Medios Homicidas

The objective of the marketing mix developed is:

“To develop a product that is available, affordable, based on local raw material, and adapted to the taste and the nutritional habits of the population”.

The elements of the mix - Product, Price, Place & Promotion have been entailed below:

Product

As 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 recognise 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 or have a plethora of brands. Here, it would be advisable to launch a complete basket of products covering both the count line 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 below:

• Stipulations regarding the use of Hydrogenated Vegetable Oil-HVO (since it contains nickel) may be adhered to. Nickel in chocolates can cause cancer. However, research is still on to prove this. Product formulation should keep this aspect 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 should keep the product crisp, fresh and protected from the harsh climatic conditions in the country, and hence provide a longer shelf life.

• Sizes: As can be seen in the findings the most popular size is 40 gms.

However, in order to provide a good assortment of offering, the following sizes may be introduced: 15 gm ⇒ ⇒ 35/40 gm ⇒ 80 gm. ⇒ Super Saver (105 gms.) ⇒ 200 gms

⇒ Gift packages: since, chocolates is a very popular gifting option, attractive gift packs may be introduced. The offering is also planned to be distributed through gift shops, hence, attractive packs on the “Swiss Coats” (small local player) concept be developed.

• Any foreign brand formulation needs to be “tropicalised” and hence, adapted to the Indian conditions. Dropping of the “international” formula (Nestle had faced problems because of this as product could not take the Indian heat) may be considered.

• Taste: Since, Indians have a preference for soft chocolates with caramels,

wafers etc inside (see findings), and the product should appeal to the Indian palate by incorporating these in the offering. In this segment there will be direct competition only from Truffle. A panel of target consumers may be called in to sample any fresh batch of chocolates, so as to ensure that the product developed appeals to the Indian palate.

The milk and creams in India are different, and workers no way as well trained as abroad. Hence, the product development must keep this fact in mind.

• The product should also have a high shelf life with a good shelf appeal as well. This so since, chocolates is an impulse buy and a good distinct product look can attract a customer.

Product Differentiation

Since, there exists strong competition from heavy weights such as Nestle and Cadbury’s; the product offering should be well differentiated. Nestle, when it launched its chocolate brands in India, ensured that each brand was well differentiated - White chocolate(not conventional brown) with a sugary taste that appealed to kids, Milky bar marbles differentiated as they had white chocolate centre instead of the brown chocolate core in Gems.

Pricing

Factors like competition, internal costs, and the positioning and corporate objective of the company need to be taken into consideration by a company before pricing a product.

Premium pricing (relative to the competing brands – not designer chocolates), with special emphasis on taste and quality (most important attributes-see findings) is recommended. The premium pricing does not suggest that the offering is made unaffordable to the target consumer. A high price would accompany a promise for a better taste and quality. Therefore, the brand(s)’ taste & quality needs to justify the high price.

Further, the product category is relatively inelastic i.e. consumers would not stop buying their favourite brands if the price is increased by a few rupees (see findings). Consumers feel that even if the price of their favourite brand is

reduced, they might not buy more of it. Also, there is a general perception of chocolates being “Reasonably O.K.”(see findings).

According to Sarura Business, the high priced (relative to other brands in the market) imported foreign brands have been able to draw a decent response. Primarily, because of their high foreign brand equity.

As can be seen in the table (on brand comparison –on price, given on the next page), Nestle and Cadbury’s are pitted against each other and Amul is the cheapest brand in the market.

Considering the above, a premium pricing strategy, with the assurance of good quality and better taste, in a market that is not high on price sensitivity may prove to be a success.

It may be noted that the price should be only Rs2/- or Rs 3/- expensive than Cadbury’s or Nestle’s offering. For instance

CDM is priced at Rs 15/- for 40 gms

Nestle’s Milk Chocolate at Rs 13/- for 40 gms Amul is priced at Rs 10/- for 40 gms

The offering in this segment may, therefore, be around Rs 16/-

While pricing the product, the following duty structure may be considered:

• 18 percent excise

• Other state levied duties (after excise) such as Sales tax, etc. (which vary from state to state)-within 10 to 20 percent.

Placement:

The success of any FMCG product thrives on distribution. Factors like financial cost effectiveness) perish ability of the product, repeat orders; managerial capacity and unit value of the product need to be carefully analysed while setting up the distribution framework of the company. The product category is essentially a “pull” market. However, the channel members provide greater visibility to the product. This is extremely important since chocolates is a low involvement impulse purchase product. The recommended distribution framework has been entailed below:

Recommended Distribution Logistics

The first task in hand should be, to effectively map the territory into smaller more accessible and controllable units. An effective territory mapping needs to be done not only to provide an efficient coverage of the market but also to provide growth opportunities to the constituents (stockiest), as the company grows. The recommended distribution chain would be as follows:

The Company

Carrying & Forwarding Agents Stockiest/ Distributors

Whole sellers Retailers Retailers

Carrying & Forwarding Agents: These may be appointed at two or more

State(s) of operation of the company. Carrying & Forwarding agents work on a commission basis – 3% (industry norms) of the goods handled. It is recommended that the country keeps about 4 to 6 weeks of inventory at the C&F level and a commission structure which is in keeping with the industry norm. Therefore a 3 percent commission on the invoice value may be provided to the agents.

