P3: Place

Distribution Channels:

Snickers has moved on from selective distribution to Intensive distribution.

Initially, Snickers used to be available only at airports and high end departmental stores. Since 2012, it has penetrated deep into the Indian consumer market and is now available at every traditional "Kirana" store and departmental store.

The Distribution Channel of Snickers is 2-level Marketing Channel:

Manufacturer --> Wholesaler --> Retailer --> Consumer

Importing Snickers:

India imports Snickers primarily from UAE, Belgium, Netherlands. Most of the Imports are done at the Port Sea followed by Sheva. Port Sea accounted for 32.97% of imports followed by Sheva and Nhava which account for 29.64% and 29.64% of imports respectively.

Snickers is imported under the HS Code 18063100, 18069010, 96063090. As per the records it was last imported on 08 Aug 2014 at under HS code 18063100 and quantity 750 as SNICKERS POUCH PACK 500GR (CHOCOLATE) from BELGIUM at the price of INR307.76

Snickers is commonly imported under the name like SNICKERS STD 50G 12 x 24 INDIA 13 (UNIT PER CASE 288) (UNIT PER PCS 50G) CHOCOLATE 323 CTN, SNICKERS MULTI 6 PACK 300GR (CHOCOLATE), SNICKERS MINI FUNSIZE 403GR (CHOCOLATE).

The average import price of Snickers is Indian Rupees 1,563. This price doesn't include Import Duties, Taxes and Freight.

The full report can be accessed at: http://geosquare.in/Snickers.htm

P2: Price

Pricing is the process of determining what a company will receive in exchange for its
product or service.

While setting price for a product, the marketer must follow these steps:

01. Select the Pricing Objectives:

Changed from Maximum Market Skimming in 2004 to Maximum Market Share in 2012.
Earlier Snickers was an imported luxury chocolate on the lines of Hershey's chocolates.
Now, it has realized the potential of the Indian middle class market and brought down it's prices.
Moreover, it is looking to setup a plant in India.

02. Determining Demand:

With the increasing purchase power of the common man in India, Snickers predicted a potential increase in it's sales if it reduces it's prices.
A survey carried out by Snickers pointed out that there is a demand for Snickers in the middle class market of India. However, a chocolate bar like Snickers has an elastic demand.
Thus, to penetrate the market, Snickers positioned itself among the chocolates that were affordable, i.e. in the range of Rs.10 to Rs.30.

03. Costs Estimation:

Snickers consists of four main ingredients: Peanuts, nougat, caramel, chocolate.
Thus, it is extremely clear that the increase in price of any one of the ingredients will impact the price, or the size of the bar.
The size of the Snickers bar has been reducing over the years, owing to the worldwide increase in the price of peanuts. The following image shows the sharp increase in the price of peanuts.

04. Competitor Analysis:

The following table shows a list of competitors of Snickers and the comparisons of their prices.

<<image>>

05. Selecting Pricing Methods:

There are 3 types of Pricing Methods:

• Markup Pricing
• Target-Return Pricing
• Perceived-Value Pricing

Snickers uses the third type.

06. Final Price:

Brands with high quality advertising tend to charge highly.

Also, consumers are willing to pay for known products.

However, quality is the king.

Snickers quality has stood the test of time abroad.

As it is a new entrant in the Indian market, it is justifiable to price it at Rs.15 and Rs.30 

P1: Product

Five Product Levels:

Combining the Kenichi Ohmae 3C model with Five Product Levels as described by Kotler, we end up with the following understanding of a product:

Now let us understand each element with respect to Snickers as the "company" and Cadbury Dairy Milk as the "competitor".

• Core Benefit: Customer wants a chocolate to satisfy his/her sweet tooth.

• Basic Product (Company): The chocolate is flavoured with Caramel (Mars Bar)

• Basic Product (Competitor): The chocolate is milk chocolate (Plain Dairy Milk)

• Expected Product: Affordable and tasty chocolate, packaged attractively.

