CENTER FRESH

Submitted ByAnuj Handa 43 Dhanajay 42

Company Profile
Perfetti Van Melle is a European global manufacturer of confectionery and gum. It was formed by the 2001 merger of Perfetti of Italy with Van Melle of the Netherlands, having its corporate headquarters in Lainate (Milan), Italy and in Breda, Netherlands. Perfetti Van Melle bills itself as the third largest confectionery manufacturer in the world after Kraft Foods (owners of Cadbury plc) and Mars, Incorporated (owners of Wrigley). It employs 17,000 people via 30 subsidiary companies and distributes its products in over 130 countries. Perfetti Van Melle India (PVMI), a fully owned subsidiary of the global conglomerate Perfetti Van Melle, started its Indian operations in 1994. The company today enjoys close to 30% market share, thus making them one of the leading players in the confectionery industry in India today. Perfetti Van Melle entered the Indian market in 1994 by offering its first brand Center Fresh, followed by Big Babol and Alpenliebe in 1995. The other brands like Chlormint, Mentos, Fruittella, Cofitos, Happydent and Marbels followed subsequently, which will be explained in detail later under the companys product strategy. PVMI enjoys a huge brand recall among its consumers which form a total estimated market size of Rs.3000 cr. Special care has been taken by the decision makers at Perfetti to make sure they consider all the aspects which will help them to understand what the Indian consumer likes. The products had to be adapted according to the Indian climate like increase in the shelf life and the composition of the product. Perfetti Van Melle has adopted an aggressive sales strategy to retain the market leader position in the confectionery industry in India backed by a wide network of Carry & Forwarding agent (C&FA), distributors & sales force. Another striking feature of this company is that in India alone it has a network of around 4,500 distributors spread across 2000 urban towns. Also, the advertising strategy followed by PVMI has managed to capture the attention of the Indian audience.

Companys Business Principles

Vision We will consumers Values Living the Perfetti Van Melle Values requires courage, vision, trust, commitment, and pragmatism. enhance our world leadership through innovative and in confectionery by gratifying highcreating quality value for products.

Strong brand building

Perfetti Van Melle has also shown creativity in its packaging as well as communication and promotions. Big Babol redemption contests, Cofitos Click Card promotion are examples of this. Alpenliebe, Big Babol, Chlor-mint are all brands built in the past decade and advertising has played a key role in the same. A series of conventional and non-conventional branding techniques and media innovations have been utilized to promote the company's products in India. Besides media vehicles like television, radio (FM), press, outdoor and on ground activities as well as point of purchase promotional material have been used tactically, across the country. The company believes in being flexible when deciding spends on a specific brand and lets the market factors determine spends on the brand and on different media vehicles. However, advertising has to be backed by availability of the product, in order for the advertising to deliver the desired results and Perfetti has taken care to ensure the same.
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Products
Some of the products they manufacture include:

Mentos mints Airheads fruit chews Frisk mints Fruittella chews Vigorsol gum Vivident gum Chlormint gum Happydent mint gum Golia liquorice gummy candy Alpenliebe caramel chews Big Babol gum Meller caramel chews Brooklyn Chewing Gum Center Fresh gum in India Chupa Chups[1] Smint

Key success factors in India

The Indian confectionery market is very different from the global market. While India is primarily a mono pack market, globally the confectionery market is a multi pack market. The trade is also Significantly different with the global market relying heavily on organized trade. In India, unorganized mom and pop retail outlets such as paan shops and kirana outlets result in the bulk of sales. Organized trade is still insignificant in terms of sales. Functional products and sugar free confectionery dominate the world-wide market, while that trend is yet to pick up in India.

