Marketing Plan for Launching a Chocolate Brand India

trade Plan for Launching a umber discolouration IndiaIndia is on the move and so atomic number 18 the markets in India. obscure from economic changes. India is also facing social changes like changes in manner style, hobbies and so forth New fashions, Advertisements holidays, and so forth argon in today.Further, food habits of Indians ar changing rapidly. burnt umbers, which were believed to be kids resource, are now be consumed by kids, teen hop onrs, and adults. umber market in India (Currently 20,000 tones is growing at the rate of 22% annu in ally).To bribe advantage of the growing market, global confectionery companies are getting prepare to woo the proverbial Indian Sweet tooth. An influx of worlds aiming hot coffee bean players is expected.Further, since Confederation of Indian manu itemuring (CII) is a representative body of the Indian Industry, it receives its inquiries for pertinent merchandise information from respective(a) domestic and international players, who indispensableness to invest in India.In the above context, the prime objective of this opus is to prepare a marketing plan for any denounce that is training to enter the India Chocolate grocery store. Therefore, this report is generic (broad based) to the fulfilment that it does not nidus on any single mark. However, this may prove to be a relevant marketing guide for any brand launch in India.METHODOLOGYAs mentioned earlier, the objective of the study is to formulate a Marketing Strategy for any new entrant in the Indian Chocolate Industry. While recomm kiboshing the said strategy detailed information from both primal and secondary sources was collected and analyzed. This includedPrimary SourcesFour level direct information collections were undertaken. These wereIn order to get relevant information regarding competition, executives of the adjacent cocoa players in the market were interviewedMr. Sanjay Verkey, Branch Manager, Cadburys India Ltd., ANZ Gri ndlays Building, Connaught stick, New Delhi.Information Cadburys profile, wares, distribution, and so forthMr. Verma, Sarura Business (I) Ltd., Panchsheel Vihar, New Delhi, the company that has launched spoil Inc. brands (imported) in India.Information distinguish marketing strategy-since, imported deep browns marketing is a new conceptMr. N Bohidar, Manager Corporate Communication, draw close India Ltd., Connaught Place, New DelhiTo analyze tainting demeanor and in order to gain an insight into the buyer need-satisfaction level, a questionnaire was explicate and administered among 80 people. The profile of the respondents was as fol scurvysConsumers of hot chocolates 12 twelvemonths + in Delhi. This was since chocolate function was witnessed amongst all age groups.A distributor was also interviewed so as to get pertinent information regarding the ab appear important P of FMCG marketing Place, information provided by Mr. Rajesh Mittal, Ex-distributor of Nestle India (Ro hini district), was extremely helpful in recommending the distribution strategy.Extensive interviews were conducted with retailers in the Naraina Vihar area. These included pan shops, bakeries, departmental stores, etc. they provided information on various facts of chocolate distribution such as point of obtain material (dispensers etc.), infrastructure problems, critical informational regarding the policies of the present players in the market, etc. secondary SourcesA number of secondary sources of information were used. These wereMr. M.N. Rao, Secretary, Indian Confectionary Manufacturers Association, Sugar House, Nehru Place, New Delhi.Information Industry statistics, problems facing the attention, future outlook, etc. Also measures being adopted for cocoa production development.Confederation of Indian Industries reports.PHDCCI FICCI library.Internet websites of Cadburys, Nestle and indiainfoline.com, askjeeves.comExtensive use of secondary information in the form of magazines /journals/newspapers clippings, such as Business World, Business Today, Business India, AM, Brand Equity, Economic Times, etc.The methodology adopted was as followsIndustry scenario draft (utilizing secondary information)Extensive interviews held with Primary/Secondary Sources(Companies/Chocolate manufacturers Association)Interview with ex-distributor of Nestle India Ltd.Extensive retailer interviews in Naraina AreaFormulation and administration of a questionnaireFormulation of the Recommended Strategy on the basis of the above mentioned Primary and Secondary InformationLimitations of the studySince, the administration of the questionnaire was restricted to Delhi, results may provide an urban view of the buying behavior and the like.Also, secondary sources were used for information regarding Amul. Industry scenario was also drawn up, utilizing secondary information.THE INDUSTRY SCENARIOWith the entry of multinationals, and home companies sprucing up their act, the confectionary mar ket is booming. Mckinsey has estimated the confectionary