• Augmented Product (Company): The chocolate has real peanuts and nougat that fulfills the customer's hunger. Projected as a hunger killer. (Snickers is born!)

• Augmented Product (Competitor): Adds rice crisps / dry fruits for a different taste. (Dairy Milk variants)

• Potential Product (Company): Snickers Bites, Snickers Ice Cream

• Potential Product (Competitor): Cadbury Silk- Super Soft chocolate

Product Hierarchy:

Let us understand the six levels of Product Hierarchy with the help of Snickers.

1. Need Family: Food and Beverage
2. Product Family: Confectionery
3. Product Class: Chocolate
4. Product Line: Snickers
5. Product Type: Snickers The Lot, Snickers Fudge, Snickers Maximus, Snickers PB Squared, Adventure Bar, etc
6. Item: Snickers Fun Size, Miniatures, Minis

Product Length,Width, Height

The following diagram explains a product's length, width and height:

Packaging

As Snickers is a chocolate bar, it has been packaged in brown paper.

Variants of Snickers display variety of ingredients on the cover, depending on which ingredient has more presence in that particular variant.

For example, as Snickers More Nuts has more of peanuts in it, peanuts are displayed on the cover.

Similarly, Maximus has the photo of caramel on it's cover.

Marketing Mix: 4Ps vs 4Cs vs 4As

Traditionally, marketing strategy has revolved around the dominant framework of the 4Ps(Kotler, 1999) – Product, Price, Place, and Promotion.

In the 21st century this framework has been deemed inadequate (Kotler, 2003). Two of the most prominent alternative paradigm existing in the marketing literature is that of the 4Cs – Customer value, Customer costs, Customer convenience, and Customer communication (Kotler, 2003) and the 4As – Awareness, Availability, Affordability and Acceptability.

The 4Cs and 4As make more sense in today's world because the 4Ps look at marketing from the provider's point of view rather than from the customer's perspective. In today's world, the customer is in charge and demands are to be served as per the requirement of the customer.

Let us have a look at the 4As, the 4Cs and the 4Ps from the Snickers point of view:

AAAA

Awareness:

Snickers has managed to create awareness in the minds of the Indian consumer due to it's great product positioning and brilliant advertising campaigns. Also, the product delivers on taste.

Availability: 

Snickers has ensured that it seeps in every household by ensuring a continuous supply of its products through all the retail stores - big or small - that the customers have easy access to.

Affordability: 

The price of Rs. 15 and Rs.30 makes Snickers affordable to all sections of the society. All the competitors have placed their chocolates within this price range.

Acceptability: 

MARS, the owner of Snickers, has come out with a vegetarian (eggless) version of Snickers just to cater to the demands of the Indian consumer base. This has widely been accepted throughout India.

CCCC

Customer value: 

In a market ruled by Cadbury Dairy Milk, it was important to stand out. Snickers realised that the Indian customer has a fancy for imported chocolates. However, most of them could not be consumed by Indians due to the presence of animal gelatin or egg in them. Thus, it tapped the Indian market with a vegetarian version of it's international chocolate snack that stood out from the other plain milk chocolates and wafer chocolates of the same price.

Customer Costs: 

Snickers is placed at an affordable Rs.15 and Rs.30, which in today's world is the price of an average chocolate bar in India.

Convenience:

Snickers has been strategically placed throughout the country so that it is available everywhere, from malls to the local baniya stores.

Communication: 

Snickers has successfully managed to communicate to the customer about how it is different from other chocolates through it's visuals and advertisements. The ads clearly state that the best way to satisfy your hunger is to grab a Snicker.

PPPP

Product:
Snickers is a product that promises complete satisfaction from hunger to the consumer. It is essentially a chocolate bar marketed as a snack bar.

Price:
Snickers is placed at an affordable Rs.15 and Rs.30, which in today's world is the price of an average chocolate bar in India.

