A PROJECT ON

“Distribution enhancement in unconventional outlets in parts of Mumbai for Perfetti Van Melle”

SUBMITTED BY

Abbas Reyroadwala

Roll No. 2

MMS (2005 - 07)

UNDER THE GUIDANCE OF MR. BHAVIK JOSHI FOR PERFETTI VAN MELLE

RIZVI INSTITUTE OF MANAGEMENT STUDIES & RESEARCH

CERTIFICATE

This is to certify that

Mr. ABBAS REYROADWALA

Student of MMS II, Roll No. 2, has carried out his Summer Training at

PERFETTI VAN MELLE

In partial fulfillment of the Management Studies Courses (2005-

2007) conducted by the University of Mumbai through RIZVI

INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH in

Operations Management

During the academic year, 2005 – 2007

_______________________ ____________________ Mr. BHAVIK JOSHI Prof. KALIM KHAN Area Sales Manager (Director)(Modern Trade and Institutions)

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ACKNOWLEDGEMENT

I would like to express my gratefulness to Mr. Kalim Khan (Director), Rizvi Institute of

Management Studies And Research for his valuable guidance and constant

encouragement in the project work. His persistent interest has been a source of

inspiration to me.

During the course of this project, a lot of people have helped. Although it would be

impossible to mention everyone, I particularly want to express my appreciation to the

following individuals:

I am thankful to my project guide Mr.Bhavik Joshi of Perfetti Van Melle for his

constant motivation and priceless guidance.

I am also thankful to Mr.Devang Saraiya who earlier worked with Perfetti for guiding

us in the initial part of our project.

Special thanks are due in particular to Mr. Murli Krishnan, regional sales manager of

Perfetti Van Melle, for providing us with the opportunity of working with this company.

Last but not the least I would like to give my sincere regards to all my friends and

college staff for their kind co – operation towards completion of my project.

______________________

ABBAS REYROADWALA

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EXECUTIVE SUMMARY

The size of the Indian confectionary market is estimated at Rs. 26.0 billion ($600

million).

The confectionary market is highly fragmented with several local players such as

Parle’s, Nutrine, and Ravalgaon. Key foreign companies are Nestle, Cadbury’s,

Perfetti, Lotte, Wrigley, Candico, and Joyco.

The Confectionery industry that I was assigned, I have studied two major sub-

industries i.e. Candy & Chocolates. Cadbury dominates the Chocolate industry

with having 70% of market. Product line for Candies comprises of Candies,

mints, chewing gum & bubble gum and Perfetti is a dominatnt player in this

product catagory.

The Company is planning to expand its existing distribution network of 3500 to

4500. The products are sold at 6.5 lakh retail outlets all across the country. Also

the products are stocked at 2.5 lakh pan shops all across the country. The share

of modern trade in total sales is rising for Perfetti

Threat to Perfetti mainly arises through other major players in the market. The

rising cost of inputs particularly sugar has added to the cost factor. The vast

untapped rural market is dominated by local also presents a threat.

The project that I was given was to target various unconventional outlets and

convert them into outlets that stocked our products. During the course of project

I approached outlets like branded apparel showrooms, mobile phone galleries,

hotel chains, gift stores, cyber cafes, etc.

The emphasis was on the above-mentioned outlets as they were more inclined to

provide better customer service to their clients and hence would use our product

to give it to their clients as a freebie.

3

In the next phase of the project, I studied the distribution channel of Perfetti in

supplying products to railway stations and convincing the stockist to stock our

product through company distributor.

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TABLE OF CONTENTS

Sr.No. CONTENT Page No.

1. Introduction 06

2 Confectionery Industry: A global perspective 08

3 Indian confectionery industry 14

4 Marketing Mix 16

5 Major Players and their policies 26

6 Industry Scenario 30

7. Company Profile 32

8 Product and Product Mix 37

9

Product Assortment Offered by Perfetti Van

Melle 39

10 First Phase of Project: Unconventional market 45

11 Findings and Suggestions 46

12

Second Phase of Project: Studying the

distribution channel for Railway Station 48

13 Findings and Suggestions 49

14 Observations 52

15Recommendations

53

16 Bibliography 54

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INTRODUCTION

Sitting in a conference room with Branch Manager and sharing our experience of the

market with him was a unique and gave a feel of how the corporates functions.

I did my summer internship program with Perfetti Van Melle(PVM) one of the leading

confectionery companies globally. Currently, it operates in many countries across

Europe, Asia, Africa and South America.

PVM a leader in gum, candy and chewy segments with portfolio of strong brands like

Big Babol, Center Fresh, Alpenlibe, Chlormint, Mentos and Marbels are favorites

amongst millions of people. It is the company which revolutionalised the confectionary

market and the way companies do business in this sector.

PVM brands known for their great taste and excellent quality are manufactured at state of

the art manufacturing facilities located like Manesar in Haryana and Chennai using the

most modern process technologies and product development know how.

Its product are directly distributed to over 4,00,000 outlets through around 4000

distributors in what is one of the most efficient distribution system set up in the country

within a short span of 10 years. The company spends around 10% to 15% of sales on

advertising Through creative and effective advertising PVM has created some of the best

brands in this sector.

Perfetti Van Melle’s insight about its consumers combined with its strengths in product

development, access to world class technology and great advertising enables it in

bringing joy to the life of millions of its consumers and prosperity to its business

partners.

As far as my project is concerned, the areas of operations were in Mumbai and also

studying the distribution channel of the company servicing various canteens in railway

stations from Mumbai up till Nagpur. I started my project on the 8th of May 2006. My

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project started with a week of training in which I was made to do retailing. The aim of

the training was to give a first hand experience to us about how FMCG products are sold

to primary customer through the company’s distribution channel. I went to all the retail

outlets with the salesman in a particular area, i.e.Andheri. The areas are divided in three

categories P1, P2, P3 and a distributor takes the charge of distributing the product

category, which is assigned to him by the company. Thus the area Andheri will have

three distributor and they will have one product category.

On an average a salesman used to visit 60 retail outlets out which most used to turn out

to be productive. I did retailing for six more days in various other parts of Mumbai.

My project dealt with the distribution enhancement of the unconventional markets in

Mumbai. I was asked to strengthen the network of the company by locating such outlets,

which have not been covered by the company so far, and more importantly they lie

outside the usual distribution network of the company. Such outlets included places like

restaurants, branded showrooms, cyber cafes, beauty salons, toy stores, mobile service

providers etc.

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CONFECTIONERY INDUSTRY:

A GLOBAL PERSPECTIVE

Introduction

The confectionery market consists of cereal bars, chocolate, gum and sugar

confectionery. The market is valued according to retail selling price (RSP) and includes

any applicable taxes.