industry to touch a whopping Rs.8500 cr. by the year 2009.Till the eighties, the chocolate market was small and the product category itself was fuzzy. In the eighties, Cadburys the virtual monopolist had resolute to focus its efforts on qualification chocolates a distinct category with an identity of its own. And the marketer had sharply positioned its product at children to do that. Hence, chocolates bore an only for kids tag, and kept adults at bay.By the end of the eighties, Cadburys still ruled the roost with over 80 % market fortune. And though several brands like Amul and Campco tried to break into the market, none of them had succeeded in shudder the leaders grip. In fact, Cadburys had be experience a brand virtually generic to chocolates. Then chocolates were used to reward and reinforce positive behavior and thence were categorized as a luxury reserved for additional occasions. This was, a stark contrast to the west where chocolates were snacked on, eaten as mini meals or full to suppress pangs of hunger.But constant working by players like Cadburys (re-launch of Cadburys dairy draw targeting adults and as a casual any-time buy) and Nestle towards exploding the myth that chocolates are meant for children only has resulted in the segment booming.Trends in the IndustryWith socio-economic changes rapidly fetching place, the young and not so young population allow lead a new life style and chocolate eating is by all odds going to be widespread and acceptable.In the industry, both population and family in suffices as well as urbanization are on the increase.There has been a signifi stooget growth in the heart and soul class, with 5.8 million people having upgraded to the quoted middle class.There is quantified data on FMCG usage having increased (NRS -VI IRS 98 figures) give thanks to the above reasons the growth in the chocolate market is estimated to be at 28% in 2009. But markete rs in the industry are looking at forward to a much(prenominal) soaringer growth rate, as Indias per capita consumption of chocolates is only 15 Gms. Versus 6 kg in the west.The Industry Chronology course of studyDemandRupeeGrowth Rate199012000 tones350 cr.2 %1994Excise trading increased to 15 %13 %Excise duty advance increases to 28.75 % hot chocolate Prices ZoomDrops to 6 %1995Excise duty reduced to 25%, further to 20% and finally to 18%. Import Nestle launches Kit-Kat places up a new unit. Production arrangement with CAMPCO continues. Mars selects production site.1996Market zooms up due to greater marketing thrust by players (especially Cadburys) Chocolates Selected import distributor point22 %1998Chocolates Open general license20000 tones22 %2003Quantitative childbed lifted32000 tones22 %The Indian Chocolate market can be sliced into four parts.Moulded Chocolate Segment comprising slab chocolates like dairy farm Milk chocolates, etc. These are made by pouring the ingr edients into moulds.Countline Segment comprising veto like 5 star, Bar One, Perk, Kit Kat, etc. These have ingredients new(prenominal) then chocolate and are usually bar shaped, making for podgy bites.Choco-Panned Segment comprising chocolate forms like Butterscotch, Nutties, Tiffins, etc. Panned varieties have different results/centers, which are covered with a layer of chocolate.Sugar-Panned Segment comprising chocolate forms such as Gems, Chocolate clairs, etc. These generally have a sugar application program on the outside.The Chocolate industry has grown from 12000 tonnes in 1990 to around 32000 tonnes in 2001. The rejuvenation exercise of Cadburys, was one of the key reasons behind the churning up of the countrys Rs. 350 crore chocolate market to a growth rate of 22% in 1996, from a mere 2% two years earlier.Chocolate Market SharesInterestingly, kaira district cooperative Milk Producers Ltd. (KDCMPL) the manufacturer of Amul chocolate is selling any(prenominal) it produces. Limited capacity is also a reason for the share it has.However, Amuls unforgettable advertising campaign positioning it as a A bounty for someone you love, saw the sales graph rising. Amuls sales grew by 39% then. Ever since, Amul has maintained a low profile.It can further be seen that Amul (see findings).Other Domestic PlayersThe only former(a) organized player in the market is Campco, which has an insignificant share of the market. It is supplying its production to Nestle. Apart from this Campco did come up with its new brands like Treat. But crunch of resources grossly established the pace of the company and is hardly to be heard of today. drinking chocolate LAUNCHES oer THE YEARS1956Cadburys Milk Chocolate launched1967Cadburys 5 school principal launched1970Cadburys clairs launched1974Amul chocolates launched1986Cadburys milk chocolate re-launched as Cadburys dairy milk (CDM)1991Nestle chocolates launched. Cadbury paying backs Nestls entry with all silk, and unfu rls huge consumer promotion campaign. CDM revamped. Nestle launches Milky Bar Cadbury counters with Creamy Bar.1994Cadburys legitimate savour of Life and 5 Stars Reach for the Stars campaign rolled out. clairs revamped and renamed Dairy Milk Eclairs.1995Cadbury launches Perk, pre-empting Nestles Kit Kat. Overtures is withdrawn.1998Market growth rate tops 40 percent per annum.IMPORTED BRANDSConsidering the high growth potential, various multinationals wanted to set up facilities in India (Mars being one of them). However, shortage of cocoa, seasonality in demand, and the absence of a proper cold chain deterred them from investing in India. The presidential term also moved the import of chocolates from special item list to fall in general license category. The duty structure was also reduced. This resulted in making import of foreign brands easier and price competitive.Due the above, mars inc.