confectionery industry

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Confectionery IndustryBy:P. KeerthiI. Siva Rama Krishna

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HistoryCavemenFirst chocolate factoryin the United States was established in 1765.Ancient Olmec civilizations of Mexico made thefirst chocolate drink.Cocoa powderwas made in 1828.David Peter and Henry Nestle from Switzerland created thefirst milk chocolatein 1876.George Smith invented the firstLolly Popin 1908.

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Products under confectionery ChocolatesCandies CakesIce creamsBakery products

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DriversGrowing gift cultureRapid urbanizationGrowing retail marketGrowing income & consumptionDeveloping rural sectorMarketing campaigns

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TOP 10 CONFECTIONERY COMPANIES IN INDIA 2016

Cadbury India Ltd. -A big multinational confectionery company. It has Consumers in approx. 165 countries across the globe. Treated as number 1 brand in Biscuits, chocolates and CandyNet Revenue - $34 billion, Founded- 1849, Number of Employees 5000

Lotte India Co. Ltd. It is a multinational firm with headquarters based in South Korea and Japan.It runs with a vision of being number 1 confectionery company in Asia by 2018. Net Revenue $ 28 billion, Founded- 1948, Number of Employees 6000+.

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Nestle India Ltd. The Company is among the leading confectionery company, being a merger of Anglo- Swiss- Company formed in 1905. It is the largest food company in the world with 447 factories, operates in 194 countries. Net Revenue $ US 497 million, Founded- 1866, Number of Employees 10001+

Candico India Ltd. The company started its operations in 1997 with the badge of one of the largest confectionery companies in India. It operates in 19 countries with an estimated annual turnover of US$ 2 trillion. Net Revenue US$50 Million, Founded- 1997, Number of Employees 1000+

Lotus Chocolate Company Ltd. The food processing unit deals in cocoa processing and a chocolate manufacturing plant.Since 2008, Lotus Chocolate Company Limited is an Indian owned entity.Net Revenue Rs. 15.12 Cr, Founded- 1992, Number of Employees 500+

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Campco Ltd. -Central Arecanut and Cocoa Marketing and Processing Co-operative Limited (CAMPCO) was introduced in Mangalore in July 1973. Net Revenue Rs. 41.6 Cr, Founded- 1973, Number of Employees 400

Candi co India -Candico began its operations in the year 1997. Net Revenue Rs. 10- 100 Cr, Founded- 1997, Number of Employees 500.

Sampre Nutritionis counted among the top 10 confectionery companies of India and has been manufacturing quality products that include clairs, candies, toffees, powder etc.

Wrigley Indiais a global confectionery company that has production unit in India.

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Perfetti Van Melle India Pvt. Ltdis another prominent confectionery company that has global presence. Most sold products of the company are Alpenliebe Creamfills, Alpenliebe POP, Centre Fruit, Happydent White, Protex Happydent, Marbels, Mentos, etc.,

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Revenues of Top Companies in India

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Marketing StrategiesIndia has got more than 50% of its population below the age of 25 & more than 65% below the age of 35.

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Separate plan for each age group.0-18 yrs. 50% studying in schools.19-35 yrs. active on social media36-65 yrs. working population

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Confectionery industry can also be classified in terms of different product categories.

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Global segmentation

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In India, Southern India accounts for the majority share of confectionery consumption.

Region wise sales of confectionery (2015)

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Structure wise segmentation (2015)Region wise segmentation (2015)After successfully capturing urban markets, the players are now keento establish a foothold in rural India.

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Market growth rates of sugar confectionery

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Advertising in confectionary industryThe only way to create brand salience is through innovative advertising.

Large confectioneries spend 12 to 13 per cent of their sale revenue on advertising and brand promotion.

Advertisements need to appeal to all consumers across age brackets and socio economic groups.

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Targeting adultsTraditionally, the confectionery companies considered only children as their target market and confectionaries advertisements were also always targeted at children.But stagnancy in he growth rates made the companies rethink their strategies.Cadbury was the first company that repositioned its brands for adults.

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HISTORY OF CADBURYStarted by John CadburyFactory in Bourneville in 1861- chocolate production in U.K1897-Manufactured 1st milk chocolate.1950- First overseas factory near Hobart, Tasmania

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CADBURY INDIAIn India, Cadbury began its operations in 1948 by importing chocolates.

It today has 5 company-owned manufacturing facilities & 5 sales offices in 5 metros. The corporate office is in Mumbai.

Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the world!

Cadbury Dairy Milk is considered the "gold standard" for chocolates in India.