The global market consists of Europe, Asia-Pacific, the USA, Argentina, Brazil, Canada,

Chile, Colombia, Mexico and Venezuela.

The global confectionery market grew at a steady rate over the past five years, and this

trend is expected to continue throughout the forecast period. Mars, Inc is the leading

company within the global confectionery market. The leading distribution channel within

the global confectionery market is the supermarkets/hypermarkets.

The global market for confectionery grew at a steady rate over the past five years, and

this trend is expected to continue throughout the forecast period, with good performances

from the Chinese, Polish and Indian markets driving global revenues upwards. The

global market is expected to reach a value of $107.6 billion by the end of 2010, an

increase of $17.4 billion since 2001.

The global confectionery market generated total revenues of $98.1 billion in 2005, this

representing a compound annual growth rate (CAGR) of 2.1% for the five-year period

spanning 2001-2005. Market consumption volumes increased at a CAGR of 1% between

2001-2005, to reach a total of 14.6 billion kg.

The leading revenue source for the global confectionery market is the chocolate sector,

which generated total revenues of $54.6 billion in 2005, equivalent to 55.7% of the

overall market value. In comparison, the sugar confectionery sector was worth $29.5

billion, which represented 30.1% of the market value share.

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Going forward, the global confectionery market is expected to grow at a slightly slower

rate than in previous years, with an anticipated CAGR of 1.9% for the five-year 2005-

2010 period expected to drive the market to a value of $107.7 billion by the end of 2010.

Market Value

The global confectionery market grew by 2.2% in 2005 to reach a value of $98.1 billion.

The compound annual growth rate of the market in the period 2001-2005 was 2.1%.

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Mars, Inc is the leading company within the global confectionery market, with sales of

$10.4 billion in 2004; equivalent to a 10.9% share of the market. This firm plays a

significant role in the confectionery markets of the US, the UK, Belgium, China,

Denmark and Australia.

Another major competitor in the global market is Nestle S.A.; the company generated

total sales of $9.4 billion in 2004, equal to a 9.8% share of the market. Nestle is closely

followed by Cadbury Schweppes plc, with 2004 sales of $8.8 billion and a 9.1% share of

the market.

The leading distribution channel within the global confectionery market is the

supermarkets/hypermarkets sector, which generated sales of $28.8 billion and held a 30%

share of the market in 2004. In comparison, the convenience stores sector generated sales

of $14.8 billion and held a further 15.4% share of market distribution.

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Global Confectionery Market Forecasts

The compound annual growth rate of the market in the period 2005-2010 is predicted to

be 1.9%.

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Global Confectionery Market Segmentation I

Chocolate sales account for 55.7% of the market's value.

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Sugar confectionery sales generate a further 30.1% of the market's revenues followed by

Gums category with sales value of 10.3 Billion US Dollars was the third largest category

and followed by Cereal Bars with the sales value of 3.6 Billion US Dollars.

Market Segmentation II

13

Europe is the world's largest confectionery market; it generates 50.5% of the global

market's value.

The US accounts for a further 26% of the global market revenues.

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INDIAN CONFECTIONERY INDUSTRY

The Indian confectionary market can be divided into four categories - chocolate

confectionery, sugar confectionery, gum and cereal bars.

Sugar confectionery is the largest product category. It will remain the most lucrative

category over the next five years. These products are most suited to the Indian climate.

Chocolate and gum confectionery follow this, each with a similar sized share of the

Indian market. Standard grocers are the leading distribution channels, with one third of

the Indian confectionery market, by value. Traditional grocers are the only other channels

to take a double-digit share. The remainder of the market shows a high degree of

fragmentation.

The size of the Indian confectionary market is estimated at Rs. 26.0 billion ($600

million). Sugar confectionary accounts for 61 percent of this market, with the balance

being chocolates, mints, and gums. The confectionary market has been growing at over

6 percent annually over the last five years. The gum-based confectionary segment has

grown even faster at over 10 percent. The confectionary market is highly fragmented

with several local players such as Parle’s, Nutrine, and Ravalgaon. Key foreign

companies are Nestle, Cadbury’s, Perfetti, Lotte, Wrigley, Candico, and Joyco.

Company Name Products

Amul Dairy products, ice cream, chocolate

ITCBranded wheat flour, biscuits, ready-to-eat food,

confectionary

Parle Products Biscuits, candies, toffees

Nutrine

Confectionary

Company

Confectionary, chewing gum

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Multinational/ Joint Venture companies

Company Name Products

NestleCoffee, chocolates, confectionary, instant

noodles, milk products, beverages, health drinks

Cadbury Chocolates, health drinks

Perfetti Chewing gum, candy

Wrigley Chewing gum

Lotte India

Corporation Ltd.

(Parry’s)

Confectionary

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MARKETING MIX

Introduction

Neil H. Borden first used the term Marketing Mix in 1964 in his article, The Concept of

Marketing Mix. He has used this term after James Culliton had described the marketing

manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included

product planning, pricing, branding, distribution channels, personal selling, advertising,

promotions, packaging, display, servicing, physical handling, and fact-finding and

analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that

today are known as the 4 P's of marketing, depicted below:

1. Product

2. Price

3. Place (Distribution)

4. Promotion

In the Confectionery industry that I was assigned, I have studied two major sub-

industries i.e. Candy & Chocolates. The major companies in Candies are Nutrine,

Perfetti, Candico, and Parry-Lotte & Parle. Cadbury dominates the Chocolate industry

with having 70% of market followed by Nestle with 20-25% share.

The 4 P’s in terms of Candy industry, in general, can be described as:

1. Product - Product line comprises of Candies, mints, chewing gum & bubble gum.

2. Price - The price is set at 25 paisa, 50 paisa and Re. 1 for all the products covered

in this segment.

3. Place- The distribution channel network is very extensive covering the nation

with large no of distributors and retailers offering the products to the customers.

Even the local pan-wallas play an important role in the sell of mints and candy.

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4. Promotion - The promotional budget and strategies depend on company to

company in this industry. Some use heavy budget and promotes their entire

product line while some are happy with promoting their flagship brand and

enjoying the heavy market share with it.

Looking at the individual companies now:

1) Nutrine: This Rs 180 Cr industry is acquired by Godrej Foods & Beverages.

Looking at the 4 P’s

a) Product – The product range comprises of

Kokanaka cookies

Elaichi cookies

Maha Lacto

Wild Koffy

Aasay

Chocolate Eclairs

Aam Ras

Nutrine Gold

Gulkhand

Superstar Assortment

Caramella

Marvel Assortment

Lollipop

Coolers

b) Price – The price for different products are set at 25 paisa (in rural areas), 50

paisa and Re. 1

c) Place – Godrej will use the already existing distribution network of Nutrine

alongside its vast network of distributors and retailers.