- the US giant, who had decided to set up facilities in 1995 (the site for which was als o selected), decided to skirt its investment plans.An alternate strategy was formulated to import Mars chocolate brands into India done Sarura Business (I) Ltd. Sarura, which came into existence about and year ago, imports Mars brands and sells through its own distribution network. Highlights of the strategy being followed are mentioned belowImports Mars brands every 40 days, after careful demand analysis. Takes 20 to 22 days to reach India.Duty structureCustoms Duty40%Counter vailing Duty (a form of excise)2%Special Duty (Surcharge)3%The import duty on finished product is expected to come down to 20-25 % in a phased manner.Distribution LogisticsThe company has its operations being controlled from Delhi. A typical FMCG distribution chain is being utilized. This includes-Carrying Forwarding AgentsDistributorsRetailers and Wholesalers (about 5000 as of now)ConsumersIn Delhi, the company reaches the retailers and the wholesalers on its own. It operates about 3 vans, and each other r etailer is serviced twice a month. grocery storeING OBJECTIVESShort verge Objectives winning into consideration the growth rate of the market competition with major brands, the marketing objectives can be as underTo introduce chocolates in various new flavors.To make a place in consumers mind.To provide caliber chocolates at affordable price.To achieve a market share of around 15% by the end of two years of operation by the means of7.5% by creating the new market.7.5% by taking competitors share.Long Term ObjectivesInvesting in strengthening the grass root level operations like cocoa farming, milk collection and storage.A broad product portfolio, a large and efficient RD department, decentralized management, etc.Nestle has about 2000 distributors in 1700 towns and more than 500,000 retail outlets to match thisMARKET RESEARCHIn order to recommend and execute an effective strategy for marketing of goods services, a systematic market question needs to be undertaken. The buyer pre ference research would play a vital role in the sound judgement of consumers taste/purchase habits and a better understanding of the consumers mind. In fact the strategy formulation/recommendations in this report of the marketing mix relies firmly on these research findings.A questionnaire was administered (as mentioned in the Methodology) amongst people of different age groups and professions. Results from this research provided interesting cues, which were extremely beneficial in the formulation of the recommended marketing mix.The main object of this research/questionnaire were as followsTo find out the trustworthy taste/chocolate eating habits.To find out the extent of brand loyalty.To get feedback of consumers perception about flavors and conventional outlets.To find out extent of price sensitivity.Retail outlet preference.Brand preference etc.OBSERVATIONS base on the basis of the questionnaire research, some of the facts that came to the fore have been listed below. These r esearch findings compete a key role in the development of the recommended marketing strategy. sentience secure PREFERENCETop of Mind AwarenessPurchase decomposeWhat influenced you to buy the selected brandPURCHASE BEHAVIOURReasons for PurchaseChocolates A bounty to a love oneAs a gift it is for proclivity DRIVENMost of my chocolate purchases are preplannedI often pick up chocolates part I make other purchasesREINFORCING IMPULSE PURCHASEIMPORTANCE OF ATTRIBUTES PERCEPTUAL MAPSImportance of various Attributes in ChocolatesRank of Chocolates on various attributesAttributes12345TasteCDMKitKat5 StarPerkAmulQualityKitKatCDMPerk5 StarAmulPackagingKitKatCDM5 StarPerkAmulPricePerk5 StarKitKatAmulCDMFlavorKitKatCDMAmulPerk5 StarAdd-onsKitKatPerkCDM5 StarAmulBrand imageCDMKitKatPerk5 StarAmul convergence RELATEDTaste PreferenceSize Usage. What size of a chocolate go you normally buy-PRICE RELATEDSuitable price for a 40 gms ChocolatePrice Perception. The price of most preferred brand isPrice sensitivity (Elasticity). If price of your favorite brand is reduced. You will buy more of itPrice sensitivity. If the favorite brand is few Rs. Expensive would you to go for itADVERTISING/PROMOTION RELATEDAdvertisement Recall Test