Perfetti Van Melle entered the Indian market in 1994 by offering its first brand Center Fresh, by Big Babol and Alpenliebe in 1995. Cofitos, its Happydent and Marbles form The other brands like followed subsequently. a total estimated
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followed Fruittella,

Chlormint,

Mentos,

PVMI enjoys a huge brand recall among market size of Rs.3000 cr.

consumers

which

Perfetti Van Melle launched after consumers. kept under

India has more than

15 brands under its umbrella,

all of which have been

considerable market research

and insight so as to adapt to the likes and preferences of the geographical composition and region long have shelf been life.

The climatic conditions of the Indian consideration for product

In the year 2008 PVMI clocked close to 850 Crores. The PVMI manufacturing units in India are located in Gurgaon and Chennai with another plant commissioned at Rudrapur, Uttaranchal in 2007. The Indian subsidiary also takes care of the development of South Asian markets and exports to other Asian countries. Perfetti Van Melle has adopted an aggressive sales strategy to retain the numero uno position in the confectionery industry in India backed by a wide network of Carry & Forwarding agent (C&FA), distributors & sales force. Perfetti Van Melle India has a network of around 4,500 distributors spread across 2000urbantowns.

PVMI brands have launched several innovative ad campaigns like Happydent White, Chlormint, Alpenliebe and Mentos which have won several awards for the company like the Abby for Protex Happydent & Centre Fresh, Cannes (Silver & Bronze) & Ad fest for Happydent White and Effies for Mentos.

Segmentation
Customers are people, so differ considerably. The marketing now-a-days is very customer driven, changes are continues and the customer needs are never the same. Perfetti Van Melle makes use of a demographic segmentation. Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, sexual orientation, family size, family life cycle, income, occupation, education religion, ethnic community and nationality. The marketing people identify different ways to segment the market & develop profiles of the resulting market segment. Product which perfetti offers in the market are very universal on the basis of consumption. The age group that Centre Fresh is targeting is quite wide, from 8 years to 24 years .

Segmentation(Benefits)
Freshness (Center fresh, Chlor- mint, mentos) Good for teeth (HappyDent) Bubbles for kids (Big babool) others (Alpenliebe, Chocoliebe)

Competitors
Hidden Competitors in India Pan Flavoured supari Chutki Pass Pass

Competitors Orbit Pim pom Boomer Juicy Fruit

Positioning
Currently Center Fresh is positioned on the platform of great taste which make them prefer to chew than speak. Center fresh truly Rakhe Zubaan pe lagaam
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Constant re-invention of brands

The company continually works towards developing its brands and goes to the extent of re-inventing the same if the situation demands. An example is the brand Cofitos that was re launched at a lower price point because of the market demands. Variants of Alpenliebe were also launched in the year 2002 to take the brand forward and to create excitement in the market. Similarly the company has worked on the positioning of brands like Chlor-mint and modified the same in order to develop it further. in June 2009 Center Fresh has launched a new campaign India, baate kam, kaam zyaada as an extension to the brand thought Zuban pe rakhe lagaam.

The agency was tasked with creating a new approach for the existing brand proposition. The film shows a group of policemen, office executives, politicians, doctors and two cricketers seemingly engrossed in serious discussions in their respective fields. This is accompanied by an audio praising the talent and future of India. Cut back to the same set of people actually discussing about the most mundane things which are absolutely not related to their respective professions. This is followed by the voiceover India, baate kam, kaam zyaada.

Product: (Center Fresh)

Center fresh is a product of Perfetti Van Melle confectionery. Globally, Perfetti Van Melle ranks third in the confectionery sweepstakes after Mars and Cadbury. L argest manufacture of confectionery and chewing gum products. Two brothers ambrogio and egidio perfetti founded perfetti in 1946. Izaak van mella founded van mella in 1841.Perfetti acquired van mella in Jan 2001.
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But in India, it leads the pack with a 25 per cent share of the Rs3,000-crore (Rs 30 billion) per annum market. I ndia, in fact, is the only country out side Italy where Perfetti is ahead of both its rivals. Center Fresh, the flagship brand of Perfetti Van Melle's was launched in 1994. It was the first liquid filled chewing gum which has tantalized the taste buds of millions of Indians and is a house hold name today. Over the years, Center fresh has grown to become the largest selling gum brand in India.

