Tuesday, May 22, 2007

ITC Bingo - Too many variants????


ITC in March launched it's ready-to-eat snacks 'Bingo' to mark it's entry into the Rs 2,000 crore fast-moving branded snacks market. As usual the company has backed the launch by a well designed ad campaign and the taste and variants of the product are based on extensive research on tastes of consumers . The launch of Bingo represents ITC Foods' fifth major line of foods business after Staples, Biscuits, Ready-to-Eat and Confectionery businesses. The launch represents the attempt made by the company to reduce the dependence on tobacco in it's total turnover.

Though the success of otherwise of 'Bingo' would be decided in the market one thing which I have not been comfortable with is the number of variants that the product has been launched with. There are a total of sixteen variants. The intended strategy would be try and cater to the tasted of the as many consumers as possible, but total number of variants seem a little too high, especially for a new launch.

The impact of too many variants would be on three participants . First is the the channel, here the advantage of having more variants that it would enable the sales force to push more stocks into the channel during the launch. This initial push would give the sales force some thing to cheer about. The distributor would have to take minimum quantities of all the variants which would eventually force him to carry more stocks, with him having no idea of what would sell. The retailer normally would have a limited budget for the category and when confronted with this many variants he would either have to select a few or take smaller quantities of all, both of the strategies would be risky for a new launch.

The consumers would be the second set of people who would also be troubled by the number of variants. He has to try the new tastes one by one to decide which one would be best. Though the comapny would want to claim that the pricing at 5 and 10 rupees should make trials easy. And if he is not happy with the first variant he tries he might not go on to try the other variants in offer.

Lastly the production people would also behappy if lesser variants are introduced to start with, because they would not know what is moving off the shelfs and the consumer acceptance of the variety in the offerings.

So all in all though the impact of many variants would look good in the short run, it may not turn out to be the best strategy in the long run.......

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