biscuit. Available in two variants,Classic

salted and Chilli flakes - the very first of its kind in

India.

Sunfeast Sweet n salt

These thin and crisp biscuits come with a distinctive sundry taste, that of salt and

sweetness. A bite into one of these one keeps wondering about its taste!


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Sunfeast Nice

These are crisp coconut biscuits showered with sugar crystals.

The crisp sugary sweetness will just go on to make all those nice

moments nicer.

Sunfeast Special

ITC Sunfeast presents a range of Special cookies and creams.

Special Cookies:

Made with best quality wheat, cashew and butter, Sunfeast Special cookies are baked with

real butter and the finest ingredients to give a mouth-watering treat that makes every

moment special.

Available in Cashew & Butter.

Special Creams:

Delicious value for money cream biscuits with a thick layer of cream sandwiched between

two biscuits.

Available in Orange, Chocolate & Elaichi variants.


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Sunfeast Pasta

The Sunfeast product portfolio has been further expanded to include healthy snacking

options as well. 'Sunfeast Pasta Treat', a whole wheat based instant pasta, was introduced

in 2005 as a healthy snacking option for children. Sunfeast Pasta Treat is made from 100%

Durum Wheat - high in protein and fibre content and it is a non-fried snack. After the

tremendous success of four initial flavors Cheese, Tomato Cheese, Masala, Sour Cream &

Onion, the instant Pasta range has been extended with two new exciting flavors Pizza and

Chicken.

Pasta was traditionally a hitherto unknown/ alien product confined to a niche segment ofconsumers. The biggest challenge for Pasta Treat was to create a category in 'Instant Pasta'

and make it accessible to the masses, and Sunfeast was able to overcome this challenge by

introducing a range of innovative flavors packaged in a familiar cooking format. The concept

was very well received by consumers who were looking for alternate healthy snack options.

The pasta segment was further expanded with the launch of'Sunfeast Benne Vita' in 4

innovative variants in 2006. The range has been enhanced recently with the launch

ofSunfeast Benne Vita Flax Seed biscuits that reflect the brand essence of Benne Vita,

which in Italian stands for Good Life. The flax seed content in these protein and mineral

enriched biscuits is a rich source of Omega III acids for vegetarians.

Sunfeast Pasta contributes to the Hara Banao social forestry campaign by contributing 25p

from every pack of Pasta Treat & Re 1 from each pack of Benne Vita.


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Sunfeast Yippee!

The portfolio has been further expanded with Sunfeast

Yippee!instant noodles. Three years

of exhaustive developmental work has gone into the

creation ofSunfeast Yippee! The product has two

intrinsic components - the noodle block and the masala

mix. Wheat is a key ingredient of the noodle block. The

sourcing and blending expertise that has made

Aashirvaad India's No 1 branded Atta has been

leveraged to make a truly delightful noodle block.

Sunfeast Yippee noodles do not lump even 30 minutes after cooking. At present, Sunfeast

Yippie is available in two lip smacking variants -Classic Masala and Magic Masala.

Foods Division launched Sunfeast YiPPee! Noodles on September 14, 2010. Initially, the

launch was rolled out in selected markets in South and Jaipur and then spread to all India

from November 2010 through January 2011.

Over 4000 consumers were spoken to about the product post which the product was

developed and launched.

Product Benefits

Round block:Being round in shape, you dont need to break the block. No breakingmeans longer noodles and fun to eat

Non-lumpy noodles:Unlike other noodles in the market, this noodle doesnt lumpup after a while. You can enjoy your noodles now or later. They remain as slurpy as

ever.

Choice of Masalas: YiPPee! gives you two masalas - Classic Masala and Magic masalaThese benefits came through from the research and have been widely identified as defining

reasons for purchase.

Classic Masala

Is the perfect blend of spices and gives you the perfect Indian Masala tasteMagic Masala

Is a special Masala formulated by ITC. Is a red coloured Masala unlike otheryellow coloured Masalas. Has five kinds of dehydrated Masalas in it.