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d) Promotion – The promotional scheme followed by Nutrine were scholarships,

competition and attractive prizes. It enjoys a share of 80% in rural market

because of its 25-paisa toffees.

2) Perfetti Van Melle :

a) Product – The product range comprises of:

Alpenlibe (The flagship brand of PVM and a market leader)

Alpenlibe Lollipop

Big Babol

Center fresh

Center shock

Chatter Patar

Chlor – Mint

Choco – Tella

Cofitos

Fruit – Tella

Happy dent White

Happy dent Protex

Marbles

Mentos

b) Price – The price is set at 50 paisa and Re. 1

c) Place – The Company is planning to expand its existing distribution network

of 3500 to 4500. The products are sold at 6.5 lakh retail outlets all across the

country. Also the products are stocked at 2.5 lakh pan shops all across the

country.

d) Promotion – The Company spends 10-15% of its net sales on advertising.

McCann Erickson handles the advertising account.

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3) Lotte: The Korean giant Lotte acquired 60% of Parry stake on 16th Jan 2004. Later is

took 20% of its stake through open offer.

a) Product – The product range comprises of:

Coffy Bite

Lacto King

Caramilk

Coconut Punch

Spout

Eclairs

Butter Scotch

Fruitz

Coconut Crème

Orange Candy

b) Price – The price of the gum and candies are priced at 50 paisa and Re. 1

c) Place – The company operates through a network of 15,000 dedicated

wholesalers and has access to 10 lakh retailers across the nation

d) Promotion – The Company spends 10% of its sales on advertising and

promotion of its products. It also used repackaging of its top brand Coffy Bite

to increase sales and came up with new products such as Butter Scotch from

time to time.

4) Candico:

a) Products – The product range comprises of:

Loco Poco Bubble Gum

Gumbo Bubble Gum

Time Bomb

Big Bubble Gum

Elaichi Roll

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Koffi Toffi

Eclairs

Fruits Candy

Candi Mint Candy

Lacto Plus

Flavors

Sweet Moments

b) Price – The price is set at 50 paisa and Re. 1.

c) Place – With 24 depots, 1500 authorized dealers and a 250 people strong sales

force, Candico’s distribution network in India has a direct or indirect reach in

most towns and cities with a population of over 25,000. It is estimated that its

brands reach to over 60% of India’s population.

d) Promotion – Candico regularly enters into cross-promotional deals with other

FMCG (Fast Moving Consumer Goods) companies to offer joint promotions

to its consumers. Candico has entered into joint promotions with a number of

large international and domestic corporations to jointly promote their product

lines. Cross promotion was done with Coca Cola, Power2Youth Corporation

& Nirula’s.

5) Cadbury :

a) Product - The product range comprises of:

Dairy Milk

Perk

5 Star

Gems

Celebrations

Bytes

Dairy Milk Eclairs

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Fruit & Nuts

Halls

Googly

b) Price – The price of Dairy Milk Eclairs is set at Re. 1 while the prices of

chocolates are Rs. 5 and Rs. 10. The larger packs are priced higher

accordingly. Fruit & Nuts starts from Rs. 22 and the Celebration pack comes

in range of Rs 50 and above.

c) Place – Cadbury has a total no of 2,100 distributors with 3, 80,000-retail

outlets. Cadbury is using entirely different network for candy operations.

Total retail outlets for both chocolates and candy are 6 lakh.

d) Promotion – The super hit campaign “Kuch Meetha Ho Jaye” launched Dairy

Milk to the top of the market. Cadbury is endorsed by superstar Amitabh

Bacchan and Preity Zinta. Cadbury was the highest spender in print media in

2005. Much of the revenue is used for brand building. Cadbury also had a tie-

up with BPL mobile and E-cube to start a service to SMS a chocolate in

Mumbai.

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SEGMENTATION, TARGETING & POSITIONING

M. Porter’s Five-Force Model

Introduction

Michael Porter's famous Five Forces of Competitive Position model provides a simple

perspective for assessing and analyzing the competitive strength and position of a

corporation or business organization. Porter model has a special ability to represent

complex concepts in relatively easily accessible formats, notably his Five Forces model,

in which market factors can be analyzed so as to make a strategic assessment of the

competitive position of a given supplier in a given market. The five forces that Porter

suggests drive competition are:

Porter's five forces:

1. Existing competitive rivalry between suppliers: Does a strong competition exist

between the existing players. Is there any kind of monopoly prevailing in the

market?

2. Threat of new market entrants: How easy or difficult it is for new entrants to start

for competing, what are the entry barriers.

3. Bargaining power of buyers: How strong is the position of buyers? Can they work

together in ordering large volumes?

4. Bargaining Power of suppliers: How strong is the position of sellers? Do many

potential suppliers exist or only few potential suppliers, monopoly?

5. Threat of substitute products (including technology change): How easy can a

product or service be substituted, especially made cheaper.

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Confectionery Sector:

1. Threats of New Entrants :

The entry of multinationals, aggressive rise of commodity branding and low

cost of technology is changing the economics of the Indian food Industry. The

rise of aggressive regional players making forays into categories where entry

barriers are low and a boom in Indian FMCG markets and the rising need for

these products are the key reasons for this growth in food business. The

Confectionery industry is witnessing a 20% annual growth rate and,

consequently, the demand for it in the country is constantly on the rise.

It is estimated that there are about 5,500 manufacturers in the unorganized

sector who produce local brands, and duplicate or look alike substandard

products.

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2. Bargaining Power of Buyers:

Due to the introduction of 8 per cent excise duty on confectionery products

and an additional MRP based excise duty of 1.5 per cent, the overall 'cost

increase' has been severely affecting the industry. Also due to the easy

availability of the cheaper substitutes, the buyers hold a better stand in terms

of bargaining with the confectionery manufacturers with respect to the price.

3. Bargaining Power of Suppliers:

Various raw Materials required for the confectionery sector includes mainly:

Sugar

Various oil seeds like Sesame Seed Sun flower Seeds, Muskinelon

Seeds etc.

Packaging Material, etc.

Cost factor is a key to the growth of the confectionery industry. Prices of

sugar, the single largest ingredient of the confectionery industry, have gone

up by 27% last year. Packaging material costs are up by 15-16 % and freight

charges have increased by 20%. Similarly, freight charges increased by 20 per

cent, mainly due to the increase in petroleum prices. The manufacturers are

facing stiff competition and survival requires huge spending on promotion. If

the organized players increase their prices, the unorganized sector will invade

the market and add to the competition.

Bargaining power of the suppliers is also affected by the Govt. regulations

like some ingredients are subject to double taxation. While a candy is taxed at

eight per cent, if it has chocolate as another ingredient, it is subjected to 16

per cent tax.

