“Price Wars and Premium Identity: A Strategic Risk Management Analysis of Haldiram’s Sev Namkeen in India’s Fragmented Snacks Market”

 Title

“Price Wars and Premium Identity: A Strategic Risk Management Analysis of Haldiram’s Sev Namkeen in India’s Fragmented Snacks Market” 

Abstract

India’s namkeen sector is characterized by extreme fragmentation, intense price sensitivity, and a dominant unorganized market. Haldiram—one of India’s most iconic FMCG snack brands—faces escalating pressure from local manufacturers selling loose sev at significantly lower prices, particularly in Tier-2 and Tier-3 regions. This case-cum-research paper investigates how Haldiram balances affordability with premium positioning through psychological pricing, selective discounting, product diversification, and supply-side risk management. Using secondary data, competitive mapping, and risk assessment frameworks, the study evaluates threats such as health-driven preference shifts, inflation-led cost volatility, and growing rivalry from both organized and unorganized players. Findings reveal that Haldiram’s strategic mix of value-based pricing, limited promotions, supply chain diversification, and heritage-driven brand reinforcement sustains its competitive advantage without diluting brand equity. Implications suggest that FMCG firms must adopt adaptive pricing, strengthen product differentiation, and invest in health-oriented innovations to thrive in price-intensive markets.

Keywords

Haldiram; Sev Namkeen; Pricing Strategy; Brand Image; Risk Management; Price Wars; Consumer Behaviour; FMCG; Competitive Strategy; India Snacks Market

1. Introduction

The Indian savory snacks market has undergone dramatic expansion over the last decade, driven by urbanization, rising disposable incomes, and changing eating habits. Yet, the sector remains highly fragmented, with over 70% of market share held by local and unorganized players selling low-priced loose products. Despite being a premium and heritage brand, Haldiram competes directly with these local sellers—especially in its flagship product category: sev namkeen.

Price wars have intensified as unbranded manufacturers undercut branded players, threatening market share and brand positioning. For Haldiram, the challenge lies in maintaining perceived quality while offering price points acceptable in price-sensitive regions. This paper examines how strategic risk management enables the firm to defend its premium identity without sacrificing competitiveness.

2. Literature Review

2.1 Pricing Strategy in FMCG Markets

Research shows that FMCG consumers often rely on psychological cues, reference prices, and perceived quality (Kotler & Keller, 2021). Small pack pricing and ₹1–₹100 psychological thresholds help brands penetrate rural and middle-income segments.

2.2 Brand Dilution and Price Cuts

Aggressive discounting can erode brand equity (Aaker, 2015). FMCG brands must therefore balance short-term sales targets with long-term identity protection.

2.3 Competitive Dynamics in Fragmented Markets

Unorganized competitors often dominate through lower prices and deep local networks (NielsenIQ, 2023). Branded players respond through packaging innovation, distribution expansion, and supply chain optimization.

2.4 Consumer Preference Shift Toward Health

Growing awareness of calories, oil content, and clean labels has shifted snack preferences, creating pressure on traditional fried snacks (KPMG, 2024).

3. Theoretical Framework

This study draws on three strategic frameworks:

3.1 Porter’s Five Forces

Used to analyze competitive rivalry, substitution threats, and buyer power.

3.2 Risk Management Framework

Assesses operational, reputational, competitive, and demand-side risks.

3.3 Value-Based Pricing Theory

Explains how perceived value—not cost—drives willingness to pay.

4. Case Background: Haldiram’s Sev NamkeenMarket Position

Haldiram competes in a category where:

• Local sellers offer loose sev at significantly lower prices.
• Branded players hold <30% of overall market share.
• Price sensitivity peaks in Tier-2/3 towns.

Haldiram offers small packs of sev priced between ₹29–₹55 (150g). This allows penetration without compromising premium perception. However, risks include:

• Brand dilution from excess discounting
• Cost inflation on gram flour, edible oil, packaging
• Consumer shift toward baked/low-oil alternatives
• Supply chain disruptions

 

5. Methodology

This study uses:

5.1 Secondary Data Analysis

Industry reports, retail price audits, and competitor pricing.