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PlaceThe key markets of biscuit industry are UP, Maharashtra, and Tamil Nadu. The per capita

consumption of biscuits in India is only 1.2 kg per annum while the per capita consumption

is 15 kg p.a in developed nations. While the glucose biscuits are popular in Rural India,

Urban markets prefer Cream biscuits.

Distribution maze

It's common knowledge, that for FMCG products, distribution channels are very important.

For biscuits, distribution and visibility are extremely important as it's partly a impulse

purchase product. And in biscuits, setting up a distribution channel is anything but easy.

However, in this regard, Sunfeast has been fortunate: thanks to its tobacco business, ITC

already had a good understanding of distribution channels.

The company says the brand is now available in nearly 1.8 million outlets.

The company used its existing network of convenience stores-

The companys name for the hole-in-the-wall pan-beedi shops for sunfeast. The company also looked at grocery stores and other retail formats.


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The main key factors kept in mind while designing the distribution process of sunfeast are

1. Strict compliance standards

2. Low profit margins

3. Intense competition4. High customer- service expectations.

Distribution Channel of Sunfeast

Key factors kept in mind while distribution

ITC uses FIFO method to reduce the wastage of goods due to expiry. They also keep the good on constant move from low sales area to high sales area. The company collects all the expired goods four times a year, and destroys them. Retailers must return expired or damaged products within six months after the date

of expire.

Adjustment for them is done in three months time. ITC provides their retailers with racks, hangers, etc to display the products. The benefits received by the retailers depend upon their sales volume and also the

location of their shops.


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PricePricing models

The biscuits industry now has two clear models. Parle products play the low price game atall varieties of biscuits from glucose to cream.

Essentially, Parle plays a high volume, low margin game. But Britannia and Sunfeast look at a

two-pronged strategy. High margins in cream variants and volumes from the Marie and

Glucose segments.

For instance, cream biscuits from both Britannia and Sunfeast cost Rs 10 for 100 grams.

Parle, however, only charges Rs 5 for its cream variants. Except for Hide & Seek, all of Parle's

products lie in the price range between Rs 4 and Rs 6 for 100 gram packs.

To be fair, in Glucose and Marie, the companies have little choice. As there is little

differentiation, consumers are extremely price sensitive. But these segments are important.

Marie and the popular glucose varieties make up for nearly 55 per cent of the Rs 4,000 crore

(Rs billion) biscuits segment -- a significant Rs 2,200 crore (Rs billion).

The biscuit consumer is willing to pay more only when he sees a clearly differentiated

product. Hence companies have little choice in terms of pricing. No wonder all the Glucose

and Marie variants straddle price points of Rs 4-6 (for 100 grams).

Sunfeast yippee noodles are available at the price tag of Rs. 10 to match the competitive

prices that the other competitors are offering.

The entire range of Sunfeast Biscuits will be packed in vibrant colours, distinctive graphics

and fonts identifying sub categories at the same time maintaining a consistent look of the

umbrella brand Sunfeast.


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PromotionTo establish a brand in this tough market was never easy. Sunfeast using heavy promotion

and careful brand building have already garnered 10% market share in this market. Sunfeast

is positioned as an exciting brand. This platform is supported by a series product launches.

Since Biscuits are convenience goods, new tastes and new products are essential to built

excitement in the market. Sunfeast have maintained continuous series of new launches like

Milky Magic, Coconut, strawberry, pineapple cream etc. Recently Sunfeast launched a

product for the premium segment named "Dark Fantasy" with chocolate flavour and cool

advertisements.

Marketing Budget:

Analysts say that ITC's deep pockets have helped Sunfeast in many ways.

The company claims that it has been spending 35-40 per cent of its turnover from the

biscuits segment on advertising and promotions. Going by that number, ITCs annual

marketing spends are estimated to be in the region of about Rs 115-120 crore (Rs billion).

Until last year, Priya Gold spent close to Rs 45-50 crore (Rs billion), nearly 10 per cent of its

turnover on marketing. Even market leader Britannia with spends of Rs 100 crore (Rs billion)

(2004-05) spends about 10 per cent of sales on marketing.

