Haldirams Place Strategy

Haldiram’s, a renowned brand known for its quality and flavor, originated from a humble shop in Bikaner and has since expanded its presence not only within India but also internationally. It exports its products to various countries including Thailand, Japan, New Zealand, Australia, UAE, Canada, UK, and Sri Lanka.

Within India, it operates through a vast network of retail outlets, making its products easily accessible in numerous food stores, confectionary shops, bakeries, convenience stores, local markets, discount stores, supermarkets, and hypermarkets. Its initial manufacturing facility was established in Kolkata, followed by plants in Nagpur, Bikaner, and New Delhi.

With manufacturing facilities and outlets in key cities like Kolkata, Mumbai, New Delhi, Nagpur, and Bangalore, Haldiram’s also maintains an online presence through its official website and partnerships with various e-commerce platforms. Through a robust distribution network, products are distributed to retailers and consumer markets by C&F agents and distributors, ensuring wide availability both domestically and internationally.

Here are five important points regarding Haldiram’s distribution strategy:

1. Broad Retail Presence: Haldiram’s has a widespread retail network, comprising its own branded outlets, franchise locations, and partnerships with supermarkets and convenience stores. This extensive presence ensures that customers can easily find Haldiram’s products in various places.
2. Online Retail and E-commerce: The company has established a strong online presence through its official website and collaborations with e-commerce platforms. This approach enables customers to conveniently purchase Haldiram’s products online and have them delivered to their homes, enhancing accessibility.
3. Global Expansion: Haldiram’s has expanded its market beyond India and into international territories. They distribute their products through diverse channels in countries around the world, making Indian snacks and sweets available to consumers globally.
4. Effective Supply Chain Management: The company prioritises efficient supply chain management to ensure prompt product delivery to its retail outlets. This involves well-coordinated distribution networks, inventory control, and transportation logistics.
5. Product Innovation and Localization: Haldiram’s tailors its product offerings to align with the preferences of specific regions and consumer demographics. This approach allows them to effectively penetrate diverse markets within India and abroad by offering customised products suited to local tastes and preferences.

Haldirams Pricing Strategy

The company recognized the price sensitivity of Indian consumers and opted for a competitive pricing strategy, keeping its prices lower than its competitors. This approach aimed to make its products affordable and within reach of customers, aligning with their budget constraints.

Haldiram’s introduced smaller packaging options to encourage more frequent purchases, resulting in higher sales volumes and increased overall revenue.

Key aspects of Haldiram’s pricing strategy include:

Value-Based Pricing: Haldiram’s focuses on providing value to its customers by pricing its products based on the perceived value they offer in terms of taste, quality, and brand reputation.

Premium Pricing for Quality: Known for its high-quality snacks and sweets, Haldiram’s adopts a premium pricing strategy to reflect its superior product standards and establish itself as a trusted and premium brand.

Competitive Pricing: In a competitive market, Haldiram’s closely monitors its rivals’ pricing strategies to ensure its offerings remain competitive. It seeks to differentiate itself through product quality, variety, and brand image.

Dynamic Pricing: During special events or promotions, Haldiram’s may employ dynamic pricing tactics like discounts, bundled offers, or limited-time deals to attract and retain customers, boosting sales during peak periods.

International Pricing Adaptation: In global markets, Haldiram’s adjusts its pricing strategy to accommodate local market conditions, currency fluctuations, and competitive dynamics. This adaptability enables the brand to stay competitive while catering to regional preferences and economic factors.

Haldiram’s promotional strategy revolves around:

Festive and Seasonal Campaigns: During festivals and special occasions, Haldiram’s launches tailored marketing initiatives that resonate with cultural sentiments, aiming to drive sales during peak seasons.

Digital Marketing and Social Media: Utilising social media platforms and digital advertising, Haldiram’s interacts with customers online, building brand recognition and highlighting its product range to a wider audience.

Product Sampling and In-Store Promotions: To encourage trial and purchase, Haldiram’s organises product sampling events and promotions within stores, fostering customer engagement and loyalty through firsthand experience with its products.

