Brand Extension Analysis

Himanshu, PGP30022, Sec A

• ITC first introduced 'Kitchens of India' in to enter in the food market

• IT Centred the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad Atta(wheat flour)

• Witnessed the introduction of Sunfeast as the Company entered the biscuits segment

• Entered the branded snacks category with Bingo!

• launched noodles brand Sunfeast Yippee in the Indian market

Company – ITC Ltd.

2002

2003

2007

2010

2001

Major ITC Brands

Sunfeast – Brand Extention

Sunfeast Biscuits

Sunfeast Yippee Noodle!

Sunfeast, the challenger biscuit brand, launched in 2003, within a span of 7 years, has made presence felt in categories like biscuits, pasta and now in noodles

In September 2010 , the brand launched its noodles brand extension- Sunfeast Yippee.

Sunfeast made its first brand extension in 2005 when it launched Sunfeast Pasta Treat and created the pasta category in the Indian market

Sunfeast Yippee! Noodles

Sunfeast Yippee brand gained 3% in value share in 2014 by :1) leveraging strong distribution channel 2) targeting both mothers and children

ITC using an umbrella brand strategy to make space for the Yippee brand in the instant noodle category.

Yippee’s Chinese Masala launched in 2014 and heavily promoted in TV commercials targeting kids has good acceptance in the market space.

Sunfeast Yippee noodles’ television ad in 2014 positions ‘The Better Noodle’ which is: • long, • non-sticky• tasty

Yippee positioned well against the category leader and promoted as ‘does not form lumps even 30 minutes after cooking’.

Indian Noodles Market at a glance

Value growth of 19% in 2014 takes noodles

sales to INR 53 billion

Pouch instant noodles register the highest

current value growth of 21% in 2014

Rural penetration with small pack size variants are supporting growth

in 2014

Average unit price increases by 8% in

current terms in 2014

Nestlé India Ltd continues to lead with a 63% value share in

2014

Noodles is expected to see a 9% value CAGR at

constant 2014 prices over the forecast

period

Indian Noodle Market

2010 2011 2012 2013 20140.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

34.10%

29.71%

24.42%21.95%

20.58%

INR million 2009 2010 2011 2012 2013 2014

Chilled Noodles - - - - - -

Frozen Noodles - - - - - -

Instant Noodles 14,401

19,274

24,962

31,028

37,810

45,562

- Cups/Bowl Instant Noodles

207

240

274

312

353

396

- Pouch Instant Noodles 14,194

19,034

24,688

30,716

37,457

45,166

Plain Noodles 4,369

4,850

5,344

5,904

6,502

7,228

Snack Noodles - - - - - -

Noodles 18,770

24,124

30,306

36,932

44,312

52,789

Sales of Noodles by Category: Value 2009-2014

Sunfeast Category

MARKET GROWTH RATE - POUCH INSTANT NOODLES

Instant Noodle Product

Category grew by 218% in last 5 Years!

Market Growth rate has been declining over the

years. From 34% in 2010, it came down to 20.6% in

2014

Indian Noodle Market

Nestle with its Maggi Brand, continues to be the LARGEST PLAYER in the product category

followed by ITC!

Sunfeast’s market share has grown from 0.71% in 2010 to 10.81% in

2014

63%11%

5%

3%

2%

1%

1%

1%

13%

Major Players 2014

Nestlé India Ltd

ITC Ltd

Bambino Agro Industries Ltd

Indo Nissin Foods Ltd

Capital Foods Ltd

MTR Foods Ltd

CG Foods India Pvt Ltd

Hindustan Unilever Ltd

Others

Year Yippee’s Market Share

2014 10.81%

2013 8.31%

2012 5.30%

2011 3.40%

2010 0.71%

Segmentation-Targeting-Positioning- Yippee Noodles

Demographic Segmentation Target Group

Young people and children from upper and middle class

People looking for a healthy snack when hungry

Positioning

A. Sunfeast Yippee noodles’ television ad in 2014 positions ‘The Better Noodle’ which is: • long, non-sticky and tasty

B. Shape of the contents within the Yippee noodle pack is in round shape which keeps the noodles intact and long and smooth

C. Yippee noodles can be had even after hours of cooking it whereas Maggi must be had immediately as the taste deteriorates after sometime. Promoted as ‘does not form lumps even 30 minutes after cooking’.

Marketing MixProduct

PromotionPlace

Price• Products – Classic and magic

Masala• Packaging – package with red and

yellow contents• Contents - Round cake instead of

the rectangular cakes as used by other brands

• Labeling - 90 gram pack with two variants available &more lined up for launch in the coming months

• ITC’s biggest Distribution reach has brought of greater advantage to Yippee

• Penetration into rural areas at a rapid pace

• Company heavily emphasizing on Benefit Positioning Concept

• Deal with Paytm for Cash back

• All ads show how Yippee is different and better from Maggi

• Advertising also done to increase product recall

Magic/Classic Masala Price (Rs)

Large 85g / Mini 42.5 g 10 / 5

Family pack 40

• Available at price tag of Rs10 to match competitive prices of Maggi

Competitive Frame of Reference

POPs PODs

• Similar Pricing• Instant ready to eat noodles

category• Available in different sizes • Targeted mainly at kids• Similar packaging

• Round shape of packaged noodle content instead of rectangular that keeps the noodles intact and long and smooth

• Yippee noodles don’t lose the original taste even after hours of cooking unlike Maggi whose taste deteriorates after sometime

SWOT Analysis

Strength• Good advertising and visibility• Good product distribution and availability• Lots of flavors and varieties available

Weakness• Media generated news about health issues• Brand loyalty of Maggi is tremendous

Opportunity• Ban on Maggi• Untapped rural markets keeping in mind ITC’s Distribution strength• DINKS, single professionals; more flavors/variants

Threat • Price wars with other noodle brands esp. biggies like Maggi

References

• http://www.itcportal.com/• http://

www.itcportal.com/about-itc/shareholder-value/annual-reports/itc-annual-report-2014/pdf/report-accounts-2014.pdf

• http://www.sunfeastyippee.com/• http://www.euromonitor.com/india• GMID Database• http://timesofindia.indiatimes.com/• https://www.aaramshop.com/product-detail/sunfeast-yippee-noodles-magic-masala• http://www.mouthshut.com/product-reviews/Sunfeast-Yippee-Noodles-reviews-925616217• http://basicmarketingfundas4u.blogspot.in/2011/07/sunfeast-yippe-foray-of-itc-into.html• https://www.scribd.com/doc/119187165/Yippee-as-a-Substitute-for-Maggi• http://marketingpractice.blogspot.in/2010/12/brand-update-sunfeast-enters-noodles.html

Thank you!