4. Threats of Substitutes:

This industry along with the existing within the industry competition is also

facing stiff competition from the other substitute sectors. These include both

organized and unorganized players. Some of those sectors are:

25

Home made sweets (Mithai)

Indian traditional sweets-(e.g., Bengali Sweets, Brijwasi, Haldiram

etc.)

Biscuits and cakes-(Monginis, Britannia, etc.)

Ice Creams-(Kwality, Amul, Nirulas, Naturals etc.)

Jams and Jellies-(Sil, Kissan, etc.)

5. Competitive Rivalry within the industry:

Competition in the sugar confectionery market is heating up. Cadbury India

has drawn up an aggressive marketing plan to promote its acquired brand

'Halls'. While Perfetti India is pushing its sugar confectionery brand Mentos

with equal vigor. HLL on the other hand, has entered the fray with its Max

Candy.

Cadbury is strengthening its presence in the sugar confectionery segment with

a brand new communication package and is looking at various retail

initiatives to enhance the visibility of its brands. It plans to set up special

Halls dispensers at retail outlets. To support its mass media ad campaigns, the

company is planning to launch a package of above-the-line-communication

initiatives.

Perfetti is also chalking out an ambitious marketing plan to promote its

Mentos and Centre Shock. Perfetti has recently launched two television

commercials to promote the new variants of Mentos. The ad campaigns will

be supported by dealer meets and retail initiatives.

The sugar confectionery sector includes manufacturers like Perfetti India,

Cadbury India, ITC and Hindustan Levers Ltd among others.

Apart from that, the import of confectionery products is rampant in our

country, amounting to the tune of Rs 200 to 300 crore. The manufacturers are

facing stiff competition and survival requires huge spending for promotion.

Now, on an average, the industry has to spend at least 10 per cent of the

returns for promotion and branding. But their major problem is that they are

not in a position to absorb the high cost and pass it on to the consumer.

26

MAJOR PLAYERS AND THEIR POLICIES

Candico

Candico is primarily a marketing led company and attempts to keep its ear close to the

ground to produce innovative and interesting campaigns across media vehicles.

Candico's savvy use of media has been commented upon by every major Newspaper and

Magazine. One of their campaigns, Minto, "the whole mint" which positioned itself

aggressively against Nestlé’s POLO, is now a case study in numerous Business Schools

throughout India.

Global Expansion Plans:

Candico, the Rs125-crore domestic confectionery company, is going global. The

company is setting up a $5-million manufacturing plant in South Africa for catering to

seven countries in the South African region. Having conducted an extensive market

survey and competitor analysis in this market, the company is gearing up to tap the huge

potential of this market where foreign brands have so far had very low penetration.

The Johannesburg plant is Candico's second unit in Africa since the acquisition of its

plant in Tanzania for $1 million in October last year. It has now ramped up the capacity

in its first plant from 1,800 tonnes to 3,900 tonnes per annum and is further increasing it

by 40 percent within a year.

Candico's second plant in South Africa will be followed by two more strategic

acquisitions for catering to North and West African markets. Candico is steadily gaining

a firm foothold in the global confectionery market.

In the $100 billion global confectionery market, Candico is the only Indian multinational

in the confectionery segment. The company's global expansion strategy is aimed at

generating 50 per cent revenues from international operations in the next five years.

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Cadbury’s

Cadbury's presence in India dates back to 1948, when the parent Cadbury Schweppes set

up a wholly owned subsidiary Cadbury Fry (India) Ltd. In 1978, CSOL diluted its equity

stake to 40% to comply with FERA guidelines. The name was changed to Hindustan

Cocoa Products in 1982. Schweppes again raised its stake in the Indian subsidiary to

51% in 1992 through a rights issue. In its 5 decades of operations in the country,

Cadbury has remained the market leader in chocolates with a 70% market share.

Strong brand equity:

The company's strong brand equity in the chocolate market is reflected by the fact that

the Cadbury name is used synonymously with the category itself.

Market growth in the chocolate segment has hovered between 10 to 20%. In the years

1995-2000, the category has grown by 14-15% on an average and is expected to continue

growing at a similar rate in the next five years. The market presently has close to 60mn

consumers and they are mainly located in the urban areas. Growth will mainly come

through an increase in penetration as income levels improve. It is now trying to add

10mn new consumers to our fold every year.

Positioning:

Snack food is a good "enabler". It helps in softening people for consumption, where the

consumer feels that "yes, I can consume this product". There is an intended message

behind the positioning of chocolates as snack food, there is a perceived message and then

there is the actual use of the product. The positioning change however does not really

affect market growth. Behaviorally, it is still consumed as a chocolate and not as filler.

Perk still competes with a Dairy Milk and not with biscuits/ other snack foods. India is

still far away from using chocolates as a snack food. You need to have an offer that adds

value. At the end of the day, how many Indians can afford a snack food priced at Rs16-

17 for 50gms?

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ITC

Products:

ITC acquired the brand "mint-o" from Candico in March 2002 and re-launched the

compressed mint product mint-o with new and improved product and packaging. Mint-o

is the first mint in India to be also available in an orange flavour besides the regular mint

flavour. An innovative "Lemon mint" flavour was launched on 26 th February, 2003. The

product is available in two sizes – rolls of 20s and 6s. mint-o offers the discerning

consumer a value-added mint that captures the international essence of youthful "cool".

mint-o is currently available in all major markets.

'Mint-O Fresh', a hard-boiled mint candy, was launched in October 2004 in two flavours.

This launch extended the Mint-O brand, which had been present only as compressed

mint tablets. The launch of Mint-O Fresh is in line with ITC's marketing strategy of

adding excitement and contributing to the growth of the confectionery category. It is in

line with its business strategy of providing the adult consumer with the complete range of

mint-based confectionery products across price points.

Candyman Butterscotch Licks and Orange Licks were launched in December 2003 and

are now available in markets across the country. This marked ITC's entry into the

deposited candy market. In addition, Candyman Eclairs and Candyman hard-boiled

candies like Wild Banana, Mango Delite, Orange Josh and Pineapple Punch are also

available across India.

With two brands in its portfolio now, ITC’s confectionery division is a serious contender

in the market. Established confectionery players include Perfetti Van Melle, Nestle India,

Hindustan Lever and Joyco. While Perfetti Van Melle, Nestle and Joyco have a

comprehensive basket of confectionery brands, HLL muscled its way into this market

last year with the introduction of Max hard-boiled candy in three variants.

Given that confectionery is a large- volume, low-margin business, industry analysts point

out that it would take ITC’s confectionery business a minimum of two years to break

even.

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Nestle

Nestle India has signed up Rani Mukherjee to endorse its chocolate brand Nestle Munch.

