THE INDUSTRY SCENARIO With the entry of multinationals and home companies sprucing up their act, the confectionary

y market is booming. Till the eighties, the chocolate market was small and the product category itself was fuzzy. In the eighties, Cadburys the virtual monopolist had decided to focus its efforts on making 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 share. Though several brands like Amul and Campco tried to break into the market, none of them had succeeded in shaking the leaders grip. In fact, Cadburys had become a brand virtually generic to chocolates. Then chocolates were used to reward and reinforce positive behaviour and hence were categorized as a luxury reserved for special occasions. This was, a stark contrast to the west where chocolates were snacked on, eaten as mini meals or just to suppress pangs of hunger. But constant working by players like Cadburys (re-launch of Cadburys Dairy Milk 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 Industry With socio-economic changes rapidly taking place, the young and not so young population will lead a new life style and chocolate eating is definitely going to be widespread and acceptable. In the industry, both population and family incomes as well as urbanization are on the increase. There has been a significant growth in the middle class, with 5.8 million people having upgraded to the quoted middle class. There is quantified data on FMCG usage having increased Marketers in the industry are looking forward to a much higher growth rate, as Indias per capita consumption of chocolates is only 15 Gms. Versus 6 kg in the west. The Indian Chocolate market can be sliced into four parts: Moulded Chocolate Segment comprising slab chocolates like Dairy Milk chocolates, etc. These are made by pouring the ingredients into moulds. Count line Segment comprising bars like 5 star, Bar One, Perk, Kit Kat, etc. These have ingredients other than chocolate and are usually bar shaped, making for chunky bites. Choco-Panned Segment comprising chocolate forms like Butterscotch, Nutties, Tiffins, etc. Panned varieties have different cores/centres, 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 coating on the outside.

AMUL CHOCLATES Parent Company Category Sector Tagline/ Slogan USP Amul Chocolates Food Products Taste of India Quality and affordability STP Segment Target Group Positioning Quality conscious children and adults Kids and youth Taste of India by giving them quality products SWOT Analysis 1. Good product range which includes chocolates, toffees, syrups etc 2. Good quality and packaging 3. Excellent distribution network of Amul ensure availability 4. Branding and advertising through TVCs and print ads is popular 5. Pricing is good as it attracts large segment 1. Limited international presence as compared to leading global brands 2. Penetration in rural areas is still limited 1. Tie-ups with hotel chains, restaurants 2. Special occasion packages 3. Global expansion and more rural penetration

Strength

Weakness

Opportunity

Threats

1. Local sweet dishes 2. Entry of other local or international brands Competition 1. Cadburys 2. Nestle

Competitors

3. Mars(with all its child brands)

PLC of Amul Chocolates : Amul Chocolates is in the Maturity Stage Market Targeting: Differentiated marketing strategy for targeting its customers. Differentiated marketing means market coverage strategy in which a firm decides to target several market segments and designs separate offers for each. AMUL targets its customers according to the segments like geographic and demographic. PACKAGING: Packaging of the products of AMUL varies according to the nature of the product. As most of the products are perishable in nature special care is taken in packing them. CHOCOLATES are packed in cardboard packing. The company maintains the standards prescribed by BIS, with regards to packing. These products are then packed in cartoons, for greater safety measures and for transporting them to the market. Labelling: Labelling printed information that appears on or with the package, is also a part of packaging. Labels may range from simples tags attached to products to complex graphics that are part of the package. The labels of the products of AMUL are attractively designed. It contains all the information as per statutory requirements. Information like name of product, brand name, logo, date of packing & manufacturing, expiry date, price, code number, ingredients, storage and usage instructions, weight, manufacturers and marketers name, logo showing PURE VEG etc. appears on the label of the products.

