The wafers category is giving a hard time to the market leaders in the biscuit category. Parle Products, which boasts of 40 per cent market share in the biscuit category, forayed into the organised wafer business in 2009, and launched three new snack brands – Musst Stix, Musst Chips and Monaco Smartchips. It was a time, when many entered into the snacks category.
Parle Agro’s Hippo is one such example. While Hippo basks in the sunshine, the three products from Parle Products bombed in the market. What went wrong with the three products despite the same distribution channel. Was it a product failure or was there any other factor that played a bigger role in the failure?
What went wrong?
According to experts, the products failed because there was no product differentiation in the category. According to Abraham Koshy, Professor, Marketing, IIM Ahmedabad, “Musst Stix was an imitation of Kurkure. Consumers seek a difference in taste and Parle Products failed at that.” The storyboard of the ad commercials for the products showed the company comparing it with other products in the market and offering 50 per cent extra on each pack.
Musst Chips and Musst Stix, both launched in the same year aimed at competing with the market leaders, Lays and Kurkure. While Musst Chips was positioned as a young and light, fun snack, Must Stixx was positioned as a family snack. However, the positioning didn’t work for them. “Wafers don’t find the kind of customer acceptance that biscuits do. Remember, the consumer may be the kid in the family, but the customer is the mom or dad who shops for food and grocery. Moms and dads don’t find wafers either nutritious or filling. Plus, wafers cost as much or even more as compared to biscuits,” says Ray Titus, Professor of Marketing and Corporate Strategy at Alliance University, Bangalore.
But the company has a different story to tell. According to B Krishna Rao, Group Product Manager at Parle Products, the company’s umbrella brand or one brand strategy is at fault. “In most of the sectors, be it consumer electronics or FMCG in totality, most big brands follow the one-brand strategy. It is done in order to save on costs. In the wafer segment, we followed the same path but it didn’t work. Consumers couldn’t accept separate snack brands with the same brand name.”
There is a similar story behind Monaco Smartchips that was aggressively launched in the same year. The product, which was positioned as a healthy snack, met the same fate like its predecessors. For Koshy, the commercial worked against the product. “Who was the focus in the ad? Was it Aamir Khan or the product?,” Koshy asks, as he adds, “Besides, the wafers category is a fun and light category and no one likes to be lectured about wafers.”
While Koshy blames the creatives, M Unnikrishnan, Managing Director, Brand Finance feels the contrary. He feels that the commercial was great but the product failed to live up to the hype and expectations. “Consumers are over-indulging in wafers and therefore there is a need for healthy snacks that can be consumed without putting health at risk. Monaco Smartchips aimed at doing just the same but failed as a product.” Thus, the company had made a smart brand proposition with Monaco Smartchips, but as a product failed.
The battle ground
Pepsico’s Lays and Kurkure were the first players of the market. Thus, they managed to capture a large market share with their wafer brands. While Lays had international flavours, Kurkure had the desi flavour. “Kurkure is extremely innovative which appeals to the Indian consumers. A thorough taste research has been done and the flavours are inspired by the traditional Indian snacking,” notes Unnikrishnan.
According to another expert, Pepsico has understood the ‘flavour fatigued’ concept in the market. Consumers seek new flavours time and again and Pepsico did just that with both Lays and Kurkure.
While this is the story of the market leaders, snack brand Hippo that was launched in the same year as Parle Products, the story is a bit different. Parle Agro introduced in the market, a baked wafer that was a non-potato based. The product was differentiated because of its taste and it took instant liking by the consumers. Initially, the product was launched in international flavours and later in Indian flavours. The product was positioned as fulfilling snack that satiated hunger. Hippo, again stood out for its brand name. The brand name was inspired by the fact that a Hippopotamus has a wide mouth and can gobble down maximum food at one go to suffice his hunger.
ITC’s Bingo too launched ‘Mad Angle’ that was different in design. The triangular snack brand focused on desi flavours and launched various variants in the market.
Taking a corrective measure, Parle Products has relaunched its two brands - Musst Chips and Musst Stix this year. Musst Chips, now called Parle Wafers and Musst Stix, relaunched as Full Toss have the same positioning in the market. The brand decided to use its Parle logo in the name, so that consumers have an affinity towards the new product. “Earlier, the logo was really small, therefore, consumers gave it a miss as they mistook it as a local product,” says B Krishnarao. “Full Toss was inspired by our campaign Parle 20-20. The campaign, which centered around cricket was a huge hit. Hence Full Toss,” he adds.
The company admits that consumers were averse to the brand name ‘Musst’ as it sounded derogatory. “The word Musst (sounded like the Hindi word – mast) in these cases was not accepted in the market. According to our research, our target group didn’t want to be seen with Musst Chips or Musst Stix,” notes Krishnarao.
Parle plans to spend 80 per cent of its marketing budget on TV while remaining 20 per cent has been divided between print, digital and radio, to push the new brands. In terms of distribution, the brand will use its existing distribution channel, but has appointed exclusive distributors in places where the existing distributors have refused to take the wafers. These exclusive distributors will only keep Parle Products’ wafers in their stores.
What they can do best?
According to Unnikrishnan, the brand should focus on developing a new category. “The wafers category has tremendous potential. Instead of trying to grab the market share of established players, Parle should create a new category and try to develop on innovations.”
As per market reports, the snack market exists on the visibility factor. A product which is more visible to the eyes of the consumers, gets an instant liking. However, Koshy feels that snack the market functions on the product up to a point, what basically maneuvers is the product innovation. “Unless, innovations are not done in the products, all of them will become ‘me-too’ products,” Koshy says.