Nestle Munch sells at Rs5 per piece and the largest selling SKU in the chocolate and

wafers category with widespread sales in metros and in smaller towns. The company

feels that as the brand ambassador Rani Mukherjee complements the popularity of the

Munch brand and like the brand, her star appeal cuts across age, town, class and SEC.

Nutrine

Has a presence in candies, cookies, coolers and gums.

Nutrine Confectionery Company Limited was founded in 1952.From a small-scale unit

manufacturing only candies in the early 60’s; Nutrine Confectionery has grown to be a

multi-product, multi-market giant and continues to be the single largest manufacturer of

confectionery and toffees in India since 1980.

Since 1985 Nutrine has diversified into other food products:

Chewing-gums

Instant foods

Dehydrated fruit bars of Mango, Banana, Papaya, Guava fruit pulp,

processed fruits

Nutrine has a wide range of more than 72 varieties of candies, toffees, lozenges etc.

Being the leader in the industry for more than a decade, NUTRINE has always

endeavored to satisfy the customers changing wants and desires with its special emphasis

on quality, range and cost effectiveness.

Nutrine enjoys a high market share of 34% in confectionery in the organized sector in

India.

Nutrine has a very extensive well-organized distribution system throughout India.

Nutrine Confectionery Company Limited has Branch, Regional Offices at Madras,

Bangalore, Hyderabad, Delhi, Bombay, Calcutta and 40 depots and C&Fs throughout

India. Nutrine products are distributed through 3500 stockiest within India and reach

more than 400,000 outlets throughout the country.

30

INDUSTRY SCENARIO

Indian v/s Global

1. India is primarily a mono pack market while the market worldwide is a multi pack

market.

2. The trade is also significantly different with the global market relying heavily on

organized trade. In India retail outlets like paan shops, kirana outlets result in the bulk of

the sales and organized trade is still insignificant in terms of sales.

3. Functional products and sugar free confectionery dominate the worldwide market

while that trend is yet to pick up in India.

4. The presence of unorganized players in this sector in India.

Problems faced….

• A high degree of fragmentation.

• low margins

• high volumes

• price sensitivity

• high advertising expenses

• perishable nature of the product; India lacks a cold chain

distribution network

• scarcity of milk

• rising prices

• lower penetration

• declining profits

Major Issues in recent times……

In Financial Sphere:

ICMA has urged Finance Minister to:

• Limit the maximum impact of duties and taxes on confectioneries to 12.5 per cent

including excise duty of 8 per cent and other State taxes of 4 per cent.

31

• Excise duty on sugar boiled confectionery is retained at 8 per cent, but abatement

(base duty charged on `MRP less abatement') be allowed at 40 per cent instead of

35 per cent now.

• The 16 per cent excise duty, it said, should be brought down to 8 per cent as in

the case of toffees and candies. For bubble gum and chewing gum sold at 50

paisa

and Re 1 per unit, the levy should be rationalized at 8 per cent, the release said.

• According to the ICMA, the import duty on cocoa beans is fixed at the same rate

applicable to that of finished chocolate products. This affects domestic

manufacturers who use this as an input for value addition.

• The ICMA has asked the Government to lower the duty to 20 per cent.

Steps taken….

• Players like Cadbury and Nestlé have also introduced chocolates in smaller

packs, costing less than the regular packs to have larger penetration in the market

• Repositioning product as snack product for adults (e.g. Perk)

• Regular investigation of look alike and counterfeit products

Impact of Other Industries

Sugar

Rising prices along with scarce supply becomes major issue.

Milk

Scarcity of milk in the nation adds up to a problem again.

Cold Storage

India lacks a proper cold storage chain, which hinders proper stocking of the

products.

Unorganized Market

Indian habit of having ‘paan’ as a mouth freshener instead of mint and other

locally made candies poses a competition to the confectionary giants.

Cannibalization within the Industry

In the industry itself, chocolates vying up for small sachets pose a competition to

candies etc.

32

COMPANY PROFILE

Background

Perfetti Van Melle was established in March 2001 through the merger of Perfetti S.P.A and

Van Melle NV; however the two companies had been cooperating in a number of countries

since 1979. Later in 1991, the common interests led Perfetti to acquire a 37% share in Van

Melle, growing even stronger until in January 2001 Perfetti bought Van Melle’s entire

shareholding. In this way two companies formed a new group that is today one of the

world’s most important confectionery player.

Perfetti Van Melle is a privately owned company producing and distributing candies and

chewing gums in more than 130 countries worldwide. In 2003 Perfetti Van Melle achieved

the third position in the global confectionery market after Cadbury and Wrigley and in Asia;

PVM is the leading confectionery company in many countries. The company’s head offices

are located in Italy and in Netherlands.

Profile

Perfetti Van Melle, India started its operations in 1994 with a single brand Center Fresh. It

leads the Indian sugar confectionery market with more than ¼ th of the value shares of the

market. With a basket of 14 main brands, the company strives to leverage the international

brand portfolio, while adapting flavours and blends to the local taste. The foundations on

which Perfetti Van Melle, over which the company has built a success that is growing and

getting stronger everyday is quality, innovation, knowledge of markets and consumer

desires.

Perfetti Van Melle operates with the largest distribution network among any confectionery

company in India.

Perfetti provides employment to over 11,600 people and operating more than 30 companies

through out the world.

33

World- wide employment generation

73%

18%

9%

Asia

Europe

America

The ability to develop products, versions and flavours that suit the different demands and

opportunities of local markets is indeed one of the group’s keys to success.

Perfetti has shown a tremendous growth in the sales from the past 5 years

1200

1250

1300

1350

1400

1450

2001 2002 2003 2004 2005

In b

illi

on

eu

ro

Series2

34

Net sales for 2005 were 1,434 billion euros comprising of candies and chewing gums.

38%

62%

Chewing gumsCandies

Perfetti Van Melle’s present market position in global confectionery

0 1 2 3 4 5

Sales in $bn

Cadbury

Wrigley

Haribo

Perfetti Van Melle

Hershey

Mars

NestleNestle

Mars

Hershey

Perfetti Van Melle

Haribo

Wrigley

Cadbury

Vision

We will enhance our leadership in confectionery by creating value for people through

delightful and imaginative high- quality products.

35

Mission

To develop, manufacture and market high- quality and innovative products

for our consumers through efficient use of our resources and in partnership

with our customers.

