Customer Behaviour – Preference and Patterns in the Snack Industry

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Customer Behaviour – Preference and Patterns in the snack industry 1. Select a topic
Customer Behaviour – Preference and Patterns in the snack industry We will approach this topic in the light of snack industry, especially in the context of Indian Wafer industry. We chose this topic as at the root of any marketing strategy it is the customer and his preferences. Without an understanding of the customers buying patterns it, a company would spend huge amounts of time and money behind the wrong strategy and thus lead to loss of profits, reputation and market share. The Indian wafer industry is a high growth industry with the presence of only two or three major players in the organized sector, namely Frito Lays, ITC Bingo and Parle Smart Chips. We will examine customer preference in terms of traditional vs modern snacks, branded vs unbranded, international flavours vs. traditional flavours. Other factors affecting the branding and positioning strategy like price points and promotion media preferred, demographics, per capita consumption, government policies and strategies adopted by competitors, will also be examined.

2. Literature Review/ Background
The snack food market in India is valued at INR 1530 crores and is one of the largest markets in the world, out of which potato chips holds the major market share of around 85%. The Indian snacks food market is of the order of 400,000 tones. Big players like McChain Smiles and NP Foods have also entered into Indian potato snack industry in 2005. The wide range of products are categorized under potato chips, savory snacks, snack nuts, popcorn, French fries. The organized market for chips is estimated to be 6500 tons valued at INR 2 billion. Consumer expenditure on food, beverages and tobacco in India is forecasted to grow at a CAGR of 12.2% during 2007 to 2011. The market for branded chips has been growing at a fast pace of around 20-25 % annually. The organized category basically comprises of the traditional segment (bhujia, chanachur), western segment (potato chips, cheese balls) and the newly established finger snacks segment, an adaptation of traditional offerings to the western format.With changing lifestyles, the traditional eating has witnessed a revolutionary change. You need not spend hours in the kitchen, as you get ready-to-eat snacks to appease your appetite. The sheer variety of gastronomic preferences across the regions, hereditary or acquired, has brought about different modules across the country. It may take some time for the local enterprise to mature to the level of international players in the field. Many of the traditional dishes have been adapted to suit the emerging fast food outlets. The basic adaptation is to decrease the processing and serving time Traditionally snacks were prepared from ingredients commonly available in the home, often leftovers, sandwiches made from cold cuts, nuts, fruit, and the like. The Dagwood sandwich was originally the humorous result of a cartoon character's desire for large snacks. Beverages are not considered real snacks, especially coffee. The only instance in which a beverage constitutes a snack is if it possesses a substantive food item (e.g., strawberries, bananas, kiwis) and then blended to create a smoothie. With the spread of convenience stores, packaged snack foods are now a significant business. Snack foods are typically designed to be portable, quick and satisfying. Processed snack foods are designed to be less perishable, more durable, and more appealing than prepared foods. They often contain substantial amounts of sweeteners, preservatives, and appealing ingredients such as chocolate, peanuts, and specially-designed flavors (such as flavored potato chips). A snack eaten shortly before going to bed or during the night may be called a midnight snack.

The development of the snack market has also created a growing demand for dehydrated potato products, used as raw material for snacks. With regards to...
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