25 Comments

It is written that "they started with an insight that customers don't consider tasty as healthy". So, that means they feel only health conscious people buy their product? In that case, how many people beyond tier - I cities are health conscious? I would like to draw an analogy of coca-cola's failure of "diet coke" in semi -urban and rural areas. Because, the notion of health consciousness is secondary when compared to taste. It will be interesting to see how they are going to perform in tier - II & III markets.

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Hello Anudeep. Great point. Actually not only Tier 2 and 3 markets, even Tier 1 cities won't have enough health conscious people for Too Yumm to make money. But, that's where a very interesting marketing factor comes in which I think can be best illustrated by example of Nike. Nike's positioning is all about excellent athletic performance. But, how many people who wear Nike are actual athletes. Maybe less than 2-3%. Remaining might have not played a sport in years. The idea is that not all are athletic but deep down they aspire to be. It's very similar with Too Yumm. In all markets, they would have very few super users who are actually health conscious and counting calories. But, the majority of the customers aspire to be fit and one way to fulfill this need is try a healthy snack. Hence, they might go very well beyond their super users in Tier 1 cities.

In Tier 2 and 3 cities, I feel the product would be driven by variety seeking behaviour of customers in this segment, ads/promotion and Virat on the packaging. Definitely smaller pack sizes would be very critical here.

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Great analogy sir. Customers in tier 1 cities might get attracted to the marketing campaigns of Too Yum. Also, You mentioned that one of the factors for people in tier 2 and 3 cities would be "variety seeking behaviour". But, there are many examples of huge brands who failed while trying their hands on variety products. Examples like Aata Maggi, pepsi blue, etc..

On the contrary, one can point out success story of Kellogg's products (variety, right?) in India. Even here, they have added the "healthy diet" angle to their positioning much later. But, when we look at their consumption in areas other than tier 1 cities, how good are they?

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One essential thing if you see in case of Pepsi blue or atta maggi is that the customers have a reference of the product in mind. They love the product as it is. And that's one reason they didn't have much incentive to switch to other variants. Similar case of lays baked.

But in case of Kellogg's it was a completely different product being positioned as a healthy breakfast option. And that's why it clicked. Because of being convenient to prepare and healthy.

On similar lines, too yumm is not coming along with a variant. It's trying to establish itself in a position which no present snacking brand occupies. Hence, I hope it can do relatively well. Think sensodyne in toothpastes. But of course major demand would be from tier 1 cities with tier 2 and below contributing lesser volumes.

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Definitely tier 1 cities would the driver given the case here. Tier 2 and 3 would account for relatively lesser volumes.

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Hippo was discontinued in 2014. How is the 2019 Nielsen report showing its market share? It raises questions on authenticity of all your data. Also, your analysis of Hippo is incorrect. Demand did not fizzle. It remained very popular till the end. A quick google search will show you that its flavors had an entirely positive response. Too Yumm has adapted many of them.

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Hi Chitpreet. Thanks for pointing out the errors. It was our first article and hence bound to have some mistakes. But, nevertheless, in future articles, we have improved on that. Though the focus was more on Too Yumm, will try to research more on Hippo and update.

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I was surprised to not find Balaji on the list of players - it's pretty popular in Mumbai suburbs for the quantity it offers for the same price as other brands. I think it's presence is only limited to Mumbai/Gujarat?

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Balaji is comparatively smaller. Though I couldn't find the exact percentage of its market share. But it would be around 7% basis the revenue numbers that I found. And though we have not represented it in the first image, it would be in the last segment of Haldirams and other regional brands.

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Balaji Wafers had Annual TO of >2200 crs in the last fiscal.

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Good Article . One suggestion : Links to sources for research and additional section perhaps as to how did u do research for this article .

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Thanks Neeraj. We have started doing that for all articles going forward :)

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What did you mean by a "being a me-too brand" ? - In my understanding, the interpretation is that, the Too- Yum brand didn't want to be in the "I'm also one among the healthy snacks Crowd."

Please do correct me if my thinking is wrong?

Thank You . Looking forward to more from this page.

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Hi Sai, me too brand in the article refers to all the brands which were pretty much the copy of each other. Eg. There are too many brands which are exactly the same as Lays. There was no point of being a me too brand for too yumm.

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Thanks a lot Azhar Jafri

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product first then marketing. thanks. for the write up.

can you please add US dollars as money value? I don't really understand indian money.

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Hi Jon, glad you liked it. I have added the dollar figures now. You can go through it again when you find time.

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Awesome guys! Waiting for more articles! :)

Best of luck :)

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Thanks you Nibha! New post is out. It's an introductory piece on Venture Capital. Please do have a look and let us know if it was helpful for you :)

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Beautiful piece of writing and a perfect marketing class notes for 4Ps. Thanks, Azhar and Vivek to put this case together. I am inquisitive to know, how beginners work on scaling up their distribution channel? How easy it is to reach out the tier 2 and tier 3 cities? How the last mile connectivity is ensured when you are not an HUL or PNG? I would like to know about that from you in your upcoming segment. Thanks again, guys. Looking forward to more from this page.

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In urban landscape, with rise of modern trade (supermarket chains), you strike deals with them for shelf space on their aisles.

But for other stores, you generally have a city level or district level distributor you tie up with who will get your product across to all the mom & pop stores in their region.

As a new brand, distribution to Tier 3 cities is tough. Because the distributor system explained above is a legacy system that works on trust and scale. You have new companies like StoreKing trying to build a new and easier distribution channel to Tier 3 and rural. Ecommerce is also helping to an extent.

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great and useful article, i would like to inquire about the bibliography

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Hey, 750 million dollars is not equal to 10000 cr

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You guys should also write a post on how you concept and create those slides in the article. They're simple yet informative. Thank you for the work.

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Beautifully curated especially by referring to 4P's. I read that they represented Virat as their brand person who they boarded to connect to customers. I'm wondering how early-on brand should invest on such marketing where you on-board a celebrity to advocate, how the ROI is calculated?

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