5.2 Qualitative Case Method

Interpretative analysis of Haldiram’s strategic decisions.

5.3 Risk Matrix Mapping

Evaluating probability vs. impact of key threats.

 

6. Analysis

6.1 Threat Assessment

a. Intense Competition

• Local unorganized sellers offer extremely low prices.
• Organized rivals like Bikaji, Balaji, and Prabhuji invest heavily in advertising.

b. Health Trend Shift

Growing preference for baked, multigrain, low-oil snacks impacts traditional sev demand.

c. Cost Pressures

Volatile edible oil markets increase production costs.

d. Regulatory Risks

FSSAI norms and export compliance add cost layers.

e. Reputation Risks

Inconsistent raw material sourcing may affect quality.

 

6.2 Haldiram’s Risk Mitigation Strategies

1. Competitive & Psychological Pricing

• Affordable entry packs at ₹29, ₹49, and ₹55
• Maintaining price floors to protect premium image
• Avoiding permanent discounts; using festival-only promotions

2. Product Diversification

• Low-oil sev
• Baked namkeens
• Ready-to-eat (RTE) Indian snacks
• Multigrain mixtures

3. Supply Chain Risk Management

• Local sourcing to reduce transport volatility
• Multi-supplier contracts for flour, spices, oil
• Automation in quality inspection

4. Brand Protection Through Differentiation

• Highlighting heritage and authenticity in marketing
• Upgraded packaging for freshness & hygiene
• Emotional storytelling on authenticity

 

7. Findings

1. Price Wars Do Not Always Require Price Cuts

Haldiram shows that value-based small-pack pricing is more effective than aggressive discounting.

2. Premium Brand Image Can Survive Competitive Pressure

By maintaining quality and consistent taste, Haldiram preserves its premium perception even when offering entry price points.

3. Health-Oriented Innovation Is Critical

Diversified product lines help counter market shifts toward healthier snacking.

4. Supply Chain Strength Directly Impacts Pricing Power

Efficient sourcing and inventory control support price stability.

 

8. Managerial Implications

For Haldiram:

• Continue investing in medium- and low-price packs for rural penetration.
• Expand healthier sev variants to capture wellness-focused customers.
• Strengthen storytelling around quality and purity.
• Use targeted digital promotions instead of mass discounting.

For FMCG Firms:

• Price wars should be managed through value creation rather than panic discounting.
• Small SKUs are powerful tools in price-sensitive markets.
• Brand equity should be guarded through selective promotional strategies.

 

9. Conclusion

Haldiram’s strategic response to price wars in the sev namkeen segment illustrates how a heritage FMCG brand can protect its premium identity without compromising market reach. Through psychological pricing, diversification, controlled promotions, and strong supply chains, it balances competitive pressures with long-term brand value. As health trends reshape the snacks market, continued innovation in low-oil and baked products will be essential for sustained relevance.

 

10. Future Scope for Research

• Impact of AI-driven demand forecasting on FMCG pricing.
• Comparative analysis between Haldiram and Bikaji’s market strategies.
• Consumer perception studies on health-oriented namkeens.
• Effectiveness of digital influencer marketing on category penetration.

 

References

·         Aaker, D. A. (2015). Aaker on branding: 20 principles that drive success. Morgan James Publishing.

·         Kotler, P., & Keller, K. L. (2021). Marketing management (16th ed.). Pearson.

·         KPMG. (2024). India’s snacking market: Trends and consumer shifts. KPMG Insights Report.

·         NielsenIQ. (2023). India snacking behaviour and brand preference study.

·         Singh, R., & Mahajan, P. (2022). Pricing psychology and FMCG consumer behaviour in India. Journal of Retail Insights, 14(2), 55–67.