Haldiram's Group - Seeking the 'Right' Marketing Mix

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The Road Ahead Contd...

According to media reports, Haldiram's lagged behind competitors in the area of customer service. A report in Deccan Herald that Prabhu Shankar Agarwal, the owner of the Kolkata unit, was arrested on charges of manhandling customers only reiterated this opinion. The report also mentioned that few of the company's restaurants did not possess the minimum requirements, such as sufficient seating arrangements and adequate parking lots.

Haldiram's also had to deal with problems created by spurious products. Some companies claiming to be close associates of the original Haldiram's of Bikaner used the Haldiram's brand name in their products. For example the 'Haldiram Madanlal' company claimed that its proprietor, Anil Kumar Agarwal, belonged to the Haldiram's family of Bikaner. The manufacture of spurious products threatened to dilute the Haldiram's brand image apart from affecting the sales. According to some analysts, many of the problems facing Haldiram's arose due to an informal split between its three units in the early 1990s. The split occurred when Prabhu Shankar Agarwal, who was heading the Kolkata unit of Haldiram's, filed a complaint in the court against the Delhi and Nagpur units, alleging breach of contract when they opened a sweet shop in New Delhi in 1991. This led to a bitter court battle for many years. The court delivered a final verdict in 1999, when Haldiram's units were formally split as three separate companies with specific business territories.

The consequences of the split were a matter of concern. Though on paper, the three companies had clearly defined boundaries within which they should operate, in practice, they did not stay within their boundaries. They penetrated each other's territories and competed among themselves for a larger share of the snacks market. Analysts felt that competitors would take advantage of this split.

Since the scope for increasing market share in India was limited, these companies began to compete aggressively in international markets. They used the internet, not only to market their products but also compete with each other. Each company claimed that its products were superior to those of the others in terms of quality.

For instance, an advertisement in 'haldiramusa.com', a web portal that sold the products of the Delhi company in the US, read, "Our items come specially packed from the Original Haldiram's of Delhi offering superior taste and superior quality, the only Haldiram approved by the US FDA (Food and Drug Administration). Try the Delhi stuff and you will never touch the Nagpur Haldiram packets that most grocery stores store." Analysts were of the opinion that the internal rivalry among its own companies may lead to dilution of Haldiram's brand equity.

Exhibits

Exhibit I: Product Range of Haldiram's Group

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