To create a fulfilling workplace for our employees built on trust, mutual

respect and appreciation of their diversity

To value the role we play in our communities, as a socially and

environmentally committed organization

To create economic value through superior growth and profitability

Values

Integrity without compromise

Achieving excellence

Dedication to the customers

Care for people

Social and Environmental Responsibility

Independence

Brand Portfolio

Alpenliebe (The flagship brand of PVM and a market leader)

Alpenlibe Lollipop

Big Babol

Center fresh

Center shock

Chatar Patar

Chlor- Mint

Choco- Tella

Cofitos

Fruit – Tella

Happydent White

36

Happydent Protex

Marbles

Mentos

Achievements

Perfetti Van Melle is the undisputed market leader in India

Perfetti Van Melle is the third largest confectionery player in the world

Perfetti Van Melle has been rated among the top 4 advertisers in the

country during the ABBY Awards of 2003,2004,2005

Perfetti Van Melle has been rated by AC Neilsen among the top 10 fastest

growing FMCG companies in India during 2002-2003/2003-2004

Over 28 million PVM India products are consumed in a day

Alpenlibe was rated as one of the 150 most trusted brands in the country

37

PRODUCT AND PRODUCT MIX

Product

A product is a bundle of need-satisfying tangible and intangible attributes offered to a

buyer by a seller. It is anything that can be offered to the market that might satisfy a need

or want. It may be an object, a service, a place, an organization, a person or an idea.

Products can be thought about at a number of levels. Every product has a basic

component, known as the 'core product'. We rarely think about products only in terms of

core product, however. Products have brand names, packaging, qualities and styling, for

example - these make up the formal product'. Beyond the formal product is the

'augmented product', which includes warrantees, guarantees, after-sales service,

installation, delivery, credit. At a final level, marketers usually perceive the product as

one that will be further developed. Therefore we have the future product.

Product mix

A product mix also called product assortment is the set of all products offered for sale by

an organization. The product mix includes all product lines and categories. It may be

defined more narrowly in specific cases to mean only that set of products in a particular

product line or a particular market.

A company’s product mix has a certain width, length, depth and consistency.

The width if the product mix refers to how many different product lines

the company carries.

The length of a product mix refers to the total number of items in the mix.

This is obtained by dividing the total length by the number of lines.

The width of a product mix refers to how many variants are offered of

each product in the line.

The consistency of the product mix refers to how closely related to the

various product lines are in end use, production requirements, distribution

channels, or some other way.

38

Diagram for Product Mix for Perfetti Van Melle

Product

Line

Length

Product-Mix Width

Chewies Gums Candies Lollypops

Mentos Mint Chloromint Alpenliebe Caramel Alpenliebe Caramel

Mentos

StrawberryBig Babol Cofitos

Alpenliebe

Strawberry

Mentos Lime Happydent Choco-Tella Alpenliebe Choco

Marbles Centre Fresh Chloromint

Friut-Tella Chatar Patar

Alpenliebe Strawberry

These four product mix dimensions permits the company to expand its business in four

ways.

It can add new product lines;

Lengthen each product line;

Add more product variants to each product and deepen its product mix;

More product line consistency.

39

PRODUCT ASSORTMENT OFFERED BY

PERFETTI VAN MELLE

1) Big Babol

Soft bubble gum that comes in assorted flavours and formats. An extra ordinary product

whose flavours and huge bubbles have delighted and entertained generations of kids.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

Stick Display 24 Pcs 24 144 18 126 106.04

Stick Display 18 Pcs 24 90 11.74 79 66.48

Jar150 Pcs 16 150 19.57 131 110.24

Jar115 Pcs 16 115 15 100 106.16

2) Alpenliebe

Rich and genuine like its ingredients. Alpenlibe is one of the most delicious candies in

Perfetti Van Melle family of products. It is as delicious as it as homemade, smooth and

creamy qualities inherent in all its flavours. Alpenlibe is a small luxury with which

consumer’s worldwide love to treat themselves whenever they seek something

exceptionally tasty.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

CostBasic

Price

Stick 10 Display 12 90 11.74 66.48

Jar1000 Pcs 4 500 65.22 439 369.44

40

Jar 275 Pcs 12 137.50 17.93 122 102.67

Choco Jar 275 Pcs 12 137.50 17.93 122 102.67

Pouch 165 20 82.50 10.76 60.59

Choco Pouch 165 20 82.50 10.76 60.59

Pouch 54g 96 10 1.30 7.32

Lollipop 16 Hanger 16 96 12.52 70.69

Lollipop House Display 4 120 15.65 88.36

Lollipop 40 Pcs Jar 12 80 10.43 58.91

3) Centre Fresh

It’s the first liquid filled chewing gum in India, also PVM’S first brand offering in the

year 1994. Outside, it is a creamy drop. Inside, its liquid heart it’s fresh and delicious.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

Stick 18 Display 20 90 11.74 79 66.48

Stick 18 Display 12 90 11.74 79 66.48

Mono 150 Pcs 12 150 19.57 131 110.24

Jar100 Pcs 16 100 13.04 87 73.21

Air Action 100 pc 16 100 13.04 87 73.21

4) Centre Shock

Launched in 2001 in the Indian market, is a shock filled chewing gum indeed! Bite into

the taste of peach, green apple, mirchi or lime blast.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

Jar 150 12 150 19.57 131 110.24

41

Jar 100 16 100 13.04 87 73.21

Lime blast 100 16 100 13.04 87 73.21

5) Chlormint

Available as chewing gum pellets and lozenges. Chlormint actively releases a cool and

refreshing flavour that really freshens the breath.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

PCH 100 Pcs 16 50.00 6.52 44.00 37.03

Jar 150 Pcs 16 75.00 9.78 66.00 55.54

Jar 100 Pcs 16 50.00 6.52 44.00 37.03

Jar 115 Pcs 16 57.50 7.50 50.00 42.08

Jar 115 Pcs 16 57.50 7.50 50.00 42.08

6) Fruit-tella

This historic brand offers all the goodness of fruits that nature has to offer for a range of

high quality candies that allow children and adults to enjoy delicious and delightful

sensations. Its range has been recently extended with new products for kids (jellies and

lollipop) abroad and for adults (sugar-free and functional candies)

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

Jar 150 Pcs 16 75.00 9.78 55.54

Foot pop House

Display 50 Pcs12 100 13.04 73.21

42

7) HappyDent Protex

Happy Dent Protex is a sugar free chewing gum that contains Xylitol, which helps

prevent tooth decay. Xylitol, is a good tasting bulk sweetener that occurs naturally in

many fruits. It is also known to give cooling effect to the mouth.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

16 blister 12 80.00 10.43 70.00 58.91

24 Blister 12 120.00 15.65 105.00 88.36

Jar 100 Pcs 16 100.00 13.04 87.00 73.21

8) HappyDent White

Happy Dent White is a minty fresh chewing gum which helps keep your teeth clean and

white and your breath fresh.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

Flip Top Box 12 120.00 15.65 105.00 88.36

Flip Top(Rs 5 off) 12 115.00 15.00 100.00 88.16

Jar 115 Pcs(BI Pack) 16 115.00 15.00 100.00 88.16

43

9) Marbles

Marbles is a chewy sweet that is available in a host of yummy flavours- strawberry,

mango, lime-n-lemon, orange and blackcurrant.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

Pouch-24 hanger 12 120.00 15.65 105.00 88.36

48 Sachet-12 hanger 12 96.00 12.52 84.00 70.96

Sour marles-12 hanger 12 96.00 12.52 84.00 70.96

10) Mentos

A cult for entire generation of young people, Mentos is known throughout the world as

the freshest mint. Mentos is a chewy dragee with an addictive taste. This irresistible

round shaped candy is based on an innovative concept: crunchy and smooth outside, soft

and really fresh inside. An incomparable formula that from the very outset has been a

worldwide success. Available in more than 150 countries, research shows that an

equivalent of approximately 45 rolls of mentos is consumed every second around the

world.