Haldiram’s quest to become a global brand name

Pankaj believes that Indian fast food hasn’t gained global popularity due to the complexity of its preparation and the lack of investment in packaging for extending shelf life. For instance, dishes like Rajkachauri require numerous fresh ingredients and specific spices, some of which have short shelf lives. In contrast, Western fast food like burgers and pizzas can be frozen and easily transported globally, thanks to advanced packaging and supply chain technology.

Haldiram’s can position itself as an Indian fast food brand rather than a Western one, avoiding direct competition with franchises like Pizza Hut or McDonald’s. This opens up a significant market opportunity for Haldiram’s to establish itself as a global brand. The company receives inquiries from businesses worldwide interested in franchising Haldiram’s restaurants, indicating strong international demand for its products.

Challenges faced by Haldiram’s

One of the significant challenges faced by Haldiram’s in the food industry is the preference of Indian customers for fresh food over packaged items, except for namkeens. Customers often demand freshly packed sweets, even if the packaging indicates a shelf life of several days. This demand for freshness poses a challenge for Haldiram’s, prompting them to focus on enhancing their packaging methods. Despite lacking food technologists, Haldiram’s has established a fully equipped laboratory with chemists to address this challenge and develop improved packaging solutions internally.

Competitors

Entrepreneurs from South India typically focus on offering authentic South Indian cuisine when expanding into the North, whereas Haldiram’s has a broader positioning. While customers seeking specific South Indian meals may choose a South Indian restaurant, Haldiram’s caters to families where each member desires a different type of cuisine, making it their preferred choice. In the namkeen and snacks segment, Haldiram’s faces competition mainly from Lehar, Pepsi, and Frito Lay. However, the branded namkeen market in India represents only a small portion of total namkeen sales, with many local manufacturers offering loose namkeen at lower prices. Although Haldiram’s maintains quality leadership, competing on cost is challenging due to factors like supply chain and distribution costs, especially in smaller cities and villages where customers prioritize affordability over quality. Namkeen accounts for over 90% of Haldiram’s total turnover, with the fast food segment comprising only about 10%. While Pepsi may have an advantage in snack categories like potato chips, Haldiram’s strategy is not to directly compete but to focus on creating its own market niche. Instead of large-scale advertising, Haldiram’s relies on its distributor network for low-key promotion, aiming to gradually capture market share through a guerrilla warfare approach, avoiding head-on competition with larger competitors like Pepsi.

Franchise opportunities

As stated earlier, Haldiram’s are developing their own internal systems. Until and unless, they are strong in-house, they would not like to expand. Unlike their competitors Haldiram’s don’t want to dish out a lot of franchisees and expand very fast. They would rather like to grow steadily but at the same time have everything in control. They are definitely thinking of giving their franchisees. They are not franchising across the board for all htier products, they would rather limit their variety. So, they will be focusing only on their core products like Indian chat, papri chat, golgappas, Indian snacks like chole-bhature, pav-bhaji, tikkis. They want to give out franchisees for that along with the sweets. They want to promote both of these products together in a branded format. Haldiram’s don’t want to go far from Delhi so in order to maintain control and face the initial problems more effectively. Maybe they can even take it in another way that they buy a place, they invest everything and they manage it in the way of a franchisee. Like today, they manage each and every outlet personally. They go visit that place but that model they can take in the form of franchisee, how to deal with the franchisee so that they can learn from it and at the same time, they don’t affect their brand name also because that will be done everything in house. So, at any time they can change the model. There is a vast scope in Delhi. They don’t have any outlets in west and east Delhi. They are looking to start in Delhi to see how things turn up, customers reaction, turnover of the franchisee, costs etc.