Analysis of the Product

SWOT Analysis
Strength Innovation Promotional Tactics Packaging Quality

Weakness Maintaining technology superiority Price constain

Opportunity Innovation within the brand Sugar free products

Threats Competition from International Brand Competition from Domestic player

The components of Perfettis products, which need to be analyzed are: Design Features Flavours Size 8

Packaging Quality Ingredients Logo Punchline Uses

Design
Each of Perfettis various brands and their variants have distinct design features. By just looking at a unit of candy, one can identify with the brands. Center Fresh is in the shape of a rounded square while Big Babol has an unmistakable rectangular shape. Also, the various flavours of each product come in different colours, making them easily identifiable.

Features
Each offering that is part of Perfetti Van Melles product basket has a unique feature. This makes each of Perfettis individual products stand out to the customer. Big Babol is the non-sticky bubblegum which can blow bigger bubbles, Chlormint is the mint with Herbasol, Happydent helps keep teeth naturally white and Mentos is the candy with a crunchy and chewy texture rolled into one., while center fresh keep the mouth fresh.

Flavours Spearmint Peppermint Sweetmint

Size Mono pack Stick pack

Logo

Punch line
Baaten kam kaam zyada Zubaan pe rakhe lagaam

Uses
It provides enjoyment It tastes very good Its like a mouth freshner

Price
For all we know, Perfetti has been following the simplest of pricing strategies. Most of its products are available in the market at two basic price points, i.e. 50 paisa for a mono pack, which has a single tablet and Re. 1 for brands like Center Fresh, etc. The prices of different products do not vary from region to region, i.e. the part of the country they are being sold in, they are same throughout. But almost all of the products are available in different kinds of packaging. Heres a look at some of the products the company offers: Center Fresh Earlier it was available for Rs 1.5 per unit for several years, which included a huge profit margin, but then it was reduced to Re1. It is also available in the form of a stick, which has 5 pieces for Rs. 5.

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Analysis of the Price

The company has been following an economic pricing strategy right from the starting. It has been aiming at maximizing its marketing share by keeping its products at a very low cost so that everybody can buy them. Earlier there were only the smaller units that were freely available in the market, and hence the profit margin for the retailers was very less, so the prices were a little higher. But then, the company realized the need of bigger packaging and hence came the plastic jars and the 1kg packaging. As already the pricing of the product is very low, there is no use giving any discounts to the customers and moreover if they give any sorts of discount on a 50p candy, there would be a lot of problem for the shopkeepers as well for the customers in terms of how to exchange the money. So what the company did was that on the bigger jars and the 1kg packing, they packed in more candies, hence giving the customers more than what they would usually get, and also gave a chance to the retailers to earn more as they now had more numbers to sell. The plastic jars were also made of pretty good quality, so that they could be used later when all the candies are sold off. But now, the only problem we believe they face is that of stagnation. Due to the pricing that they have been following, they cannot introduce a new product at a higher price, and hence limits their scope of R & D and trying out newer products which might actually be good. The problem is that now the customer has a fixed mindset about the Brand, and if the company introduces little costlier product, say at Rs 5 per unit, the customer might think twice before buying it as he would be skeptical due to the price, and this did happen with the company, when they introduced the Alpenliebe Lollipop in two flavours at Rs 4 per unit, it failed very badly, despite the product being very good.

