Pricing Strategy of ITC Bingo (Food & Beverages)- Group 6

1) Pricing Objective-

· The Bingo brand of chips was launched by ITC on 14th March 2007 with an aim to capture at least 25 percent market share of the Rs 2000 crore branded snack market within five yrs with an aggressive pricing strategy.

· Presently the relative market share of Bingo is 16% (Lays 45%).

· They tried to be on par with the leading market players (Lays, Kurkure) by maintaining pricing their products at Rs 5, Rs. 10 and Rs.20. For the competitive edge they tried to offer more weight.

· To recover the manufacturing cost, transportation cost, distribution and sales cost,etc.

2) Competitors price mix-

· The pricing strategy adopted by Bingo is a clever one. Bingo is priced the same as the Lays brand of chips at Rs10 for a 35g packet and Rs5 for the smaller one. By adopting a consistent pricing strategy and by offering higher margins to the retailers Bingo has won the retailers’ hearts.

3) Pricing method-

· Reference pricing

Bingo priced itself at Rs. 10 for 45 grams as compared to Lays which was Rs. 15 for 45 grams. This gave them an edge to grab in market share.

· Price cues

It followed odd number discounting i.e. 33% extra

· Competition based pricing

4) Final pricing-

· Since the initial objective of Bingo was to capture 25% market share but now keeping in mind the increasing inflation rate and production costs it will have to sooner or later re-price its products.

· But it should wait for the market leader to take the initiative in this context.

It should also reduce the quantities it is offering and other discounts.