Perfetti Van Melle India Marketing Essay

Perfetti Van Melle,an Italian global manufacture of confectionery and gum, has its headquarters in Lainate, Itlay and in Breda, Netherlands. Earlier it was Perfetti only but in 2001, Perfetti acquired VanMelle of Netherlands. It has a true global reach as it is present in Europe, Asia Pacific Region, Africa, Middle East and the Americas. It produces and distributes candies and chewing gums in more than 130 countries worldwide. It is the third largest confectionery group in world and first in main Asian markets. It has employed over 14,000 people operating in 32 companies throughout the world. It has global brands like Mentos, Fruitella,Alpenlibe, Golia, Happydent, Big Babol, Chupa Chups and Smint. Besides these global brands, it offers a wide range of local and regional products. The Group’s ke success lies in its ability to develop products, versions and flavours that suit the different demands and opportunities of local markets.

Perfetti Van Melle India

The confectionary market in India is divided into three categories:- Candies and toffees, gums and mints. Perfetti’s advantage is that it is the only company which has products for all the three categories. It is a fully owned subsidiary of global conglomerate Perfetti Van Melle and started its Indian operations in 1994. In confectionery industry, the company enjoys market share of 30%, thus making them one of the leading players in India.

Perfetti Van Melle India has launched its products after extensive market research to adapt the likes and preferences of the consumers. There are more than 15 brands under its umbrella. For every product composition and its long shelf life, the Indian climatic conditions are considered very minutely to get the desired results.

In India, the PVMI has three manufacturing units, which are located in Gurgaon, Chennai and Rudrapur, Uttaranchal. The Indian subsidiary also deals with exports to other Asian countries and takes care of the development of South Asian markets. In India, it has adopted an aggressive sales strategy to retain the number one position in the confectionery industry which is backed by a wide network of Carry & Forwarding agent (C&FA), distributors & sales force. It has a network of around 4,500 distributors which spread across 2000 urban towns in India.

In India, after becoming the market leader in confectionery industry, Perfetti Van Melle has entered into snacks category with launch of StopNot in Dec, 2011.

Perfetti VanMelle has divided its operations on the basis of outlets. It has divided its trade into two:-

General Trade, which includes Sec C, Sec D outlets and outlets in rural markets

Modern Trade, which includes hypermarkets, institution sales, Army canteens and standalones under Sec A, Sec B.

Different strategies are followed for both trades.

Organization Structure:

In Perfetti, under sales department, there are two separate teams for General Trade and Modern Trade, Each having Sales Manager, Area Sales Manager and Direct Sales Executive. The DSE’s are point of contact with the third party i.e distributors. Under Area sales Manager, there can be multiple DSE’s. Based upon the area and its potential, numbers of DSE’s are appointed. For e.g:- Gurgaon has one DSE for modern Trade and one for General Trade but In Delhi there are 2 DSE’s for modern Trade and one for General Trade. Under DSE, there is a salesman who is from third party.

Strategy:

The marketing mix strategy of Perfetti vanMelle can be explained as follows:-

Product Strategy: The product portfolio of Perfetti consists of several mouth-watering and heavy candies. In candies Perfetti has many brands like alpenlibe, chocoliebe, mangofillz, chupa chups, etc. In gums, Perfetti has big babool, center fresh, center shock, center fruit, fruittella etc and in mint gums, Perfetti has mentos, cholro mint, happydent mint gym. Now Perfetti has launched a snacks product adding one more star to their credentials. Inspired by the flavours of the Indian Kitchen, StopNot, a completely indigenously develop snack, was launched in Dec 2011. Currently StopNot is available in 4 flavors- Full Masala, Spicy South, Tangy Tomato and Khatti Metthi. The product strategy of Perfetti can be analysed on these parameters:-

Design:- Perfetti’s products and their variants have different design feature. Each product is having different shape, colour and flavour. Even Stop Not comes in two shapes and has different flavours which are represented by different colours.

Packaging: Perfetti’s products have an attractive packaging which helped in arising interests of consumers. Especially, candies and Big Babool filly folly have very eye-catching packaging and colours which attracts kids and youth. The confectionery products are available in different packaging like blisters, pocket bottles, sticks, fliptops, etc. Even in Snacks category, “Stop Not” pack has a face print on its packaging. Different colours for different flavours and face print with golz makes it easily recognizable among other brands.

Quality: This is one of the most important parameter on which Perfetti focuses greatly. All the three manufacturing units located in Manesar, Chennai and Rudrapur are ISO22000 certified.

Price Strategy: The pricing strategy of Perfetti is very simple and economic right from the starting. In confectionery, the price varies from 50paise candy to Rs. 30 pocket bottle. In snacks category, the StopNot has three variants viz Rs.5, Rs.10 and Rs.20. The company believes in gaining market share by giving comparatively higher margin and promotional offers to the retailers than its competitors.

Margins/Shelf-space:

Since Perfetti has divided its trade into two general trade and modern trade. Its margin varies accordingly. In general trade both on confectionery and snacks category, it gives 11-14% cash down margin. But when it comes to modern trade, it follows altogether different model. For hypermarkets like Big Bazaar, Spencer’s, Hyper City, it gives 20-22 % margin in confectionery category and 21-25% in snacks category. In both categories, for institutional sales and army canteen, the margin is 18% and for standalones, the margin is 18-20% cash down. Based upon the potential of outlets, shelf space have been taken, For instance, in Big Bazaar’s and Spencer’s, Perfetti has bought an end cap for Rs. 70,000 per month and in standalones, Perfetti spend from Rs. 500 to Rs 2000 per outlet to attain a particular shelf space based upon negotiations with the retailers.

FSU/Dispensers:

Perfetti has a wide range if dispensers and floor store units based on the area and location of outlets. The company has a bargaining power when it comes to dispensers and FSUs. For hypermarkets, there are large racks, cash counters dispensers and FSUs, but for standalones, cash counters dispensers, airport dispensers, hanging dispensers and parasites are there. These dispensers are kept inside the store based on the negotiation with the retailers paying them decent amount as shelf space.

Place/Distribution Strategy: From the three manufacturing units in India, the distribution is done in four regions:- Delhi, Mumbai, Kolkata and Bangalore to manage sales in region. Before merger in India, the company offered hefty sales-linked incentives such as increase in margin in percentage terms with the increase in sales and offered one pack free on every pack sold. But after Merger with Van Melle in India, the company brought a distribution network of 3 lakhs which now has become 10 lakhs. In the beginning, Perfetti focused on pop outlets which are unable to purchase large quantity. It created a multi-tiered distribution system. In this sytem, it divided its 11 brands into two groups in P1 and P2. Non conflicting brands like Alpenlibe original, Chlormint, Big Babool and Center Fresh were grouped under P1. Center Shock, Chlormint gum, Mentos, Marbels, Fruit-tella and Happy Dent were planted in P2. But now under general trade, there are three P1, P2 and P3 divided on the basis of flavours and products. These P1, P2 and P3 go to outlets once a week. There is a well-defined path which these vans follow and visit outlets alternatively. It is based on ready to stock and not on order taking delivery. In modern trade, direct sales are done from company CFA to hypermarkets like Big Bazaar, Spencers’, etc. The distribution to standalones and institutions is done through third party distributor. The company pays 5-6 percent margin to the distributors for both categories as compared to the average industry figure of 10 percent.

Promotion Strategy: Perfetti spends Rs. 17 crore for advertising and marketing of the product to attract customers and improve sales.

Promotions/Offers:

Retailer

Consumer