Stockiest: A stockiest provides a local delivery point for the

manufacturer/marketer. They store the products, break bulk, and distribute to the retailers. With greater no. of retailers now seeking credit from the retailer, efficient management of collection has become a vital part of the stockiest’ job.

The main problems that new product faces is that of getting experienced and effective channel members. As existing marketing marketer/manufacturer can piggy back on the existing channel structure. A new company will have to provide greater incentives convince channel members to stock the product offering. Hence, an innovative means of channel handling needs to be adopted:

• Competitive commission to the stockiest-around 5.66% on the invoice (industry standards 5.66%)

• The efforts of the sale representatives employed by the stockiest to get orders may be supplemented by the manufacturer’s sales force.

• Retail outlets to be serviced at least four times in a month (at least once a week)

• Distributors (stockiest) to maintain stock of not more than 15 to 20 days

• Since, distributors are to maintain air-conditioned godowns, in summers the A/C expenses may be borne by the Co.

• The Merchandiser concept : Merchandisers may be appointed by the company (salary to be borne by the Co.) in order to keep a constant touch, and to “feel the pulse” of the market. These merchandisers would also facilitate implementation of various schemes of the co. Regular job would include:

to check if products have reached expiry, ⇒

Proper setting of shelf space ⇒

POP material displays, etc. ⇒

• More transparent and clearer claims handling policy

Wholesaler: Whole seller’s prime concern is buy in bulk and sell at the fastest

rate. The aim of any distribution chain of mass-market product category like chocolates would be to expand its reach i.e. the no. of outlets storing its products. This may not be possible even with a well established stockiest network. Hence, wholeseller’s play a significant role in supplementing the stockiest’ effort send in providing a better reach to the product.

Retail Outlets: It is extremely important for any chocolate brand to have a

well entrenched retail presence. Reach I the key. Consider, General De Confetaria (marketer of Boomer Bubble gum) having its products available in 400000 outlets around the country, and Perfetti with 250,000 outlets. The aim would be to expand the retail network as wide and deep as possible.

A “blitz force” tactic for retail chain enhancement may be followed. A blitz force is a “commando” unit hired to target specific work. About 5 to 10 salesmen, recruited from the same locality will be roped in to penetrate a specific area. Being far more familiar with the area, they are expected to create about 10 to 12 new outlets daily. This task on a later stage may be entrusted to the distributor’s salesman.

The biggest problem in distributing a product category like chocolates is lack of infrastructure. The product needs to be kept in refrigeration (more so, in summers)-limiting the points at which it is available (ideal temperature needed for chocolates is 18 to 25 degrees). Hence, summer see sales suffer. Demand falls by almost two-thirds in the summer months. To counter this, the Co. can –

• Cool/chilled vans may be operated in summers (for C&F to Stockiest transit of goods). Because of only a seasonal requirement, these may be out sourced.

• Insulated boxes, Ice/chilled pads and packs, Ice surrounded Sintex tanks, towels etc may be used to ensure that the product reaches the retailers without losing its form.

• Considering the importance of refrigeration ( specifically in summers), Vizzy coolers may be installed. These coolers not only provide refrigeration but also a good POP value.

Further, while distributing chocolates, it must be ensured that the brand has a deep retail coverage not a selective presence.

Finally, while deciding onto the selling outlets, certain unconventional outlets may be considered. These include –

a. Sweet Shops: The product may be kept at traditional Sweet Shops. More so, during festival times.

b. Gift Shops: As the idea of gifting chocolate is becoming more popular among the targeted segment, it would be profitable to ensure the availability of chocolate chocolates at various gift shops.

c. Stationary/Book Shops: Teenagers, is a lucrative segment with a high consumption rate. They frequent book shops and magazine stores quite often. Hence, making chocolate available at these outlets may be considered.

d. Ice Cream Parlors : In India, ice cream is treated as a fun product and a sweet dish or a desert after meals. Both these attributes match with chocolate consumption habits. Hence, ice cream parlors may prove to be beneficial in providing greater reach to the product. Here again, chains like Dollops, etc. may be used in order to facilitate greater reach. A strategic distribution tie-up may be reached with ice cream companies such as Kwality Walls, Vadilal’s etc for distribution of chocolates along with the distribution of ice creams through the Vending Trolleys.

e. Fastfood Joints/Restaurants: As a discussed above that on our country the chocolates can be served as a sweet after meals, hence separate counters may be installed at various fast food joints such as Mac Donald’s, Nirula’s etc. This would provide the brand, not just greater visibility but also valuable sales. Also, these outlets possess adequate infrastructure to store chocolates.

f. Jewellery Shops: The leading jewellery shops in the city entertain their customers with cold drinks and or tea. These are not suited to all. The complimentary chocolate treat at the particular shop would only status of treating his clients differently and the children folk would also enjoy this special treatment and leave fiddling with the precious gold garments.

g. Exclusive Chocolate Parlors : As can be seen in the findings, there has been an overwhelming response to the idea of buying chocolates from exclusive chocolate outlets. Hence, development of exclusive chocolate parlors may be considered.