The concept of frozen technology

Studies for frozen pizzas and burgers are common in the industry, unlike frozen samosas, due to the relatively low demand for the latter. In the United States, frozen samosas and parathas are readily available, thanks to established technology and infrastructure for frozen products. However, in India, the lack of a robust cold chain infrastructure and frozen refrigerators in shops hampers the adoption of frozen products. Despite this, certain Indian products like frozen samosas and tikkis show promise for leveraging frozen technology. Therefore, the export market becomes the primary target for such frozen products, as the Indian market requires time to adapt. Haldiram’s may face challenges in establishing its brand domestically, prompting foreign companies to consider Haldiram’s as a sourcing partner and use their brand for global sales. Haldiram’s is open to partnerships with international firms interested in purchasing frozen samosas for local markets, provided it is profitable. Currently, Haldiram’s is researching freezing technology, experimenting with frozen products to determine shelf life and taste compared to fresh ones. Initially, they plan to introduce frozen concepts in one of their outlets. Haldiram’s focus remains on food, as it is their core expertise, with no intention to diversify into unrelated sectors like television manufacturing, which faces intense competition and limited profit potential.

SWOT Analysis of Haldirams

Strengths in the SWOT analysis of Haldirams:

This analysis sheds light on the core strengths of Haldiram’s, showcasing its competitive advantages in the market. Strengths typically represent the fundamental expertise of the business.

1. Brand Recognition: Haldiram enjoys significant brand awareness globally, positioning itself as an Indian brand with a wide international reach, consistently supplying products across borders.
2. Diverse Product Line: The brand boasts an extensive and varied product line, offering customers numerous options such as namkeens, papads, chips, cookies, sweets, dry fruits, and sherbets.
3. Trusted Quality and Hygiene: Haldiram’s restaurants maintain high standards of cleanliness and hygiene, earning trust for the quality of their products.
4. Eye-Catching Packaging: Haldiram’s products feature attractive packaging that catches the attention of customers in retail stores, even if not placed at eye level, contributing to increased sales.
5. Efficient Supply Chain: Haldiram has developed a robust supply chain network, ensuring product availability at various points of sale, a crucial factor in driving sales.
6. Competitive Pricing: The brand strategically prices its products to cater to middle and upper-income groups, offering different package variants priced according to quantity, making them accessible to a broad customer base.
7. Flavorful Taste: Customers appreciate the distinctive taste of Haldiram’s products, establishing a niche in the market for its food offerings.
8. Global Reach: Haldiram’s global presence enhances its brand reputation, signalling that its products are exported internationally, further solidifying its position in the market.

Weaknesses in the SWOT analysis of Haldirams :

This represents the areas of concern within the organisation, where there’s a lack of resources or expertise. It’s essential for businesses to address these areas to remain competitive. While every business may have some weaknesses, they shouldn’t be significant enough to jeopardise the company’s position in the market.

1. Branding and Advertising: Haldiram’s marketing efforts are relatively limited, primarily focusing on Above-the-Line (ATL) activities. This approach puts the brand at a slight disadvantage compared to competitors who invest more heavily in marketing and advertising.
2. Limited Presence in South India: Despite its global reach, Haldiram’s stores are primarily concentrated in northern India. As a result, the brand’s popularity is confined to this region, limiting its exposure to other parts of the country and potentially hindering its overall market penetration.

Opportunities in the SWOT analysis of Haldirams :

This enables businesses to explore new avenues for growth and leverage their existing skills and resources. It allows them to identify areas where they can expand their operations and attract a broader customer base.

1. Market Expansion: Haldiram’s has the opportunity to further penetrate the Indian market beyond its current stronghold in northern India. This expansion can help broaden its customer base and increase brand recognition nationwide.
2. Diversification into Hospitality: There’s potential for Haldiram’s to venture into the hospitality sector on a global scale. With a significant Indian diaspora worldwide, investing in hotels could capitalise on this market and expand the brand’s reach.
3. Enhanced Marketing Efforts: Implementing aggressive advertising and branding strategies can boost Haldiram’s visibility and brand recall, helping to capture more market share and attract new customers.
4. Health-Conscious Snacks: Introducing healthier snack options, such as low-fat, low-calorie baked snacks, can appeal to health-conscious consumers and tap into growing market trends for healthier eating choices.
5. Innovation for Youth: Developing innovative snack offerings tailored to the preferences of younger consumers can help Haldiram’s stay relevant and capture a demographic that values novelty and variety in their food options.