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Place (Distribution)
Perfetti Ven Melle manufacturing units in India are located in Manesar and Chennai with another plant commissioned at Rudrapur, Uttaranchal in 2007. From these the distribution is done in four regions, and has branch offices in Delhi, Mumbai (Maharashtra), Kolkata (West Bengal) and Bangalore (Karnataka) to manage sales in the regions. During the entrance in the Indian market, Perfetti did not merge or acquire any company. It adapted the simple way that the quantity of goods demanded will be supplied. To build up its network, initially it followed the booking system of distribution (sales officials would make calls to outlets and supply according to the order received). On the initial stage, company also offered hefty sales-linked incentives such as increase in margin in percentage terms with increase in sales and offered one pack free on every pack sold. The great change occurred when it acquired the Van Melle. The acquisition brought a distribution network of 3 lakh outlets which today have become around 10 lakhs. Instead of expanding the distribution network over a large region, they focused on specific areas. The main distribution channels used by the company are wholesalers, brick and mortar store, agent, internet, retailer and direct sale. Wholesalers are to resale (sale without transformation) goods to retailers, industrial, commercial, institutional or professional users, or to other wholesalers. Perfetti has tackled the challenge by giving its products to retailers in plastic jars. This makes life convenient for the retailer and gives the company the opportunity to place its brands prominently at the outlet. Of course, brand visibility on a jar is better than small two- or three-gram units.

Analysis of the Place

Perfettis distribution strategy of focusing on small retailers such as paan shops and kirana s tores is another success strategy as main sales of confectioneries are done through them in India. Idea of placing the products on shelves such that children can easily see them and at the cash counters are successful as target customers for confectioneries is mainly children and youth. As for the cash counters, while paying customers might think of getting some after seeing the product and can also get these instead of the change they might be getting.

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Promotion
We are not heavy advertisers , we are clever advertisers.

Mr. Sameer Suneja CEO, PVM India

To consolidate its worldwide market presence, Perfetti Van Melle has always paid special attention to advertising, in terms of investments and creativity, as they both play a vital role in the creation of a product's distinctive personality and market positioning. For Perfetti Van Melle, advertising is not simply means to access; it is one of the most important parts of strategic development. Television, radio, press, Internet; Perfetti Van Melle has in depth knowledge of the contemporary media, effectively differentiating their use according to their specific target groups, as well as customs and conditions in each particular country. The promotion strategy adopted by Perfetti can be divided into three major sub-divisions: Advertising Sales Promotion Events and Experiences

Advertising
Innovative advertising is the only way to create brand salience, given the clutter in the Confectionary market. Like in other FMCG categories, large confectioners spend 12 to 13 percent of their revenues on advertising. Perfetti spends close to 15 crore on its advertising campaigns. Perfetti puts humour (Center Fresh), emotion (Alpenliebe),

bizarreness (Happydent and Chlormint) and fun in liberal measures in all its commercials. They use generic tagline for its products which suits the Indian scenario and catch the customer mind. Thus, there is Zubaan par rakhe lagaam for Center Fresh, Dobara mat puchna for Chlormint and Dimag ki batti jala de for Mentos. Perfetti have also roped in Kajol as a brand ambassador for Alpenliebe and Salman and Sohail Khan as brand ambassadors for Chlormint.

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While the promotions for Center fresh had been predominantly TV-led, Perfetti also used newer media such as the Internet (ads) In doing so, it became one of the first companies in India to start major online initiatives for its brands.

Sales Promotion Perfetti started the concept of add-ons like whizzler which boosted sales of the chewgum industry in a major way. They introduced whizzler , which were meant for children. Perfetti also came up with redemption contests for its cricket trump cards for its Center Fresh brand. Perfetti Van Melle, has also adopted a unique way to reach to its consumers. The company has tied-up with the famous 'Dabbawalas' of Mumbai to distribute its newly launched Mangofillz candy with each Dabba, the famous tiffin in Mumbai. Perfetti distributed 2 lakh Mangofillz thus reaching a massive consumer base. Events and Experiences In 1996, Perfetti associated itself with the Cricket World Cup through its Center Fresh brand. It became the official chewing gum of the World Cup, the rationale being that cricketers like to chew gum on the field. The brand emphasized its cricket connection - on the packaging, billboards, hoardings and TV commercials. Free samples were passed around outside the stadiam on match days. Sales took off and the "official chewing gum" status continued for some years.

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