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OBJECTIVESTo become the Worlds Biggest and Best Confectionery Company.To make lots of chocolate & improve the quality of their chocolate.Have loads of stores worldwide.To be an ongoing company & achieve revenue growth of 20% per year.Increase earnings by 15% annually & dividends per share by 7% per year.

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ACHIEVEMENTS2008- SILVER award for the 'Most Effective Use of Advertising.2008- Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG company in India.Cadbury Dairy Milk & Bournvita have been declared a `Consumer Super brand' for 2006-07.Cadbury India has been ranked 5th in the FMCG sector, by Business World magazine in 2007.

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MARKETING MIX4PS

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PLACEProduced at the chocolate factory in Bourneville in Birmingham.It is then transported to the stockrooms.After this Cadbury sells it products to shopsthat deal with beverages and confectionery e.g. corner shops, superstores. They then sell it to the general public.

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Five company-owned manufacturing facilities: Thane Induri (Pune) Malanpur (Gwalior) Bangalore Baddi (Himachal Pradesh)

4 sales offices: New Delhi Mumbai(h.q) Kolkota Chennai

THESE FACTORIES CHURN OUT CLOSE TO 8,000 TONNES OF CHOCOLATE

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PRODUCTCadbury Dairy Milk is made from Real Chocolate Its ingredients include cocoa butter There is a glass and half full cream dairy milk in every 200 grams of Cadbury dairy milk chocolateCadbury buys 65 million liters of fresh milk each year to make Cadbury dairy milk chocolate

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PRODUCT BarsCakes &BiscuitsDrinks

Ice Creams &Desserts

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PRICE

Adopted competitive pricing strategy for the basic productWhereas premium pricing on other variantsCut down on weight but did not increase coste.g. 5 Rs pack was of 13gm but now it is 10.5gm

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PromotionThe media mix for any campaign for diary milk comprises of TV, radio, print, OOH and Internet

The advertisements are used to create an emotional bonding with the consumers

The promotions increase brand loyalty, encourage repeat purchases and at the same time increase market share

Cadbury spends approximately 45 crore on advertising.

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Shubh Aarambh

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Kuch Meetha Ho Jaaye

Tried to relate to the consumers culturally by positioning it as a sweet. All the ads are based on a joint family thus relating to India culturally.

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"The obvious part of the communication is the self-indulgent product and the irresistibility of it

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MARKET SEGMENTATIONGeographic segmentDemographic segmentBehavioral segmentPsychographic segment

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MARKET SEGMENTATIONGEOGRAPHICRegionCountriesClimate

DEMOGRAPHICAgeGenderFamily Life cycleIncome

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MARKET SEGMENTATIONPSYCHOLOGICAL Attitude Toward The ProductLife Style

BEHAVIORALOccasionsBenefitsUsage rate

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SWOT

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STRENGTHS World leader-200 CONTRIES Powerhouse brands and Products-dairy milk, Bournvita, oreo, &five star. -some are cash cows for Cadbury.Brand name, brand equity and Brand loyalty- -strong branding over the years- the brand equity of high.-comfortable charging a premium product because high brand equity.

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Positioning as gift.- CELEBRATIONSPromotions-kuch meetha ho jaye- excellentbrand recall.Indian connectemotional marketing.Placement and distributionone of the best FMCG

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Weaknessesfew cases-found-cockroaches &rodents in chocolatesrural distribution These are needs to be strengthened.

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OpportunitiesRural markets- india village based & high potential to grab market.New Tastes- Indian consumers- like to eat small chocolates than bars.

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ThreatsCost and price increase.Health consciousness on the rise.Decreasing importance of festivals.Rising demand of people, growing purchasing power .

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ChallengesRise in ingredient pricesRise packaging costsRegulatory challengesFake confectioneriesGrowing health concerns

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MY SUGGESTIONSBring out new products for health conscious people.Continue to promote itself as substitute to mithai.Choco-biscuits should be introduced.Should use Indian ads and avoid global ads in India.Consider attractive display or its own Chocolate boutique (retail store).Special chocolates for Christmas should be introduced e.g. rum, champagne flavoredNew flavors like strawberry,orange,vanilla etc.

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CONCLUSIONSThere is an immense scope for chocolate industry in India Indian chocolate industry is unique mix with extreme consumption patterns, attitudes, beliefs, income level and spending Understanding consumer preferences and demands is the key to growthPricing, quality , flavors and pack size are some of the important factorsEconomical distribution using proper supply chain management is necessity Brand loyalty should be maintained

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