unassistedMost like Ads UnaidedWhether, sales promotion would affect your purchase decisionBand loyalty. If a particular brand is not easy, you willIf you want to buy a wafer chocolate, say Kitkat and if it is not available, you would settle for a Bar/Moulded chocolate say 5 Star or CDMCHOCOLATE BRANDS IN INDIAAre you happy with the kind of chocolate brand available in IndiaPLACE RELATEDOutlet PreferenceDEMOGRAPHIC compose OF THE RESPONDENTSAgeSexMarital StatusOccupationMonthly incomeMichael Porters case for Competitive AdvantageThere should be day-and-night efforts towards competence by drawing down costs and improving product quality. According to Michael Porters 5 point model for competitive edge, any corporate entity needs to counter th reats posed by the following five market forces.The Corporate Entity capableness Entrants Competitors ActivitiesSuppliers BuyersSubstitutesPotential EntrantsWith the increase in growth rate of the market and wide spread acceptance of chocolates in Indian market, companies like Mars, Sara downwind etc. are eyeing the chocolate market. American Hershey foods etc., also plans to enter in it. though these companies would facilitate further growth of the market, they would also want a share of the pie.Further, a favourable duty structure would facilitate import of international products than new manufacturing units being set up.MARKETING MIXThe objective of the marketing mix developed isTo develop a product that is available, affordable, based on local raw material, and adapted to the taste the nutritional habits of the population.The elements of the mix Product, Price, Place Promotion have been entailed belowProductAs mentioned earlier, the two most important segments of the market are moulded and countline segment (segments have a high share of the market). Also, it can be seen in the findings, the Indian consumer does not discover the difference between moulded and countline segment. Further, a key decision that needs to be taken is to decide whether to have a core brand focus of have a plethora of brands. Here, it would be advisable to launch a pass with flying colors basket of products covering both the countline and the moulded chocolate segment (at least if not Panned). A range of brands can help cushion out risks over the entire offering. Also, it has been that to sustain in the long term, a complete portfolio of chocolates for every taste is essential. However, a concentration strategy may be adopted in the first phase, focusing on one core flagship brand.The various product attributes have been mentioned belowStipulations regarding the use of Hydrogenated Vegetable anoint HVO (since it contains nickel) may be adhered to. Nickel in chocolates can c ause cancer. However, research is still on to prove this. Product formulation should keep this sight in mind.Packaging The packages or the cover packs, of the brands can be in Blue, Green and Red color which represents a fun element. The packaging shouldMARKET TESTING PLANIt would reduce the risk of failure in the market where it goes national, by validating the marketing mix.Facilitate validation of positioning.Allow strict action through incorporation of consumer feedback.For test marketing the chocolates, the plan may be as followsTest Objectives To validate the brand names, new outlets, etc. and to measure the sales volume, pricing and promotion policy. Competitor reaction can also be analyzed.The product may be launched in Bombay (as a soft test launch). This selection was based onBombay is uniformly represent by the target segment.Competitor activity is high. Also, Nestle was able to seize a significant market share from Cadburys when it was launched.Bombay is representati ve of the target segment. performanceA Well-designed marketing plan counts for nothing, if not implemented properly. Success in the market place depends upon the way the plan is implemented. The launch is recommended to be beforehand winters-say September or October, since-That period would facilitate high Diwali sales, andFUTURE mentalityThe growth and expansion of the Indian chocolate market in the chivalric has been hampered, due to stiff excise duties on chocolates (at 18 percent while other agro based products are being charged as low as 8% and a few, even 0% excise) and non-availability of quality cocoa in the country.Also, import of chocolates has been put in the OGL category, with duties being reduced (in a phased manner). The industry has made recommendations to the Indian government to go back to the special item list category, in order to safeguard the domestic industry.However, continuous marketing focus by the players in the market has resulted in the industry looki ng up like never before. These companies/brands have become much more market savvy. The Indian chocolate market is transforming and new players (Sara Lee is planning to set up base in India) are entry the market. Hence, considering the low per capita consumption of chocolates, the future of the industry seems to upbeat.