One of the oldest Perfetti Van Melle brands, this “fresh maker “launched its 50 year old

tradition in India with mouth watering flavours such as mint, strawberry and lime.

Display per

carton

Maximum

Retail Price

Retailer

margin

Retailer

Cost Basic Price

44

Jar 300 pcs 12 150.00 19.57 132.00 111.08

Roll Hanger 30 60.00 7.83 53.00 44.60

Jar 165 pcs 16 82.50 10.76 72.00 60.59

Pouch 115 Pcs 24 57.50 7.50 50.00 42.08

Pouch 18 Pcs 96 10.00 1.30 8.70 7.32

Stick Hanger-10 roll 32 50.00 6.52 43.48 36.59

Mint Roll-18 12 90.00 11.74 79.00 66.48

Stick pack jar 12 100.00 13.04 87.00 73.21

Lime n Lemon Jar 165 16 82.50 10.76 72.00 60.59

45

FIRST PHASE OF PROJECT:

UNCONVENTIONAL MARKET

As mentioned in the report, Perfetti has a very wide distribution network covering the

entire length and breadth of the country. It has a strong presence in the traditional

markets of kirana stores, paan beedi outlets, canteens, etc. The modern trade also now

constitutes a fair chunk of sales. However, with an increasing competition in

confectionaries business like the entry of tobacco major ITC into confectionery business

and the cut throat competition in snatching up the shelf space by ever increasing brand

line of various companies, confectionery majors are now exploring various other avenues

to increase their market share.

The conventional and unconventional market for Perfetti can be ascertained by the

serviceability of a particular market by the company. Hence if a market which the

distribution channel of Perfetti is not serving would constitute to be an unconventional

market. Since there are large number of unconventional markets, the report focuses on

exploring few major unconventional markets for Perfetti like branded retail outlets,

mobile service providers, cyber cafes, beauty parlours, show rooms, etc.

The reasons for targeting these markets were:

To attract and retain customers these branded retail outlets, showrooms etc are

looking at providing value added services to their customers. Thus giving candies,

chewies to their customers as a freebie serves well for these outlets.

The branded retail outlets offer standardized service in every outlets, this

provides a window of opportunity for Perfetti to service an entire chain of branded

outlet.

The packaging and pricing of PVM’s products goes well with the customer

service strategy of these outlets.

46

Since Perfetti has a wide range of branded products, it relates well with these

branded outlets and showrooms.

FINDINGS AND SUGGESTIONS

As stated above my objective of the study was to enhance the distribution network of

Perfetti Van Melle in unconventional outlets in Mumbai. The outlets that were selected

for this project were, apparel showrooms, cyber cafes, toy stores, mobile service

providers etc. The reason to target these outlets were

The branded stores has chain of outlets, thus giving us enhanced scope of

business.

These branded stores and customer care galleries are conscious towards providing

enhanced customer service.

But the main question arising was that why outlets such as restaurants, apparel

showrooms , cyber cafes, toy stores be keeping candies, chewies and gums which lies

completely outside the mail line of business of such outlets ?

As it is said there has to be a reason for the buyer to buy your product. And I exactly did

that, brought about a reason for such outlets to keep the products of Perfetti. For the

chain of branded apparel showrooms like Provogue, Levis and Lacoste etc I managed to

persuade the individual store manager to keep candies like Chlormint, Alpenlibe etc on

the billing counter so that when a customer who comes for shopping in these outlets and

when he make a purchase, he come to billing counter for payment . It usually takes some

time for the bill to get processed, hence in the meanwhile the customer is offered one or

two candies as complimentary item. As far as the chain of high end restaurants are

concerned, the selling pitch was that after a customer has had his lunch he may like to

have a candy or a chewy as a mouth freshen. Hence I made an offer to a Mars restaurant,

which operates a chain of high-end restaurant to keep our product at their billing counter

47

and sell them. This would open up an added source of revenue for them. The response I

got was encouraging.

The following were the unconventional outlets covered by me during the

course of my summer internship:

Sr no.

Name of outlet

Area Type DSO Product sold

1 Provouge Colaba apparals Nagender sharma

1.Chloromint2.Mentos

2 Provouge Crossroads apparals Nagender sharma

3 Provouge Aitra apparals Nagender sharma

4 Provouge Inorbit apparals 5 Provouge Malad apparals Jayanta B6 Provouge Vashi apparals 7 Provouge Thane apparals 8 Provouge Infinity apparals 9 Provouge Bandra apparals Ali Azgar H

10 Dockers Colaba apparals Nagender sharma

1.Alpenlibe,1.Creamfills

11 Dockers Bandra apparals Ali Azgar H12 H20 Colaba sea

derivedNagender sharma

1.Chocotella,1.Creamfills

13 H20 Aitra sea derived

Nagender sharma

1.Creamfills

14 Arrow Colaba apparals Nagender sharma

1.Frutella

15 Jini and jonney

Thane apparals Raziur rab s 1.Alpenlibe,1.Alpenlibe strawberry1. Chocotella

16 Levis Thane apparals Raziur rab s 1.Chloromint17 First beauty

parlourMahim Beauty

ParlourAnkit Shah 1.Mentos,

1.Coffetos18 CompuSoft Mahim Cyber

CaféAnkit Shah 1.Happydent,

1.Coffetos19 Levis Mulund apparals 1.Alpenlibe chochlate ,

1.Alpenlibe strawberry

20 Airtel Parel Mobile Gallery

Ankit Shah 4.Mentos Lime,2.Coffetos,1.Alpenlibe Strawberry1000

21 Provogue Crossroads apparals 1.mentos jar 165 pcs

48

THE SECOND PHASE OF PROJECT:

STUDYING THE DISTRIBUTION CHANNEL FOR

RAILWAY STATION

The next phase of my project involved studying the distribution channel of Perfetti Van

Melle products for railway stations. The area covered by me included the railway

stations from Nagpur up to Nashik. During the course of the project, which was a week, I

covered 25 railway stations. The objective of this project was to enhance the

distributional sales of Perfetti Van Melle through its dealers. At many stations the

canteen owners were buying our products through wholesellers ands since the

wholesellers were supplying our products to most of these stations, the dealers were

suffering loss of sales from it.