Place:
Snickers has been strategically placed throughout the country so that it is available everywhere, from malls to the local baniya stores.

Promotion:
Snickers has successfully managed to communicate to the customer about how it is different from other chocolates through it's visuals and advertisements. The ads clearly state that the best way to satisfy your hunger is to grab a Snicker.

The Product, Price, Place and Promotions will be discussed in detail in the coming blogs.

Life Cycle Concepts

Product Life Cycle:

The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products.

• Introduction
• Growth
• Maturity
• Decline

Currently, Snickers is the best chocolate in the USA. It is at the Maturity stage there.

However, in India, being a late entrant, it is still at the growth stage.

Industry Life Cycle: 

Chocolate industry is at the maturity stage overall.

Competition and Industry

Snickers does not only compete within the chocolate industry, but outside it as well! This is because, Snickers is marketed as a snack instead of a candy bar. While the USA has easily adopted it as a snack, India is yet to see it become a snack.

For Indians, anything made of chocolate is a chocolate or sweet dish, not a snack. This is the biggest problem for Snickers in India.

Snickers competitors within the industry in USA:

Below is a list of the top 3 competitors of Snickers in USA. Currently, Snickers is at number 1 position.

1. M&M: Coming from the same parent company, Mars
2. Reese's: The Hershey Company
3. Hershey's: The Hershey Company

As is clearly evident, there are two companies ruling the roost in the USA: Mars and Hershey.

Snickers competitors within the industry in India:

Snickers has a tough competition in India as it is a new entrant in the market as compared to established brands like Cadbury and Nestle. Cadbury has such a wide impact that chocolate is synonymous with Dairy Milk almost all over India.

1. Dairy Milk and it's variants: Cadbury
2. Kitkat: Nestle
3. Munch: Nestle

Snickers needs to come up with some really brilliant advertising and promotion campaigns to make a mark in the Indian scenario.

Snickers competitors outside the industry in India:

As said earlier, the idea of snacks is something different in the mind of the Indian consumer.

Some of them are as follows:

1. Vada Pav
2. Street Food
3. Chips and Samosas

It may take a while for Indians to view Snickers as a snack.

Consumer Decision Process Elements

Who buys Snickers?

• People who need a quick snack
• People with a craving
• People who need some energy
• Impulsive customers
• People who generally aren’t health conscious

What problem will this product solve?

• Satisfies hunger
• Uplifts mood of the consumer

Which attributes are important? Why?

• Texture of the chocolate
• Right proportion of chocolate, caramel and peanuts
• Should not be too soft
• Peanuts satisfy the hunger pangs and the mood.
• Chocolate uplifts mood

First time buyer vs repeated buyer

First Time: 

• It’s an international brand, now easily available in every store. Must try.
• Peanut, nougat, caramel
• Interesting ingredients.
• Yummy taste. Different from the other plain chocolates available in the market.
• Ads promise killing of hunger pangs.

Repeated:

• Need it to satisfy hunger pangs.
• Should not be too soft else it will become sticky and messy while eating.
• Slightly more expensive than other chocolates.
• Heavy on the stomach, can’t have in large quantities.
• Eat in limited quantities as it is not good for health.

Deliberation in the head of the consumer

This chocolate is different from the others present in the market.
It consists of peanuts and is fulfilling.
Other chocolates satisfy taste, this satisfies hunger.
The taste is very good.

Stages of decision making:

Explanation with respect to Snickers:

Need Recognition: Hunger satisfaction or chocolate craving

Information Search: Search for quick snacks or chocolate

Evaluation of Alternatives: Compare with snack options like Vada pav or with chocolate options like Dairy Milk.

Purchase Decision: Go for Snickers as it seems to satisfy both, hunger pang as well as sweet tooth.

Post-Purchase Behaviour: Go for Snickers again if it satisfies the consumer.