 BRANDING: Umbrella Brand: The network follows an umbrella branding strategy. Amul is the common brand for most product categories produced by various unions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk. By insisting on an umbrella brand, GCMMF not only skilfully avoided interunion conflicts but also created an opportunity for the union members to cooperate in developing products. Brand Equity: Brand equity refers to the value of a brand, based on the extent to which it has brand loyalty, brand name awareness, perceived quality, strong brand associations, and the other assets such as patents, trademarks and channel relationship. It is evaluated on the basis of brand assets which are: 1. BRAND AWARENESS: Awareness level of Amul Chocolates is very low due to low visibility. 2. BRAND LOYALTY: Low 3. BRAND ASSOCIATIONS: Customers associate AMULs brand with high quality standards and reasonable price. 4. BRAND IMAGE: Though Amul has created brand image by offering excellent quality products, but in chocolate segment has failed to create its image & appeal to the masses. PRICING APPROACH AMUL employs different pricing policies for different products depending upon the life cycle stage of the product, market condition and the nature of product. In case if the product is newly launched in the market the company doesnt emphasize on the profit margin and keeps its prices as low as possible so as to penetrate in the new market. However in case of the already established products the company uses a mix of cost plus pricing approach and competitor based pricing approach i.e. it sets its prices keeping in view the cost of production, desired profit margin and prices of competitors products. In spite of being affordable Amul has failed to create its mark in the chocolates segment.

 Current Pricing:

Bindaaz Wafer Chocolate Almond Bar Dark Chocolate Milk Chocolate Fundoo Fruit n Nut

Rs 5 Rs15 Rs15 Rs15 Rs 15 Rs15

18g 26g 35g 30g 30g 30g

Competition Scenario: The chocolate market in India has only three big players, Cadbury (79%), Nestle (14%) and Amul (5%) New brands such as Sweet World, Candico and Chocolatiers are present in several malls. The largest target segment for Cadbury is youth. Consumer Trend: Mithai- is getting substituted by chocolates - Convenient packaging and better shelf life. Sudden spurt in advertisement between July & Sep in festival seasons. The range and variety of chocolates available in malls seems to be growing day by day, which leads to lot of impulse sales for chocolate companies. Chocolates which used to be unaffordable, is now considered mid-priced. Designer chocolates have become status symbols. Consumers can choose from wide range of chocolates. So many SKUs with almonds, raisins and all sorts of nuts. Latest 5 star crunchy and Ultra Perk. In past, consumers had negligible inclination for dark chocolates. But now we have seen a change in the Indian palate, which is increasing the base of this sub-segment Advertisement trends: Chocolate advertising rose by 30 per cent. Maximum chocolate advertising was during Raksha Bandhan. As expected chocolate advertising skewed towards kids channels and regional GEC took the second position. Cadbury India Ltd rules chocolate advertising on television Regional GEC took the second place with a 21% share ad volumes of chocolates, followed by Hindi movie with 13% share.

Cadbury India Ltd was way ahead of its peers with 66 per cent share followed by Nestle India Ltd and Parle Products Pvt Ltd. During January-November 2008 the number of new chocolate brands advertised decreased to seven from 12 during 2007. Nestle Munch Pop Chocolate led the chart of new chocolate brands advertised on television during January-November 2008.

Amuls Advertising (PROMOTION): In 1990s - Introduced newer varieties of chocolates, like Bindas, Nuts About You and others, targeting teenagers. In 2003 - Increase in sales due to cadbury worm controversy.(20 % increase in sales) Thus to boost sales, Amul launched three new chocolates in under the brands Fundoo, Bindaas and Almond Bar. While the first two have been priced at Rs 10 for a 30 gm stick, Almond Bar carries a price tag of Rs 10 for a 35 gm chocolate. As a result, AMUL's festival season pack "Rejoice" came with six chocolates, up from three during the festive season before. In 2004 Repositioning : Launch of Choco zoo - chocolates in shapes of motorcycles, aeroplanes, animals and comic characters. Targeted Kids. Introduced economic variants of chocolates priced at Re 1, Rs 3 and Rs 5. A tub of Chocozoo chocolates were priced at Rs 138 for 46 units of chocolates, but retailers can sell the chocolates loose, at Rs 3 each. This, was done to attract kids. Trendy Look Removed the cute little butter girl and cheese boy from its wrappers. New wrappers, designed by a US firm, trendy and colourful. A new tag line: Amul Chocolate For Someone You Love. Not merely gifts, but make a more emotional pitch with emphasis on Amul Chocolates for love on all occasions. In 2007 Strategy Rework: Reworked its strategy in the chocolate category to push its chocolate product sales. A new product portfolio(dark chocolate). Strategy was to identify the market gaps and try and fill them as done in the past with their sugar free and Choco Zoo, both of which have been appreciated by the consumers. Placed its chocolate products at lesser price points compared with its competitors. Concentrating on the niche segment such as health chocolates, launched Trix, a wafer biscuit coated with rich milk chocolate.