ITC is clearly among the largest spender on ads and promotions in the biscuits category.

Communication Mix

The Marketing Communications Mix is the specific mix ofadvertising, personal

selling, sales promotion, public relations, and direct marketing a company uses to pursueits advertising and marketing objectives.


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Definitions:

Advertising - Any paid form of nonpersonal presentation and promotion of ideas, goods, or

services by an identified sponsor.

Personal selling - Personal presentation by the firms sales force for the purpose of making

sales and building customer relationships.

Sales promotion - Short-term incentives to encourage the purchase or sale of a product or

service.

Public relations - Building good relationships with the companys various publics by

obtaining favorable publicity, building up a good "corporate image", and handling or

heading off unfavorable rumors, stories, and events.

Direct marketing - Direct communications with carefully targeted individual consumers to

obtain an immediate response and cultivate lasting customer relationships.

Communication Mix at Sunfeast

Advertising:

Sunfeast have used the baseline "Spread the Smile" as the

brand essence and the brand is endorsed by Shah Rukh

Khan. The use of SRK makes sense since the target is mainly

kids. SRK have the energetic persona that goes well with the

brand. The mascot of Sunfeast is the Animated Sun which is

the symbol of contentment, satisfaction and Pleasure. This

mascot has been well received by the target group (TG). The

ad campaigns are catchy and full of colors and excitement.

The product is also of very high quality. Thus Sunfeast has

managed to get all the winning combinations in the right mix.

Well differentiated advertisements, some which showed a complete cream world with

cream rivers, cream mountains and cream trees, were targeted at kids watching cartoon

channels.

At the same time, on general entertainment channels, mothers received information on the

importance of glucose, the wholeness of wheat and so on. Also, the company tied up with

Bey Blades, the popular television series that was a rage among children, to promote itself.


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Advertisement Targeting

Sales Promotion:

In August 2003, a month after its launch, the company undertook a major sampling exercise

to promote the product. For two years then, the brand did all the usual rounds -- riding

behind buses, blocking television spots, booking that corner space in your favourite

newspaper and so on.

In the same year, as the official sponsor of WTA tennis championship -- titled the Sunfeast

Open -- the company had teenage sensations Sania Mirza and Mahesh Bhupathi

campaigning for it. But that's not all. For promotions in southern states, Sunfeast has signed

Tamil super star Surya as a brand ambassador.

Below the line promotion and Direct Marketing:

Sunfeast also uses lot of Below the line promotions for brand building. It sponsors Sunfeast

Open, a recent initiative aiming at the school kids by providing them an opportunity to

enhance creativity through painting competitions, "Hara Bano" campaign which set a world

record in planting maximum number of saplings etc.

Sunfeast register better among kids compared to adults. Learnings from biscuits track

revealed that spontaneous recall of Sunfeast among kids is about three times more than

their mothers.

The constant product launches and careful promotions have enabled Sunfeast to move to

the top league in the biscuit market within a span of 3 years. We may see this brand

expanding to many categories.

Awareness AdsMothers

Cartoon Channels

Children

Sunfeast Open

Mumbai & BangloreMarathon

Teenagers

ShahRukh Khan

Surya

Mass

Population


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RecommendationsEven though Sunfeast has been making its mark ever since its launch 2003 and has given

a tough competition to the existing giants as well as new entrants, there are a few things

that Sunfeast can still work upon to improve its market share and to reduce the gap

between the #2 and #3 position of the industry.

Sunfeast should aim at increasing the visibility of biscuits in the rural segment as itscompetitors are dominant there.

Sunfeast should assist the dealers with promotional merchandise Inspite of heavy investment in promotional activities, Sunfeast has been unable to

connect with the people at some level. In contrast, competitiors like parle and britania

have been successful in craving a distinct image in the consumers mind due to their age

old presence as well as captivating advertisements and jingles.

Sunfeast should work on similar lines and come up with enduring promotions.

Documents

Sun Feast 4P's