Hence my project involved going to a particular station and conducting a study on

following grounds:

Does a particular railway station have a canteen?

If yes, then is the canteen an IRCTC or a private contractor.

If private contractor, does he stocks our products

If he stocks our products, then from were he gets the supplies.

If the contractor is being supplied through wholeseller, then he needs to be

convinced to source our product through distributor from that area.

49

FINDINGS AND SUGGESTIONS

During the course of the project and the research done by me put up some interesting

facts. The major railway stations like Nagpur, Bhusaval, Manmaad, Badnera have

canteens that are managed by IRCTC which has its zonal offices in Bhusaval and

Mumbai. These Canteens are allotted to contractors through bidding process. The

contractor who manages these canteens is thus bound by the rules and regulations of

IRCTC. Thus those products which are mandated by the zonal office of IRCTC are

allowed to keep in these canteens. Also the contractors of these canteens are required to

pay certain percentage of his sales to the zonal office. This leads to reduced margins

earned by the contractors on sale through such canteens. Also at many stations, the

contractor further sub contracts the selling responsibility to sales people and they earn a

certain percentage of commission on sales amount. This leads to further constraints on

margins earned by the contractor. Some of the findings from the study are listed below:

In IRCTC canteens margin is an issue for the contractors.

Companies like Britannia provides margin of about 26% to these contractors

whereas to other retail outlets it provides a margin of 16%

Less enthusiasm to stock jars due to loss of stock by misplacement.

The sales of stick product is highest in these stations.

In some places like Jalgaon the contractor was not stocking our product citing

railway rules and regulations which says that the canteens are only allowed to

stock the products which are specified by the railways for all canteens whether

IRCTC or not.

50

The following are the details of the railway stations covered by me during the coarse of

the project:

Sr.No Station Name

Caterer

name.

Our

Stocks

available Products sold

1Nagpur Nagpur No

No, IRCTC canteen

2Ajni M/s Goyal No

Alpenlibe strawberry, Coffeetos

3Sewagram M/s Goyal No No, IRCTC canteen

4Wardha

M/s R.K.Aggarwal No

No, IRCTC canteen

5Phulgaon

M/s Dolumal Tejumal

No

Big Babool, Coffetos, Alpenlibe

6Dhamangaon

M/s Mukund Rangari

No

Alpenlibe stick, Big Babool stick, Hypedent

7Murtizapur

M/s Anil Kanhayalal

Alpenlibe jar, Big Babool jar

8Badnera M/s Latif No No, IRCTC canteen

9Akola

Satyanarayanji Pratapji No No

51

10Shegaon

New Railway Canteen

Alpenlibe, Hypedent

No

11Nandura

M/s Vilas

Bheese No

Alpenlibe jar, Alpenlibe strawberry, Coffetos jar, Marbles

12Malkapur

M/s Prabhumal Kedarmal

No Aplenlibe stick

13Bodwad No Canteen

No No

14Bhusaval M/s N.J& Sons No

Alpenlibe jar, Alpenlibe strawberry, Coffetos jar, Centerfruit, Centergrapes, Hypedent, Hypedent strawberry.

15Jalgaon M/s S.B Wani No No

16Pachora Jn

M/s Makhijani & Sons

No

Alpenlibe stick, Coffeetos stick, Alpenlibe Lolipop, Marbles

17Chalisgaon M/s B.L.Sharma

Bandra NoNo

18Manmad

1. M/s B.V.Balke

No No

19Lasalgaon

M/s N.T.sharma No No

52

OBSERVATIONS

1. Due to the creative and effective advertising PVM has succeeded in creating a

powerful brand image for its brands like Mentors, Alpenlibe, Happy dent etc.

2. The products are priced at 50 paise or Re. 1 which suites its range of customers

from school going kids to adults. These affordable prices backed with effective

advertisements helps in increasing the sales of its products

3. The distribution network of Perfetti Van Melle is quite effective as well. The

division of its products into categories of P1, P2 and P3 forms the basis of

division of distributors as well and each distributor can take the distribution rights

of any one of the product categories. Weekly visits by the salesmen to the retailer

enhanced the network.

4. The market of unconventional outlets for Perfetti has a huge scope for further

growth as outlets like mobile service providers or branded showrooms won’t

mind spending such small amount of money, which in turn provides satisfaction

to their customers.

5. In case of railways, most big stations have canteens managed by IRCTC. PVM

products are not being sold in these canteens; hence the company can look at this

avenue for enhancing its sale.

53

RECOMMENDATIONS

Following are some of the recommendations for the company, which may prove useful:

1) Though the company’s advertisements have proved quite effective in boosting up

the sales, which mostly concentrated on visual media such as in the form of TV

commercials. PVM can also explore the opportunity of putting up advertisement

in regional channels to reach wider rural customers.

2) The company should consider unconventional market as great avenue for

enhancing sales, sustaining brand recall and promotion for the unconventional

markets. The company in case of unconventional outlets should have a separate

team or department taking charge of only such outlets like they have in case of

modern trade that is departmental stores, super markets, hypermarkets etc.

3) Until now only ice creams are being sold to consumers through salesmen on

tricycles as seen outside schools, colleges etc so even Perfetti could try out this

option and be the first confectionery company to do so.

4) Unconventional market is not only for sales, but its provide great avenue for

advertisements and publicity, where in when Reliance webworld, or Airtel

customer service office offers Apenlibe or Cloromint he offering a

complementary token. And this token helps in brand recall when the father or

mother buys the same alpenlibe at the retail outlet for his son and he remembers

he got this candy as token from reliance. Therefore its imperative to offer more

discounts 15% + Tie up + 5% extra to reliance and unconventional market.

54

BIBLIOGRAPHY

Interview with Mr. Vivek Chopra – National Sales Manager (Lo’real)

Interview with Mr. Deepak Vajirani – Purchase Manager (Kaya Clinic)

Interview with Mr. Amit Goyal – Web World Manager (Reliance Infocomm)

Interview with Mr. Chaitanya Bharadwaj – Marketing Manager (Planet M)

Interview with Mr. Satyem Milwani – Assistant Marketing Manager (Mars Restaurants)

Interview with Mr. Parag -store manager (Arrow)

Interview with Mr. Rajendra – stores manager (Dockers)

Interviews with canteen owners at various railway stations in Maharahstra.

Interview with Distributors

www.cii.com

www.ficci.com

www.perfettivanmelle.in

www.ibef.org

55