Cadbury's Perk and Munch from Nestle are other two major players in the wafer chocolate segment. Priced at Rs 5, available in strawberry and chocolate flavours. Introduced father son advertisement, Rose day advertisement.Corporate Image advertisement. Market share increased to 10 %.

RECOMMENDATIONS: Modified Positioning: Something to have just like that. Gifting Target Audience: Everyone Youths, kids, Teenagers, Old. Different products for different age group MODIFIED MARKETING MIX: 1. Product: Introduce of new range of chocolates to suit different targeted segments. Variety Design Plain bars, filled, chocolate covered wafers Sizes and Packages wide range to suit key price points and occasions. 2. Price: Pricing should be in line with Cadburys offerings Introduce incentive schemes e.g. Nestls Maha munch give more value for the same price Price at key price points like Rs.5

3. Promotion:

Must choose a Brand ambassador- e.g. Rani Mukherjee for munch ( targeting youth), Cadbury is planning to rope in Genelia DSouza of JTYJN fame. ADVERTISING Increase in frequency, especially at prime time. Must increase advertising expense from the current 1% of the revenue to 5-6% as done by other competitors.

4. Place: a) b) c) d)

Amul has: 67 Depots dry & cold warehouses 3500 Distributors 5 lakh retail outlets Amul parlours Make use of its strong distribution structure. Urban as well as rural. New Regional Sales Offices to increase width and penetration and focus in rural areas.

OTHER RECOMMENDATIONS: Must introduce Festival Gift boxes like Cadbury Celebration. Must offer low-priced packs for the masses and launch new products to target different age groups. Must focus on the availability of its products. Should increase R&D spending to improve the quality & taste. Must introduce at price points such as Rs 1, Rs 2, Rs 5 (13gms), Rs 10 (26gms), Rs 15 (43gms), Rs 50 and even at Rs 100 Visibility at retails points: To increase the visibility of its products, target areas near bus stops, colleges, schools, cafes and places of entertainment like theaters and amusement parks. Must enter into marketing alliances with various portals to offer products (on those portals that were developed for festive occasions and celebrations such as Valentines Day and Friendship Day. Rejuvenate and strengthen the existing brands Extend its reach to semi-urban and rural markets.

Sell its products through 'non-traditional' outlets like music stores (such as MusicWorld), malls, renowned bookstores and popular apparel outlets (such as Pantaloons and Wills Sport boutiques). To put chocolate carts (similar to traditional bicycle ice-cream carts) in malls and near college campuses to increase its reach. Increase frequency of advertisement. Company should introduce sales promotion schemes like free weight, pranky, tattoo, contest, free gifts etc. Advertisement can be done with the help of animations that attracts children and teenagers because chocolates are consumed largely in this segment.

Amul Parlours: Amul has entered into direct retailing through "Amul Utterly Delicious" parlours created in major cities Ahmedabad, Bangalore, Baroda, Delhi, Mumbai, Hyderabad and Surat. Amul has plans to create a large chain of such outlets to be managed by franchisees throughout the country Amul should give local advertisements apart from the advertisements given at the national level. Local advertisement must mention the exclusive Amul shops of the city Chocolate boutiques & shelves: Amul must come up with its own chocolate boutiques. Form its own shelves in retail shops and take ownership of maintaining them. Amul Cyber Store: Amul does e-selling of all its products including chocolates but very few people know about it. AMUL must make use of the hoardings and print ads to communicate this. Contests: Amul can start some contest for chocolates as it is doing for some of its other products E.g : Amul Chef of the Year, 2009 contest Amul Maharani Contest, 2008-09 Amul Food Festival Contest Winners of Slogan likho Disneyland dekho contest Winners of "Amulya Fly to Bangkok Contest"