Promotion: This involves communicating persuasively to the consumers, in

order to arouse their interest in the product. A detailed promotion plan involving advertisement, sales promotion and public relations is proposed.

Positioning:The positioning of the various brands in the market has been

listed below:

Cadbury’s Brands Positioning Nestle’s Brands Positioning

Cadbury’s Dairy Milk

“The Real Taste of Life” Classic Milk Chocolate Positioned as an affordable, enriched milk chocolate Fruit n Nut Positioned at

Creamy Bar adults as an Roast Almond impulse anytime

Nut Milk Purchase

Crackle - self expression

Bournville values attached

5 Star / Perk Perk-Positioned as a Kit Kat Positioned as a Snacking Consumption. Snacking Consumption Break/Crisp/ Double Decker

“Thodi Si Pet Pooja” 5 Star-Energy Bar

“Have a Break, Have a Kit Kat” Reach for the Stars Bar One Positioned as a

trendy, cool anytime snack Gems/Eclairs

Positioned as Butterscotch variety, gifting Caramels/ Overtures and taste preference Nutties/All Silk Tiffins Relish

The flagship brand may be positioned as a premium (see pricing) anyplace, anytime snack. Since, snacking proposition is the growth engine for the

industry, positioning should hence, be focused on that. The two drivers – Impulse purchase and need to snack.

Advertisement Plan

The Advertisement plan could be as under:

Corporate objective: The corporate image should be built over a period of

time, so as to reinforce consumer confidence in the brands of the company. This is also essential to counter competition, since over a period of time, names such as Cadbury’s, Nestle have attained high levels of recognition and assurance.

Advertisement Objectives

• To position the product as a “high quality brand, with a wide range of offering, providing, fun anytime, anyplace products”.

• To create awareness about new flavours.

• Induce consumer trials.

• Build corporate image

• To undertake competitive advertisement.

The Budget : Considering the fact that the market is dominated by big-wigs

such as Cadbury’s and Nestle, aggressive competitive advertising needs to be undertaken.

Since both Kit Kat and Perk are allocating 60 to 70 percent of their total ad budget on chocolates, an allocation of about 20 to 25 percent of the projected turnover may be sufficient in the first year. After which about 10 to 12 percent may be used to sustain the brands.

Message: The message design will be consist of following;

• Appeal: Chocolate is basically a fun product and exchange chocolate as gifts is getting popular these days. An EMOTIONAL appeal of “Love” can be designed. Apart from it chocolate can be highlighted by fun elements in life can be positioned as MOOD ELEVATORS. An ASPIRATION appeal would also be helpful.

• Presentation: The design of advertisement will be the setup of fun scene like picnic, college, campus, sports. Ground, partly time can be suitable so that people can “Associate” the chocolate with fun.

• Message Source: For print media the message source will be the copy part and creative advertisement design. For electronic media, the source will be whole family unit, younger enjoying exchanging and eating chocolate.

Media

Print Media: Will be the major magazines read by the target segment i.e.., India today, society, famine, stardust etc.

• P.O.P.Material induce impulse purchase.

• Electronic Media: Since the whole of target segment watch Satellite TV during prime time and advertisement will be featuring share for 3 or more time to leave an impact. Apart from it company will be sponsoring the fun related programmes on DD and Satellite TV.

Public Relations:

I. The company will hold a press conference announcing its arrival in India and will highlight its global achievements.

II. Company has plan to sponsor events like 2 viz., skiing river rafting, yachting etc.

III. Company will also sponsor fun based TV programs.

Sales promotion Activities: To induce consumers to try the new chocolate

and to get the product pushed in the market the sales promotion plan should include the following :

Trade promotion: The Company will have to offer lucrative trade promotion schemes, in order to push primary sale. These include incentives to stockiest for pushing the sale of chocolates. At the retail level, the following trade promotion measures may be adopted:

• Schemes such as , a certain percent off on the purchase of Rs 5000 or Rs 10,000 worth of chocolates.

• A box of chocolates free with every dozen purchased.

• Shop Displays/Vizzy Coolers –linking them to sales

Apart from these, WindowShelf space may be purchased outright.

Consumer Promotion: Some of the consumer offers that could be introduced are :

1. Free gifts like pen, comics etc., on return chocolate wrapper. 2. Money Savers

3. Chocolates in a toy truck etc.

4. The Company can announce consumer “contests” (with proof of purchase) with attractive prizes, supplemented by an advertisement campaign.

Point Of Purchase Material:

POP is of extreme importance, to a product category like this. This is so, since sales are impulse /casual driven. Hence, heavy point of purchase advertising in the form of danglers, chocolate dispensers, etc. may be used.

In document TRABAJO DE INVESTIGACIÓN PARA OBTENER EL GRADO DE: LICENCIADO (A) EN CIENCIAS JURIDICAS PRESENTAN: LORENA DEL CARMEN CORTEZ GRANADOS (página 87-91)